BLACK MONEY TRIAL SHIFTS TO ISLAND NATIONS

As India expands its probe into suspected black money stashed abroad, the trail appears to have gone much beyond the Alpine mountain ranges of Switzerland to various island nations and global financial centres like Dubai, Singapore, Luxembourg and Cyprus. While Switzerland has agreed to cooperate and share details in cases where probe by Indian authorities have independently shown 'tax crimes' prima facie, "a few cases" where such information exchange is taking place involve entities and transactions much beyond Swiss shores. While exact number of these "few cases" could not be ascertained, sources said that the ongoing cooperation between Swiss and Indian authorities is generating many more leads for further investigations and they suggest routing of funds through various other jurisdictions that range from well- established financial centres like Dubai, Singapore and Luxembourg to numerous small island nations. India is strengthening its bilateral tax information exchange treaties with many such jurisdictions, but a further push might be required for 'technical assistance'. While Switzerland has been the focus of India's fight against suspected black money stashed abroad, investigations into various cases show large-scale instances of illicit funds having been channelised abroad through other locations too. A number of island nations in Caribbean and other parts of the world figure among such locations. India has also signed information exchange pacts on tax matters with a number of such locations including Saint Kitts & Nevis, Bahamas, Bermuda, Liechtenstein, Gibraltar, British Virgin Islands, Isle of Man, Cayman Islands, Jersey, Macau, Liberia, Argentina, Guernsey and Monaco, among others. A Special Investigation Team is currently looking into the black money issue, including the cases related to untaxed money stashed abroad by Indians. In one of its reports recently submitted to the government, the SIT, however, observed that absence of riminal legal treaties between India and tax haven nations is one of the major impediments in initiating steps to bring back illegal funds stashed abroad by Indians. The role of some banks, including those outside Switzerland, has also come under scanner for acting in concert with the suspected black money hoarders and also for making 'safe haven' promises for their funds. The suspected lapses on the part of these banks are also being probed for allegedly facilitating re-routing funds of certain Indian corporate houses back into their listed companies as foreign investments. Such transactions are suspected to have taken place in case of 15-20 Indian companies, a senior official said, but refused to disclose their names as also that of the banks saying it might impede the investigations.

SEBI HELPS US REGULATOR TO BUST SOCIAL MEDIA FRAUDSTERS

In one of the biggest cross-border regulatory cooperation, markets watchdog Sebi has helped its counterpart in the US bust a major investment scam being run through online social media platforms. The 'Profit Paradise' scam was being run by two Indians -- one based in Mumbai and another in Hyderabad -- in the name of a 'High Yield Investment Product (HYIP)' wherein gullible investors were being enticed through pervasive social media pitches on Facebook, Twitter, Google Plus and YouTube. Such FYIP schemes have become very popular on various online platforms, wherein the operators solicit investments in securities, but most of them have turned to be yet another frontier for defrauding gullible investors in name of high and quick returns. In the latest case, the operators of 'Profit Paradise' were inviting investors to deposit funds that would supposedly be pooled with other investors' funds to make "huge profits" in forex, stocks, and commodity trading. Although operating from India, they disguised Profits Paradise's physical location by providing the false Internet data, indicating that Profit Paradise's operations were within the United States when they were not. While probing the case, the US markets regulator SEC (Securities and Exchange Commission) sought assistance from its peers in India, Canada and Hong Kong. After completing the probe and announcing charges against the two Indians, Pankaj Srivastava and Nataraj Kavuri, SEC said it "appreciates the assistance of the Securities and Exchange Board of India (Sebi) as well as the Autorite des Marches Financiers in Quebec, the Ontario Securities Commission, and the Securities and Futures Commission in Hong Kong." The case is being seen as one of the biggest in terms of cross-border cooperation among regulators to crack down on illicit investment schemes. Both Sebi and SEC are members of International Organisation of Securities Commission (IOSCO), an international policy forum for securities regulators that also sets global standards for securities regulation. Sebi and SEC are also signatory to the IOSCO MMoU which represents a common understanding amongst its signatories about how they will consult, cooperate, and exchange information for capital market enforcement purposes. The MMoU sets an international benchmark for cross-border co-operation. In the present case also, Sebi extended all necessary assistance to the SEC within the framework of IOSCO-MMoU. As per latest available data, Sebi received as many as 94 requests from overseas securities regulators for information during 2013-14 -- more than double of what it had got in each of the two preceding fiscal years.

