Tokyo, July 26
Nomura Holdings Inc named Koji Nagai as its new CEO on Thursday and said it was likely more insider trading cases would come to light in a scandal that forced Kenichi Watanabe to quit as head of Japan's top investment bank.

The management shake-up was confirmed in a news conference at the end of a dramatic day in Tokyo that also saw Watanabe's top lieutenant, Takumi Shibata, resign over leaks of insider information to clients of its securities unit in 2010. Nagai, a three-decade company veteran, took over that unit in April as part of a management reshuffle.

In an update on its own investigation into the scandal, Nomura said there was a "high possibility" more insider trading leaks would be uncovered beyond those reported to the Financial Services Agency.

The resignations of Watanabe and Shibata, Nomura's chief operating officer, and their replacement by Nagai and Atsushi Yoshikawa, the head of its US operations, would take effect on August 1, the bank said.

The departure of the architects of Nomura's takeover of the Asian and European assets of Lehman Brothers raises questions about the future of the global expansion strategy they pursued.

Nagai said he would map out a "new global strategy", adding he had no intention of dropping the ambition of being a global investment bank centred in Asia. "We’ll make bold choices of what we will focus on," he said. "We will not simply stick to how we did things in the past."

Nomura's shake-up comes a month after the bank cut pay for both of its top executives in response to the third insider trading scandal since Watanabe, who joined the bank in 1975, took the helm four years ago. — Reuters

New Delhi, July 26
Equity markets that had been rallying in anticipation of tangible measures on economic reforms from the government to revive the economy are losing steam as worries mount that decisions may not happen in a hurry.

A JP Morgan research report points out the markets have been rallying since June when Pranab Mukherjee’s candidature for president was announced. It says the markets expect the government to use the relatively light political calendar through to the end of the year to take tough decisions to revive the economy.

Limiting the fiscal deficit and reviving the investment cycle are priorities as are a diesel and urea price hike, a quiet burial to the controversial GAAR proposals, fast track clearance for investment projects and allowing FDI in retail and aviation.

The report says expectations related to GST, land acquisition, labour reforms are muted. The window of opportunity for the government is limited as there are ten state elections next year followed by the general elections in 2014.

However, the report points out that even these could be a challenge to execute as coalition allies have been assertive. The NCP was asserting itself last week, the SP has expressed reservations to opening up retail FDI and the TMC has always been opposed to both retail and diesel reforms. “Against this backdrop, building a consensus to meet the markets’ nominal expectations could test the UPA leadership’s political skills”, the report adds. It notes the government’s policy stance over the next month could be important in determining market direction through to the end of its tenure.

While the government seemed to be gaining some momentum on FDI in retail and initiating a dialogue with states, the move by Left parties along with SP to write a letter opposing it has played a spoilsport. The government was working on the lines that states which want to introduce FDI in retail may go through with it and others may not but this move has created a roadblock given that the vice presidential elections and Parliament’s monsoon session are scheduled in the first week of August.

The markets were expecting action from the government just after the presidential polls got over and before the monsoon session. However, those hopes seem to be fading as even on diesel prices, along with the strong political opposition, the poor monsoon has become a big headache for the government. Crisil Research says providing relief to the states will translate into a higher burden on the exchequer.

Mumbai, July 26
The Reserve Bank of India is expected to hold its policy interest rate steady at its quarterly review next week, keeping pressure on the government to reduce a ballooning fiscal deficit and take steps to remove bottlenecks that are driving up food prices.

Of 20 economists polled by Reuters, 19 expect the central bank to keep its repo rate unchanged at 8% on Tuesday. After the midquarter policy review in June, roughly one-third of respondents had expected a July rate cut.

The RBI, which said it "frontloaded" rate cutting in April with a steep 50 basis point drop, has stressed the need for the government to reduce its fiscal deficit and said high interest rates were not the key reason for slowing economy.

India’s economy grew 5.3% in the March quarter, its weakest showing in 9 years. Complicating the picture for policymakers is weaker-than-average summer monsoon rains, which are pushing up food prices and adding to inflation.

Economists still expect the RBI to cut rates to support sagging growth, but later in the current fiscal. — Reuters

Ludhiana, July 26
The excise and taxation department has once again invited the wrath of traders by issuing a new notification, according to which all dealers in Punjab will now have to furnish online data of goods that are delivered even within the state. The department had issued the notification earlier also but was forced to withdraw it under pressure from industry.

The notification said details on intrastate movement of goods would have to be furnished by all traders transacting sales of Rs 3 lakh or above in a single transaction, except in the case of iron and steel where the threshold would be Rs 2 lakh The new norm will be applicable from August 10.

"This notification is uncalled for. When revenues from industry are rising the new rule will create friction with the excise department," said Badish Jindal, president of the Federation of Punjab Small Industries Association.

“Only 35% of industrial units in Punjab have a computer at their premises while only 20% have internet and just one-tenth have full-time accountants to operate such systems, under such circumstances it’d be difficult for the industries to comply with such norms”, said Jatinder Khurana, president of the Taxation Young Lawyers Association.

“We’re all aware of the poor broadband services in Punjab and under such circumstances deliveries of the materials will be delayed, which is going to further slowdown Punjab’s economy”, Jindal added.

"Details on intrastate movement of goods will have on e-TRIP (Transportation Information within Punjab), which is a virtual information collection centre. This won’t hinder smooth transportation of goods. All traders filing returns under the Punjab VAT Act can avail of this service by using their username and password for e-filing”, excise & taxation commissioner A. Venu Prasad stated in the notification.

Chandigarh, July 26
The escalating prices of most food commodities, riding on the back of a deficient monsoon this year, has finally prompted the government to initiate measures to contain prices. Though it has put off a decision to ban futures trading in major farm commodities till July 31, the Forward Markets Commission (FMC) has warned traders against price manipulation.

While maintaining the government was keeping a close watch on the prices f all agriculture commodities, the message that has gone down to the traders is that they should not indulge much in speculation. The FMC has already doubled the deposit money that a trader is expected to keep with the commodity exchanges for trading in turmeric following the unusual price movement.

Because of the weak monsoon, prices of all farm commodities — wheat, sugar, pulses, potatoes, soya and onions — have been rising. The deficient rainfall, especially in Maharashtra, Karnataka, Andhra and Gujarat and the delayed monsoon in most northern states have led to a sudden rise in prices of most commodities. Interestingly, in spite of the government having huge stockpiles of wheat, wheat prices have been going up. Wholesale prices have risen by Rs 50 per quintal in the region and by almost Rs 100 per quintal in Punjab.

Raj Sood, a Khanna based wheat trader, said the main reason for soaring wheat prices was the government had hiked prices of wheat, which it releases from its quota for flour mills, from Rs 1,170 to Rs 1,285 per quintal. “Another reason why prices have risen is that exports have picked up due to a crop failure in Russia. As a result, global firms are lifting wheat for import from major wheat producing states”, he said.

A food commodity research analyst at a Mumbai-based brokerage firm, said the monsoon has been deficient and the sowing has been delayed by 10- 15%. “Initial studies show futures trading is not the reason for the price rise. The threat of ban on futures trading has already brought trading in most commodities down. The scare has led to people squaring off their biposition on the commodity exchanges,” she said.