CRUDE OIL PRICES CHART

RUPEE vs DOLLAR FROM 1947-2013

SENSEX UP BY 219 POINTS

Stock markets today rose for the third day with S&P BSE benchmark Sensex jumping 218.68 points to end at over two-week high of 18,619.72 after Prime Minister Manmohan Singh assured that the rupee's decline will be addressed without capital controls or reversal of reforms. The currency markets also appeared to strengthen with the rupee gaining over 50 paise to trade at 66.05/06 levels against the US dollar compared to yesterday's close of 66.55. While the stock markets were volatile as the Prime Minister began his speech in the Parliament shortly after noon, share prices surged on heavy buying in the last 90 minutes of trade with sectors like consumer durables, healthcare, banking, IT and FMCG seeing good enquiries. The 30-share Sensex ended at 18,619.72, up 218.68 points or 1.19 per cent, extending gains to the third session in which the index has rose over 650 points. Today is the highest close for Sensex since August 14 (19,367.59).  Broad-based National Stock Exchange index Nifty rose by 62.75 points, or 1.16 per cent to end at 5,471.80, after moving between 5,360.20 and 5,493.30. Also, MCX-SX' SX40 index ended at 10,938.49, up 88.98 points.

RUPEE GAINS 85 PAISE

The rupee got a boost today from the Prime Minister's assurances in Parliament on combating the currency's fall and reviving economic growth, gaining 85 paise to close at 65.70 against the dollar. Support for the local currency also came from dollar sales by exporters and some banks after the central bank took steps on Wednesday to stem the rupee's fall. The rupee was getting support from the strong positive closing in the stock markets..The gains came a day after the battered local currency posted its biggest single-day rise in at least 15 years as the Reserve Bank of India allowed state-owned oil refiners, the biggest buyers of dollars, to purchase foreign-exchange through a special forex swap facility. The benchmark S&P BSE Sensex climbed 218.68 points or 1.19 per cent. Foreign institutional investors sold a net Rs 248.18 crore of shares yesterday, as per provisional data.

ECONOMIC GROWTH SLIDES TO 4.4 PERCENT

Pulled down by a drop in mining and manufacturing output, economic growth in the April-June quarter slid to 4.4 per cent, Growth was at the slowest pace since the 2008 financial crisis, with all but one of the eight sectors registering a lower rate of expansion or contraction. The country's gross domestic product (GDP) had expanded by 5.4 per cent in the April-June quarter of the last fiscal. On a sequential basis, the growth rate declined from 4.8 per cent in the January-March period of 2012-13. The biggest drag on growth came from mining and quarrying, which contracted by 2.8 per cent in the April-June quarter against a 0.4 per cent growth in the same period of the last fiscal, according to data released today by the Central Statistical Organisation (CSO). Contraction in the manufacturing sector widened to 1.2 per cent from 1 per cent a year earlier. Other sectors, including construction, power generation, hotels and transport, showed a marked deceleration in growth. Farm sector output expanded by 2.7 per cent compared with 2.9 per cent in the corresponding period of the last fiscal.

The growth rate in the services sector, including financing, insurance and real estate, stood at 8.9 per cent against 9.3 per cent in same quarter of 2012-13. Growth in electricity, gas and water supply was 3.7 per cent compared with 6.2 per cent. The construction sector expanded 2.8 per cent as against 7 per cent in the year-ago period. The trade, hotels, transport and communications segment grew at 3.9 per cent against 6.1 per cent. Only the community social and personal services sector registered a higher growth of 9.4 per cent compared with 8.9 per cent.

NEW CPI NOT ENOUGH  

The new series of consumer price index (CPI) is not enough for a robust statistical analysis of of prices, Reserve Bank Governor D Subbarao said today. He also said the new CPI has an excess focus on food prices, which has a 50 per cent weight. House rents, which account for 10 per cent, are also a cause for concern given doubts over the efficacy of the prices, he added. "The new CPI has only 19 data points which is not sufficient for a statistically robust analysis," Subbarao, who demits office on September 5, said while speaking at the Statistics Day conference at the RBI headquarters here. Posing the question if there is a case for shifting focus to the CPI, Subbarao said even in case of such an eventuality, the central bank will not abandon the wholesale price index (WPI) as a tool to monitor producer prices. "My own view is we will not, because analytically we need to develop a series of producer price indices that will help us gauge how price momentum builds up in the economy." Subbarao said RBI has traditionally focused more on WPI because of the deeper analytical insights it offers. "We've traditionally used WPI because we thought the legacy CPI is not representative enough for the entire population. WPI is more extensively researched by way of its empirical relationship with other variable like output, monetary aggregates and interest rates and presents richer analytical insight," he said, conceding that other central banks use CPI for policy formulation. The new more inclusive CPI was introduced in 2011 and ever since that Subbarao has been repeatedly asked if the RBI will rely more on the new indice. His uniform response has been that the central bank uses all the available data points, including the CPI and WPI, in its policy formulation. The wedge between the WPI and CPI number has consistently been high. For July, WPI came in at 5.71 per cent while the CPI was still hovering around the double-digit mark.

"We have had a problem in calibrating our policy whenever there has been a divergence between CPI and WPI and more importantly, in communicating our policy...it poses a major challenge in assessing inflation dynamics in the short term," Subbarao said talking of RBI's predicament. "In our country, we have a problem of excess of inflation measures," the RBI chief said, adding there is the WPI, three legacy CPI indices and the new CPI indices. He acknowledged that the analysts have criticised the WPI for being flawed and also for not considering the services sector, which contributes two-thirds of the economy. Maintaining that other central bankers are "reticent" talking about it, Subbarao said there is no single equilibrium exchange rate which is the most acceptable one to predict the real value of a currency. He stressed the need to deepen the statistical research capabilities to understand how developments in the external economy spillover in our economy.

INVEST WITH 12-18 MONTH TIMELINE

In the face of increasing volatility in the debt market, industry leaders have advised investors to keep a 12-18 months horizon in short-term and long-term debt funds for stable returns. "In the short-term (income) funds, investors should have a horizon of not less than one year. Similarly, in the long-term funds, investors should stay invested for 18 months or beyond," Amit Tripathi, Fixed Income Head at Reliance Mutual Fund, told PTI today. He said volatility could stay for another three-four months. To contain rupee volatility, the Reserve Bank, since mid- July, squeezed liquidity from the financial system through a slew of measures, which in turn, pushed up yields both in the short and long-end bonds. While short-term rates have gone up by around 300 basis points, long-term rates have increased by around 120 basis points since RBI's announcements. While short-term rates are hovering around 10.5 per cent, 10-year benchmark yield is at around 8.8 per cent as of now. Another fund manager echoed similar sentiment. "If an investor has a medium term outlook and risk appetite, then he should at least stick to 12-18 months (horizon)," Fixed Income Head at Sundaram Mutual, Dwijendra Srivastava, said. Fixed maturity plans (FMPs), along with interval schemes, are suitable products for investors who are averse to volatility. The yield curve would depend on the MSF (marginal standing facility) rate determined by the RBI, he said. Chief Executive of Baroda Pioneer Mutual Fund Jaideep Bhattacharya said FMPs should be preferred products of the retail investors given the high yield prevailing in the market. Asked about the bond yield curve, he said it is very difficult to predict a level as it would depend on RBI actions on liquidity.

