GST, demonetisation to have far reaching impact: RBI governor 

Patel said that it is expected to significantly transform the domestic economy in due course in terms of greater intermediation, efficiency gains, accountability and transparency through increasing adoption of digital modes of payments .
 Reserve Bank of India (RBI) governor Urjit Patel said that the nationwide goods and services tax and legislation of bankruptcy code should impart resilience to the economy. He added that the withdrawal of specified bank notes will impart far reaching changes going forward, in his foreward to the Financial Stability Report published by RBI. With respect to demonetisation, 

Patel said that it is expected to significantly transform the domestic economy in due course in terms of greater intermediation, efficiency gains, accountability and transparency through increasing adoption of digital modes of payments, notwithstanding the short-term disruptions in certain segments of the economy and public hardship. Patel also raised concerns about stress in the banking sector. “While the domestic banking sector continues to face significant levels of stress partly reflecting legacy issues, on balance, enhanced transparency has helped to reinforce the stability of India’s financial system,” he said. 

Overall, he said that there is little room for complacency and it is important to guard against sporadic volatility in financial markets. Patel said that they are adhering to global regulatory standards without losing sight of domestic compulsions. In this context, the governor said that there are various regulatory changes underway globally to strengthen financial stability. At the same time, Patel said that the global financial crisis has prompted regulators to require banks to undertake stress tests to see if their risk appetite matches their risk taking capacity. The asset quality review of Indian banks and the subsequent corrective actions are steps in this direction, he explained.

Foreign investors have pulled out of India at record pace 

In November, foreign portfolio investors (FPIs) net sold equities worth Rs 18,909 crore, the highest ever monthly outflow, triggering a streak that saw net sales for 18 consecutive days from November 9 through to December 5.  Faced with increasing turmoil in global markets and a weak economic outlook triggered in part by the government's unprecedented demonetisation move, foreign portfolio investors have pulled out of Indian stocks at a record pace.

 In November, foreign portfolio investors (FPIs) net sold equities worth Rs 18,909 crore, the highest ever monthly outflow, triggering a streak that saw net sales for 18 consecutive days from November 9 through to December 5. Before this, the longest FPIs had remained net sellers for was a streak of 12 days, in October 2008 at the height of the global financial crisis. Back then, they net sold Rs 11,662 crore in Indian equities. 

 November's FPI outflow, however, did not impact markets in a major way -- the Sensex fell only 4 percent through the month -- mostly because domestic institutional investors (DIIs) bought Rs 18,277 crore, a majority of this being buying by mutual fund houses. The 18-day outflow streak was broken yesterday (December 6) when FPIs turned net buyers, as per provisional data. In the last one year, on a monthly basis, FPIs bought highest in March 2016 accumulating Rs 23,620 crore.

Foreign investors have pulled out of India at record pace In November, foreign portfolio investors (FPIs) net sold equities worth Rs 18,909 crore, the highest ever monthly outflow, triggering a streak that saw net sales for 18 consecutive days from November 9 through to December 5. Moneycontrol Bureau Faced with increasing turmoil in global markets and a weak economic outlook triggered in part by the government's unprecedented demonetisation move, foreign portfolio investors have pulled out of Indian stocks at a record pace. In November, foreign portfolio investors (FPIs) net sold equities worth Rs 18,909 crore, the highest ever monthly outflow, triggering a streak that saw net sales for 18 consecutive days from November 9 through to December 5. Before this, the longest FPIs had remained net sellers for was a streak of 12 days, in October 2008 at the height of the global financial crisis. Back then, they net sold Rs 11,662 crore in Indian equities. November's FPI outflow, however, did not impact markets in a major way -- the Sensex fell only 4 percent through the month -- mostly because domestic institutional investors (DIIs) bought Rs 18,277 crore, a majority of this being buying by mutual fund houses. The 18-day outflow streak was broken yesterday (December 6) when FPIs turned net buyers, as per provisional data. In the last one year, on a monthly basis, FPIs bought highest in March 2016 accumulating Rs 23,620 crore.

