Sultan of Brunei Bids for Sahara's New York and London Luxury Hotels: Report

New York: The Sultan of Brunei has made a bid for New York's Plaza Hotel, Dream Hotel and London's Grosvenor House hotel, the Wall Street Journal's website edition reported on Saturday, citing people familiar with the situation.

An investment firm affiliated with Brunei has offered to pay $2 billion for the three hotels, which are currently owned by the Sahara conglomerate, WSJ.com said.

Sahara's chairman Subrata Roy has been negotiating a sale of the company's luxury hotels from a makeshift office in prison, having been held for more than five months after failing to appear at a contempt hearing in a long-running dispute over his group's failure to repay billions of dollars to investors who were sold outlawed bonds.

Roy's lawyer S. Ganesh last week told India's Supreme Court that the businessman was holding "very effective" negotiations with potential buyers and that the group had signed a preliminary accord for the hotels.

Brunei officials have reportedly been in discussions throughout the summer with representatives of Sahara, WSJ.com said, citing its sources, adding that an agreement could be reached as early as next month.

The Sultan, along with his luxury hotel operator, the Dorchester Collection, has been criticised for harsh new laws in Brunei.

The laws, which include death by stoning for homosexuals and adulterers, have fueled public calls in the United States for the company to sell its properties. They have resulted in boycotts of the Beverly Hills Hotel and other Dorchester properties in Europe, costing the luxury hotel operator millions of dollars in lost revenue, Dorchester has said.

Copyright: Thomson Reuters 2014

Deutsche Bank Expects FM to Present 'Path-Breaking' Budget

Deutsche Bank expects the following 12 big policy measures in the budget,

(1) Rationalize subsidies in a politically prudent manner through moderate monthly price hikes, stretching beyond diesel to LPG and even kerosene (Key beneficiaries: HPCL, BPCL ONGC, Oil India)

(2) Re-direct government expenditure from revenue to capital expenditure and use welfare programmes for capacity creating outlays. Enhance resource allocation to infrastructure. (L&T, UltraTech, ABB, Siemens)

(3) A reorientation of the MGNREGA scheme towards focused capacity creating measures like rural roadways and irrigation projects (UltraTech)

(4) Announcement of new flagship mega-infrastructure projects with time bound deadlines - Delhi Mumbai industrial corridor, Diamond quadrilateral for railways, broadband highways, smart cities. (L&T, ABB, Siemens)

(5) Usher in a new regime of FDI Liberalization with special focus on raising FDI limits in Defense, railways and insurance to 51 per cent or higher (Siemens, L&T, Bharat Forge, Max India, Reliance Capital)

(6) The highest ever target for disinvestments of government's equity stakes in PSU companies. Announced target in range of Rs.60,000- Rs. 80,000 crore.

(7) Create enabling environment for higher flows into equity capital markets, by raising investment limits of pension funds and the LIC in equity capital markets. (Kotak Mahindra Bank, HDFC Bank, Reliance Capital)

(8) Address the urgent need to recapitalize PSU banks either via diluting government stakes to 51 per cent or through establishing holding company entity for government stakes in PSU banks. (Punjab National Bank, Bank of Baroda)

(9) With limited room to raise taxes , and yet address fiscal imbalances, government to rely on raising revenue through auction of resources like coal and telecom spectrum, which can be fairly significant.

(10) Provide tax relief to the middle class through raising basic exemption limit to Rs. 3 lakh - Rs. 4 lakh and hiking deduction under Sec 80C to Rs. 2 lakh. The revenue thus foregone may be compensated by raising tax on the super-rich.

(11) Articulate a credible roadmap with time-bound deadlines on ushering the Goods and Services Tax (GST) by March 2016.

(12) Address foreign investor concerns on retrospective taxation by making India's tax environment transparent, less adversarial and prospective only.

Source: NDTV Profit

PM Modi Eyes First Labour Overhaul in Decades to Create Jobs

Prime Minister Narendra Modi has set in motion the first major revamp in decades of the archaic labour laws, part of a plan to revive the flagging economy, boost manufacturing and create millions of jobs.

Successive governments have agreed labour reform is critical to absorb 200 million Indians reaching working age over the next two decades, but fears of an ugly union-led backlash and partisan politics have prevented changes to free up labour markets.

Now, with the benefit of a single party majority in Lok Sabha for the first time in 30 years, laws that date back to just after the end of British rule are set for an overhaul. Officials at the labour ministry say this is a top priority in the government's first 100 days in office.