RUPEE FALL CAN BE TACKLED LIKE THIS

Fall in rupee to record lows has raised the prospect of government or RBI taking steps to support the currency, seen vulnerable because of a record high current account deficit. Below are some measures the Reserve Bank of India and government could consider to protect the rupee
* Dollar window for oil cos
RBI could open a dollar window for oil companies to buy dollars directly from it instead of markets, but it would drain foreign exchange reserves
* Dollar for oil bonds
RBI could hold auctions to buy bonds from oil companies, providing them dollars or other non-rupee currencies, but the outstanding amount of oil bonds is small as the government has been giving direct cash subsidy to oil companies
* Asking exporters to buy Indian rupee
RBI could ask exporters to convert part, or their entire, overseas foreign currency earnings in the market immediately, providing near-term relief to the rupee
* Curbing net open position limit for banks
It could ask banks to limit their net overnight open position limits, making it difficult to short the rupee and prevent speculative trading
* Moral persuasion
RBI could persuade banks and financial institutions to raise funds in dollars abroad and lend them locally, a measure that has worked in the past when overseas rates were attractive
* Stagger import payments
It could issue rules delaying or staggering import payments, which are typically made at the end of every month, although RBI has not taken this step in recent years
* Additional fiscal reforms
The government could review sectors such as defence, or revive pension and insurance reforms, but passage through parliament could be tough
* Govt-backed NRI bond
The government could issue a sovereign bond through State Bank of India to non-resident Indians, but such a move could increase external debt and interest liability w * Sovereign overseas bonds
The government could issue sovereign bonds to raise dollars from overseas investors, but RBI is reluctant to expose the country to foreign exchange risks during repayment

SUBBARAO HITS HARD ON GOVT

In a forthright "last public lecture" before he retires next week, RBI Governor D Subbarao was today sharply critical of the government, blaming its "loose fiscal stance" for the current economic woes, and warned that the root cause of rupee depreciation is "domestic structural factors." While the speed and timing of the rupee's depreciation was due to the markets reacting to US Fed announcements, Subbarao said, "We will go astray, both in the diagnosis and remedy, if we do not acknowledge that the root cause of the problem is domestic structural factors." He said it would be "misleading" to blame recent policy pronouncements of the US Federal Reserve for the decline in rupee, which has slid 23 per cent against dollar this fiscal. "...there has been a growing tendency to attribute all of this (ferocity of rupee depreciation) to the 'tapering' of ultra easy monetary policy by the US Fed. Such a diagnosis, I believe, is misleading," he said in his last public lecture as RBI Governor. While some of the growth slowdown was attributable to the RBI's monetary tightening, he said, "India's economic activity slowed owing to a host of supply-side constraints and governance issues, clearly beyond the purview of the RBI." Blaming the "loose fiscal stance of government during 2009-12" for slow growth and high inflation, he said, "Had the fiscal consolidation been faster, it is possible that monetary policy calibration could have been less tight." The governor has often been criticised from within the government for his tight money policy at the cost of growth. The root cause behind the rupee's decline, he said, is a current account deficit that's running well above the sustainable level for three years in a row and may possibly continue at that level for the fourth year this year. The only lasting solution is to reduce the current account deficit (CAD) to a sustainable level, he said. "Reducing the CAD requires structural solutions - RBI has very little policy space or instruments to deliver the needed structural solution. They fall within the ambit of the government." Subbarao, however said, that in the interim "we need to stabilise the market volatility, a task that falls within the domain of the Reserve Bank."

The government aims to bring down the CAD, which touched a record high of 4.8 per cent of GDP in 2012-13, to 3.7 per cent of GDP (USD 70 billion) this fiscal. GDP growth slowed to a decade low of 5 per cent in the last fiscal. The RBI has pegged growth at 5.5 per cent in this fiscal. Sacrificing growth on account of high interest rates was only for the short term, Subbarao said. "...RBI had run a tight monetary policy not because it does not care for growth but because it does care for growth." The rupee, which closed yesterday at a record low of 68.80 against the dollar, gained 225 paise to 66.55 today. Subbarao said it is the RBI's "avowed policy" not to target an exchange rate and it has stayed true to that policy. "Our efforts over the last few years, particularly the last three months, have been to smoothen volatility as the exchange rate adjusts to its market-determined level so as to make the near-term cost of adjustment less onerous for firms, households and banks," he said. Referring to criticism that the RBI's measures have been confusing and betrayed a lack of resolve to curb volatility, Subbarao said, "Let me first of all reiterate that our commitment to curbing volatility in the exchange rate is total and unequivocal." He, however, admitted the RBI could have communicated the rationale of its measures more effectively. "But our actions were consistent. Our capital account measures were aimed at encouraging inflows and discouraging outflows. Also, we tightened liquidity at the short end to raise the cost of short-term money so as to curb volatility," he said. At the same time, he added, the RBI wanted to inhibit the transmission of the interest rate signal from the short end to the long end as that would hurt the flow of credit to the productive sector of the economy. "...it is not the policy of the RBI to resort to capital controls or reverse the direction of capital account liberalisation," Subbarao stressed. The RBI's measures did not restrict inflows or outflows by non-residents, he added. 

Chidambaram will one day say 'thank God RBI exists

Bringing their differences into open, outgoing RBI Governor D Subbarao today took a dig at Finance Minister P Chidambaram for his comment once that he would "walk alone" to ensure growth in the face of tight money policy of the central bank. A week before he demits office, Subbarao referred to a lot of media coverage on policy differences between the government and the Reserve Bank and the issue of autonomy and accountability. "Gerard Schroeder, the former German Chancellor, once said, 'I am often frustrated by the Bundesbank. But thank God, it exists.' "I do hope Finance Minister Chidambaram will one day say, 'I am often frustrated by the Reserve Bank, so frustrated that I want to go for a walk, even if I have to walk alone. But thank God, the Reserve Bank exists'," Subbarao said in his last public lecture as RBI Governor. He was obviously referring to a statement of Chidambarm in October last year that "if the government has to walk alone to face the challenge of growth then, 'we will walk alone'." Chidambaram was then upset over RBI's decision to keep the interest rates high despite government unveiling a five-year fiscal consolidation road map.

                   RUPEE ZOOMS 225 PAISE

The battered rupee gained 225 paise to 66.55 against the dollar today, the most in at least 15 years, after the Reserve Bank of India eased pressure in the currency market by starting a facility for state-run oil refiners to buy foreign exchange. The rupee, which closed at a record low yesterday, ended a three-day losing streak even as the dollar strengthened overseas and capital outflows continued. Fresh dollar sales by exporters on expectations of a further rise in the rupee also helped the local currency. The RBI last night said PSU oil companies could buy dollars through a special swap window effective immediately. Indian Oil, Bharat Petroleum and Hindustan Petroleum are the biggest buyers of dollars, requiring about USD 8.5 billion every month to import an average 7.5 million tonnes of oil. "The decision is aimed at removing a major source of dollar demand from the spot market," said Abhishek Goenka, CEO of India Forex Advisors. "The sustainability of this measure will be closely watched as the central bank had taken a similar measure in 2008, which provided short-lived relief." Bank of America Merrill Lynch said in a report today the RBI will have to take far more pro-active steps to rebuild forex reserves, because if the status quo remains, the rupee could touch 75 per dollar by the end of 2014. At the interbank foreign exchange market, the rupee opened at 66.90 to a dollar from the previous close of 68.80 and fell to a low of 67.92 on dollar demand from importers. It bounced back to 66.51 before ending at 66.55, a rise of 225 paise or 3.27 per cent. The rupee's recent decline cast a shadow in Parliament today, with opposition parties saying there was panic in the country. 