CMAI With digital payments witnessing manifold growth post demonetisation,

 India needs separate digital payment laws and courts along with an "appropriate legal framework", CMAI Association of India (CMAI) today said. | 1 Comments With digital payments witnessing manifold growth post demonetisation, India needs separate digital payment laws and courts along with an "appropriate legal framework", CMAI Association of India (CMAI) today said. CMAI, which represents companies across telecom, ICT and cybersecurity segments, said an appropriate legal framework is needed to protect consumers in case they lose money during digital transactions. "India does not have proper laws in this regard as of now. The only remedy available is under Information Technology Act, which largely deals with cyber breaches. All cases of money lost in digital payments may not fall in the category of cyber thefts/breaches," CMAI President NK Goyal said. With proliferations of digital payments across India in big and small towns, there may be widespread cases of small amounts here and there throughout the country, he added. 

"To address them in timely manner, CMAI requests that there is need for separate digital payment laws and digital payment courts across India," he said. The body also urged the government to promote domestic manufacturing of Point of Sale (PoS) machines and its software development. "Government reports say during next few months 20 lakhs new PoS machines will be added to 15 lakhs existing ones. When crores of people are joining digital payments movement daily, safety of data remains paramount which can be ensured only by pushing indigenous manufacturing of PoS machines," he said. Stating that digital payments have gone up 300 per cent since demonetisation, Goyal said:

 "We cannot depend on foreign manufacturers if we want to make our economy cashless". A majority of PoS machines currently are imported from the US, Europe and China. "There is a need for legal framework for data storage, data protection... draft legal framework should also include standards on refunds, complaint redressal system, cash backs, compliance to various policies and procedures need to be displayed on company's website details of complaints received/addressed, money refunded and action taken on regular basis, cash back policy etc," he said. CMAI has also urged for putting in place an "appropriate and robust mechanism" for reporting losses and recovery of money lost/theft/frauds in digital payments.

Asia stocks slip, dollar underpinned by yield premium

 Japan's Nikkei lost 0.7 percent, edging away from its recent one-year top. Australia's main index eased 0.4 percent, having touched a 17-month peak the previous day. Asian shares slipped on Thursday after Wall Street suffered a mild setback after weeks of gains, while the dollar stayed in demand as US government debt offered ever-fatter premiums over euro zone bonds. Japan's Nikkei lost 0.7 percent, edging away from its recent one-year top. Australia's main index eased 0.4 percent, having touched a 17-month peak the previous day. MSCI's broadest index of Asia-Pacific shares outside 

Japan was off a slight 0.1 percent. The pullback on Wall Street came amid light volumes and likely reflected caution about what the New Year might bring, given Wednesday was the first session when trades actually settle in January. The Dow fell 0.56 percent, while the S&P 500 lost 0.84 percent and the Nasdaq 0.89 percent. Boeing fell 0.9 percent after Delta Air Lines cancelled a USD 4-billion order for 18 Dreamliner aircraft. Technology was the largest weight on major indexes, with Nvidia down 6.9 percent after short seller Citron Research said the market was overlooking the headwinds for the stock - which had earlier touched a record high. Weak home sales data were blamed for some of the selling, though normally this series barely gets a mention in markets. Contracts to buy previously-owned

 US homes fell in November to their lowest level in nearly a year, a hint of how rising mortgage rates could weigh on the housing market. The soft report combined with surprisingly strong demand for a sale of new five-year Treasury notes to give US bonds a rare rally. Yields on 10-year paper fell to their lowest levels in two weeks to around0 2.53 percent. Yet euro zone yields were also falling on concerns about the strength of a rescue plan for Italian banks and normal year-end caution. Germany's 10-year yields hit their lowest in seven weeks at 0.181 percent, while their discount to Treasury yields hit the widest on record. 

The ever-widening yield gap kept the euro on the defensive around USD 1.0424, after touching an eight-session trough of USD 1.0372. Sterling was also soft at USD 1.2226 after hitting its lowest in two months. The dollar was sidelined on the yen at 117.00 having spent the last seven sessions caught between 116.84 and 117.88. In commodity markets, oil came off the boil after data showed a surprise build in US crude inventories. US crude eased 42 cents to USD 53.64 a barrel, while Brent was last quoted down 16 cents at USD 55.93. 

JSPL gets banks' nod to recast Rs 7125 cr debt under 5/25 scheme....!

