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Indian economy to recover in 6 months:
BankAm-ML
IMF cuts growth forecast to 6% for 2013
Nifty flash crash: NSE blames bad orders
Sebi initiates probe into 900-point CRASH
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Sahara seeks review of SC order to refund investors
Insurance FDI hike may attract Rs 30k cr: IRDA
Banks to follow suit if RBI cuts rate: IBA chief
Haryana sets up food processing council
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Indian economy to recover in 6 months:
BankAm-ML
New Delhi, October 5 According to BankAm-ML, the lead indicators still point to six months of pain and it is not until the March quarter that growth is expected to recover to 6.5% levels. While reforms are a medium-term positive, immediate revival will surely depend on lending rate cuts. A turnaround in loan demand is critical for recovery and high lending rates are still pulling down credit, the report said. "High lending rates are still pulling down credit. Unless lending rates come off, FY13 growth will likely find it difficult to do our 5.6% forecast, let alone the RBI's 6.5%," BankAm Merrill Lynch said. The report pointed to three "faint-and-flickering" rays of hope for a March turnaround. Firstly, trade credit —advances to traders — has bottomed out; secondly, north Indian reservoirs that water the winter wheat crop have recovered and thirdly, risk aversion is topping off. In addition, the three key concerns for risk aversion —Greek exit from the eurozone, drought and policy paralysis in Delhi — are receding now. Reacting to the cabinet decisions on crucial economic bills, Edelweiss in a report said that these crucial bills have been pending for a long time now. In particular, hiking the FDI limit in the insurance sector has been on the anvil for a while and is quite critical from the industry’s perspective given the dire need for capital. Besides, deepening of the insurance sector helps channelize savings into longer-term infrastructure projects. The report says most of these bills need parliamentary approval (unlike FDI in multibrand retail) and, therefore, while the cabinet’s approval is certainly a step forward, it remains to be seen whether the government manages to push these through the winter session of Parliament. The report said as of now it seems the main opposition party, BJP, is opposed to hiking FDI in insurance and pension sectors although it might allow passage of the Companies (Amendment) Bill. “Clearly, it might be some time before these bills become a reality. Nonetheless, it is becoming clearer from these actions that the government is on a reform drive, committed to reviving business and market sentiment as well as the economy”, the report added.
IMF cuts growth forecast to 6% for 2013
The International Monetary Fund will lower its forecasts for global economic growth to 3.3% this year and 3.6% in 2013 from earlier forecasts of 3.4% and 3.9% respectively, a Germany newspaper reported Friday. The IMF expects the eurozone economy to shrink by 0.4% this year and then grow 0.2% in 2013, business daily Handelsblatt said in a preview of the fund's latest forecasts which are due to be released next week. Chinese growth for 2013 is seen at 8.2%, versus a previous IMF estimate of 8.4%, Indian growth is seen at 6% versus a previous forecast of 6.6% and Brazilian growth at 4% versus 4.7%, it reported. "The further cooling of global economic growth this year and next year is accompanied by a significant increase in downward risks," it quoted the IMF as saying. — Reuters |
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Nifty flash crash: NSE blames bad orders
Mumbai, October 5 During the period, the investor wealth slumped by nearly Rs 10 lakh crore. The Nifty finally closed the day at 5,746.95, down 40.65 points or 0.70%, recovering most of the initial losses. On the other hand, the BSE Sensex ended 119.69 points lower at 18,938.46. Market regulator Securities & Exchange Board of India has begun an initial probe into the “flash crash”. The NSE has claimed there were no technical glitches in its system and the crash was due to “erroneous” trade orders worth over Rs 650 crore by Emkay Global, which has been now disabled by the bourse for trading. The exchange said the abnormal orders were 'non-algo' in nature and were entered for an erroneous quantity which resulted in executing trades at multiple price points across the entire order book. The exchange has also identified these orders to a specific dealer terminal. The incident occurred on a day when expectations were high for a significant upward rally on the bourses, following some major reform measures approved by the government last evening, including on FDI in sectors like insurance and pension. "A healthy move on the back of fresh reforms was expected in the markets today. However, the initial euphoria was cut short due to confused sentiments resulting due of erroneous trade on NSE near the start of the day," Milan Bavishi, research head, Inventure Growth & Securities said. Trading resumed at NSE at 1005 hrs, NSE said, adding that the market is functioning normally since then and the incident is being investigated. The BSE Sensex had also fallen about 300 points in the morning, in reaction to the Nifty crash, as many stocks are common to the two indices. — PTI
Sebi initiates probe into 900-point CRASH