FOOD SECURITY BILL ILL TIMED

 Former RBI Governor Bimal Jalan today said the Food Security Bill is ill-timed and will further aggravate the economic situation by increasing fiscal stress. "Given the macroeconomic situation just now, whether we can afford it (food security plan) right now ? Timing is not right, timing is an issue," Jalan told PTI while replying to a query whether the food security plan will increase government's fiscal stress."We should not do this because of electoral considerations. We should do it because it can be done, it needs to be done. And this is a desirable thing to happen. We should not do this because of electoral considerations. We should do it because it can be done, it needs to be done. And this is a desirable thing to happen," he added. 

Jalan further said: "The current macroeconomic situation is very distressing as of now. India's GDP growth is low, CPI s high, current account deficit (CAD) is high, fiscal deficit is high, and you are seeing there is no confidence in the market." His comments come within days of the RBI in its annual report raising concerns about the viability of the Food Security law.

The Lok Sabha on Monday passed the Food Security Bill, barely eight months ahead of the 2014 general elections. It will have to approved by the Rajya Sabha. The BJP had dubbed food security bill as "vote security bill". The passage of the Food Security Bill in Parliament will pave the way to give nation's two-third population the right to 5 kg of foodgrain every month at highly subsidized rates of Rs 1-3 a kg. At Rs 1,30,000 crore government support, the food security programme will be the largest in the world. It would require 62 million tonnes of foodgrains.

As the Bill is likely to be implemented in the remaining months of the current fiscal, its impact on government finances will be less in 2013-14, but much more in the years to come, rating agency Moody's said. The total food subsidy budgeted in the current fiscal is Rs 90,000 crore, of which Rs 10,000 crore is towards the implementation of the programme.
The former RBI governor, who held office during the time of the Asian crisis of 1997-98, said that RBI will have to take measures which are supportive of investment and confidence boosting. 

ACTUAL IMPACT IN COMING FISCAL 

The proposed food security law will increase the government's subsidy bill but its impact is expected to be felt only in the upcoming fiscal years, says an HSBC report.
"The Food Security bill which has been recently approved in Parliament will also increase the subsidy burden. However, its impact may be felt only in upcoming fiscal years," HSBC said in a research note today.

The annual financial burden after its implementation is estimated to be about Rs 1.30 lakh crore at current cost. 

AURUNDHATI BHATTACHARYA TO BE SBI CHIEF?

The Appointments Committee of the Cabinet, headed by the Prime Minister, has suggested that the Finance Ministry interview all the four SBI Managing Directors for the post of Chairman of the country's largest bank. The incumbent Chairman Pratip Chaudhuri is retiring next month. The Finance Ministry had sought exemption in regulatory guidelines so that more candidates could be interviewed for the top post in State Bank of India (SBI). Based on the exemption sought, the Appointments Committee of the Cabinet (ACC) suggested that the Finance Ministry invite all the four MDs for interview, sources said. ACC comprises the Home Minister and the administrative ministry in-charge (the Finance Ministry in this case). As per the existing norms, a candidate for the post of Chairman is eligible for the interview only if he/she has at least two years of service left before retirement. Going by this rule, only one of the four Managing Directors, Arundhati Bhattacharya, is eligible for the post of the Chairman of the bank. Another Managing Director A Krishna Kumar has one year and three months left before his retirement. He will retire in November next year, while Bhattacharya recently elevated as MD will retire in March 2016. The term of senior-most Managing Director Hemant Contractor, who is group executive for international banking, ends in February next year. S Viswanathan, MD in-charge of subsidiaries and associates, will retire in April 2014. Prior to her elevation, Bhattacharya was MD and Chief Executive of SBI Caps, the merchant banking subsidiary of SBI. Earlier this month, seven CGMs were elevated as Deputy MDs: V G Kannan, Jeevandas Narayan, N Jambunathan, Krishnamachari, S A Ramesh Rangan, Praveen Kumar Malhotra and Jibendu Narayan Misra. The SBI top deck comprises the chairman, four MDs, 12 deputy MDs and over 35 CGMs. Prior to the elevation, Kannan was President and Chief Operating Officer at SBI Caps, Misra was Chief General Manager (Maharashtra & Goa circle) and P K Malhotra was Chief General Manager (CGM) for project finance. 

SEBI ADVISORY FOR INVESTMENT ADVISORS

Market regulator Sebi today directed all investment advisers to get registered with itself by October 21 to continue their services. The Securities and Exchange Board of India (Sebi) in a notification in January had made it compulsory for investment advisers to first obtain a certificate of registration for the same in a move to weed out unauthorised entities giving advice to investors.
"All the persons acting as an investment adviser before the commencement of Investment Advisers Regulations are advised to make their application for grant of registration before October 21, 2013 to continue to do so," Sebi said in a statement.
It also said that they "shall comply with the requirement of obtaining a certificate of registration for acting as investment adviser under the IA regulations, it added. As a part of its efforts to make it convenient for genuine entities to get the registration, Sebi has allowed filing applications with its regional and local offices across the country.
The regulator said the applicant seeking to act as an investment adviser should make an application to Sebi in a prescribed format along with the necessary supporting documents like details of the investment advice provided. As per the regulation, Sebi made it mandatory for investment advisers to register with the capital markets regulator and also require them to disclose all issues that could result in conflict of interests, among others.
"...no person shall act as an investment adviser or hold itself out as an investment adviser unless he has obtained a certificate of registration from the Board or he is specifically exempt," Sebi noted. "Provided that "a person acting as an investment adviser immediately before the commencement of these regulations may continue to do so for a period of six months from such commencement or, if it has made an application for a certificate within the said period of six months, till the disposal of such application," it added.
To ensure more transparency, the new regulations require investment advisers — banks, non-banking financial companies (NBFCs) and corporates — would have to segregate their investment advisory services from other activities.
Investment advisers also have to disclose the fee received for their advice on a particular financial product. Sebi said all entities engaged in advising on financial products would need to get registered with it. Besides, the investment advisers need to separate this activity from all other activities such as distribution. To be an investment adviser, corporate bodies need to have a minimum worth of Rs 25 lakh while the threshold level would be Rs 1 lakh for individuals.

INDIA HAS LOST CONFIDENCE

With the economy in distress, leading industrialist Ratan Tata has said India has lost the confidence of the world and the government has been slow to recognise it. He also said the government has "swayed" under the influence of vested interests in private sector and policies have been "changed, delayed and manipulated". Tata, who demitted office as Tata group Chairman last December, said Prime Minister Manmohan Singh has held India's "esteem high but in recent times we have lost that esteem We have lost the confidence of the world. We have been slow to recognise that in the government," he told CNN-IBN while responding to a query on PM's silence on investors losing confidence.
He further said it would be good for the country if policies were implemented as they were written. "The government has issued policy which vested interests, quite often in private sector have changed, delayed or manipulated that policy. So, for one reason or the other, the government has swayed with those forces," Tata said.
Recollecting the 1991 reforms, when "the brave moves were made", he said "it's the same team. What has happened in my view is that there have been forces...too many competing interests. By and large whatever is happening should be looked at to the benefit of the people of India not to few vested interest in India".
While stressing that his respect for the leadership of Singh continued to be "very high", he, however, said there is a lack of leadership in the country to lead from the front.
"...we don't have leadership that we have been talking about, that is leading from the front," Tata said. He further said the government is being pulled in different directions, even from within it.
"We should have one view...the team has been pulling in different directions, allies are pulling in different directions...states are pulling in one direction. We are not consolidating ourselves in the government," Tata said.
On Gujarat Chief Minister Narendra Modi's leadership, he said: "I think in Gujarat he has proven his leadership and he has moved Gujarat into a position of prominence. I am not in a position to gaze what he would do in a country." 