The debt had seven banks behind it with State Bank of India as the lead. Axis Bank, ICICI Bank and IDBI Bank were among the other lenders.S B I had an exposure of more than Rs. 3,000 crores, the source said Dhirendra Tripathi Jindal Steel & Power Ltd has secured the approval of its lenders to restructure Rs. 7125 crores of its 5-7-year debt into a long term debt of 20 years under the Reserve Bank of India’s 5/25 scheme, according to a source familiar with the development. “The restructuring will immediately enhance cash flow as the interest outgo every year will significantly come down,” the source told the company’s interest outgo in the first six months (April-September) of the current financial year was Rs. 1,725 crores, higher by 7% from the same period a year ago. 

The debt had seven banks behind it with State Bank of India as the lead. Axis Bank, ICICI Bank and IDBI Bank were among the other lenders. SBI had an exposure of more than Rs. 3,000 crores, the source said. Under the 5/25 scheme, lenders can restructure their debt for up to 25 years with the flexibility of refinancing every 5 years. Jindal Steel had a consolidated gross debt of around Rs. 45,000 crores at the end of March 31 this year. Hit hard by Supreme Court’s 2014 verdict cancelling coal block allocations and the downturn in steel and power sectors -- its two core businesses -- the restructuring of the debt should come as a shot in the arm for the New Delhi-headquartered company. JSPL has reported net loss for last seven straight quarters. Net loss at the Naveen Jindal-promoted company widened to Rs. 1,987 crores during April-September from Rs. 1,567 crores in the year ago period. Gross operating margins during the same period declined by 200 basis points to 20%.

7 among top 10 cos lose Rs 44,928cr in m-cap.....!

SBI, ONGC , HDFC , HUL , Infosys , CIL and ITC witnessed a decline in their market capitalisation totalling Rs 44,927.73 crore, while TCS , HDFC Bank and RIL raked up gains, during the week ended December 23, aggregating Rs 3,257.36 crore. The market capitalisation of SBI was hit the most as it fell by Rs 12,032.91 crore to Rs 1,93,487.22 crore, while the market valuation of ONGC plummeted by Rs 11,288.79 crore to Rs 2,47,557.66 crore. Market valuation of HDFC tanked by Rs 7,155.85 crore to Rs 1,94,181.92 crore, while HUL valuation plunged Rs 5,704.93 crore to Rs 1,71,183.31 crore, and Infosys by Rs 3,421.97 crore to Rs 2,27,236.74 crore. CIL saw an erosion of Rs 3,202.04 crore in its m-cap, following which it stood at Rs 1,78,835.46 crore, while ITC dipped by Rs 2,121.24 crore to stand at Rs 2,72,443.77 crore. 
Since the market started on a weak note as the investor was mostly cautious before the BOJ policy rate decision, no strength was visible at any point of the week," Rohit Gadia, Founder & CEO, CapitalVia Global Research Ltd said. Defying the broader market trend, TCS added Rs 1,671.39 crore to its market capitalisation to soar to Rs 4,51,267.41 crore, while HDFC Bank saw its market worth rising by Rs 1,391.08 crore to Rs 3,02,900.38 crore. The m-cap of RIL improved by Rs 194.89 crore to Rs 3,43,220.75 crore. In terms of ranking of the top 10 firms, TCS retained its numero uno status followed by HDFC Bank, RIL, ITC, CIL, Infosys, HUL, HDFC, ONGC and SBI. For the week, the Sensex lost 448.86 points, or 1.69 per cent, while the broader NSE Nifty dropped 153.70 points, or 1.88 per cent. This is their biggest drop in five weeks since November 18.

Govt looking to hike short-term capital gains tax in Budget.....!

 A report in the Business Standard says that short-term capital gain tax, which stands at 15 percent currently, could be hiked to 20 percent. The government is likely to hike both short-term and long-term capital gains tax rate in the upcoming Budget. Prime Minister Narendra Modi in his speech on Saturday had said that tax collection from capital markets players is low majorly due to illegal activities. 