Market regulator Securities & Exchange Board of India has begun initial probe into the 'flash crash' of the National Stock Exchange index Nifty, which fell by nearly 900 points this morning, halting the trade on the exchange for about 15 minutes. While the NSE blamed "abnormal" orders placed by stockbroker Emkay Global in multiple trades of various stocks at low prices for the crash, sources said that regulator is looking into all aspects of the incident. The NSE has claimed there were no technical glitches in its system and the crash was due to “erroneous” trade orders worth over Rs 650 crore by Emkay Global, which has been now disabled by the bourse for trading. However, a senior regulatory official said SEBI would look into whether adequate safeguard mechanism was in place to avoid a “flash crash” like situation, as the so-called freak trades were executed in a number of well-known bluechip stocks. |
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Sahara seeks review of SC order to refund investors
New Delhi, October 5 The company has sought hearing of the review plea in the open court, instead of the usual practice of holding the proceedings in the judges’ chamber. A bench comprising justices K.S. Radhakrishnan and J.S. Khehar has asked the two companies to return the money within three months with 15 per cent interest. While Sahara India Real Estate had raised Rs 19,400.87 crore, Sahara Housing Investment had mobilized Rs 6,380.5 crore. The amounts stood at 17,656.53 crore and Rs 6,373.20 crore respectively as on August 31, 2011 following premature redemptions by some of the investors. If the group failed to comply with the directions for refunding the money, SEBI could take recourse to all legal remedies, including attachment and sale of properties and freezing of bank accounts for realization of the amounts, the SC had said. The bench had upheld the Securities Exchange Board of India’s June 23, 2011 order saying the optionally fully convertible debentures issued by the two firms were in fact public issues and, as such, the Sahara Group was “bound to have listed the OFCDS on a recognized stock exchange and also to have followed the disclosure requirement and other investors’ protection norms.
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Insurance FDI hike may attract Rs 30k cr: IRDA
Hyderabad, October 5 A day after the Centre announced its decision to allow up to 49% foreign direct investment in insurance, IRDA chairman J Hari Narayan said the move was essential as inflows are necessary for the sector to grow at 11 to 12%. "It (the FDI) will give boost to the insurance sector. And it is required any way. Otherwise, we don't have required capital for the insurance sector," Hari Narayan told PTI. "If the insurance sector has to double then it would require at least Rs 30, 000 crore (in the next five years)," he added. Carrying forward the big-ticket reforms agenda, the government yesterday decided to move ahead with its proposal to hike the FDI ceiling in the insurance sector to 49%, from 26% at present. The decision was taken by the cabinet, headed by Prime Minister Manmohan Singh. The government also gave the green signal to foreign investment in pension funds, saying the FDI limit could go up 49 per cent. According to IRDA, the insurance sector constitutes around 4.5% to the GDP. Last year, the total premium collected was at Rs 283,000 crore. With the increase in the FDI limit, the percentage of contribution from insurance sector to the India’s gross domestic product may also go up, Hari Narayan said. "This move will increase insurance sector share in the GDP. If the GDP also rises then the percentage may remain marginally high," he added. The premium income of the general insurance industry, comprising 21 private and four public sector insurers, stood at Rs 27,942 crore in the first five months of the current fiscal. It was 18% higher than Rs 23,748 crore in the corresponding period in fiscal 2011-12. However, the premium income of life-insurance industry declined by 15% to Rs 34,358 crore in the first five months of the current fiscal, compared to Rs 40,654 crore in the same period last year. FOREIGN INSURERS STILL KEEN: Despite a recent slowdown in India’s insurance industry, foreign insurers are still keen to get a greater piece of this business, according to industry executives, the Wall Street Journal said. The Indian government’s move to hike the cap on foreign direct investments in the insurance sector comes at a time when the growth of Indian insurance companies has slowed, partly due to several recent rule changes by the insurance regulator, it added. — Agencies
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Banks to follow suit if RBI cuts rate: IBA chief
Mumbai, October 5 Indian Banks' Association chairman K.R. Kamath, who also heads the state-run Punjab National Bank, and other top bankers met RBI chief D. Subbarao and the four deputy governors at a pre-monetary policy consultation. Kamath said RBI officials had asked lenders if they would pass any reduction in policy rates to their customers. —
Reuters |
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Haryana sets up food processing council
Chandigarh, October 5 While stating this here on Friday, an official spokesman said the state agriculture minister will be the Processing Development Council’s vice-chairman. |
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A flash 900-point crash in the National Stock Exchange's index Nifty this morning eroded an estimated Rs 10 lakh crore of investor wealth, though for a brief period.
A flash 900-point crash in the National Stock Exchange's index Nifty this morning eroded an estimated Rs 10 lakh crore of investor wealth, though for a brief period.