Sebi had received 40 requests from foreign peers in 2012-13, while it had got 37 requests in 2011-12. At the same time, Sebi made 17 requests to capital markets regulators in other countries for information in 2013-14 as against 9 requests in the previous financial year. This is the highest number of requests sent out by the Indian market watchdog since 2011-12. The capital market regulator had sent out 9 requests each for regulatory assistance in 2011-12 and 2012-13 to foreign securities market watchdogs. Sebi has in place a robust system for information sharing and coordination with foreign regulators to nab manipulators and fraudsters operating across boundaries in a globalised world. In 2003, Sebi had signed the International Organisation of Securities Commissions (IOSCO) multi-lateral memorandum of understanding (MMoU) for mutual assistance on enforcement and compliance of regulations with several countries including Securities Exchange Commission of US. One of the IOSCO principles require the regulators to establish information sharing mechanisms, which set out when and how they will share both public and non-public information with their domestic and foreign counterparts. "As a crucial part of its commitment towards the IOSCO MMoU concerning consultation and cooperation and the exchange of information, to which Sebi has been a signatory since April 2003, Sebi provides cooperation and facilitates exchange in other jurisdictions," the market regulator said in its latest annual report for the year 2013-14. In the Profit Paradise case, SEC has charged Pankaj Srivastava and Nataraj Kavuri of offering "guaranteed" daily profits by anonymously soliciting investments for their purported investment management company. The SEC has charged that the guaranteed returns were false, and that the investments being offered bore the hallmark of a fraudulent high-yield investment program. Srivastava and Kavuri attempted to conceal their identities by supplying a fictitious name and contact information when registering Profits Paradise’s website address. They also communicated under the fake names of 'Paul Allen' and 'Nathan Jones'. After the SEC began its investigation into the investment offering, the Profits Paradise website was discontinued.

GOVT TO AMEND CONSUMER LAW

With an aim to empower consumers, the government plans to amend a law to allow customers to file case against sellers from their place of residence. As per current norms, the case has to be filed at the place of transaction. Also, the requirement of engaging lawyers in the consumer forums is likely to be done away with, if the goods or services availed is of less than Rs 2 lakh value. According to sources, the Ministry of Consumer Affairs proposes to bring amendments to the Consumer Protection Act, 1986 to make it more effective. The proposed amendments would be sent to the Cabinet for approval after seeking views from other ministries, they added. The objective for bringing in amendments is to protect consumer rights by simplifying the judicial process to ensure speedy and inexpensive justice. "Currently, customers have to file case against sellers from the place where they have bought the goods. We propose to allow customers to file the case from the place where they reside," a source said, while giving details about changes proposed by the Ministry. "No lawyers shall be permitted for both the parties (consumers and sellers) if the value of good or service is less than Rs 2 lakh," the source said, adding that mediation between both the parties would be allowed except in certain cases. The amended Act is likely to have provisions to cover e-commerce companies and some other service providers like Railways and courier firms. To make the complaint registration procedure simpler for consumers, the Ministry has not prescribed any fixed format and the complaints can also be made online. After 21 days, the complaints would be deemed to be accepted. Concerned over the pending cases in consumer forums, sources said the department has proposed that there would be only one stage for appeal in higher forum. Recently, Food and Consumer Affairs Minister Ram Vilas Paswan had said that the government plans to make amendments in the Consumer Protection Act to "make it more effective as protection of consumers in terms of quality, quantity and safety is of utmost importance." The government has proposed an authority under this law to protect consumers against unfair trade practices and also to keep a close watch on various consumer services also, he had said. Sources said the Central Consumer Protection Authority would be like an investigating agency, which will take up cases suo moto or complaints involving more than one person. It will promote, protect and enforce consumer rights and even recall hazardous products.

1 STOCK @ A PRICE OF SMART PHONE

As stock market continues its record-breaking rally, there are many shares with per-unit price running into thousands of rupees and equal the cost of buying a smartphone, a LCD television or even a split AC. Helped by the new government's reform push and growing expectations for better economic scenario, the foreign funds have been on a buying spree in stock market and the benchmark indices Sensex and Nifty have scaled new peaks above 28,000 and 8,400 levels, respectively. The Sensex has rallied by 33 per cent so far this year, making India the best performer among the world's ten biggest markets. At the same time, stock prices of at least 37 companies, out of the top-100 listed firms in India, now cost Rs 1,000 or above for one share, as per the stock exchange data. Leading the charts in terms of per-share value, Bosch commands a share price of Rs 16,571 apiece, while Eicher Motors and Shree Cements have share prices of Rs 14,001 and Rs 9,077, respectively. The market value of just one share of P&G, GSK Consumer Healthcare and Nestle is also in the range of Rs 5,000-6,500. Companies like Maruti Suzuki, Dr Reddy's, Oracle Financial Services, Grasim and Infosys command a price of Rs 3,000-4,000 per share. For blue-chips like TCS, SBI, Bajaj Auto, Ultratech Cement, Tech Mahindra and Hero MotoCorp, the per-share price is Rs 2,000-3,000, while others in this bracket include United Spirits, Colgate and GSK Pharma. Those with share price in the range of Rs 1,000-Rs 2,000 include ICICI Bank, HDFC, Aurobindo Pharma, ACC, Britannia and AB Nuvo. Outside the top-100 companies also, there are many with share prices running into thousands of rupees and one notable stock among them is MRF which currently commands a share price of Rs 32,337.60 apiece.