 Market took this as a hint for a probable hike in February. A report in the Business Standard says that short-term capital gain tax, which stands at 15 percent currently could be hiked to 20 percent. Short-term capital gains is the profit earned on shares held for less than a year. The news report in Business Standard further adds that government is in talks with market regulator Securities and Exchange Board of India (SEBI) and stocks exchanges to discuss making changes in the capital markets.

Demonetisation impact: Market movements don't indicate immediate price correction....!

When Housing News analysed the impact of demonetisation over the property prices, some of the critics disagreed and even took it as an endorsement of black money in real estate. Nevertheless, the theory that lesser supply and higher input cost, will leading to an increase in property prices, is based on the ground realities in Indian real estate. There is only one economic rationale that supports the theory that demonetisation will lead to lower property prices. 

This theory argues that once the sector moves beyond black money, cleaner sources of funding will emerge as the dominant market force. This will compel developers to adopt clean business practices, to avail lower cost of funding. The impact of foreign funds on the Indian property market The proponents of this economic theory, assert that foreign funds, like the US Pension Fund and others, are scouting for opportunities in Indian real estate. Once these funds enter the market with lower expectations on ROI (as they are used to 3%-4% returns back home), the input cost of the developers towards land purchase will be much lower. However, whether these foreign funds will be interested to invest at the level of land finance, remains unclear. If the foreign funds only invest in construction finance, as has been the trend, it will not address the need for cash or black money in the sector. Moreover, most of these funds are likely to invest only in the top 3-4 developers in each city. In such a scenario, the dynamics of demand-supply-execution, comes into the play. Most of the top developers in each of the key markets, are already over-leveraged in their scale-to-capacity ratio. Defaults by large developers, like Unitech, Jaypee Group, DB Realty, etc., suggest that more money often prompts developers to launch more than what one can deliver. Even the debt burden of DLF, has a correlation with its over-leveraging, in terms of execution target. Removal of black money may not lower prices Nikhil Hawelia, managing director of the Hawelia Group, points out that the final cost of an apartment, is a combination of money, material, manpower, machinery and management.

 Demonetisation analysis: Will property prices increase or fall? “I am not sure, whether the foreign funds will be inclined to invest in the Indian real estate market, across the board. They will only look for the bigger players who are in the business for quite some time, are mostly listed and have a certain level of corporate governance and operate in a transparent eco-system with mostly clean money. So, it is a paradox that while more liberal finance to these developers can lead them to far exceed their execution capabilities and default, the developers who have limited resources and stay within their execution capabilities would still need higher cost of land finance,” says Hawelia. Amit Oberoi, national director – knowledge systems, Colliers International, however, believes that in the long run, demonetisation will improve corporate governance and compliance and make it easier for foreign entities to invest in India. 

“It will also boost the listing of REITs (Real Estate Investment Trusts) in the Indian market. We should see a more robust institutional investment market, as retail investments in these segments will shrink,” says Oberoi. Although there is optimism that demonetisation will lead to a more clean and transparent system, its impact on property prices, remains a different story altogether. Odds in favour of higher property prices Supply constraints and high input costs, rule out the possibility of a reduction in prices. Credit reliability for land finance, is limited to a few developers. Most of the foreign funds are interested in construction finance and hence, clean funds for land finance will remain costlier. Most of the leading developers are already over-leveraged, vis-à-vis their execution capacity. A large number of mid-sized developers, who are producing mass housing, are only able to avail of land finance at high rates.

Sun Pharma rebounds on stake buy in US  Co, brokers say Hold key....!

Healthcare major Sun Pharmaceutical Industries shares rebounded over 2% intraday Friday on short covering and after the company picked up a stake in the U.S company. Analysts say Halol plant resolution is the key for future growth shed 11% in previous seen consecutive sessions on fears of delay for Halol plant resolution.

One of the wholly owned subsidiaries of the company has acquired 1.3 crore series preferred stock of SC Pharmaceticals INC Today which is equivalent to 14.58 percent fully diluted equity stake on coversion by way of alllotment for 13 million, the Pharma major sai in its filling Incorporate in 2014, Sc pharmacauticals Inc is united state pharmaceutical products for subcutancous delivery..

Its lead products are the first formulation of furosemide (the most widely) used parenteral antibotic outside the hospital setting. Meanwhile Bank of America Merrill lynch has lowered its target prices stock to Rs 750 following cut in earnings estimates though it has maintained buy rating on the stock.  

