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Monday, January 25, 2016

RBI to auction four dated govt sec for Rs 14,000 cr on Jan 29

The Reserve Bank of India on Friday said that it will auction four dated government securities for Rs 14,000 crore on January 29, 2016.

“The auctions will be conducted using multiple price method,” RBI said in a notification.

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on January 29, 2016. The non-competitive bids should be submitted between 10.30 a.m. and 11.30 a.m. and the competitive bids should be submitted between 10.30 a.m. and 12.00 noon.

The result of the auctions will be announced on January 29, 2016, it notified.

Investment via P-Notes hits 15-month low at Dec end

Investment through Participatory Notes (P-Notes) into India's capital markets has hit a 15-month low of Rs 2.35 lakh crore (about USD 16 billion) at the end of December, said the media reports. P-Notes, mostly used by overseas HNIs (High Net Worth Individuals), hedge funds and other foreign institutions, allow investors to invest in Indian markets through registered foreign institutional investors (FIIs). This saves time and cost for them, but the flip side is that the route can also be used for round-tripping of black money. According to Sebi data, total value of P-Notes investment in Indian markets (equity, debt and derivatives) declined to Rs 2,35,534 crore at the end of December from Rs 2,54,600 crore in the previous month, reported PTI. This is the lowest level since September 2014, when the cumulative value of such investments stood at Rs 2.22 lakh crore. In October, investment was at Rs 2.58 lakh crore through this route. The total outstanding value of P-Notes witnessed a steady rise since January and the momentum continued till March. However, investments through this route registered a drop in April, but hit a seven-year high in May. The inflows slipped in the subsequent three months (June-August) but marginally rose in September and October and again fell in November as well as in December. The drop in investment via P-Notes during June-August came when Supreme Court-appointed Special Investigation Team (SIT) on black money asked Sebi to review its regulations on participatory notes to help identify the end users of these instruments. However, the government later said it had no intention of banning this financial instrument overnight. The quantum (percentage) of FII investments via P-Notes fell to 10.1 per cent from 11 per cent. Till a few years ago, P-Notes used to account for more than 50 per cent of total FII investment, but their share has fallen over the years after Sebi tightened disclosure norms and other related regulations. As things stand, P-Notes make up around 15-20 per cent of the total FII investment in India since 2009. While it used to be much higher, 25-40 per cent in 2008, the reading was as high as over 50 per cent at the peak of stock market bull run in 2007. In absolute terms, the value of P-Notes investment rose to a record of Rs 4.5 lakh crore in October 2007, but dropped to Rs 3.22 lakh crore in February 2008 and Rs 60,948 crore in February 2009.

Refunds for ITR filed online to be further hastened: official

The Income Tax department will further hasten the speed of issuing refunds to taxpayers who e-file their returns as it's Bengaluru-based CPC has adopted a variety of smart business procedures in the recent past, a senior official said as per the PTI report.

The official involved in the operations of the Central Processing Centre (CPC) said while it has ensured that refunds are issued within 30 days in 73 per cent of e-filed ITR cases during this year, the new and modern protocols adopted by it will ensure that these numbers go up substantially in the coming days and enhance taxpayer satisfaction.

"If the returns and the details within it are filed correctly by the taxpayers, the department is sure that the refunds could be issued in less than a month's time. In many cases the CPC has issued refunds within a week and we expect this to soon become a routine affair. Adopting new business processes and certifications is a work in this direction," the official said as per the media report.

The CPC, a flagship project of the department for IT Returns (ITRs) filing, has recently been awarded the 'ISO 9001:2008' standard for Quality Management System and with this latest cap in the feather, it has become the only organisation in the country to have received three top-notch awards for undertaking best business practises in its work domain.

"The IT department's CPC is the only organisation in India which has been awarded the top awards in business management under the categories of quality management, privacy and security management and records upkeep management. With these accolades the CPC is surely enabled to work and deliver taxpayer services in a better, enhanced and efficient manner," BSI Managing Director Venkataram Arabolu said as per the reports.

The BSI had conducted an audit of the CPC in this regard and handed over the certification based on various parameters and benchmarks created to check best business practises.