RUPEE HITS LIFETIME LOW

The rupee collapsed to a lifetime low of 68.85 against the dollar and closed at 68.80, registering its biggest single-day loss of 256 paise

The rupee today collapsed to a lifetime low of 68.85 against the dollar and closed at 68.80, registering its biggest single-day loss of 256 paise, as global oil prices jumped, deepening concerns about the current account deficit and capital outflows. Consistent dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices, kept the rupee under pressure.
At the interbank foreign exchange market, the rupee opened at 66.90 a dollar against 66.24 previously and dropped to 68.75 in late morning deals. It recovered some ground in the afternoon after the central bank was said to have intervened but dropped to an all-time intra-day low of 68.85 before ending at 68.80, a fall of 256 paise or 3.86 per cent. In three trading days in a row, the rupee has lost 560 paise, or 8.86 per cent, against the dollar. So far in August, it has tanked by 840 paise, or about 14 per cent, and in the current year by 1,381 paise or over 25 per cent.  

FALL AGAINST ALL CURRENCIES

As rupee's record fall against the US dollar continues to hog the limelight, it has also lost ground and breached key levels against a host of other currencies including British pound, euro and Swiss franc. Adding to rupee's woes, British pound today crossed Rs 106 level, euro went past Rs 92, Swiss franc touched Rs 75 mark, Canadian dollar was at Rs 65, Australian dollar at over Rs 60, while New Zealand dollar, Singapore dollar, Bruneian dollar and Libyan dinar crossed Rs 50 level. Among even more expensive foreign currencies, one Kuwaiti dinar is now worth more than Rs 240, Bahraini Dinar over Rs 180, Omani rial has went past Rs 175 and Latvia Lat at Rs 130. Against the most prominent foreign currency US dollar, the rupee has fallen to a record low of Rs 68.75.
The US greenback has appreciated by about 28 per cent since May this year, amid aggravating concerns over flight of foreign funds from India due to weak domestic economic conditions and global headwinds. Rupee's fall has been same or higher against a host of other foreign currencies including pound, euro, Swiss franc for the same period. The plunge has been less sharper against a few like Australian dollar (10 per cent), New Zealand dollar (16 per cent) and Brazilian real (8 per cent).
A few currencies against which the rupee has appreciated since May include those in countries like Panana, Tongo, Surinam, Tajikistan, Solomon Islands, Salvador, Haiti, Kyrgyzstan, Liberia, Syria, Congo, Somalia, Sierra Leon and Guinea.An analysis of foreign exchange rates across the world shows that Kuwaiti dinar is the most expensive against the rupee at current level of close to Rs 243, followed by Bahraini dinar (Rs 182), Omani rial (Rs 178) and Latvian lat (Rs 130).
Among the major foreign currencies, British pound is the most expensive and hit a record high of Rs 106.91 this afternoon, followed by euro, Swiss franc, US dollar, Canadian dollar and Australian dollar.
At least eight foreign currencies currently trade over Rs 100 mark, including Isle of Man pound, Gibraltar pound and Jersey pound. Besides, euro and Jordanian dinar are in 90s. At least 50 foreign currencies trade at over Rs 50 level.
The number of foreign currencies having a value higher than rupee is at least 100, while those valued less than Indian currencies include those of Bangladesh, Liberia, Algeria, Serbia, Kenya, Angola, Japan, Nepal, Pakistan, Albania, Syria, Iceland, North Korea, Sri Lanka and Nigeria. Currencies in countries like Guyana, Yemen, Hungary, Malawi, Zimbabwe, Costa Rica, Chile, Rwanda, Congo, Burma, South Korea, Iraq, Somalia, Lebanon, Burundi, Mongolia, Tanzania, Colombia, Uzbekistan, Uganda, Cambodia, Paraguay, Lao, Belarus, Indonesia, Iran and Vietnam also carry value less than one rupee. 

CARS AND CONSUMER DURABLES TO BE COSTLIER

As the rupee continues its freefall against the dollar, cars, TVs, washing machines and other home appliances are set to cost more with companies set to hike prices to offset impact on their margins. While General Motors India has announced that it will hike the price of three of its models by up to Rs 10,000 from September first week, Godrej Appliances and Haier also said they would increase prices of their products by up seven per cent from next month. "The sharp rupee depreciation combined with heavy discounting due to competitive pressure has adversely impacted margins. So, we have decided to raise prices in the range of Rs 2,000-10,000 from September first week," General Motors India Vice-President P Balendran told PTI. The company will be increasing the prices of its compact car Beat, SAIL and multi-purpose vehicle Enjoy by 1.5 per cent, which translates to a range of Rs 2,000 to Rs 10,000. Consumer durables maker Haier's India President Eric Braganza said the company had no option but pass on the burden of the rupee depreciation to consumers.
"We would increase price between 4 per cent from September 1," he said, adding: "it could go up to six per cent also if the rupee slides further". Echoing similar sentiments, Godrej Appliances Executive Vice-President, Sales & Marketing, Kamal Nandi said that rupee depreciation has put an "adverse impact on the industry" and put pressure on the prices. "Given the scenario that it has crossed 68 against the dollar now, one can expect price increase ranging from 5 to 7 per cent starting from September," he said. The rupee today tumbled to all-time low of 68.75 against the US dollar in early trade. Other companies like Samsung, Sony and Whirlpool have said the adverse currency fluctuation has made import of components very expensive thereby putting strain on margins. Samsung has recently increased the price of its mobile phones and tablets up to five per cent to undo the effect is also considering the same. "Given the sharp rupee depreciation , we are considering a price increase for our consumer electronics products as well," Samsung India senior VP - Consumer Electronics Business - Atul Jain said. 

GOLD RECORDS SINGLE BIGGEST EVER RISE

Gold prices zoomed to a record high of Rs 34,500 per ten gram with a biggest ever single day surge of Rs 2,500 in opening trade in bullion market today amid the rupee hitting historic low of 68.75 a dollar. The current upsurge surpassed its record price of Rs 32,975 per ten gram, set on November 27 last year, with its biggest ever single day surge as panic-striken investors rushed to purchase gold as a safe haven during current financial crisis when forex and equity melting fast. The rupee has been witnessing an unprecedented plunge in its value as it dropped to an all-time intra-day low of 68.75 per dollar today, while the BSE benchmark Sensex also declined sharply. "The bullion demand has got a boost as the rupee hit fresh record low and equities tumbled, leaving no place for investors but to park their funds in gold as a safe-haven," Surender Jain, Vice President, All India Sarafa Bazar told PTI. He said the yellow metal climbed to over three-month high in global markets as speculation that the US could lead military action against Syria within days spurred investors' demand for a haven.
A Delhi-based bullion merchant Rakesh Anand said the outlook for gold is bullish as dollar-priced metal moving hand-in-hand with forex market and shifting of investors funds from melting equities. "Gold will have more upward strength in coming days keeping in view the approaching festival and marriage season," Anand said. The gold in Singapore, which normally set price trend on the domestic front here, dropped by 0.3 per cent to 1,419.55 dollar an ounce.
Traders said a steep rise in gold prices on the Multi Commodity Exchange in early trade today further supported the uptrend, indicating more demand for the precious metals in coming sessions.