INFLATION AT 5 YEAR LOW

Continuing decline in food prices, including vegetables, pulled wholesale price inflation to a five year low of 1.77 per cent in October.
The Wholesale Price Index (WPI) based inflation was at 2.38 per cent in September and 7.24 per cent in October 2013.
As per data released by the government today, the food inflation fell to a nearly two-and-half year low of 2.7 per cent. Food inflation is on decline since May.
The sharp drop in WPI inflation, which fell for the fifth month in a row, came at the back of retail inflation declining to a record low of 5.52 per cent in October.
The rate of price rise in onion contracted 59.77 per cent as compared to a contraction of 58.12 per cent in September.
In case of vegetables, the contraction was 19.61 per cent, while in protein rich items of egg, meat and fish it was 2.58 per cent in October.
During the month, inflation in potato stood at 82.11 per cent, against 90.23 per cent in the previous month.
Inflation in manufactured products, like sugar, edible oils, beverages and cement, fell to 2.43 per cent in October as against 2.84 per cent in the previous month.

RETAIL PARTICIPATION IN MFs INCREASE

Retail participation in mutual funds from beyond the top 15 cities in the country has increased remarkably in the past 18 months, due to joint efforts made by the MF houses and stock market regulator SEBI, says AMFI. The MF industry's assets under management (AUM) crossed Rs 1,07,000 crore from retail investors living in places beyond the top 15 cities as on October 31.
It was a 33 per cent growth over 18-month. As on March 31, 2013 the AUM was Rs 65,000 crore, according the Association of Mutual Funds in India. The AUM relate to equities, equity-linked saving schemes (ELSS) and the balanced funds which essentially involves retail participation, the industry body said. "We have crossed the Rs 1 lakh crore mark in AUM from beyond 15 cities during past 18 months after we started the journey to reach retail equity investors living in 400 centres located in Tier-II and Tier-III cities, beyond the top 15 cities of the country," AMFI chief executive H N Sinor told PTI here. "This is a major indication of increased retail participation in equities," he added. "While we have achieved 20 per cent of overall retail participation, we have also been able to mobilise 10 per cent of overall AUM from 400 centres which are located beyond top 15 cities of the country comprising semi-urban and even rural areas," he said. After the global slump of 2008, stock market regulator SEBI had come up with guidelines to re-energise the mutual fund industry. These guidelines had allowed the industry to take additional 30 basis points of already existing expense ratio which could be used to incentivise distributors across slabs to give a push to sales of mutual fund products.

Asset management companies (AMC) are allowed to keep aside 2.5 per cent of their AUM as fee in case their AUM is less than Rs 100 crore. The fee is decreased to 2 per cent if AUM goes up to Rs 300 crore and 1.75 per cent in case the AUM goes beyond Rs 300 crore. However, since April 2013, Securities and Exchange Board of India has allowed them to charge 50 basis points additional amount in the form of management fee in each of the slabs which they can use to incentivise their agents so that they could increase their penetration in Tier-II and Tier-III cities. Secondly, it has allowed MF houses to use two basis points of their AUM for creation of awareness among investors. Thirdly, market conditions have improved helping achieve such a result, as per AMFI. Besides, mutual fund houses adopted several districts on a voluntary basis which also attracted investors from smaller towns towards mutual funds. "So far, we have adopted 187 districts across the country. While large mutual funds have adopted around ten districts, medium mutual fund houses have adopted around five districts and small mutual fund houses adopted two districts on their own," Sinor said. "It all has helped the industry increase the number of folios to 2.04 crore as against 1.83 crore folios it had received in March, 2013 which shows an increase of 20 lakh folios during past 18 months," he added.