Echoing similar views, the official said with government's enhanced impetus on issuing quick refunds to taxpayers, the CPC will surely be the most important and instrumental wing of the department to usher in these measures.

As per official data till December last year, the CPC processed 3.27 crore returns, registering a growth of 18 per cent over 2.65 crore returns processed during the same period the previous year.

During the current year, the CPC issued refunds in 1.81 crore cases out of which in 1.32 crore cases, 73 per cent, the refunds were issued within 30 days of filing of the returns by the taxpayers.

Operationalised in 2009, the CPC has earlier been certified for its information security management system in 2014 and for its records management system in 2013.

"Conformance to these internationally recognised standards ensures that the CPC is able to efficiently and accurately process Income Tax returns and expeditiously issue refunds," the Central Board of Direct Taxes (CBDT) had recently said.

Sales to pick up in next 6 months; investment to stay muted: Survey

India Inc hopes to see better sales volume and improved capacity utilization in the next two quarters but does not expect any uptick in investment and corporate earnings even as the overall macro situation would change for better, according to an ASSOCHAM Bizcon Survey. The Bizcon Survey, capturing the reading of the economy as also the firms at the individual level in December,2015 noted that 62.5 per cent of the respondents felt “the state of economy would be better in the coming six months”, although not much has changed in the past six months . Lack of investment appetite in the private sector in the backdrop of lower capacity utilization, excess supply and continuous pressure on profitability are the areas of concern, for the next few quarters. “In terms of the domestic investment, 58.3 per cent felt that there has been no change in the investment plans at the level of individual firms. The sentiment seems to remain muted, going forward with 62.5 per cent respondents of the view that January to March 2016 quarter would not see much change in the investment levels. Thus there seems to be a continuing lack of appetite for new investment in the private sector”, the Bizcon Survey said. ASSOCHAM Secretary General Mr D S Rawat shared the concerns brought out by the respondents in terms of pressure on profitability and lack of investment. “Global deflationary situation creeping into India in several sectors is hitting investor sentiment. The consumer confidence can return only if there are more job opportunities through higher investment into productive areas of the economy like construction, infrastructure and manufacturing. The lead, has to be taken by the government which has an onerous task before itself along with financial sector regulators like Reserve Bank of India and SEBI to ensure investor confidence in the markets which can then feed the investment climate”. Broadly in line with the macro picture, the Bizcon Survey also found similar state of affairs at the industry level, which is however, maintaining a sense of hope and optimism for the short to medium terms, at least in projecting better sales volume and capacity utilization.

Moody's places ONGC, OVL rating on review for downgrade

Moody's Investors Service has placed the ratings of state-run oil producers ONGC and its subsidiary ONGC Videsh "on review for downgrade" on slumping oil prices, weakening demand and prolonged period of oversupply. Besides Oil and Natural Gas Corp (ONGC) and ONGC Videsh Ltd (OVL), Moody's placed the ratings of Oil India Ltd amongst 120 global exploration and production firms on review for downgrade. "These reviews reflect a mix of declining prices that are near multi-year lows, weakening demand and a prolonged period of oversupply that will continue to significantly stress the credit profiles of companies in the oil and gas sector," it said as per the media report. The action, Moody's said, reflected the rating agency's effort to recalibrate the ratings in the oil and gas portfolios to align with the fundamental shifts in credit conditions. Of the 120 companies, seven are from south and southeast Asia. These include Pertamina of Indonesia, Malaysia's Petroliam Nasional Berhad or Petronas and PTT Exploration & Production of Thailand. Moody's said it is placing local currency issuer rating of Baa1 of ONGC on review for downgrade. The same has been done for the foreign currency issuer rating of Baa2 of ONGC Videsh and Oil India's Baa2 Backed Senior Unsecured Regular Bond/Debenture rating. "Oil prices have deteriorated substantially in the past few weeks and have reached nominal price lows not seen in more than a decade," Moody's said. Stating that it has adjusted its view downward for the likely range of prices, the rating agency said it saw "a substantial risk that prices may recover much more slowly over the medium term than many companies expect, as well as a risk that prices might fall further." "Even under a scenario with a modest recovery from current prices, producing companies and the drillers and service companies that support them will experience rising financial stress with much lower cash flows," it said. As part of its ongoing assessment of energy markets, Moody's sharply reduced its oil price assumptions in light of continuing oversupply in the global oil markets and demand growth that remains tepid. "Iran is poised to add more than 500,000 barrels per day to global supply while OPEC and many non-OPEC oil producers continue to produce without restraint as they battle for market share. "The addition of Iranian oil to the market this year will offset or exceed expected declines in US production of about 500,000 bpd," it said. The increased production vastly exceeds growth in oil consumption, given modest growth in consumption from major consumers such as China, India and the US. "Production now exceeds demand by about 2 million barrels per day, adding to already high global oil stocks," Moody's said, projecting crude oil price to average USD 33 per barrel in 2016, USD 10 lower than its previous estimate.