India has a forest of labour laws, including anachronisms such as providing spittoons in the work place, and are so complex that most firms choose to stay small. In 2009, 84 per cent of India's manufacturers employed fewer than 50 workers, compared to 25 per cent in China, according to a study this year by consultancy firm McKinsey & Co.

The World Bank said in a 2014 report that India has one of the most rigid labour markets in the world and "although the regulations are meant to enhance the welfare of workers, they often have the opposite effect by encouraging firms to stay small and thus circumvent labour laws".

Business leaders hope Modi, who advocates smaller government and private enterprise, will be a liberaliser in the mould of Margaret Thatcher or Ronald Reagan. Perhaps the most important change, they say, is to rules making it hard to dismiss workers.

First up, though, to win public support, his Bharatiya Janata Party (BJP) government is looking to make changes that benefit workers, three senior officials at the labour ministry said. Among the changes: making more workers eligible for minimum wages, increasing overtime hours and allowing women to do night shifts.

"We are trying to provide a hassle free environment that helps both workers and industry," a senior labour ministry official involved in the deliberations said. "It is a priority for us."

Next on the reform agenda will be the most sensitive issue of loosening strict hire and fire rules. Officials said they have begun preliminary talks with concerned groups about slowly implementing the changes.

"There is a definite push ... you will see more measures," said another official at the ministry who is privy to the discussions within the government.

Reforms Key to Manufacturing Jobs

India's 20-year streak of fast economic expansion is often derided as "jobless growth" since the service sector-led model has been capital rather than labour-intensive.

India does not produce reliable, regular jobless data, but long-term surveys by the statistics department show the country only created 5 million manufacturing jobs between 2004/5 and 2011/12. In the same period some 33 million people left farms looking for better paid work. The majority were absorbed into low productivity and irregular work on construction sites.

Moreover, research suggests India needs 12 million new jobs every year to absorb the largest youth bulge the world has ever seen. It has fallen far behind that target.

Companies complain that current laws requiring rarely granted government permission for layoffs make it impossible to respond to business downturns, and blame the laws for the country's relatively small manufacturing sector.

Manufacturing contributes just 15 per cent to India's nearly $2 trillion economy. New Delhi says it wants to lift that share to 25 per cent within a decade to help create 100 million jobs. Comparatively, manufacturing accounted for 45 per cent of China's GDP in 2012.

"If business cycles are volatile, the ability to downsize and upsize should be freely available," said R. Shankar Raman, chief financial officer at Larsen & Toubro, one of India's biggest conglomerates.

In what is seen as a test for Modi's labour reform agenda and is intended to inspire other states, Rajasthan this month proposed amendments to the central law to allow firms in the state to lay off up to 300 workers without government permission. Currently, clearance is required to fire more than 100 workers and this is rarely granted.

Labour Militancy Declines

Labour unions cutting across party affiliations have opposed thestate government's move and have asked Modi to intervene. The BJP's own union has called a meeting of its officials early next month to chalk out a strategy to protest what it said was a lack of consultation over the shakeup in Rajasthan.

Since almost all the unions in India have political affiliations, their opposition to reforms has a risk of turning into a full-scale political agitation. But the risk that the reforms could also bring full-blown street protests similar to that seen in Thatcher's Britain are unlikely.

Labour militancy has declined in India, although sporadic violent protests like one at a Maruti Suzuki factory in 2012 which resulted in a death of a company official are enough to make policymakers wary on the pace of reform.

The labour ministry has asked for public comments by early July on the changes it plans to the Minimum Wages Act, which sets minimum wages for skilled and unskilled labours, and the Factory Act, which governs health and safety.

The proposed changes would standardize minimum wages nationally while increasing the frequency of salary revisions based on consumer prices. Although potentially inflationary, the move could bring millions of workers into the formal economy.

The ministry also wants to extend the amount of overtime workers can clock and scrap a 1948 rule that prohibits women working at night in factories, suggestions that have been welcomed by both labour groups and employers.

Copyright: Thomson Reuters 2014

LPG Cylinder Prices May Go Up By Rs. 5 Every Month: Report

After diesel, the government is considering raising cooking gas (LPG) and kerosene rates in small doses of Rs. 5 per cylinder and Rs.0.50-1 a litre every  month to wipe out Rs. 80,000 crore subsidy on the two fuels.
     
The previous UPA government had in January 2013 decided to raise diesel prices by up to 50 paise litre every month.
     
But for aberrations on two occasions, the monthly increases have taken place regularly to trim subsidy on diesel to just Rs. 1.62 a litre. This too looks set to be wiped off to make the fuel deregulated or free, with the new government continuing with the UPA decision.
     