NIFTY OUTLOOK FOR 17 & REVIEW

FORENOON BETTER

Nifty                               8390  +32

Nifty traded with positive bias through out the day and closed at the highest level for the week and week closed with a gain of about 0.60%. Nifty has been moving in a narrow range of 8300 and 8420 for the last Eight  trading sessions and a clear breakout / breakdown appears imminent in a day or Two.    If it breaks out on the upper side(closing above 8400), Nifty could go upto 8500 / 8550.  Short term trend continues to remain positive  and stoploss  may be  continued at  8300 (on close basis).  Nifty spot is expected to encounter resistance at 8430,, 8465 and find support at 8350, 8315 for Monday.   While Global cues  and  Funds flow  are expected to broadly guide the market movement, based on the present market position, market can be expected to be generally better in the forenoon session.

MARKET CLOSE ON RECORD HIGHS

Stock market indices today scaled record highs on sharp fall in wholesale inflation, persistent foreign capital inflows and good bluechip earnings with benchmark Sensex rising 106.02 points to end at fresh closing peak of 28,046.66. Similarly, buying mainly in realty, metal and refinery counters lifted the NSE Nifty index by 32.05 points, or 0.38 per cent, to end at new closing high of 8,389.90. The wholesale price inflation dropped to a 5-year low of 1.77 per cent in October due to fall in food prices. The Wholesale Price Index (WPI) based inflation was at 2.38 per cent in September and 7.24 per cent in October 2013. This data comes after easing of consumer price index. "We expect that milder-than-expected inflation and low industrial growth are strong reasons to expect a 25-bp policy rate cut at the RBI's coming 2nd December monetary policy meet," said a Anand Rathi Institutional Research report. Besides, data showing that Foreign Portfolio Investors (FPIs) buying shares worth a net Rs 690.61 crore yesterday, also gave a boost to the buying momentum. "News flow both domestic and globally has been in favour of equity markets and that makes Indian markets one of the favourite destinations for the flow of risk investments," said Hiren Dhakan, Associate Fund Manager, Bonanza Portfolio. In bluechip earnings, State-run State Bank of India posted 30.5 per cent growth in net profit at Rs 3,100.41 crore for the quarter ended September 30, pushing its shares up by 2.55 per cent. The BSE Sensex resumed higher at 27,949.54 and shot up further to 28,093.23 before concluding at all-time closing high of 28,046.66, a gain of 106.02 points or 0.38 per cent. The CNX 50-share Nifty also firmed up by 32.05 points or 0.38 per cent to all-time closing high of 8,389.90 after touching a high of 8,400.65. 

KASHMIR SAPPHIRE SOLD @ RECORD PRICE

A rare step-cut Kashmir sapphire in rich velvety blue has sold for a world record at a Sotheby's auction in Geneva, where it fetched USD 6 million. "A rare 27.54 carat step-cut Kashmir sapphire which exhibited a rich, saturated velvety blue colour achieved USD 5,984,474, a world auction record for a Kashmir sapphire," Sotheby's said in a statement. The gem was purchased by a buyer from Asia, auctioneers said. Previous record was set by a Kashmir sapphire weighing 28.18 carats when it sold for USD 5,093,000 at Sotheby's New York in April 2014. Kashmir sapphires sport a rich lustrous blue colour often compared to that of a cornflower. In the 1880s a landslide in Kashmir, caused the legendary sapphires to be discovered. With a limited production, Kashmir sapphires make up a tiny percentage of the world's total sapphire supply. The American Gemological Laboratories labels this stone a "Classic Kashmir," denoting that it not only exhibits the classic gemological features of the Kashmir region, but also represents the top quality of stones from the region. Meanwhile, the sale of "Magnificent and Noble jewels" on November 12 was led by a 'Graff Ruby' from the collection of Dimitri Mavrommatis. The 8.62 carat cushion-shaped gemstone soared above estimate and set a world auction record for a ruby at USD 8,600,410, as well as a record price per carat for a ruby at USD 997,727 when it sold to Laurence Graff, auctioneers said. Another highlight of the sale was a natural pearl and diamond necklace formerly in the collection of Josephine de Beauharnais, Queen of Sweden and Norway and likely once the property of Josephine de Beauharnais the first wife of Napoleon Bonaparte and Empress of the French. Comprising 111 pearls, the necklace achieved USD 3,426,669. In addition to Beauharnais's necklace, the sale featured the 'English Rose' a diamond pendant, dating 1876, once the property of Queen Victoria of Great Britain, which made USD 71,367. Commenting on the results, David Bennett, Chairman, Sotheby's Switzerland said,"The Graff Ruby mesmerises all who view it. It is truly a gem among gems, and quite simply the greatest ruby of its size I have ever seen."

