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S&P maintains negative outlook on India’s rating
NSEL sacks CEO, six others; pays only
Rs 92 crore to investors
Weak rupee: Punjab, Haryana steel makers stop scrap import
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GSM players add 14.9 lakh users in July
RBI eases investment norms for NRIs
Khanna Paper Mills stops export to Pakistan
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S&P maintains negative outlook on India’s rating
New Delhi, August 20 "We view the capital outflows and depreciating rupee as an indication of weakening investor confidence in India ... We maintain a negative outlook on India's BBB- sovereign credit ratings," S&P Senior Director Sovereign and International Public Finance Ratings (Asia-Pacific) Kim Eng Tan said in an emailed statement. 'BBB-' is the lowest investment grade and a downgrade would mean pushing the country's sovereign rating to junk status, making overseas borrowings by corporates costlier. Referring to the recent measures announced by the government to restrict capital outflow, Tan said these "have also increased uncertainties among investors both foreign and domestic". "If the uncertainty continues, business financing conditions could deteriorate further and investment growth could slow further". In order to tame the sliding rupee, the RBI and the government had on August 14 announced stern measures, including curbs on Indian firms investing abroad and on outward remittances by resident Indians. Earlier in May, S&P had warned that it may downgrade India's sovereign rating to junk grade if the government fails to pursue reforms and check deterioration in fiscal and current account deficits. S&P said its future credit rating action would depend upon the response of policymakers to the latest economic developments. India's long-term growth prospects could weaken on a sustained basis, with negative implications for the sovereign credit fundamentals, it said. It added that investments continue to be stifled by inadequate infrastructure, rigidities in labour and product markets, and red tape, among other issues. A sliding rupee, which is mainly on account of widening Current Account Deficit (CAD), will make imports costlier and fuel subsidy bill. Moody's has said despite previous price liberalisation in the petroleum sector, the subsidy bill is likely to rise due to depreciation, thus widening the government's deficit, which is also under pressure from slower revenue growth. "We believe the currency will remain under pressure until the current account deficit narrows meaningfully, or capital inflows accelerate due to an improving growth outlook," Moody's said. Meanwhile, JP Morgan has downgraded Indian shares to "neutral" from "overweight", citing strain in balance of payments, while upgrading China shares to "neutral" from "underweight". The brokerage adds it is late in downgrading India, but if the rupee continues to slide it would continue to underperform. Citi also lowered its target for the BSE Sensex to 18,900 from 20,800, citing increasing uncertainty after the rupee's slide despite Reserve Bank of India's measures since mid-July. — Agencies |
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NSEL sacks CEO, six others; pays only Rs 92 crore to investors
New Delhi, August 20 National Spot Exchange Ltd (NSEL) could settle only Rs 92.12 crore out of the scheduled of Rs 174.72 crore payment it had committed to the sector regulator Forward Markets Commission (FMC). This was largely because nine NSEL members failed to pay their dues. The NSEL had to shut down its operation early this month following the government direction in the wake of violation of certain rules. It has given seven-month plan to settle Rs 5,600 crore to investors. "The Board decided that the current key management team headed by Anjani Sinha — MD & CEO and other relevant heads of departments be removed from their current assignments, pending an enquiry," NSEL said. NSEL chief financial officer Shashidhar Kotian is also fired. The other five executives are Amit Mukherjee (Assistant VP — Business Development), Jai Bhaukhundi (Assistant VP Market Operations), Maneesh Chandra Pandey (Manager —Business Development), Santosh Mansingh (Assistant VP — Market Operations), HB Mohanty (Assistant VP — Market Operations). The Board meeting was held yesterday to identify measures to be taken to solve the problems in NSEL. "Sinha will cease to be the MD & CEO of NSEL with effect from August 20, 2013 and he will be a Special Officer assisting in recovery process," the exchange said. The Board has appointed PR Ramesh as the "Officer on Special Duty" (OSD) to exercise all powers of a CEO of the company and will report to the Board directly. — PTI |
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Weak rupee: Punjab, Haryana steel makers stop scrap import