SpiceJet swings to Q3 profit of Rs 238 cr

Indian low-cost airline SpiceJet on Friday reported that it swung to a net profit of Rs 238 crore in the third quarter ended December 31, 2015 as low fuel prices helped revive profitability. In Q3 FY 2014-15, the company had posted a net loss of Rs 275 crore, SpiceJet said in a filing to the Bombay Stock Exchange (BSE). Net income from operations climbed by 11 per cent at Rs 1,460 crore in Q3 FY 2015-16 from Rs 1,311 crore in the same period a year ago. Total expenses fell by 22 per cent at Rs 1,211 crore in Q3 FY 2015-16 from Rs 1,550 crore in the same period a year ago. Aircraft fuel expenses plunged by 35 per cent at Rs 367 crore in Q3 FY 2015-16 from Rs 562 crore in the same period a year ago amidst falling crude prices. Other income climbed 10 per cent at Rs 12.53 crore in Q3 FY 2015-16 from Rs 11.37 crore in the same period a year ago. Finance costs fell 51 per cent at Rs 23.34 crore in Q3 FY 2015-16 from Rs 47 crore in the same period a year ago. Despite the upbeat earnings numbers, shares of SpiceJet fell by 5.03 per cent to end at Rs 70.85 a piece on the BSE on Friday.

Honda introduces new variant of City sedan

Honda Cars India announced that it has introduced a new variant of its mid sized sedan City with all-new black leather interiors alongside City’s existing top end VX (O) grade that is available in beige leather interiors. Honda City which is priced between Rs. 7.63 lakh and Rs. 11.94 lakh (ex-showroom Delhi) has also launched new gear for child seats as standard equipment in the City Honda Cars India Ltd (HCIL) said in a statement, “Besides, dual SRS airbags has been made as a standard equipment for all grades in Honda City in addition to standard anti-lock braking system (ABS) and electronic brake force distribution (EBD).” HCIL Senior Vice President, Jnaneswar Sen said, “Our endeavour has always been to offer best-in-class products to our customers and we are happy to offer premium and luxurious black leather interiors in the City.” Honda has till now sold around 6 lakh units if Honda City in the country.

Pre Session- Dalal Street to extend rebound as global risk appetite returns

Indian equity benchmarks may witness a bullish opening on Monday tracking a rebound in global equities amidst bets of further central bank stimulus to prop up a recovery in the world economy, bolstering the lure for risky assets. A positive trend in Asian equities coupled with strength in the CNX Nifty Index futures for January delivery which advanced by 0.35 per cent or 26 points at 7,452.5 at 10:26 am Singapore time signals a gap up opening for the Sensex today. Global central banks have hinted that they may support the world economy with the European Central Bank (ECB) signaling a likely boost to its stimulus program as early as March while Bank of Japan may charter a similar course and expand monetary easing in the near-term. The US Federal Reserve which meets this week is unlikely to hike interest rates after a maiden lift-off since 2006 in December. A recovery in oil prices which are back above the USD 32 per barrel may also support sentiment at Dalal Street as a commodity rout eases. The 30-share benchmark on Friday snapped a two-day drop, rallying by 473.45 points or by 1.98 per cent to end at 24,435.66 as ECB’s stimulus hint and an oil rebound shored up sentiment across the globe. With markets closed on Tuesday on account of the Republic Day holiday, the Sensex may witness a volatility-ridden week as traders roll over their positions ahead of the expiry of the January Futures & Options (F&O) contracts on Thursday while Q3 earnings from the likes of HDFC, HDFC Bank, ICICI Bank, Bharti Airtel, Maruti Suzuki, Vedanta, Yes Bank. L&T and NTPC may weigh on sentiment. Investors will also be eying the two-day policy meet of the US Federal Reserve beginning Tuesday, while global market cues, investment by foreign investors, movement of the rupee against the dollar and crude oil prices are also likely to dictate the domestic market direction this week.

