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Tuesday, January 19, 2016

Pre Session-Sensex may witness positive opening on China stimulus bets

The key Indian equity benchmarks are poised to witness a gap up opening on Tuesday amidst bets of further China stimulus after underwhelming Q4 GDP data. China’s economy grew by 6.8 per cent, year on year in the December 2015 quarter, slowing from the 6.9 per cent expansion witnessed in Q3 while full-year 2015 growth came in at 6.9 per cent, the slowest since 1990 and missing the government target of about 7 per cent, raising calls for further monetary and fiscal easing measures to tame a deepening slowdown. Strength in the CNX Nifty Index futures for January delivery which advanced by 0.22 per cent or 16 points at 7,375 at 10:23 am Singapore time also signals that the Sensex may open higher today. The three-day run of losses at Dalal Street may offer a good bargain buying opportunity for investors, in beaten-down stocks, at existing levels, supporting the bourses. The Sensex has been hit hard lately as a China-induced global mayhem and sinking oil prices weigh alongside concerns over the domestic economy amidst tepid factory, exports and Q3 earnings numbers. Marking a third straight session in the red, the 30-share Sensex on Monday plunged by 266.67 points or by 1.09 per cent to end at a 20-month low of 24,188.37 as oil prices dipped to a fresh 12-year low to USD 28 per barrel, taking toll on energy stocks while exports shrank for a thirteenth straight month, down 14.75 per cent to USD 22.2 billion in December 2015 as the trade deficit widened to USD 11.6 billion from USD 9.1 billion in the same month a year ago, dimming the outlook for Asia’s third biggest economy. Shares of Reliance Industrial Limited and HCL Technologies Limited will be in focus today as the companies unveil their Q3 earnings numbers.

Asian stocks swung between gains and losses as traders weighed the Chinese Q4 GDP data which came in below estimates but raised the probability of a stimulus boost in the world’s second biggest economy. China’s industrial output grew 5.9 per cent in December 2015 from the same month a year ago, compared to an annual growth of 6.2 per cent in November 2015. China’s Shanghai Composite logged mild gains as energy companies rallied amid government measures to support fuel prices. Hang Seng was trading tad lower while Japan’s Nikkei 225 fell even as a weaker yen bolstered the appeal of exporter stocks. Wall Street was closed on Monday due to the Martin Luther King Holiday.

Top traded Volumes on NSE Nifty – State Bank of India 35653244.00, ICICI Bank Ltd. 27490009.00, Vedanta Ltd. 18767695.00, Axis Bank Ltd. 14117119.00 and Bank of Baroda 12717221.00.

On BSE, total number of shares traded was 38.95 Crore and total turnover stood at Rs. 3191.81 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 363562 with a total turnover of Rs. 18752.87 Crore. Along with this total number of contracts traded in stock futures were 665252 with a total turnover of Rs. 30532.85 Crore. Total numbers of contracts for index options were 4419641 with a total turnover of Rs. 243961.19 Crore and total numbers of contracts for stock options were 424634 with a total turnover of Rs. 21030.37 Crore.

The FIIs on 18/01/2016 stood as net seller in equity and debt. Gross equity purchased stood at Rs. 3176.35 Crore and gross debt purchased stood at Rs. 394.63 Crore, while the gross equity sold stood at Rs. 4211.22 Crore and gross debt sold stood at Rs. 668.23 Crore. Therefore, the net investment of equity and debt reported were Rs. -1034.87 Crore and Rs. -273.60 Crore.

Don't levy Swachh Bharat Cess on telecom services: COAI

GSM industry body COAI has asked the government that Swachh Bharat Cess (SBC) should not be levied on telecommunication services as there are multiple other levies applicable on the industry.

The government had imposed SBC at a rate of 0.5 per cent on provision of all taxable services with effect from November 15, reported PTI. Further, it was clarified that the credit of SBC cannot be availed and the cess cannot be paid by utilising credit of any other duty or tax.

In its budget recommendations, Cellular Operators Association of India (COAI) said with levy of SBC, effective rate of service tax has further increased to 14.5 per cent and this would increase the overall cost of telecommunication services for customers.

"Given the fact that there are multiple other levies such as licence fee, applicable on telecommunication industry, SBC should not be levied on telecommunication services," it said as per the media report.