Following the diesel model, the oil ministry is now proposing monthly increases in LPG and kerosene rates, sources privy to the development said.
     
Subsidy on LPG currently is a staggering Rs. 432.71 per 14.2-kg cylinder and at Rs. 5 per month increase it will take 7 years to wipe out the subsidy.
     
Sources said the ministry is of the view that the monthly increases can be as high as Rs. 10 if the political leadership takes a stand.
     
On kerosene, the subsidy currently is Rs. 32.87 per litre and at Re 1 hike per month it would take more than two-and-a- half years to wipe out the subsidy.
     
Fuel subsidy, they said, is the biggest drain on the exchequer. In the current fiscal, subsidy on diesel, LPG and kerosene is estimated atRs. 115,548 crore. Of this, LPG accounts for Rs. 50,324 crore and kerosene Rs. 29,488 crore.
     
This subsidy is met through a combination of direct cash dole from the budget and contribution by state-owned firms like ONGC.
     
In 2013-14, the government paid Rs. 70,772 crore in cash subsidy while upstream firms shelled out Rs. 67,021 crore. In the previous year, the government payout was Rs. 100,000 crore and upstream contribution Rs. 60,000 crore.
     
For diesel, the subsidy estimated is Rs. 35,736 crore but this will come down if the monthly increases continue as planned, sources said.
     
Petrol price was deregulated in June 2010 and retail rates have more or less moved in tandem with the cost.
     
With the introduction of monthly increases in January, subsidy on diesel tripped to less than Rs. 3 a litre in May last year before a fall in rupee value led to it widening to Rs. 14.50 per litre in September, 2013

Source: NDTV Profit

Market Weekahead: High expectations as Modi becomes PM

Shares may look to extend gains in the first half of next week as Narendra Modi is set to be sworn in as the country's prime minister on Monday. The first task for Modi will be to pick a new cabinet, with the finance ministry expected to go to former commerce minister Arun Jaitley. Comments on the fiscal deficit, inflation, and the relationship with central bank Governor Raghuram Rajan will be of prime importance to investors. That could help sustain gains for the BSE Sensex, which on Friday became the best performing equity index in Asia-Pacific for 2014. However, the second half of the week could be volatile given the expiry of May derivatives contracts, and a slew of key earnings such as Tata Motors Ltd , Sun Pharmaceutical Industries   and  Coal India  .

Source: Moneycontrol.com

Rupee Hits 10-Month High of 59.51 Per Dollar on Exit Poll Hopes

Rupee rallied to its strongest level against the dollar since July 2013 on widespread hopes that exit polls later on Monday would show the opposition Bharatiya Janata Party winning a majority in the country's elections.

The optimism comes even as exit polls in previous elections have proved to be unreliable.

India's five-week long elections are set to conclude on Monday, with exit polls from media organisations to be released starting after 6:30 p.m. Actual results will be out on Friday.

The partially convertible rupee touched as much 59.51 per dollar on Monday, the strongest level since July 29, 2013, compared to its 60.02/03 close on Friday.

Copyright: Thomson Reuters 2014

Nifty Soars Above 7,000 Ahead of Exit Polls

The BSE Sensex surged over 550 points, while the broader Nifty broke above the key 7,000 levels for the first time as markets rallied to record highs for a second successive session on Monday. The rupee, too, strengthened to as much as 59.51 per dollar, its strongest level since July 29, 2013 from its close of 60.02/03 on Friday.

The Sensex has now jumped over 1,200 points or around 5 per cent in just two sessions. Strong buying in equities came amid rising hopes that exit polls would show Bharatiya Janata Party (BJP) and its allies winning a majority in the current elections. Exit poll results are due to be telecast at 6.30 p.m. after the five-week-long elections wind up today. Actual results will be announced on May 16.

"Markets are factoring numbers close to 230-240 seats for the BJP alone, and if that is the case, the NDA will get a majority on its own. That will lead to pro-growth, right of central, stable formation, which is enthusing for the investors," said Manishi Raychaudhri, strategist and head of research at BNP Paribas Securities.

The Nifty has surged 17 per cent since Narendra Modi was announced as the BJP's prime ministerial candidate on September 13. Polls have consistently shown the BJP ahead, raising expectations the opposition party, which is seen by markets as being more investor- and business-friendly, will either win or come close to an outright majority.

Domestic-oriented shares led the rally, with the Bank Nifty hitting a record high.Coal India, up 7.3 per cent, was the top Nifty gainer. HDFC Bank and Tata Motors closed with over 4 per cent gains, while ITC, Hero MotorCorp, Maruti Suzuki, SBI and Reliance Industries ended 3-4 per cent higher.