Asian shares extended an impressive rebound as risk appetite returned as major global central banks vowed to come to the rescue of a fragile world economy while oil extended a renewed rally, helping stem a financial market rout. China’s Shanghai Composite eked out a handsome rally led by gains in coal and steel producers after policymakers committed to cut overcapacity in these industries. Hang Seng surged almost 2 per cent while Japan’s Nikkei 225 rose over 1 per cent on speculation of further monetary stimulus from global central banks. Optimism of further stimulus support from central banks bolstered Wall Street on Friday as the S&P 500 marked its strongest two-day rally in three months as investors shrugged off mixed US economic data. The Dow Jones Industrial Average advanced 1.33 per cent; the Nasdaq Composite rose 2.66 per cent while S&P 500 closed up 2.03 per cent. While a gauge of US leading indicators declined for the first time in three months in December 2015, sales of previously owned homes surged in December, signaling a mixed outlook for the world’s biggest economy.

Top traded Volumes on NSE Nifty – Vedanta Ltd. 36038492.00, State Bank of India 21432409.00, Idea Cellular Ltd. 16875423.00, Axis Bank Ltd. 15009103.00 and ICICI Bank Ltd. 13771384.00.

On BSE, total number of shares traded was 32.22 Crore and total turnover stood at Rs. 3498.12 Crore

On NSE Future and Options, total number of contracts traded in index futures was 415710 with a total turnover of Rs. 21621.13 Crore. Along with this total number of contracts traded in stock futures were 855720 with a total turnover of Rs. 38691.96 Crore. Total numbers of contracts for index options were 5242729 with a total turnover of Rs. 284791.99 Crore and total numbers of contracts for stock options were 419641 with a total turnover of Rs. 19922.24 Crore.

The FIIs on 22/01/2016 stood as net seller in equity and debt. Gross equity purchased stood at Rs. 4042.86 Crore and gross debt purchased stood at Rs. 637.11 Crore, while the gross equity sold stood at Rs. 5663.73 Crore and gross debt sold stood at Rs. 803.25 Crore. Therefore, the net investment of equity and debt reported were Rs. -1620.87 Crore and Rs. -166.14 Crore.

Cairn India Q3 net plunges 99.4pct to Rs 8.69 cr

Oil & Gas exploration and production company Cairn India Ltd saw business taking a dip in October-December quarter, as the oil price collapse hit realisations. The company posted a consolidated net profit after taxes at Rs 8.69 crore in the quarter ended December 31, 2015. “The consolidated net profit after taxes of the company stood at Rs 1,349.64 crore during the same period a year ago,” said Cairn India Ltd in a filing to the Bombay Stock Exchange on January 22, 2016. Further, the consolidated total income of the company decreased by 44.5 per cent to Rs 2,230.19 crore during December, quarter 2015, as compared to Rs 4,020.57 crore during the same period last year, primarily due to decline in crude prices. Commenting on the performance, Cairn India Ltd, MD & CEO, Mayank Ashar said, “We maintain our strategic objective of generating healthy free cash flow which has been successfully guiding us through the constantly deteriorating oil pricing scenario. Our unwavering commitment to improve cost efficiency continues to help us to navigate through the weak oil price situation and to generate free cash flow.” “We continue to pursue pre-development activities for our growth projects to make them future ready for rapid development on oil prices rebound. We are continuously engaging with the Government to take actions to support the oil & gas industry in such a low oil price environment,” he added. Cairn said gross production per day for Q3 FY16 declined by 7 per cent to 2,02,668 boepd, as compared to 2,18,900 boepd during Q3 FY15 and working interest production per day was 1,28,402 boepd during the current quarter. Gross Sales averaged 2,00,449 boepd. Meanwhile, shares of the company closed at Rs 112.9 apiece, up 2.64 per cent, from previous close on BSE.