Regarding direct taxes, COAI said there is some uncertainty on the withholding tax obligation, if any, under section 194J of the Income Tax Act, 1961 on payments made in consideration for spectrum acquired through trading.

"Therefore, a clarification may be issued that payments made in connection with the trading/sharing of spectrum are not in the nature of royalty and hence do not attract withholding tax obligations," it added.

It said this would facilitate an effective implementation of spectrum trading and reduce any potential tax dispute arising out of such transactions.

The industry body has also sought to amend the definition of the term 'Royalty' with retrospective effect to exclude telephony, internet bandwidth and other similar services.

COAI said domestic as well as cross-border payments in respect of a wide array of telecom services are under litigation on account of retrospective amendment in the definition of 'Royalty' vide Finance Act, 2012.

"By virtue of this amendment, payments made by telecom companies, even for standard telecom services could be considered as 'Royalty' by tax authorities, resulting in protracted litigation not only on characterisation but also on the aspect of retrospective withholding of taxes," it added.

Regarding withholding tax on distributors' margin on SIM cards and prepaid vouchers, COAI said it is suggested that the government clarify that distributors' margins on sale of SIM cards and prepaid vouchers are not in the nature of 'commission' and hence not subject to withholding tax provisions.

It also asked the government should issue a clarification that spectrum fees is an intangible asset eligible for depreciation under section 32 of the Act. COAI said in the budget of 2014-15, the rate of interest on delayed payment of service tax was increased to 30 per cent.

"This rate of interest is not compensatory but penal in nature and the same should be reduced to a more reasonable rate," it said.

States make out a case for key agri reforms

State governments called for key reforms in the agriculture sector, including convergence of schemes and an enabling environment to boost private investment, which Prime Minister Narendra Modi said could come up as new schemes, reported PTI.

The other proposals at the conference of agriculture ministers of states included launch of Pradhan Mantri Kisan Dhan Yojana, interest subvention for long-term investment credit, raising share of agri priority sector lending to 18 per cent and a cut in urea subsidy to make more funds available for investment in agriculture, among others.

"For the first time, agriculture ministers and officials have sat together for two days and come out with suggestions to improve the farm sector. Some are short term and long term. Some are related to regulation and pooling financial resources. All suggestions may not apply to all states... But some thing, new scheme or yojana, should emerge from this," Modi said at the valedictory session of the national conference here.

He also expressed confidence that these suggestions could find their way into the state and central agriculture development map. "This should also reflect in the state budget," he added.

Outlining the challenges of the farm sector, the state governments -- after deliberating on five key areas -- made a presentation to the Prime Minister, suggesting reforms in land leasing, enhanced investment in climate resilient agriculture, skilling centres for training rural youth, convergence of MNREGA for creating 5 lakh farm ponds over next 3 years, and linking solar energy programmes for irrigation.

They also suggested raising of resources through tax-free bonds by incitations like NABARD to fund irrigation projects, policy thrust to cover 1 crore farmers for the next 3 years, credit thrust on central, eastern and north-eastern region and access of farm credit and insurance to sharecroppers, small and marginal farmers.

Agriculture Minister Radha Mohan Sigh said, "The government firmly believes that farmers' welfare would improve if there is increase in net income. The approach, therefore, is to reduce cost of cultivation, enable higher yield per unit and realise remunerative prices."

Union Ministers Jitendra Singh, Sanjeev Kumar Balyan, Mohan Bhai Kundariya were among others present at the event. Agriculture ministers and officials from over 26 states participated in the event.

'India a land of opportunities among BRICS countries'

India is a land of opportunities among BRICS nations but lack of knowledge about various compliance requirements seem to be posing a challenge to the corporates here, said experts as per the PTI report.

In recent times, stricter regulatory framework and disclosure requirements have been put in place as part of the efforts to ensure protect investor interest, increased transparency and make India a more easier place for doing business.

Describing India as a "land of opportunities", a senior executive of global research group 'The Conference Board' today said efforts should be made to bring out the best practices of corporate governance here.

"The main challenge to companies in India for compliance is lack of knowledge about regulations and legislature," The Conference Board's Asia Pacific Executive Director Nick Sutcliffe told PTI.

Speaking on the sidelines of the launch of 'Handbook on Corporate Governance in India', Sutcliffe said there is significant interest among corporates to have a better understanding about good governance practices.