Infrastructure shares also gained, with Power Grid rising 4.35 per cent and Grasim Industries ending 4.3 per cent higher. State-run power equipment maker Bharat Heavy Electricals surged 2.4 per cent. 

"Infrastructure, engineering, cement, power and industrial stocks should gain if a Modi-led government comes to power," said UR Bhat, managing director, Dalton Capital Advisors.

Despite gains, analysts cautioned investors about going overboard amid the euphoric sentiments on the Street. That's because not only opinion polls, but exit polls, too, have got it horribly wrong in the past.

The BSE Sensex ended 556.77 points higher at 23,551, while the Nifty closed up 155.45 points at 7,014.25.

Source: NDTV Profit

Maruti, Toyota, M&M sales drop in April; Hyundai, Honda up

Major car makers, including Maruti Suzuki India, Toyota Kirloskar Motor and General Motors India, reported decline in domestic sales in April as demand continued to be subdued due to overall unfavorable macro-economic conditions.

Other manufacturers Hyundai Motor India Ltd, Honda Cars India and Ford, however, reported increase in April sales on the back of their new models.

The country's largest car maker Maruti Suzuki India (MSI) reported 12.6 percent decline in its April sales during the month at 79,119 units.

Sales of the company's bread and butter segment mini cars comprising M800, Alto, A-Star and WagonR declined by 25.4 percent to 26,043 units, while those of premium compact cars consisting of Swift, Estilo, Ritz rose by 9.9 percent to 23,659 units in April.

MSI said sales of its popular compact sedan Dzire declined 17.7 percent during the month under review to 16,008 units, while sales of utility vehicles, including Gypsy, Grand Vitara and Ertiga, also declined by 5.8 percent to 5,011 units in April.

Similarly, homegrown Mahindra & Mahindra also saw its domestic sales dropping by 15 percent at 34,107 units as against 39,902 in the same month previous year.

"It is unfortunate that the auto industry has not seen an upturn over the last couple of months in spite of a reduction in excise duty," M&M Chief Executive (Automotive Division) Pravin Shah said.

The company expects that post the general elections, sentiments would improve, leading to a better economic situation and hence increased demand, he added.

General Motors India also reported a 35.30 percent decline in April sales at 5,302 units.

"Customer sentiment continues to remain negative even with price reduction on account of excise duty cut and other market promotion schemes," General Motors India Vice President P Balendran said.

Going by the market scenario, the company expects the challenging times to continue as the general economic conditions continue to remain depressed, he added.

"The buoyancy in the market is completely missing and we don't see any upturn before the new government assumes office," Balendran said.

Toyota Kirloskar Motor also saw its domestic sales decline by 16.04 percent at 7,562 units in April. The company, which saw labour unrest at its Bangalore facility, said it resumed normal production from April 22.

In contrast, Hyundai Motor India, saw its sales increase by 8.78 percent in its domestic sales at 35,248 units last month. 

Commenting on the sales performance, HMIL Senior Vice-President (Sales and Marketing) Rakesh Srivastava said the domestic volume growth is in line with this year's objective of growth in volume and market share.

"Growth is led by sedan and utility vehicles across geographies, with new products Xcent, Grand and Santa Fe adding volumes with an overwhelming response from customers," he added.

Similarly, Honda Cars India posted a 30 percent increase in domestic sales at 11,040 units in April, riding on the success of its premium sedan City.

The company sold 7,044 units of the car in April.

Ford India also posted rise in domestic sales last month. The company sold 6,651 units in April, up 66.15 percent from same month previous year.

"Despite on-going business challenges faced by Indian automotive industry, Ford India sales have held steady in April," Ford India Executive Director (Marketing, Sales and Service) Vinay Piparsania said.

In the run up to the formation of the next government, the company remains cautious and watchful in anticipation of progressive policy interventions to energise the Indian automotive sector, he added.

In the two-wheeler segment, Honda Motorcycle & Scooter India posted 20.92 percent rise in sales at 3,13,942 units last month. Yamaha Motor India posted a 42.39 percent increase in domestic sales at 51,158 units in April. 

