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BSE, NSE put cap on share movements of four firms
Current account deficit may dip in Q4
Global IT spend to rise 4% in 2014
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Forex reserves jump by $1 bn to $293.37 billion
‘Large capital inflows needed to fund CAD’
Dubai gears up for next, more modest economic boom
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BSE, NSE put cap on share movements of four firms
Mumbai, March 29 The price band will be applicable for trading in the four stocks with effect from April 2. The decision to limit any upward or downward movement in their share prices to a maximum of 10 per cent has been taken by the the stock exchanges in consultation with market regulator SEBI. In separate notices, NSE and BSE said that a fixed price band of 10 per cent on these four stocks is being imposed as part of a "preventive surveillance measure and to ensure market safety and safeguard the interest of the investors". The decision was taken in consultation with SEBI, and the action will be reviewed periodically, they added. With an aim to prevent any systemic risks arising out of erroneous trades or stock manipulations, SEBI late last year asked the stock exchanges to put in place a system for 'dynamic price bands'. These dynamic price bands, which are generally referred to as dummy filters or operating range, prevent acceptance of orders for execution that are placed beyond the price limits set by the stock exchanges. Such dynamic price bands are relaxed by the stock exchanges as and when a marketwide trend is observed in either direction — a bullish or bearish price movement. Stock exchanges can also convert these dynamic price bands into 'fixed price bands', if required by the trading pattern of the stocks under review. In October last year, a set of erroneous orders led to the Nifty briefly crashing by over 15% following which SEBI had issued guidelines that required the bourses to set the dynamic price bands at 10% of the previous closing price. The dynamic price band is fixed for securities on which derivatives. SENSEX FALLS 3% IN Q4: Despite ending the fiscal year on a positive note, Sensex fell 3 percent in the quarter after edging down 0.1 percent in March, marking its first quarterly fall in five. March has been a particularly volatile month because of lingering disappointment over the 2013-14 budget unveiled late in February. Sentiment has also been marred since the DMK withdrew from the ruling UPA and by the RBI’s cautious stance on future rate cuts. Broader sentiment is expected to remain weak as data after market hours showed the current account deficit for the October-December quarter widened to a record high of 6.7% of GDP. "Current levels are attractive but CAD numbers are a concern and deteriorating GDP numbers on a quarter on quarter basis are another concern for the markets," said K.K. Mital, head of portfolio management at Globe Capital. — PTI/Reuters Banks, NBFCs lose Rs 1.43 Lakh cr m-cap in Q4
Witnessing a sharp value erosion in their scrips during the last quarter of the current fiscal, about 50 listed banks and NBFCs of the country have lost nearly Rs 1.43 lakh crore in their market capitalization in this period. The estimated 14% percentage loss in the market value of banking and non-banking financial companies is much higher than the overall plunge of less than 8% across the stock market between January and March 2013. While two days are still left in the current fiscal, the stock markets would now resume trading in the next financial year on April 1, as the next two days are trading holdings. An analysis of stock movements of about 50 listed banks and NBFCs during the current quarter shows that their cumulative market cap has plunged by Rs 1,43,682 cr since Jan 1, 2013 to end the fiscal at Rs 10,44,400 cr. The biggest loser among these has been state-run SBI with a loss of over Rs 23,000 cr in the current quarter, followed by private lenders HDFC Bank and ICICI Bank with losses of over Rs 13,000 cr and Rs 12,000 cr, respectively. — PTI |
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Current account deficit may dip in Q4
Mumbai/New Delhi, March 29 In a research report, Nomura estimated a CAD of 5% for this fiscal and also pegged it at the same level for the next financial year. "Looking ahead, we expect the current account deficit to improve to around 4.5% of GDP in Q4 of FY13," it said, adding moderating trade deficit will also support this reduction. It said CAD, the difference between inflow and outflow of foreign currency, tends to seasonally improve during January-March period and is particularly supported this time by the payback in gold imports after the surge in Q3. The report, however, added that reducing trade deficit was not an indication of a trend and the deficit would again deteriorate in the first quarter of next fiscal. "In our view, while domestic demand remains weak, India's current account deficit is likely to remain elevated reflecting the supply-constrained nature of the domestic economy and the global new norm of high oil prices and weak exports. We forecast the current account deficit at about 5 per cent of GDP, both in FY13 and FY14." On the impact of high CAD on rupee, the report said "vulnerability of rupee to external shocks remains intact." Meanwhile, rating agency Crisil, in a report said, domestic economy would be able to attract sufficient inflows to finance the high CAD in the next fiscal. "We believe that if the domestic reform momentum continues, India should be able to attract sufficient inflows to cover its CAD in the next fiscal." The report, however, added that if there were any signs of a global economic drought, capital flows can dry up suddenly resulting in a temporary but a sharp depreciation of the rupee. Meanwhile, C. Rangarajan, chairman of the Prime Minister's Economic Advisory Council, said Friday that India's current account deficit is expected to improve in the last quarter of this fiscal year on account of a likely uptick in exports. According to him, the current financial year is likely to end with a current account deficit of over 5%. — PTI