Chandigarh, August 20 Exporters, on the other hand, are facing cancellation of orders by foreign buyers in view of rupee value erosion. Blaming the Centre for its ‘failure’ in arresting the free fall of rupee, traders asked the government to take concrete and effective measures, including ‘fixing currency rates’ in order to save their businesses. “We have stopped importing high melting scarp (HMS) from other countries as it has become nonviable for us to import in the wake of sharp depreciation of rupee,” Northern India Induction Furnace Association president KK Garg said. Steel makers pointed out their import bill for scrap had shot up enormously causing huge losses. "I have suffered a loss of Rs 40 lakh while importing scrap because I booked an order when dollar was equivalent to Rs 55 and now I have to make payment at a rate of Rs 63.50 for a US dollar,” said Garg. According to industry insiders, the production of iron and steel products has also come down by 60-65 per cent in state’s iron and steel hub - Mandi Gobindgarh, Khanna and Ludhiana. In Punjab, over 200 induction and arc furnaces import about 2 lakh tonne of scrap every month to convert into iron and steel. The rupee today breached 64 mark against US dollar intra-day by falling 98 paise on dollar demand. On the other hand, exporters are also affected due to appreciation of dollar against rupee. "Our buyers (importers) are cancelling their orders in view of weakening of rupee against US dollar and it will be a setback to country’s overall exports," Panipat-based Handloom Exports Manufacturers Association president Ramesh Verma said. "Buyers, especially in Europe, Australia, Canada and the US, have cancelled their orders creating panic among manufacturers," Verma added. Handloom industry based in Panipat has export turnover of Rs 4,000 crore per annum and its overseas markets are in Europe, US, Japan, Australia, Brazil, among other countries. — PTI |
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GSM players add 14.9 lakh users in July
New Delhi, August 20 The GSM subscriber base stood at 67.11 crore at the end of June this year. Aircel led the growth with addition of 7.55 lakh new users to its network, taking its total subscriber base to 6.17 crore at the end of July. Market leader Bharti Airtel added 4.76 lakh users to take its base to 19.13 crore at the end of the reported period. It has a market share of 28.45 per cent. Idea added 3 lakh new subscribers to its network to take its base to 12.52 crore at the end of July and it enjoys a market share of 18.62 per cent. Vodafone, however, lost 6.10 lakh users from its network which led its base shrinking to 15.44 crore. The company now has a market share of 22.96 per cent. Uninor added 4.63 lakh users and Videocon had 3.53 lakh new subscribers in July. The total user base of the operators stood at 3.27 crore and 27.71 lakh, respectively. MTNL lost 2.44 lakh subscribers in July and its total base now stands at 40.90 lakh. — PTI |
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RBI eases investment norms for NRIs
Mumbai, August 20 Under the Porfolio Investment Schemes (PIS) for NRIs, banks were given unique code for each branches, making it cumbersome for them to administer the scheme. RBI has now dispensed with the unique code for branches and said banks shall be "free to permit its branches to administer the PIS scheme for NRI. The designated branch of the bank will grant one-time permission to the NRI applicant for purchase and sale of shares or convertible debentures of an Indian company,” RBI said in a notification. "Two distinct permission letters (for repatriation basis and non-repatriation basis) shall be issued as per the prescribed format," it said. "Designated branch will open a separate sub account of NRE/NRO account (opened and maintained by an NRI in terms of the Foreign Exchange Management (Deposit) Regulations, 2000) for the exclusive purpose of routing the transactions under PIS on behalf of an NRI," it said. — PTI |
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Khanna Paper Mills stops export to Pakistan
Amritsar, August 20 Talking to The Tribune, Khanna Paper Mills Director Suneet Kochhar said, "We have been facing problems of pilferage and material getting damaged due to manual loading and unloading at the checkposts on both sides of the border. This is the biggest reason that we have decided to discontinue the exports to Pakistan." He felt that the Integrated Check Post in Attari must have the containerised movement to facilitate proper trade between the two countries. He said they had also given a representation to the government in this regard, contending that it was a genuine demand of the trading community. "Attari is probably the only port in India where loading and unloading is done manually. Our clients were having issues with the damaged material and we were not in a position to assure them." He said they exported 500 tonne of newsprint to Pakistan before deciding to withdraw for the time being. He said they had also taken up the issue in Pakistan when he accompanied Deputy Chief Minister Sukhbir Badal to the neighbouring country in November 2012. The Khanna Paper Mills had started the newsprint exports to Pakistan on May 3, 2012, and it was the first time ever that the newsprint was exported to the neighbouring country. |
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