The book's author, Afra Afsharipour, a professor at the University of California, said India stands out among its BRICS peers.

"With most of the BRICS nation seeming to be in an economical difficulty, it is India which stands out and presents opportunity to the world. There was a real need to uncomplicate things," she noted.

About various changes brought in the regulations by capital markets regulator Sebi as well as those in the Companies Act, Afsharipour said more things have now been brought under the ambit of legislature in a more structured manner.

"These (the changes) are not drastic overhaul or a major change. These things were there and now it is brought under the purview of legislature in a more structure way," she added.

The book has been launched as part of the 'The Director's Collective' initiative by KPMG, Khaitan & Co, Russel Reynolds and The Conference Board.

Speciality Restaurant - Opening of new "Hoppipola" restaurant by Speciality Restaurants Limited (the "Company")

Speciality Restaurants Ltd has informed BSE that the Company has opened a new "Hoppipola" restaurant located at Third Floor, Infinity Mall - II, Link Road, Malad West, Mumbai - 400 064 with effect from January 18, 2016.

Accordingly, as of the date of this letter, the total number of restaurants and confectionaries of the Company are 103 (including 23 franchise restaurants) and 19 respectively.

Exim Bank inks MoU with Andhra to boost state's exports

Export-Import (Exim) Bank said it has entered into a memorandum of understanding (MoU) with Andhra Pradesh to promote exports from the state, reported PTI.

The MoU was signed by Exim Bank Chairman and Managing Director Yaduvendra Mathur and Shamsher Singh Rawat, Secretary and Commissioner for Industrial Promotion, Andhra Pradesh.

"Exim Bank seeks to support the exporters having operations in Andhra Pradesh in achieving higher exports by facilitation of market linkages through its market advisory services, which will assist in identifying suitable partners", Exim Bank said in a release.

Also, the bank would help develop skills through capacity building workshops, help exporters' participation in select trade fairs and exhibitions, and through research activities.

Exim Bank said it would also use its strong institutional linakges it has developed over the years with institutions in advanced markets -- USA, Singapore, Japan, Australia, EU, etc.

It said linkages will help facilitate technology transfer to the technology-seeking enterprises in Andhra Pradesh.

Exim Bank said it will further extend funding facilities to exporters from the state so as to provide them opportunity to access the global market.

MPS Ltd - Target 930

MPS Ltd - Target 930

Reliance Infra acquires mgmt. control of PDOC

Leading infra firm, Reliance Infrastructure Ltd has said that it has taken over the management and control of Pipavav Defence & Offshore Engineering Co Ltd (PDOC). Reliance Infrastructure will hold 36.5 per cent of the equity capital of Pipavav Defence & Offshore Engineering Co Ltd. Anil D Ambani has taken over as Chairman of PDOC. “RInfra along with defence SPVs are the new Promoters of PDOC and the company will be renamed as Reliance Defence and Engineering Ltd,” the company informed in a filing to the Bombay Stock Exchange. This is the largest acquisition in the defence sector in India and PDOC is uniquely placed to tap growth opportunities in the defence industry under Hon’ble Prime Minister Shri Narendra Modi’s ‘Make In India Programme’. Meanwhile, shares of the company closed at Rs 471 apiece, down 4.51 per cent from the previous close on BSE.

CG bags contract from Dominican Republic

Avantha Group Company Crompton Greaves Ltd (CG) on Monday said it has bagged a contract to equip 7 transmission substations of Dominican Republic Transmission Utility ETED with ZIV substation automation and telecommunication systems. In a filing to the Bombay Stock Exchange, the company informed, “CG's smart grid solutions to support the expansion of Dominican Republic's transmission network.” The delivery timing of the project is March 2016, followed by project commissioning by June 2016, it added. The project is part of the expansion of the electricity transmission system in the southern region of the Dominican Republic where the largest wind farm in the country is located, the company said in a statement. The awarded contract includes not only ZIV Protection, Control, Telecommunication and Engineering Services but also a complete telecom system for another four existing substations. They will be equipped with ZIV Universal Teleprotection Systems according to the Telecom Engineering Project, it added. Meanwhile, shares of the company closed at Rs 174.55 apiece, down 0.68 per cent, from previous close on BSE.