Source: PTI
http://zeenews.india.com/

‘Auto Slump Claims 2 lakh Jobs’ Biggest job losses likely to have occurred at the retail level, says SIAM

The longest period of slump in India’s automobile market, with sales declining for a second straight year, has taken its toll with production cuts leading to the loss of 200,000 jobs, according to the Society of Indian Automobile Manufacturers. 
“Last year was one of the most difficult periods for the auto industry,” said Vikram Kirloskar, the president of SIAM, who is also the vice-chairman of Bangalore-based automaker Toyota Kirloskar Motors. “I personally feel that across the entire value chain in the auto industry, right from raw materials to the dealerships, there could be around 1.5-2 lakh job losses.” 
The Indian auto industry employs 19 million direct and indirect workers. 
The industry is already falling behind its target on the job front as it was estimated to employ more than 25 million workers by 2016 under the 10-year Auto Mission Plan of the government. 
A consistent fall in demand and sales for the past two years is likely to create a huge employment gap. 
Car sales in India fell for the second consecutive fiscal ended March 2014 with a 4.65% drop as the auto industry continued to struggle in a sluggish economy. Besides the decade’s steepest decline in car sales, heavy trucks and buses continued its negative sales streak for the past 25 months. 
The industry is not expecting an immediate turnaround, even with a cut in excise duty. According to industry sources, the biggest job losses would have occurred at the retail levels, mainly dealerships that sell all class of vehicles — from bikes to trucks. It also hit the component manufacturers hard. 
Many auto companies have gone for downsizing. India’s largest auto company by revenues, Tata Motors, had undertaken an Early Separation Scheme last year to reduce manpower by as much as 5,000 workers across its plants at Jamshedpur, Pune and Lucknow. 
More than 500 managers had left the Chennai-based Ashok Leyland as part of its voluntary retirement scheme in November 2013. Due to declining sales for the past two years, companies are enforcing regular production cuts and industry executives said that job losses in the sector are quite common. 
Market leader Maruti Suzuki had closed its five plants for eight days in June last year to reduce its swelling inventory at factory and dealers, while others like Mahindra & Mahindra, General Motors, Skoda Auto also undertook plant shutdowns and retrenched their casual and temporary workers to align production with the slowing market conditions. 
In a major setback to the passenger car segment Hoover India, which was a master franchise of Japanese carmaker Nissan, shut its office leaving hundreds of its employees jobless. Analysts tracking the sector said that the trucks and buses segment was the hardest hit. 

Source: The Economics Times

Slashing TV Prices to Woo Buyers Sony, Panasonic, Videocon slash prices of entry-level LCD & LED TVs to attract users upgrading from CRT models

Television makers such as Sony, Panasonic and Videocon are bringing down the prices of their entry-level LCD and LED TV sets to target first-time buyers and those who want to upgrade from CRT models, a segment which is shrinking fast. 
Sony, for the first time, is entering the 22-inch LED television segment — one of the fastest-selling screen sizes in India — while Panasonic and Videocon will soon be unveiling models costing less than . 8,000, bringing down the starting price of flatpanel televisions from . 9,900 at present. 
“CRT television replacement is a big market opportunity in India and we are poised to grow there by launching a smallsize model which we believe will trigger 60% growth in television business for us this year,” said Sony India sales head Sunil Nayyar. The company is going to price its 22-inch LED TV in the sub-. 15,000 segment, cheaper than its entry-level offering now, a 24-inch model priced at . 17,000. Panasonic India managing director Manish Sharma said his company will launch new entry-level LED models targeting the CRT market in smaller towns. “There would be two models which we developed in our Indian R&D centre,” he said. 
Market leader Samsung too is widening its entry-level portfolio, which includes models in 22- and 23-inch screen sizes, as it plans to launch two 24-inch TVs soon. “There is an upward swing in demand for flat-panel televisions in B- and C-class towns due to faster transition from CRT television,” said Samsung India Electronics deputy MD Ravinder Zutshi. 
The latest moves come after LG exited the CRT television market in India last year, becoming the last multinational brand to do so. The CRT television market — 8.5 million units in 2013 — is expected to shrink to four million units this year, according to industry estimates. At the same time, sales of flatpanel televisions are projected to grow to 8.5 million units in 2014 from 6.2 million last year. Apart from Videocon and Onida, there are a slew of small local brands in the CRT television market. But Videocon too plans to drive the increasing conversion rate from CRT televisions to flat-panel TVs by launching a 16-inch LED television model this month, priced at. 7,990. 
“This will be the lowest price point in flat-panel TV in India and will compare favourably with the CRT models which are sold at . 6,000. We are also giving a CRTtype look to these televisions by bringing protruding speakers,” said Videocon chief operating officer CM Singh. 
Pulkit Baid, director of eastern India’s largest durable retailer, Great Eastern Appliances, said TV makers were trying to fill the void in sales created by the exit of major CRT television brands. “There is a sizeable sub-. 10,000 TV market which the companies were not able to fill with their current line-up, which has forced all to launch smaller screens,” said Baid. 
Television makers believe the move will help put the industry back on track for high growth rate. The sector has been hit by poor consumer sentiment in a weak economy amid a 10-12% increase in prices due to a weaker rupee. . 