SENSEX REBOUNDS AFTER CRASH

 The benchmark S&P BSE Sensex ended 28 points higher today, staging a dramatic recovery after plunging more than 500 points in intra-day trade, as the rupee rebounded from a new low against the dollar. The gains were led by IT, metal and teck sector stocks, while public-sector and consumer durable shares fell. Initially, market sentiment was weighed down after US stocks closed lower yesterday and key Asian indices fell amid indications of military action against Syria for its alleged use of chemical weapons against civilians. Investors were also concerned about the Food Security Bill's subsidy burden and capital outflows with the likely tapering of bond buying by the US Federal Reserve next month. The rupee recovered some ground after falling to a new lifetime low of 68.75 against the dollar as oil prices rose on concern about the possible military action against Syria. Higher oil prices increase India's import bill and put pressure on the current account deficit. The 30-share Sensex opened at 17,851.44, lower than yesterday's close of 17,968.08, and plunged almost 520 points to the day's low of 17,448.71. As the rupee rebounded, value-buying set in to help the index erase the day's losses and climb to 18,101.84 before ending at 17,996.15, a gain of 28.07 points, or 0.16 per cent. Life Insurance Corporation (LIC), the country's biggest institutional investor, was said to have bought shares. Stocks also recovered as investors covered their pending long positions created in the recent bear run ahead of the monthly derivatives contract expiry on Thursday, brokers said. The broader Nifty index on the National Stock Exchange also recovered from its initial sharp fall, although it closed down by 2.45 points at a 13-month low of 5,285. 

RUPEE HITS RECORD LOW OF 66.30

Worries about the food subsidy bill dragged the rupee to a fresh lifetime low of 66.30 to the dollar today before closing at 66.24 as the market ignored government assurances on keeping the fiscal deficit in check. The rupee fell amid weak local equities, dollar demand from importers and banks, outflows and rising oil prices. At the interbank foreign exchange market, the rupee resumed lower at 65 a dollar from the previous close of 64.30 and remained in negative terrain through the day. It dropped to a record intra-day low of 66.30 before settling a tad better at 66.24, a fall of 194 paise or 3.02 per cent. The rupee had plunged 148 paise on August 19. The previous lifetime low was 65.56 on August 22.
The rupee slipped below the 103- level to touch a new bottom of Rs 103.29 against the British pound today amid sharp plunge in equities and fresh investor concerns over foreign capital outflows.It finally ended the day at Rs 102.8 against the UK currency, a fall of Rs 2.68 from yesterday's close of Rs 100.12 per pound. 

The rupee had first breached the 100 level against pound on August 20 and continued to trade below this level for three consecutive days before regaining some lost ground in the past two sessions (August 23 and August 26). The rupee has depreciated by about 25 per cent in past three months, from close to 83 in mid-May. It was even higher at about 80 against the Pound in March.

WHAT AN IDEA ANAND...

An out-of-the-box idea to help contain the widening current account deficit (CAD) is monetising 500 tonnes of gold at the current value, Commerce and Industry Minister Anand Sharma said today. "It is for the banking secretary, bankers and the RBI to see how you can monetise gold, (from) the country with over 31,000 tonnes of declared gold. That is the declared part. So, even if 500 tonnes is monetised, then in today's value, I think it takes care of CAD," he said at a meeting of the Board of Trade. He, however, added that this "decision (of monetising gold) is beyond me... but I am just pointing in that direction. Can we do something there? I think we can, because you have to think out of the box." At current market rates, 500 tonnes of gold is valued at about USD 25 billion. Globally, demand for gold in April-June was 856 tonnes, down 12 per cent from a year earlier, the World Gold Council said in a statement on August 15. The government has targeted a CAD of 3.7 per cent of GDP, or USD 70 billion, in the current financial year. India's CAD, which indicates the excess of imports of goods, services and transfers over exports, touched a record 4.8 per cent of GDP, or USD 88.2 billion, in 2012-13. The CAD has widened due to increasing imports, especially of commodities such as oil and gold. Gold imports in April-July rose 87 per cent to 383 tonnes. After a dip in June, gold imports again surged in July with 47 tonnes of inward shipments compared with 31 tonnes in the previous month. The government and the RBI have taken steps to curb demand for the yellow metal. The government recently raised customs duty on gold to 10 per cent. 

HOUSING PRICES DOWN IN MAJOR CITIES

Housing prices in 22 major cities, including Delhi and Mumbai, are witnessing downward trend in April-June period compared to the previous quarter due to slowdown in demand, National Housing Bank said today. Property prices in majority of the cities, 22 out of 26 are witnessing marginal downward trend, quarterly update of NHB Residex said. The movement in prices of residential properties for the quarter has shown declining trend in majority of the cities, ranging from -0.45 per cent in Mumbai to -5.99 per cent in Ludhiana, it said. On the contrary, there was a price rise in four cities, 0.55 per cent in Dehradun and 3.07 per cent in Nagpur during the quarter April-June, 2013. In term of price decline, property prices in Indore declined by (-5.64 per cent), Vijaywada (-5.43 per cent), Hyderabad (-4.55 per cent), Kolkata (-4.06 per cent) and Guwahati (-3.92 per cent). Among others, residential property in Kochi declined by (-3.37 per cent), Patna (-3.29 per cent), Coimbatore (-3.26 per cent), Ahmedabad (-3.13 per cent), Faridabad (-2.42 per cent), Chennai (-2.26 per cent), Jaipur (-1.79 per cent), Delhi (-1.49 per cent), Bhopal (-1.30 per cent). NHB RESIDEX tracks the movement in prices of residential properties on a quarterly basis since 2007. The index for Delhi includes property transactions in Gurgaon, Noida, Greater Noida and Ghaziabad. NHB RESIDEX has been expanded to include six new cities namely Chandigarh, Coimbatore, Dehradun, Meerut, Nagpur and Raipur from this quarter, it said.

BIG FALL

The benchmark S&P BSE Sensex today plunged 590 points to end below the 18,000 mark as the rupee fell past the 66-mark to a lifetime low and concerns were raised about the subsidy burden after passage of the Food Security Bill.

Chaos returned to the stock markets after three sessions of gains as foreign funds sold heavily. Investor sentiment was unchanged after Finance Minister P Chidambaram said the fiscal deficit would be contained at 4.8 per cent of GDP even after doling out subsidies to implement the Food Security Bill. The 30-share Sensex remained in negative terrain since the opening and touched a low of 17,921.82 before ending at 17,968.08, a fall of 590.05 points or 3.18 per cent. In the previous three sessions, the index added 652.22 points. The broader Nifty on the National Stock Exchange slumped 189.05 points or 3.45 per cent to 5,287.45. The SX40 on the MCX-SX closed down 391.41 points at 10,629.77. "The Food Security Bill was passed yesterday, which is expected to add to the fiscal burden. We believe crude oil has emerged as a key risk in the near term, which is not a good sign for the rupee. Thus, on an overall basis, the macroeconomic outlook has weakened and risks have clearly strengthened."  " said Sanjeev Zarbade, VP at Kotak Securities. 

