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First repo cut in 3 yrs on cards, unlikely to cheer markets
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Maruti to invest Rs 2k crore in Gurgaon unit
Investor Guidance
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First repo cut in 3 yrs on cards, unlikely to cheer markets
Mumbai, April 14 However, investors will be pleased only if there is an accompanying cut in banks’ reserve requirements and a dialing down of policymakers’ hawkish tone. Of 20 analysts polled, 17 expect the RBI to cut the repo rate by 25 basis points to 8.25 percent on April 17, while three see it unchanged at 8.50 percent. The RBI has held its key interest rate steady since its policy review in mid-December, after raising it 13 times from March 2010 to tame high inflation, most recently in October. Its last rate cut was in April 2009. "The driving factor for a repo cut is basically to pull down the cost of funds. The slowdown in the economy is coming from a drop in investments, and that has to be reversed," said Saugata Bhattacharya, an economist with Axis Bank. Of 19 respondents, 13 expect no cut next week in the cash reserve ratio (CRR) requirement for banks, or the share of deposits lenders have to maintain with the RBI. Only four respondents forecast a 50 bps cut in CRR on April 17, while two see a 25 basis point cut. In January, the RBI cut CRR by 50 bps, and further reduced it by 75 bps in March to 4.75 percent to ease tight liquidity in the banking system ahead of advance tax payments by companies. Economists have scaled back their expectations for rate cuts in the fiscal year that started this month but have increased their expectations for cuts in CRR since a poll in March. The median estimate for the repo rate in March 2013 now stands at 7.75%, higher than the estimate of 7.50% in a poll last month. Similarly, the median estimate for CRR is 4%, compared with 4.25% in March. India's economy grew at just 6.1% in the December quarter, the slowest in nearly three years. High food inflation is likely to pinch Indians at least until July as fruit and vegetable output shrinks, hurt by rising temperatures and dry conditions, while edible oil and pulses prices are rallying on lower production and a more expensive world market. The wholesale price index, the main gauge of inflation, edged up a faster-than-expected 6.95% from a year earlier in February. Analysts are keenly awaiting the March inflation data to be announced a day before the RBI's policy. However, nonfood manufactured inflation is likely to remain low, which will offset some of the impact of high food prices, analysts said. Further inflationary pressure could emerge if India cuts subsidies on diesel and cooking fuels, and if state oil retailers raise the price of petrol to reflect the rise in global crude prices.
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Google’s 2:1 stock split raises questions
San Francisco, Calif., April 14 The declining search trends underscored investor uncertainty about Google's growth prospects and unease about the company's pending $12.5 billion acquisition of Motorola Mobility. For some investors though, Google's move to split its stock and create a new class of nonvoting shares represented a troubling development. "We worry this will set a precedent for other people to emulate this move," said Janice Hester Amey, a portfolio manager in the corporate governance unit of the California State Teachers' Retirement System, the second largest US pension fund. Google's existing stock structure, which concentrates roughly 66% of the voting shares in the hands of co-founders Larry Page and Sergey Brin and executive chairman Eric Schmidt, has been followed by Web companies such as Zynga Inc, Groupon Inc and Facebook. The creation of new nonvoting shares will allow the trio to maintain control without risk of their stakes getting diluted when new shares are issued for employee compensation, acquisitions and other purposes. In Google's case, the voting shares don't benefit shareholders much, since the founders have majority control of the company. — Reuters
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Maruti to invest Rs 2k crore in Gurgaon unit
Indore, April 14 The company will manufacture 150,000 diesel engines for Swift and Dzire in the current year to meet the growing demand, Shashank Srivastava, chief general manager (marketing), said at a press conference after launching the new model Ertiga in Madhya Pradesh. To a question whether the hike in excise duty by 2 per cent had any impact on car sales, Srivastava said it was across the board for every sector. Car production in last fiscal was 2.62 million against 2.52 million in FY2010-11, he pointed out. In the last three months of 2011-12, 50 per cent of the cars sold were diesel engine ones, which was much higher than expected, he said. He said the company would start exporting the Ertiga to Southeast Asian countries, mainly Indonesia, by April-end. In recent years multipurpose vehicles have emerged as the fastest growing sub-segment among utility vehicles, with a growth of around 20 per cent, said Srivastava. MPVs presently account for around 10 per cent share of the Indian automobile industry, he added. — PTI
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IT rebate on disabled dependent’s treatment
by A.N. Shanbhag Q: Can an assessee who has no savings deductible under Sections 80C to 80U of the Income Tax Act claim deduction for the medical treatment of his dependent grandson with 80 per cent physical disability? If yes, how much deduction can be claimed and under which section? — Yusufi Nehal Ahmed A: Under Section 80DD of the Income Tax Act, an individual resident in India having a dependent relative suffering from a permanent physical disability, including blindness or mental retardation, is entitled to tax deduction for medical treatment, training or rehabilitation of the dependent. "Dependents" includes spouse, children, parents, brothers and sisters who are wholly or mainly dependent on the assessee and haven't claimed any deduction under Sec. 80U. However, a grandson isn't defined as a dependent but if you are the only relative your grandson has and are legally responsible for taking take care of the latter, you may try and claim the deduction. Disability is classified in two parts as defined under the Persons with Disability (Equal Opportunities, Protection of Rights & Full Participation) Act, 1996. A person with disability means one suffering from not less than 40% of any disability as certified by a medical authority; disability of 80% or more is severe disability. The deduction will be Rs 50,000 for non-severe and Rs 100,000 for severe disability. Persons with autism, cerebral palsy, mental retardation and multiple disabilities as per the National Trust for the Welfare of Persons are also covered by this section. The assessee shall furnish a copy of the certificate of the medical authority along with the return of income. Where the disability is temporary and requires reassessment after a specified period, the certificate shall be valid up to the fiscal year during which it expires. Deduction under Sec. 80DD is statutory in nature and is allowed in full, irrespective of the actual expenditure incurred on medical treatment.
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An unusual stock split designed to preserve Google Inc founders' control of the Web search leader raised questions and some grumbling on Wall Street, even as investors focused on the company's short-term business concerns. Shares of Google closed 4 percent lower at $624.60 on Friday, driven by deepening worries about its search ad rates and payments to partners.