Source: The Economics Times

UNCERTAIN FUTURE FOR EMPLOYEES ...Nokia may Leave India Plant Out of MS Deal

Nokia is likely to exclude its manufacturing plant in Chennai from the global purchase of its devices business by Microsoft, as the Finnish firm runs out of time and options to resolve its tax dispute with Indian authorities, people familiar with the matter said, leaving the future of 8,000 direct employees uncertain. 
The tax authorities attached the factory soon after the Nokia-Microsoft deal was announced last September. Nokia India has offered to put . 2,250 crore in an escrow account, and has already paid . 700 crore separately to free up the plant. As directed by the Delhi High Court, it also agreed to furnish a . 3,500-crore bank guarantee covering the amount it had transferred to its parent as dividend. But it opposed another condition — to furnish another bank guarantee from the parent covering unspecified potential future tax liabilities — and appealed against it in the Supreme Court, which upheld the HC order. Time Running Out for Nokia 
Nokia hasn’t yet revealed its future course of action following the SC order. With the $7.2-billion deal on the verge of closing, given its April deadline, time is running out for Nokia to resolve the India dispute. 
“The writing is on the wall. They have no other option” but to leave the plant out of the deal for now, a person close to developments in Nokia said, requesting anonymity due to the matter’s sensitivity. The people said the recent voluntary retirement scheme offered to employees at the Chennai plant indicates that Nokia is preparing to scale down operations, trying to conserve as much cash as possible as it seeks to sort out the dispute and eventually transfer the unit to Microsoft. 
Any sale to a third party doesn’t seem likely as several handset makers that ET spoke to said they won’t be willing to pay even close to what Microsoft could be offering for the plant. Shutting down the plant totally also remains an option, people said. 
The two companies had previously said the deal closure won’t be affected by the tax dispute in India. And Nokia has already warned it may be forced to close the plant down if the dispute wasn’t resolved. 
Overseas investors have been regarding India with some trepidation as tax rules have been changed with retrospective effect and courts have overturned government decisions, forcing companies to write off investments. The inability to resolve the India hurdle comes as Nokia recently said it has received approvals from China, the European Commission, the US Department of Justice and other jurisdictions for the Microsoft deal. The case is among the high-profile tax disputes involving overseas companies that are being closely watched by foreign investors along with the one involving UK’s Vodafone Group Plc. “It will be a pity if the global deal happens leaving India out of its ambit. It will reinforce the perception in the minds of the international investing community that India has an aggressive tax jurisdiction where it is difficult to do business,” said Dinesh Kanabar, deputy CEO at KPMG India. 
(With inputs from Anandita Singh Mankotia)

Source: The Economic Times

SENSEX AND NIFTY AT RECORD HIGHS

Modi Gives Indian Markets What Even Rajinikanth Can’t!

 The Dalal Street frenzy is more than a pre-poll rally. Across global markets, money is moving from bonds to equity with India attracting a fat slice. And, the market is hitting new highs despite huge selling by large local investors. “It’s a story of high liquidity and low floating stock. Buybacks, open offers and absence of IPOs have shrunk available stocks while certain sectors such as banks were oversold,” said Edelweiss Capital Chairman Rashesh Shah on Monday, when the Sensex closed above 22,000 for the first time. 
Punters took hectic derivative positions, betting that the market would chug ahead. The Sensex surged 300 points (or 1.38%) to 22,055, its highest closing. The broader NSE Nifty rallied 88 points, or 1.36%, to end at a record 6,583. “People are underinvested…HNIs are beginning to invest, retail money is yet to come in,” said Shah. 
Buoyed by hopes that RBI Governor Raghuram Rajan will hold rates and maintain a dovish tone in the April 1 monetary policy, shares of HDFC Bank and ICICI Bank led the rally. Oil & Gas Stocks Like ONGC, GAIL Fuel Rally 
Oil and gas stocks such as ONGC and GAIL, where investors are betting on generous interim dividend, fuelled the rally. People like Tai Hui, JPMorgan Asset Management’s Asia strategist, believe RBI “is done for now in terms of hiking interest rates”. Since mid-February, FIIs have pumped in nearly . 18,500 crore into equities. On Monday, they bought stocks worth . 1,465 crore. “Activity in the derivatives segment of the market attested to a continuation of Monday’s rally,” said Siddharth Bhamre, derivatives head, Angel Broking. Option writers or sellers sold huge numbers of ‘put options’ — an indication of their confidence that markets are unlikely to dip from current levels. This is borne out by FII net sales of index options worth . 780 crore. 
Defensive sectors such as pharma and IT were under pressure with Wipro ending 0.98% lower at . 563 and Dr Reddy’s closing 1.34% down at . 2,749. 
Here, the bet is that a stable government would strengthen the rupee and squeeze exporters’ earnings. “The markets are expecting a decisive mandate in the general elections, and if results are favourable, then Nifty can touch 7,500 over next 12 months,” said Motilal Oswal, chairman at brokerage Motilal Oswal Financial Services. The market sentiment turned positive ever since opinion polls suggested that Bharatiya Janata Party (BJP) may win 210-230 seats in the parliamentary elections. Global investors such as Goldman Sachs recently upgraded India to ‘overweight’ from ‘market weight’ and has raised Nifty’s target to 7600. 
The brokerage expects domestic fundamentals to improve on recovery of economic growth in April-June quarter (Q1 of FY15), and views mid-teens corporate earnings growth this year and next year. 
“Markets are rising only based on India’s economic fundamentals, which are the best in the world currently,” said Shankar Sharma, chief strategist, First Global. 
“However, the real risk for the markets will be post elections as BJP may find it difficult to manage allies. If there is a BJP-led coalition government at the Centre, it would be fragile. Even if NDA gets 220 seats, which is the average consensus among analysts, they would have to make do with difficult allies.”