Reports said Brent crude was close to a 5-month high amid tension after a suspected chemical weapons attack in Syria. Investors lost Rs 1.7 lakh crore in wealth as 1,538 stocks closed lower and 719 advanced. The rupee fell to a lifetime low of 66.07 against the dollar on month-end demand from importers, capital outflows and food bill subsidy concerns. Twelve of the 13 sectoral indices closed lower, led by banking, capital goods and power shares. HDFC Bank, HDFC and ICICI Bank together contributed 251.54 points to the Sensex's decline. The biggest losers on the index were Bharat Heavy Electricals, HDFC Bank and HDFC. Among the gainers, Infosys added Rs 27.55, or 0.91 per cent, to Rs 3,058.10. Foreign institutional investors sold a net Rs 607.43 crore of shares yesterday, as per provisional exchange data. Chidambaram attributed the present economic woes to the stimulus provided to the industry to tide over the global financial meltdown of 2008, which cost the government in terms of fiscal deficit and current account deficit. Referring to the Cabinet Committee on Investment approving 27 projects envisaging an investment of Rs 1.83 lakh crore, the minister said once the investment cycle and manufacturing pick up, there will be positive impact on the economy and in particular, the current account deficit.

ASIAN STOCKS PLUNGE

Asian stock markets ended lower after US Secretary of State John Kerry said Syria's government will be held accountable for using chemical weapons against civilians. Key indices in Singapore, Taiwan, Hong Kong, South Korea and Japan fell, while China's Shanghai Composite inched up. In Europe, indices in France, Germany and UK declined in early trade. In the domestic market, 27 shares on the Sensex ended lower, led by BHEL (9.49 pc), HDFC Bank (8.04 pc), HDFC (7.7 pc), NTPC (5.86 pc), Jindal Steel (5.68 pc), Larsen (5.3 pc), Hindalco (4.98 pc), Bharti Airtel (4.15 pc), Tata Power (4.12 pc) and Coal India (4.09 pc). Among the sectoral indices, S&P BSE-Bankex dropped 5.34 pc, followed by S&P BSE-Capital Goods 4.71 pc, S&P BSE-Power 4.51 pc, S&P BSE-Realty 3.95 pc, S&P BSE-PSU 3.8 pc and S&P BSE-Metal 3.52 pc.
The Mid-Cap and Small-Cap indices fell 2.09 per cent and 1.7 per cent, respectively. The market breadth turned negative as 1,538 stocks ended with losses while 719 finished higher and 138 were unchanged. Total turnover rose to Rs 2,064.78 crore from Rs 1,847.82 crore yesterday. 

177 STOCKS HIT 52 WEEK LOW

As many as 177 stocks hit their fresh one-year low on the BSE today, amid mayhem in the stock market where the benchmark Sensex plunged almost 600 points.Following the weak sentiment across the stock market, blue-chips, including HDFC Bank, HDFC, Ultratech Cement, NTPC and ACC touched their respective 52-week low. Shares of HDFC Bank tanked 8.04 per cent to close at Rs 560.9, while mortgage lender HDFC plunged 7.70 per cent to Rs 686.85 and NTPC lost 5.86 per cent to close at Rs 124.50. In contrast, 47 scrips scaled their 52-week high at the BSE.

Among the 30-Sensex constituents, 27 stocks ended the day with losses in the range of 0.09-9.49 per cent, with BHEL emerging as the worst performer. From the BSE 13 sectoral indices, barring IT space, 12 ended the day in the red with banking sector taking the biggest hit.
Investors lost Rs 1.7 lakh crore in notional wealth in stocks. 

RUPEE @ 64.10-FELL BY 110 PAISE

The rupee today tumbled 110 paise to once again close below the 64 mark against the dollar, giving up a major part of Friday's gains amid heavy month-end dollar demand from importers and capital outflows. A strengthening dollar overseas and late weakness in local stocks also put pressure on the rupee, a forex dealer said. Global ratings agency Fitch today said India's fiscal numbers "look weak" and warned of a downgrade if the country is unable to meet the fiscal deficit target. At the interbank foreign exchange market, the rupee opened lower at 63.65 a dollar from the previous close of 63.20 and dipped further to the day's low of 64.75. The local currency recovered some ground after the Reserve Bank of India (RBI) was said to have stepped in through state-run banks, helping the rupee to end at 64.30, a fall of 110 paise or 1.74 per cent. "The RBI, which was there in the market on Friday, was not seen today, at least till 4.30 pm today. After that, there was some hint of intervention by the RBI. Month-end dollar demand from oil importers kept rupee under pressure," said Navin Raghuvanshi, VP for treasury at Development Credit Bank. 

STOCK MARKET UNDER PRESSURE
 The benchmark S&P BSE Sensex today rose 39 points, settling in positive terrain for the third straight session, after erasing most of its early gains as the rupee once again weakened past the 64-mark against the dollar. Brokers said trading sentiment was initially firm after the Finance Ministry indicated that steps to attract capital flows to fund the current account deficit can be expected within a week. The announcement followed Finance Minister P Chidambaram's meetings with overseas investors and top bankers in Mumbai on Saturday.
The 30-share barometer opened higher and climbed to 18,728.19, a rise or 208.75 points. Later, selling in banking, refinery and PSU stocks pulled it down to settle at 18,558.13, a gain of 38.69 points or 0.21 per cent. The closing level was the highest since August 16, when it was at 18,598.18. The wider CNX Nifty on the National Stock Exchange edged up 4.75 points, or 0.09 per cent, to 5,476.50. The SX40 index on the MCX-SX closed 60.45 points up at 11,021.18. The fall of the rupee below the 64-mark to near 64.50 per dollar also weighed on sentiment in the stock market. "Some short covering along with cautious buying at lower levels aided market recovery," said Nidhi Saraswat, senior research analyst at Bonanza Portfolio Ltd. "However, market remains wary about the present situation of Indian rupee as well as economic condition of the country." Power, capital goods, IT and pharma shares attracted buying interest. Heavy electrical equipment major BHEL was the top gainer in the Sensex pack for the second straight day and closed up 6.63 per cent, adding to Friday's 8.1 per cent gain.

DOWNGRADING INDIA RATING ON CARDS?

Stating that the space to contain expenditure is very limited in the second half of the fiscal, global ratings agency Fitch today said the fiscal numbers "look weak" and warned of a downgrade if the country is unable to meet fiscal deficit target. "India's fiscal numbers look weak...fiscal slippage could trigger negative rating action," Fitch Ratings' head of Asia-Pacific Sovereigns Andrew Colquhoun said on a conference call today. The agency's lead analyst Art Woo added that fiscal management is a challenging task. "The fiscal side is proving more challenging...a slowdown in fiscal expenditure in the second half of the year remains quite challenging," Woo said. It can be noted that last fiscal, due to a pressure from international rating agencies threatening to cut the country's sovereign rating to junk status if the fiscal deficit worsens, the government had massively cut its expenditure to meet its fiscal deficit target. The P Chidambaram-led Finance Ministry had in fact, bettered the targeted number by limiting the deficit to 4.89 per cent for the fiscal, as against a stated target of 5.2 per cent. For the ongoing FY'14, the government is targeting to get the fiscal deficit number to 4.8 per cent. In the wake of a huge depreciation in the rupee and doubts over the revenue increase targets, the government has repeatedly asserted that it will be able to meet the fiscal deficit target of 4.8 per cent. The current account deficit, which is being blamed as one of the primary reasons for the ongoing rupee depreciation, will come in at USD 75 billion in FY14 as against the USD 87.8 billion in the previous fiscal, Colquhoun said today. "We expect the GDP ratio for India's current account deficit to be lower than for either of the last two years," he said. However, it said that the ongoing battle to hold on rupee level may dent the country's foreign exchange reserves and added that the total reserves could fall to USD 230 billion from the present level of around USD 278 billion. Meanwhile, on the rupee depreciation, Colquhoun clarified that Fitch does not wish to say anywhere that the ongoing troubles do not have a bearing from the credit rating perspective. The rupee touched an all-time low of 65.56 against the US currency last week. Reports last week had attributed Fitch as saying that the rupee fall does not warrant an immediate action on the country's rating. "These pressures have exceeded those of other emerging Asian economies, but Fitch Ratings does not view these developments as a trigger for rating action at this point," Fitch had said in a note.

