New Delhi, October 9
The trade picture is improving with exports clocking a double-digit growth for the third month in a row and the trade deficit falling sharply in September compared to last year, touching a 30-month low.

A jump in exports and fall in imports in September narrowed the trade deficit to a 30-month low of $6.76 billion, which may help the rupee to stabilise as the widening current account deficit (CAD) was the main culprit for the free fall in the rupee in the past few months.

Imports fell by 18.1% and exports rose by 11.15% in September. While exports of textiles, pharmaceuticals and agriculture recorded decent growth, imports came down mainly on account of a decline in inward shipments of gold and oil.

Imports of gold and silver plunged more than 80 per cent to $0.8 billion in September from $4.6 billion a year earlier. Oil imports declined by about 6% to $13.19 billion.

“The government has taken steps to curtail imports of non-essential commodities, particularly precious stones. That is the singular reason for decline in trade deficit,” Commerce Secretary SR Rao said. The import figure for September was the lowest in the past 30 months.

India’s trade deficit has been fuelled by high imports of gold and crude oil, contributing to the current account deficit, which has touched an all-time high of 4.8% of GDP, or $88.2 billion, in 2012-13.

Federation of Indian Export Organisations (FIEO) president Rafeeque Ahmed said exports will touch $350 billion this fiscal. “The trade deficit is likely to come down to below $150 billion for this fiscal, which will help the government to keep the CAD within $70 billion,” he said.

Ahmed said all sectors of exports are doing well ranging from marine, agro, garments, textiles, leather, carpets to new emerging sectors such as pharmaceuticals, specially chemicals and agro chemicals.

He added the decline in oil imports by 5.9% and non-oil imports by 24% primarily due to drop in gold and silver imports and non-essential imports has helped to manage the trade deficit which has sharply declined from $17 billion in September 2012 to $6.7 billion.

Recognising that measures towards restricting non-essential imports have been effective, FICCI president Naina Lal Kidwai said, “As India's trade deficit has shrunk by over 60% in the month of September and by about 13% in the first half of this fiscal, it would help contain the current account deficit".

Crisil Research said in a report there has been a significant improvement in current account deficit for the second quarter. Better-than-expected export growth, if sustained, creates downside to our forecast for current account deficit at 3.9% of GDP for 2013-14.

Mumbai, October 9
The State Bank of India (SBI) today joined other public sector banks such as PNB, Oriental Bank of Commerce and IDBI Bank in cutting interest rates on car and consumer durable loans as part of the government's efforts to revive economic growth.

SBI said it was cutting interest rates on car loans from 10.75% to 10.55%. The bank also slashed processing charges from 0.51% of the loan amount to a flat rate of Rs 500.

SBI also said it was offering special deals for customers holding salary accounts so that they could avail of loans to purchase consumer durables and two-wheelers at concessional rates of interest. Loans at a discounted rate beginning from 12.05% per annum have been introduced for this class of customers, SBI said. This 'Utsav Ki Umang, SBI ke Sang' offer is valid from October 7 till January 31, 2014, and covers the purchase of cars, two-wheelers and consumer durables.

IDBI Bank said it was waiving off processing fees entirely for account holders who avail of loans to purchase consumer goods during the festival season.

Yesterday, PNB and OBC had cut interest rates or waived the processing fee on some loans during the festival season.

Earlier this month, the government announced that it would pump in extra funds into public sector banks so that they could lend at lower rates to those purchasing two-wheelers and consumer durables as part of efforts to stimulate demand. 

Washington, October 9
US President Barack Obama will nominate Fed number two Janet Yellen on Wednesday to run the world's most influential central bank, providing some relief to markets that would expect her to tread carefully in winding down economic stimulus.

The nomination will put Yellen on course to be the first woman to lead the institution in its 100-year history. The advocate for aggressive action to stimulate US economic growth through low interest rates and large-scale bond purchases would replace Ben Bernanke, whose second term as Fed chairman expires on January 31.

If confirmed by the US Senate, which is expected to endorse her, she would provide continuity with the policies the Fed has established under Bernanke. Analysts say she would move cautiously in reining in policies in place to shore up the world's largest economy.

Expectations that the Fed might start to taper its stimulus program have roiled financial markets since May and the central bank shocked investors in September by maintaining its cash injections of $85 billion a month in full.

Her nomination would come during a political stalemate in Washington that has closed the US government and threatened a US default if lawmakers fail to raise the $16.7 trillion debt ceiling by an October 17 deadline.

US stock index futures rose and the dollar slipped on the news of Yellen's pending nomination. The debt standoff is fuelling expectations the Fed may delay any plans to reduce its stimulus for now. — Reuters

New Delhi, October 9
India's exports are unlikely to be hit on account of the US shutdown which has been going on for more than a week now, Commerce Secretary SR Rao today said.