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Global IT spend to rise 4% in 2014
New Delhi/Mumbai, March 29 Global IT spend is expected to grow 4.1% to $3.76 trillion in 2013 from $3.61 trillion in 2012 and further grow by 4% to touch $3.91 trillion in 2014, Gartner said in a statement. Currency effects would be less pronounced this quarter which would help attain the growth for 2013. The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets. For more than a decade, global IT and business executives have been using these highly anticipated quarterly reports to recognise market opportunities and challenges, and base their critical business decisions on proven methodologies rather than guesswork. Spending on devices like PCs, tablets, mobile phones and printers is expected to grow up 7.9% to $718 billion in 2013 from $665 billion in 2012, it added. This will be driven by the short-term boost on spending toward premium mobile phones, spending on PCs is expected to remain flat and that on printers is forecast to decline. The segment is expected to grow by 5.7% to touch $758 billion in 2014. "Although the United States did avoid the fiscal cliff, the subsequent sequestration, compounded by the rise of Cyprus' debt burden, seems to have netted out any benefit, and the fragile business and consumer sentiment throughout much of the world continues," Gartner managing vice-president Richard Gordon said. However, the new shocks are expected to be short-lived, and while they may cause some pauses in discretionary spending along the way, strategic IT initiatives will continue, he added. Data centre systems are expected to grow 3.7% to $146 billion in 2013 and $152 billion in 2014, up 4 %. Enterprise software is forecast to witness growth of 6.4% to $297 billion in 2013 from $279 billion in 2012. It is expected to touch $316 billion in 2014, a growth of 6.7%. "The Nexus of Forces —social, mobile, cloud and information — are reshaping spending patterns.Consumers and enterprises will continue to purchase a mix of IT products and services; nothing is going away completely. However, the ratio of this mix is changing dramatically," Gartner Research VP John Lovelock said. IT services are expected to grow 4.5% to $918 billion in 2013 and another 4.9% to touch $963 billion in 2014, Gartner said. The global telecom services market is likely to remain flat over the next few years with declining spending on voice services. The segment is expected to grow 2% to $1.68 trillion in 2013 and by 2.4% in 2014 to $1.72 billion in 2014, Gartner said.
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BlackBerry posts surprise profit, but subscribers slip
Toronto, Ont., March 29 BlackBerry shares were up 2.3% at midday on Thursday on the Nasdaq, down from their 10% gain immediately after the results came out. Expressing lingering doubts, some analysts focused on a decline in the company's subscriber base, a potential threat to its long-term growth prospects and turnaround plans. Others, however, zeroed in on strong sales of the new touchscreen Z10 device, which BlackBerry started rolling out at the end of January. "I think the one million units is a nice start," said Morningstar analyst Brian Colello. "I think the encouraging thing is that BlackBerry was still able to sell a good portion of older models and generate solid service revenue during the transition. I think that will be important in terms of cash balance and profitability." The well-reviewed Z10 smartphone is the first in a line of devices that will be powered by the new BlackBerry 10 operating system. It is a key plank in the company's attempt to regain relevance and win back market share in the smartphone arena it once dominated. In a positive sign, BlackBerry said roughly 55% of the buyers of the Z10 were coming from other platforms — news that should allay fears that BlackBerry would be unable to attract users who have never used one of the company's devices, or who have abandoned BlackBerry in favor of Apple's iPhone and smartphones using Google's Android software, or other platforms. The results offered solace to both bulls and bears on BlackBerry, which virtually invented on-your-hip email before ceding ground to rivals. Some analysts noted that the company's quarterly revenue missed expectations and fretted about the decline in subscriber numbers to 76 million from 79 million during the fourth quarter. BREAKEVEN FORECAST: BlackBerry surprised some investors by saying it believes it will approach break-even in its first quarter, based on a lower cost base, a more efficient supply chain and improved hardware margins. Analysts on average had expected a loss of 10 cents a share in the first quarter, according to Thomson Reuters I/B/E/S. The Z10 device is currently available in more than 25 countries, and the company's new Q10 device, equipped with the physical keyboard that BlackBerry aficionados love, is expected to start being rolled out in April. BlackBerry said it will step up investment on marketing the new phones in the current quarter. — Reuters
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Forex reserves jump by $1 bn to $293.37 billion
Mumbai, March 29 Foreign currency assets, a major component of the forex reserves, were up by $1.06 billion to $260.41 billion for the week ended March 22, the RBI said. Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of the non-US currencies, such as the euro, pound and yen, held in the reserves, the central bank said. — PTI |
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‘Large capital inflows needed to fund CAD’