NEW TYPHOID VACCINE FROM BHARAT BIOTECH

Bharat Biotech, a city-based vaccine manufacturer, today announced the launch of Typbar-TCV, the world's first clinically proven typhoid conjugate vaccine for six months old infants and adults. Bharat Biotech CMD Krishna M Ella said the new vaccine brings hope to millions by protecting them against typhoid caused by salmonella typhi, a highly virulent and invasive enteric bacterium. Ella said that this is a fourth generation vaccine against typhoid disease which has been proven to provide long term protection to adults and infants. Typhoid vaccines fall short in two major counts, namely long-term protection and protection of children below two years of age. "We hope this vaccine will reach millions of people and help reduce the burden of this devastating disease in infants and children," Ella told reporters at a press conference here, adding that his company had commenced commercial production of Typbar-TCV in pre-filled syringes at its vaccine production facility in Genome Valley. "The pricing of the vaccine has not yet been decided. There will be two price structures. One for public institutions and the other one will be for private organisations. Pricing will be fixed by next week," he said. The plant has the capacity to produce 10 million doses each year, which is expandable to 50 million doses per year in future. Bharat Biotech is the largest producer and supplier of typhoid vaccine in the world, having distributed over 50 million doses globally, he claimed. Quoting World Health Organisation reports, Director-General of the International Vaccine Institute (IVI) Christian Loucq said that typhoid fever kills between 250,000 to 600,000, besides causing 20 million illnesses per year, affecting mostly school children. "The World Health Organisation reports that 90 per cent of typhoid deaths occur in Asia and persists mainly in children under five years of age. In India, typhoid fever is observed throughout the year and a greater number of cases coincide with the rainy season," Loucq said. While typhoid fever can be cured by antibiotics, resistance to anti-microbials is widespread along with poor diagnostics, he said, adding that hence prevention of typhoid fever is better than curing it.

ONE TIME HIKE IN DIESEL PRICE NEEDED

With 12 per cent drop in rupee value against the US dollar making imports costlier, state- owned oil firms have demanded a one-time steep increase in diesel rates to make for the widening losses. Losses on sale of diesel at government controlled rates, had dropped to under Rs 3 per litre in May following monthly increases of up to 50 paise a litre. But with the rupee depreciating against the US dollar, the losses have widened to Rs 10.22 per litre. "We had requested the government for an increase in prices on ad-hoc basis. The decision on the increase rests with the government. The government of India has to take a decision on it. I have no comments on it," IOC Director (Finance) P K Goyal said.
Losses on diesel sales have widened to Rs 10.22 from Rs 9.29 a litre in the bigging of the month. Besides diesel, the oil companies are losing Rs 33.54 per litre on kerosene and Rs 412 per 14.2-kg cooking gas (LPG) cylinder. Speaking to reporters after flagging off a biking expedition to Ladakh, Goyal said the total revenue loss or under- recoveries on diesel and cooking fuel was estimated at Rs 80,000 crore at the beginning of the fiscal, which have now widened to Rs 140,000 crore. "Rupee has depreciated 12 per cent since April. It was 59.39 to a dollar and today it is 64.10. Rupee depreciating by one against the US dollar adds Rs 8,000 crore to our under- recoveries (revenue loss)," he said. The government had in January allowed oil companies to raise diesel rates by up to 50 paisa per month till such time that the losses on the most consumed fuel in the country are wiped out. With prices being raised regularly, the losses on diesel had come down to below Rs 3 per litre in May but rupee falling by 12 per cent since April has resulted in the difference climbing to Rs 10.22 per litre.
Oil companies feel 50 paisa increase is insufficient and there should a one-time steep increase to cover for fall in rupee. Oil Minister M Veerappa Moily had on August 14 stated that oil company suggestion of one-time hike was under consideration but no decision has been taken yet. "That's under consideration, but we have not yet decided," he said. Moily, however, said there is no proposal to raise LPG or kerosene rates. Diesel price was last hiked on August 1 when prices in Delhi went up by 56 paisa (after including local taxes) to Rs 51.40 per litre. IOC, Bharat Petroleum and Hindustan Petroleum had lost Rs 25,579 crore in revenue in the first quarter ended June 30, of which the government made good Rs 8,000 crore by way of cash subsidy.

LESS DEMAND FOR BRANDED SMART PHONES

The rising demand for affordable smartphones in the major emerging markets of India and China has helped local mobile manufacturers surpass shipments by the established global brands like Samsung and Apple in April-June quarter this year, research firm IDC says. According to IDC data in the Asia/Pacific excluding Japan region, homegrown vendors shipped 46 million units, while Samsung and apple combined shipped 35 million units in second quarter this year. Other global brands like HTC, BlackBerry, Nokia, Sony, LG and Motorala shipped a combined 10 million units, whereas, the internal vendors from China like Huawei, ZTE and Lenovo shipped a total of 27 million units in April-June 2013. IDC identified Micromax, Karbonn, Lava, Maxx and Intex as the rising players in the emerging smartphone market in India and brands like Coolpad, K-Touch, Xiaomi, Gionee and OPPO in China. The research firm said local brands in the world's two most populous country, part of Asia/Pacific (Excluding Japan) region (APEJ), have aggressively scaled up their operations and are competitive on both price and hardware specifications. "Aside from the top-tier international brands or Chinese brands that also ship globally like Huawei and ZTE, there is also a rising segment of homegrown brands, which as a group have been steadily rising in shipments and prominence," IDC said in its latest report on mobile shipments. These homegrown players comprised 38 per cent of second quarter 2013 volumes, up from 20 per cent in the same quarter of 2012 and seven per cent 2011 second quarter, it added. Asia/Pacific region saw mobile shipments of 119 million units in April-June 2013, up 10 per cent quarter-on-quarter and a huge jump of 75 per cent from Q2 2012, IDC said. "In emerging markets like China and India, IDC has seen many local competitors spring up, but only in the last few quarters have we seen them aggressively scale up, competitive on both price and hardware specs like bigger screens. "We are now hitting a place where there are smartphones for every price point, where the masses will benefit from the slew of players bringing in more options," the firm said. This is the first quarter that IDC saw both the under USD 50 segment of smartphones gain some traction in China. While, the 4 inch plus screen size segment drove most shipments, the 5-6 inch segment saw its first gain in both China and India, it added.