M P C Unaimously voted for keeping Repo Rate unchanged....!

The monetary policy committee (M P C) members unaimously decided to keep the repo unchanged at 6.25 percent in the bi-monthly monetary policy that was held in December.

According to the minutes of M P C meetings released by the RBI, Governor Urjit Patel said that achieving the inflation target of 5 percent for Q4 of 2016-17 and securing 4 percent- the central point of the notified target range remains the primary objective.

The RBI governor said that global financial conditions pose a threat to macro-economic and financial stability, with large fluctuations in capital flows and assets prices imparting which gets transmitted into inflation. He said that this uncertanity shows no signs of subsiding and is likely to get accentuated in thw coming year as U.S macroeconomic and trade policies realign.

The RBI governor said global financial conditions pose threat to macro-economic and financial slability, with large fluctuations in capital flows and assets prices imparting volatiliy while get transmitted into inflation. He said this uncertainty shows no sign of subsiding and is likely to get accentuated in the coming year as U.S macroeconomic and trade realign.

"The impact of withdrawal of Specified Bank Notes (S B N) on growth inflation, while uncertain is transitory . Against this backdrop it is important monetary policy.

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Rupee may be choppy, but is still World beater, will remain so into 2017:

The India rupee has emerged as on of the best currencies in emerging economies since Nov8 when Prime Minister Narendra Modi announced demonetisation of high-value currency notes and Donald Trump pulled off a surprise win in the US presidential election.

Market experts said domestic factors like the Reserve Bank of India status on policy rates in December review also added strength to local currency,which has the potential to continue the trend through 2017.
Except the Russia rouble (up 3 percent) and the Indian rupee (down 1.80 percent) rising current  account deficit, inflation and economic and political unrest mostly affected the movement of other emerging currencies since November8.
Among the beaten-down currencies, the Turkish lira slipped over 11 percent, whereas Malysian ringgit, Brazilian real South African rand and korean won have plunged between 5.50 per cent and 700 percent since Nov8.
The Chineses Yuan,the Indonesian Rupiah and the Thai baht depreciated 2.40 percent 3percent and 2.63 percent, respectively since trump got elected as new....!         

Nifty opens above 8200, Sensex firm; ITC, Bharti, Infosys losers

The market has opened firm as the Sensex is up 79.42 points or 0.3 percent at 26732.23. The Nifty is up 19.50 points or 0.2 percent at 8244.00. About 424 shares have advanced, 104 shares declined, and 28 shares are unchanged. ONGC, Cipla, Axis Bank and HDFC twins are gainers while Tata Motors, Bharti, ITC, Bajaj Auto and Infosys are losers in the Sensex. The Indian rupee slipped in the early trade. It has opened lower by 10 paise at 68.48 per dollar versus previous close 68.38. Mohan Shenoi of Kotak Mahindra Bank said, "Oil prices have risen on the back of OPEC decision to cut production. Strong US data makes December rate hike near certain." The US dollar surged to a 9-month high against the yen and also gains against the euro and Swiss Franc after a surge in oil prices pushed US treasury yields higher.

Bank of Baroda Q1 profit plunges 60 pct as bad loans rise

Bank of Baroda, India's second-biggest state-run lender by assets, said its first-quarter profit fell about 60 percent with a rise in bad loans.
Its shares fell more than 5 percent after the results.
Net profit fell to 4.24 billion rupees ($63.4 million) for the three months to June 30, from 10.52 billion rupees a year earlier, the Mumbai-based bank said in a statement on Thursday.
Analysts on average had expected a net profit of 4.92 billion rupees, according to data compiled by Thomson Reuters.
Gross bad loans as a percentage of total loans rose to 11.15 percent as of end-June from 9.99 percent three months earlier.
Bank of Baroda shares were down 5.5 percent at 151.60 rupees by 0353 GMT in a Mumbai market that fell 0.3 pe

Tata Chemicals sells urea business to Yara for Rs 2670 cr

Tata Chemicals said it will sell its urea business to Yara Fertiliser for Rs 2670 crore  as part of value unlocking by the company.