New Delhi, March 29 “If capital inflows flow, the currency fares well”, according to Crisil. This is especially true when large inflows are required to fund the ballooning CAD of a country. While exports have begun to recover, high import requirements, especially energy imports imply that the demand for dollars will remain high in 2013-14 as well. Hence, India will need the river of capital inflows to continue and provide support to the rupee. “We believe if the domestic reform momentum continues, India should be able to attract sufficient inflows to cover its CAD in the next fiscal. If however, there are any signs of a global economic drought, capital flows can dry up suddenly resulting in a temporary, but a sharp depreciation of the rupee”, Crisil warns. Industry body Assocham has pointed out that the possible way out from this situation is to make a realistic assessment of strengths and weaknesses of the economy before entering into free trade agreements. The existing pacts need to be reviewed keeping the ground realities in mind. The Crisil report notes a sustained increase in trade deficit tends to indicate a wider structural weakness in the economy — a high level of import demand combined with a loss of export competitiveness. Net FDI inflows fell to $2.5 billion in Q3FY13 from $ 8.9 billion in Q2FY13. In contrast, net portfolio investment rose to $8.6 billion in Q3FY13 as against $7.6 billion in the previous quarter. India received its highest net FII inflows ever in 2012-13, despite the domestic slowdown. “Given the volatility of these inflows, dependence on FII inflows for funding high CAD exposes the economy to a sudden decline in the rupee”, it adds. With a surge in the import bill, India’s import cover (in months) of forex reserves has fallen steadily in recent years. Bourses closed
The Bombay Stock Exchange, National Stock Exchange, forex and money markets, MCX and NCDEX remained closed today on account of Good Friday. |
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Dubai gears up for next, more modest economic boom
Dubai, March 29 Apart from a few facilities such as a villa and a beach club, the islands are empty. After creating them at a cost of hundreds of millions of dollars, state-owned property firm Nakheel sold about 70 percent of the land. But most of the buyers have lacked the cash or the will to go ahead with development plans. A little over three years after a corporate debt crisis drove it to the brink of default, Dubai is still littered with relics of the disaster, in the form of unfinished real estate projects and battered balance sheets. But it is laying the groundwork for another economic boom, based on its role as a tourism and business hub for the surrounding region, and a haven for money from India, China and fast-growing countries in Africa. The next boom is likely to be more gradual, partly because financing will not be as cheap and plentiful as it was during the excesses of the last decade. Growth will depend more directly on services that Dubai provides, rather than on the ability of its real estate market to suck up money. But in some ways, the next boom could rival the last one, boosting Dubai's population about 50 per cent by the end of this decade and pushing it deeper into a range of industries, from food processing to diamond trading. Florence Eid, chief executive of London-based research and advisory firm Arabia Monitor, said some aspects of Dubai, such as its role as a relatively safe financial centre, were set back by the crisis and shown to be weaker than assumed. "But some have actually been strengthened in the last few years, including its role as an operating base for businessmen from around the region and as a centre for entrepot trade, which it has enjoyed since the pearl fishing and spice trading days of the Arabian Gulf," she said. "The economy now appears to be embarking on another wave of growth during which it will serve similar functions as Hong Kong and Singapore in Asia, supporting and profiting from growth in industry and trade in a large region surrounding it." DEBT: Dubai's expansion plans are striking in that they are being announced while the emirate is still many years away from working through the debt pile it accumulated during last decade's boom and bust. Standard Chartered estimates $48 billion of bonds and loans will mature between 2014 and 2016, including about $10 billion of restructured debt at state-owned Dubai World and Nakheel. Some of this debt might have to be restructured a second time, the bank said in a research report. In December, Moody's Investors Service downgraded its credit ratings of three Dubai banks, including the largest, Emirates NBD. It cited concern about problem loans and said it was prepared to cut the ratings further. But Dubai's ruler, Sheikh Mohammed bin Rashid al-Maktoum, signalled a push for growth in November. — Reuters
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Four kilometres off the coast of Dubai, more than 200 tiny, manmade islands bake under the sun. Built five years ago, they were to be one of the emirate's most spectacular projects, an archipelago of resorts and luxury housing laid out in the shape of a world map.
Both the country’s leading bourses, the Bombay Stock Exchange and the National Stock Exchange have put a price band of 10 per cent on share movements of four firms — Essar Oil, Suzlon Energy, Educomp and CORE Education — as part of preventive surveillance measures.
After touching a record high of 6.7% of GDP in the third quarter of FY13, India’s current account deficit (CAD) is likely to come down to around 4.5% in the last quarter of the current fiscal, Japanese financial firm Nomura said Friday.
Large capital inflows will be required to fund India’s current account deficit (CAD) and any global turmoil which affects these flows may result in a sharp fall in the rupee, according to Crisil Research.