Source: The Economics Times

Tata Nano, other Indian small cars fail independent crash tests

Some of India's best-selling small cars have failed independent crash tests conducted by a global car safety watchdog.

All five small cars popular on the Indian market last year, including the famous Tata Nano and the Hyundai i10, failed the crash tests performed by London car-safety watchdog Global NCAP (New Car Assessment Programme).



The cars that were tested were the Tata Nano, Maruti Suzuki Alto 800, Hyundai i10, Ford Figo and Volkswagen Polo. All cars had to be made-in-India models only, and the most basic or entry-level version available in the market was selected for testing. This meant none of them had airbags - one of the most basic prerequisites globally to pass a safety test.
There were two tests carried out on identical cars of the same make - meaning two of each car were procured by Global NCAP from Indian showrooms, and shipped to Germany for the tests. One crash test was performed at 56 kmph, the other at 64 kmph.

All five cars failed the test, landing a zero on a scale of 1-5.

Representatives from each manufacturer were invited to witness the test, and the results have been shared with them all too. Automakers said the issue of car safety is complex, involving not just passenger safety, but also the safety of those outside the car. That means cars need to handle well and drivers must be educated about the rules of the road, and roads should be in good condition.
As NDTV's Automobiles Editor, I was consulted on which cars should be tested. Of the five cars, only the Figo and Polo showed good structural rigidity and therefore a safer cabin, while the smaller cars performed rather poorly. What is rather surprising to me is that a car like the Hyundai i10 - which is only made in India for global markets - also did badly. The made-in-India for export to Europe i10 has a good rating in its Euro NCAP test for instance, which begs the question - are the cars for Indian buyers made differently?

India's growing middle class has helped fuel a booming auto industry, making the country the world's sixth-largest car market. But nearly 140,000 people die on Indian roads every year in nearly five lakh accidents. That's the worst road safety record in the world.

Given those grizzly statistics, it is staggering to think India is the only country in the world's top ten car markets that does not have a comprehensive testing programme that measures the safety of cars.

Reactions from carmakers:

TATA MOTORS

"Tata Motors sees safety as a priority, and is going to closely review the results of the Global NCAP test, before drawing any conclusions vis-a-vis its product strategy. However all its cars do meet all Indian safety regulations as mandated by the government, at this time."

FORD INDIA

"Safety is one of the higher priorities in the design of our vehicles. Our vehicles consistently meet or exceed applicable industry standards. We are monitoring the progress of this review."

VW INDIA

"At Volkswagen, we recognise this need, given increasing driving speeds, more women drivers, longer driving times and a younger driver. Therefore, we have decided to have front dual airbags as standard on the Polo, as our continuing commitment to safer and better driving. We are the first automaker in India to do so, making the Polo the safest premium hatchback in the market today."

HYUNDAI MOTOR INDIA

"Hyundai Motor India Ltd affirms that Hyundai vehicles are designed and build to meet all the prescribed safety standards set by Indian Regulatory Authorities."