"I do not think so, essentially because of the thumb rule that industry in the US is not led by government but by the private sector," Rao said when asked whether the US shutdown would reverse export growth of India.

He said US businessmen are quite aggressive and will not allow the shutdown to continue. "...the US businessmen are extremely agressive...so will they keep quiet if their business have shut?"

During the April-September period this fiscal, exports grew by 5.14 per cent to $152.1 billion. — PTI

Mumbai, October 9
Market regulator SEBI has notified new norms for listing of start-ups and small and medium enterprises (SMEs) on stock exchanges without having to make initial public offer (IPO).

The SEBI has made amendments of rules to permit listing of start-ups and SMEs in Institutional Trading platform (ITP) without having to make an IPO.

Lack of exit opportunities for existing investors and restricted access to new investors is a major problem faced by start-ups and SMEs.

In a circular dated October 8, SEBI said the minimum amount for trading or investment on the ITP would be Rs 10 lakh.

The move is aimed at providing easier exit options for entities such as Angel Investors, Venture Capital Funds and Private Equities.

Besides, the move would provide better visibility, wider investor base and greater fund raising capabilities to such companies.

SEBI said the company would not make an IPO while its specified securities are listed on ITP but can raise capital through private placement or rights issue "without an option for renunciation of rights." According to SEBI, a SME will be eligible to list on the ITP, in case the company, its promoter, director, group company does not appear in the defaulters list of Reserve Bank and there is no winding up petition against the firm.

Among other conditions, the company, group companies or subsidiaries have not been referred to the Board for Industrial and Financial Reconstruction (BIFR) within a period of five years prior to the date of application for listing.

Besides, no regulatory action has been taken against the company seeking to list on ITP, its promoter or director, by SEBI, RBI, IRDA or Corporate Affairs Ministry within five years prior to the date of application for listing, "The company has at least one full year's audited financial statements, for the immediately preceding financial year at the time of making listing application," SEBI said.

It also said a SME seeking to list on ITP needs to fulfil any of the six criteria, including a minimum investment of Rs 50 lakh by at least one alternative investment fund, venture capital fund or other category of investors as approved by the regulator. — PTI

Mumbai, October 9
Indicating companies' deteriorating credit profile, nearly 70 per cent of their debt securities were assigned 'non-investment grade' ratings in August this year - the highest monthly figure for such issues in 2013.

Credit rating agencies (CRAs) in August rated a total of 254 long-term corporate debt securities worth Rs 67,500 crore, latest data compiled by SEBI shows.

Out of this, as many as 177 ratings were categorised as 'non- investment grade', while 77 issues were given ratings of 'investment grade' with highest-to-moderate safety profiles.

A 'non-investment grade' applies to low-quality bonds that face the highest risk of default. Debt securities are issued by companies to raise funds for a variety of purposes such as business expansion.

These 177 'non-investment grade' securities were together worth Rs 3,351 crore - the second highest value for this category in this year.

The 77 issues that fell under the 'investment grade' category cumulatively amounted to Rs 64,148 crore.

Individually, 9 issues were assigned the top investment grade 'Highest Safety (AAA)' which were worth Rs 23,536 crore, while 22 securities valued at Rs 24,256 crore fell under high-safety (AA) rating. — PTI

BRIEFLY

Hike in interest rate on PF likely
New Delhi: Retirement fund body EPFO may announce higher interest rate on provident fund deposits for its over five crore subscribers in the current fiscal than 8.5% that was provided in 2012-13. "The rate of return on PF deposit for EPFO subscribers for this fiscal would be slightly higher than 8.5% provided last year," a source said. — PTI

Flipkart raises $160 million
Mumbai: E-commerce major Flipkart on Wednesday said it received an additional $160 million from Morgan Stanley Investment Management and others, taking the total amount raised in the fifth round of funding to $360 million. "Flipkart has closed its latest round of funding, which had commenced in July 2013. In this phase, it has closed an additional $160 million, adding to the $200 million it had raised from existing investors, including Naspers," Flipkart said. — PTI

6,000 bookings for Terrano
Chennai: Japanese car maker Nissan has received 6000 pre-bookings for its latest sports utility vehicle - Terrano, priced at Rs 9.58 lakh onwards. Terrano will be available in seven variants, across three engine options - 110PS diesel, 85PS diesel and 104PS petrol. — PTI

Scorpio special edition launched
New Delhi: Mahindra & Mahindra on Wednesday launched a special edition of its SUV Scorpio, priced at Rs 11.88 lakh (ex-showroom, Delhi). The vehicle, which has been launched in pearl white colour, comes with various luxury features, including chrome plated alloy wheels and new upholstery, M&M said. — PTI