NOW...SAY THANKS TO FRIENDS THROUGH FB

Facebook today launched a new initiative 'Say Thanks' that will allow users to create personalised video cards for their friends on the world's largest social network. US-based Facebook has over 1.3 billion users globally and more than 100 million users in India. "Millions of people use Facebook every day to connect with people and things that matter to them most. Your friends are at the core of your Facebook experience, and we are always looking for new ways to help you celebrate those friendships," Facebook said in a blogpost. Users can create as many personalised videos as they like for their friends, relatives and co-workers present on Facebook. The initiative will be rolled out today globally on both desktop and mobile in English, French, German, Indonesian, Italian, Portuguese, Spanish and Turkish languages. To create a 'Say Thanks' video, users will have to choose a friend and a video will be created and ready to share. Users can select one of the four different themes and choose the photos and posts that represent their friendship, the blogpost said. The video will be shared on the user's timeline along with the timeline of the person it is dedicated to. In February this year, Facebook had launched a similar initiative to celebrate its tenth anniversary. It offered users a personalised video summarising their life on Facebook over the past years. Each user's "Look Back" had a compilation of 15 or so of their most-liked photos, statuses, and life events.

NIFTY OUTLOOK FOR 14 & REVIEW

MID SESSION BETTER...

Nifty                               8358  -25

Nifty traded in zigzag manner with negative bias and closed with a loss of about 0.30%. After the positive IIP and WPI figures, market appears to have got into profit booking. Nifty has been moving in a narrow range of 8300 and 8420 for the last Seven trading sessions and a clear breakout / breakdown appears imminent in a day or Two.    If it breaks out on the upper side(closing above 8400), Nifty could go upto 8500 / 8550.  Short term trend continues to remain positive  and stoploss  may be  continued at  8300 (on close basis).  Nifty spot is expected to encounter resistance at 8400,, 8435 and find support at 8320, 8285 for Friday.   While Global cues  and  Funds flow  are expected to broadly guide the market movement, based on the present market position, market can be expected to be better in midsession.

SENSEX SLIPS FROM RECORD HIGHS

Snapping its three-day rally, the benchmark BSE Sensex today retreated from record highs to end over 68 points lower at 27,940.64 as the shares of state-owned oil companies fell as much as 6 per cent after the government hiked excise duty on petrol and diesel. The 30-share Sensex commenced on a strong note and soared to the day's high of 28,098.74 on positive inflation and factory output data announced yesterday. However, it succumbed to profit-booking and dipped below the 28,000-mark to hit the day's low of 27,822.70 before recovering partially to settle at 27,940.64, down by 68.26 points or 0.24 per cent. Yesterday, the benchmark index had ended at an all-time closing high of 28,008.90 and also hit intra-day high of 28,126.48 on sustained foreign funds inflows driven by economic reforms undertaken by the government recently. The 50-scrip NSE Nifty ended 25.45 points, or 0.30 per cent, down at 8,357.85 after shuttling between 8,408.00 and 8,320.35. The gauge yesterday concluded at record 8,383.30 after scaling a lifetime (intra-day) high of 8,415.05. Meanwhile, country's industrial production grew at 2.5 per cent in September and retail inflation eased to 5.52 per cent in October from 6.46 per cent in September, according to data released after market hours yesterday. Besides profit-booking in blue-chip stocks, sentiments also dampened after the government hiked excise duty on petrol and diesel prices by Rs 1.50 a litre each to mop up an additional Rs 13,000 crore in revenue. Stocks of state-run companies such as BPCL, HPCL and Indian Oil Corp came under selling pressure and ended up to 6.11 per cent lower.
ONGC was among the biggest Sensex losers, plunging by 2.03 per cent, while RIL fell by 0.53 per cent.
Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 459.47 crore yesterday, according to provisional data from the stock exchanges. Brokers said the market was in an over-bought position and participants adopted a cautious stance and preferred to lighten some positions by booking profits at record levels. Selling was more pronounced in realty, PSU, metal, infrastructure, banking, power and auto stocks, which dragged down the key indices - Sensex and Nifty - from record highs. Sesa Sterlite down by 2.50 per cent, Tata Power shed 2.47 per cent, GAIL fell 1.58 per cent, Axis Bank down 1.49 per cent, Hero MotoCorp by 1.38 per cent and HDFC by 1.14 per cent. Bucking the trend, Infosys surged 1.77 per cent, Dr Reddy by 1.01 per cent, Cipla 0.91 per cent, Wipro 0.69 per cent, Bharti airtel 0.68 and Bajaj Auto 0.54 per cent and averted any major fall in the Sensex.
Among Sensex components, 16 stocks ended in negative territory, while 14 closed higher.