I V RAO, HEAD OF R&D, MARUTI SUZUKI INDIA

"In India we had been basing our own safety regulations from European regulations, however based on Indian market situation and Indian road conditions and usage conditions we have been fine tuning the regulations. The global NCAP may not match our own requirements in India, so I SIAM is in discussions with the ministry of road transport and heavy industry to work on a new vehicle appraisal system which will work on this for all NCAP for India. Taking into consideration how vehicles are being used in India not only in terms of features but small issues like the usage of rear seats is also equally important in India unlike other countries. So all these factors have to be considered and also the accident analysis has to really access what is actually causing the accident.

"The NCAP will basically come into to force when accident happens and majority of accidents are not because of your own four wheelers' but other vehicles on the road so it's a very complicated issue and of course what we are learning from this conference is very good. I would compliment IRTE for organizing such a conference here and auto industry is going to comply with the various safety measures mandated by the government. Unfortunately the commissioning of test facilities for offside and side impact has been delayed so in a couple of years we will introduce the off side regulation in India"

Source: NDTV Profit

CNG price cut may be temporary: Goldman

The cost of CNG, which will get reduced by up to Rs. 15 per kg in the next few days following a rejig in natural gas allocation, will go up by Rs. 10.6 a kg in April, when domestic gas prices almost double, Goldman Sachs said.

The oil ministry yesterday said city gas distribution (CGD) companies would get cheaper domestic gas to meet all of their requirements for CNG and piped natural gas (PNG) supplies to households compared with the previous limit of 80 per cent for most states.

As a result, Indraprastha Gas Ltd will cut CNG/PNG prices by aboutRs. 15 per kg and Rs. 5 per cubic metre, respectively.

"We note that this is only a temporary relief to consumers as the domestic natural gas prices will almost be doubled from the current $4.2 from April 1, thus forcing the CGD companies to raise CNG/PNG prices to pass on the increased costs.

"In the absence of any offsetting subsidy, they would need to raise CNG prices by Rs. 10.6 per kg and PNG prices by Rs. 8 per standard cubic meter," Goldman Sachs said in a research note.

It said the price of CNG in Delhi will fall to Rs. 35.1 a kg from the current level and then rise to Rs. 45.7 a kg in April.

Goldman Sachs estimates the price of locally produced natural gas will climb to $7.8 per million British thermal units in April from $4.2 currently after the Rangarajan formula for pricing domestic gas is implemented.

The formula calls for pricing all domestically produced natural gas at the average of international hub rates and the cost of imported liquefied natural gas (LNG) in India.

Oil Minister M Veerappa Moily yesterday said the price cut was possible because the government had decided to meet the entire need of CNG and PNG from domestic gas, which is subject to an administered pricing mechanism (APM). This eliminates the need to import costlier LNG.

Retail prices are set to fall in all states, except Maharashtra and Haryana, as city gas distributors stop buying higher-priced LNG and shift entirely to APM gas.

City gas entities in Mumbai and Pune as well as Faridabad in Haryana get all of their requirements from APM gas. Goldman said the additional requirement of 1.92 million standard cubic meters a day of domestically produced gas will be met by cutting supplies to non-priority sectors.

Source: NDTV Profit

Currency notes issued before 2005 to be withdrawn: RBI

The Reserve Bank today decided to withdraw all currency notes issued prior to 2005, including Rs. 500 and Rs. 1,000 denominations, after March 31 in a move apparently aimed at curbing black money and fake currencies.

"After March 31, 2014, it (RBI) will completely withdraw from circulation all bank notes issued prior to 2005. From April 1, 2014, the public will be required to approach banks for exchanging these notes," the RBI said in a statement.

The public can easily distinguish the currency notes issued before 2005 as they do not have the year of printing on reverse side. The year of printing in a small font is visible at the middle of the bottom row in notes issued after 2005.

Asking people not to panic and cooperate in the withdrawal process, the Reserve Bank of India (RBI) said old notes will continue to be legal and can be exchanged in any bank after April 1.

"From April 1, 2014, the public will be required to approach banks for exchanging these notes. Banks will provide exchange facility for these notes until further communication," the RBI said.

From July 1, 2014, persons seeking exchange of more than 10 pieces of Rs. 500 and Rs. 1,000 notes will have to furnish proof of identity and residence to the bank.

Although the RBI did not give any reason for withdrawal of pre-2005 currency notes, the move is expected to unearth black money held in cash.

As the new currency notes have added security features, they would help in curbing the menace of fake currency.

At present, currency notes in denominations of Rs. 5, Rs. 10, Rs. 20, Rs. 50,Rs. 100, Rs. 500 and Rs. 1,000 are issued.

Source: http://profit.ndtv.com/