In a statement to the stock exchanges today, Tata Chemicals said it would continue to own the brands – Paras, TKS and Daksha and the deal does not include specialty products and complex fertilisers.

The company’s shares were trading 6 per cent up  at Rs 492 a share. 

Founded in 1905 in Europe, Yara has worldwide presence with 13,000 employees and in 150 countries.

Tata Chemicals said the divestment is in line with the strategic direction of the company to continue to strengthen the fertiliser businesses by partnerships and transfer of ownership to world class companies. The urea business will now have the benefit of international network of Yara and its global expertise.

R. Mukundan MD, Tata Chemicals said the sale marks a decisive move on the part of the company to move forward on its strategy to build consumer business while maintaining leadership in Inorganic chemicals Business and focusing the farm business through its subsidiary Rallis and Metahelix. The company is pleased to have found a strong partner to parent its Urea business.

Sensex jumps over 100 points, Nifty hits fresh 52-week high on strong global cues

The S&P BSE Sensex on Monday jumped over 100 points, while the broader Nifty50 topped its key resistance level of 8,700 to hit its fresh 52-week high.
The headline indices rallied tracking positive trend seen in Asian markets after a stronger-than-expected July jobs report lifted confidence in the strength of the US economy, heightening expectations that the US Federal Reserve could hike interest rates this year.
At 09:25 am, the 30-share index was trading at 28,207, up 129.38 points, while broad-based 50-share index quoted 8,716, up 33.35 points

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Stocks in news: HDFC Bank, Cairn India and more

Ahead of the US Fed meeting slated for Tuesday and Wednesday and on the doorstep of a futures and options (F&O) expiry, here are the five stocks that were in news today..

HDFC Bank reported 20.1 per cent growth in net profit to Rs 3,356.8 crore for the third quarter of the current fiscal on higher interest income. Its total income rose to Rs 18,282 crore during the December quarter, from Rs 14,931 crore in the year-ago period. Its shares closed 0.94 per cent up at Rs 1039.95 apiece on Monday.                    Cairn India on Friday reported a steep 99 per cent drop in its third quarter net profit as it suffered double blow of falling oil prices and high taxes. Cairn got $34.5 per barrel price for the oil it produced from its flagship Rajasthan fields as compared to about $68 per barrel in the third quarter of previous fiscal. Its shares closed 5.31 per cent up at Rs 118.90 apiece on Monday.                                                                                                                                              Budget airline SpiceJet on Friday reported a net profit of Rs 238.40 crore for the three-month period ended December 2015, staying profitable for the fourth straight quarter mainly aided by lower fuel costs. This is also the highest ever profit recorded by the carrier, which was facing turbulent times a year ago. Its shares closed 11.22 per cent up at Rs 78.80 apiece on Monday.

A TO Z ON OPTIONS

OPTIONS TRADING

Welcome to the world of option trading. A major advantage of options is their versatility. They can be as conservative or as speculative as your investing strategy dictates. Options enable you to tailor your position to your own set of circumstances. Consider the following benefits of options:
    * You can protect stock holdings from a decline in market price
    * You can increase income against current stock holding 
    * You can prepare to buy a stock at a lower price
    * You can position yourself for a big market move even when you don't know which way prices will move
    * You can benefit from a stock price rise without incurring the cost of buying the stock outright

AN "OPENING GAP" TACTIC

In cases where the markets are set to open up strongly, there will often be large gaps in the opening prices of certain stocks from the prior day's closing prices. This can provide profitable opportunities for day traders. The following sets out an easy to implement strategy or tactic that may be used to capitalize on these opportunities.

TRADING HYPE

Beware of Exaggerated or Inaccurate Claims!

Novice day traders are often exposed to exaggerated or inaccurate claims by firms and organizations seeking to profit from the sale of products and services relating to day trading. It is wise to treat many such claims with a healthy dose of skepticism, and to apply common sense in this regard. Here are some things to watch out for:

TIPS FOR BEGINERS

• Do not expect to become an expert day trader right away. It takes considerable time, practice and effort to learn the ropes.

• Paper trade or use a simulated trading Web site to practice your trading techniques before you use your own "real" money.

• Eliminate the fear of losing because "scared" money rarely profits.