MF's LINE UP FIXED MATURITY PLANS

Aiming to attract risk-averse investors seeking short-term returns, mutual fund companies have lined up at least 26 Fixed Maturity Plans (FMP) and have filed draft documents for them with market regulator Sebi. The documents for these New Fund Offers (NFOs) have been submitted with the Securities and Exchange Board of India (Sebi) since July and the schemes will be opened for subscription soon after the necessary clearances. Of these, 16 draft offers have been filed in August so far, while the other 10 were filed in July. The fund houses that have lined up these FMPs and Fixed Tenure Plans (FTPs) include HDFC, ICICI Prudential, L&T, Peerless, IDFC, Tata, Kotak, IDBI, Baroda Pioneer and Religare. Besides, LIC Nomura, J P Morgan and Birla Sun Life are launching more than one NFO in the fixed-maturity plan segment.
FMPs mainly invest in specified duration instruments like bank certificates of deposit (CDs) and commercial papers (CPs), which are issued by companies and usually have tenures of a few months or a year. The average return from FMPs have been in the range of 10-11 per cent in the past few years. Due to higher subscription amounts required, they are largely positioned for corporate as well as institutional investors. According to industry experts, the fund houses with their FMPs are looking to tap those investors who want to invest in close-ended funds with a lock-in strategy and lower interest rate risks.
"In these volatile times, fixed-maturity plans and short- term funds offer good options for investors to invest as short term interest rates have jumped by 200-300 basis points in the last few months. Besides, they would offer good return to investors," Indiabulls Mutual Fund Chief Executive Officer Sanjay Chandel said. "In fact, FMPs score better than bank deposits due to their tax efficiency," he added. The benchmark 10-year bond yield has jumped around 100 basis points to nearly 8.3 per cent from 7.5 per cent levels, in the less than two months.
RBI's liquidity tightening measures to strengthen the rupee has pushed interest rates upward. Following RBI's move, assets under under management of mutual funds in the debt fund category (liquid funds) fell by over Rs 45,000 crore to Rs 1.29 lakh crore in July because of large-scale redemption. Bond yields and return on debt funds move in opposite directions, that is, as bond yield increases return falls and vice-versa. 

PER CAPITA INCOME ROSE BY 6.7 %

The per capita income in the country increased by 6.7 per cent per annum during 2004-05 to 2011-12, while the percentage of poor declined by 2.2 per cent over the period. "The growth in employment and GDP is expected to raise the levels of income/consumption and hence results in decreasing the percentage of poor in the country," according to official sources. The per capita income measured by net national income (NNI) has increased by 6.7 per cent per annum between 2004-05 and 2011-12 and poverty reduced by 2.2 per cent per annum during the same period, according to sources. For 2011-12, the Planning Commission has estimated percentage of people living below the poverty line at 21.9 per cent. The poverty line in 2011-12 in terms of monthly per capita consumption expenditure was estimated at Rs 816 in rural areas and Rs 1,000 in urban areas. State-wise, Uttar Pradesh had highest number of people living below poverty line during 2011-12 at 598.19 people below poverty line out of every lakh. It was followed by Bihar at 358.15 people (per lakh), Madhya Pradesh 234.04 people, Maharashtra 197.92 people and West Bengal at 184.98 people living below the poverty line. "The 12th Five Year Plan (2012-17) emphasises the need to build upon the achievements of the 11th Five Year Plan and strive for faster, sustainable and more inclusive growth in order to reduce economic disparities," the sources said. 

IMPORTED BICYCLES MAY BE DEARER

Imported bicycles are set to get dearer soon with importers deciding to hike prices of bicycles, including of high-end ones, by at least 10 per cent in the wake of depreciation of the rupee against the dollar. "Definitely, there is going to be a hike in prices of imported bicycles in view of the weakening of rupee. There will be a 10 per cent increase in prices of bicycles," LA Sovereign, MD, Rohit Kalra told PTI. Expressing concern over the Centre's policies for not being able to contain spiralling increase in dollar versus rupee, Kalra said his company had to make payment at the current rate of 63-64 for orders, which were booked when the rupee was 55 against dollar. LA Sovereign Bicycles is one of the largest importers of bicycles which imports from China, Thailand and Sri Lanka. Price range starts from Rs 6,000 and goes up till Rs 2 lakh a bicycle. Bicycle importers said the price hike may affect the demand of bicycles which are priced below Rs 10,000. "There will not be any effect on demand for bicycles which are priced above Rs 10,000," Kalra said. "We will again raise prices of imported bicycles in the range of Rs 500-1,000 a unit because of wide currency fluctuations," Hi-Bird Cycles, MD, R D Sharma said while adding that company last month raised prices by Rs 500-600 a bicycle. India is gradually becoming a growing market for imported bicycles in the wake of increase in demand for high end bicycles. The market for high-end imported bicycles is pegged at 1 lakh units in the country, said industry insiders. Importers source high-end aluminium or carbon-based bicycles from countries including China and Taiwan. Besides, several bicycle components like basket, spoke, hub-cup, steel balls, free wheel, brakes etc are also imported. The country's annual import of bicycles and bicycle parts is estimated to be Rs 1,200 crore, as per bicycle makers. However, industry experts see weakening of rupee as an opportunity for domestic bicycle manufacturers, saying that high cost of import would force importers to source bicycle parts from local sources only. "Industry should take it as an opportunity and step up efforts to meet the requirements of importers here by producing cost effective items," said Satish Dhanda, Convener Bicycle Panel, Engineering Export Promotion Council (EEPC). Notably, last year the Centre raised the basic custom duty on bicycles from 10 to 30 per cent and on bicycle components from 10 to 20 per cent on to discourage imports. Ludhiana is major hub of bicycle cluster as it caters to country's over 90 per cent bicycle and bicycle parts needs. 

REALTORS CALLS FOR REIT TRUSTS

With investor sentiment waning and the rupee plunging to new lows everyday, there is an urgent need for implementing the real estate investment trusts (REITs) to ensure more liquidity in the sector, say experts. The government and market watchdog Sebi are actively working on a regulatory framework for REITs -- an asset class that buys income generating real estate assets and passes on the yield to investors. "The finance ministry and Sebi are working actively on its implementation. If implemented, we believe it will encourage both foreign and domestic investors to invest in the real estate sector," National Real Estate Development Council Vice-President Sunil Mantri said at an industry summit over the weekend here. According to Mantri, the sector can attract investments worth USD 10 billion in the next thee-four years after its implementation. "In the present scenario, if the sector has to bounce back from the lows, there is a need to bring in such a mechanism," he said. If implemented, it will be very positive for the real estate sector, attracting long-term and low-cost capital to India, PWC associate director Bhairav Dalal said. "We hope REITs is implemented soon. It will definitely give a boost to rental assets. It will act as an alternate source of funds for the developers as well," he said. However, he observed that the fund will not help in addressing the issue of non-availability of housing stock. "Though it will help in bringing liquidity in the sector, the REITs will not help developers who plan to develop residential projects. Also, developers who plan to undertake new projects, will not be able to get any benefit out of it in the initial stage," he said. Property consultancy firm Jones Lang LaSalle managing director for capital markets, Shobhit Agarwal too said REITs will not be the right answer to address liquidity issues. "REITs model, adapted to the existing mutual funds platform, do not seem to be the right answer. While everybody is working on entry and creating assets, the important question of who will buy these assets to provide an exit to the developers/investors needs to be addressed," he said. Agarwal further said FDI is clearly the only life-saver, which the real estate sector can look up to. "With all these routes being plugged because of the risk involved, FDI is clearly the only life-saver which the real estate sector can look up to. "However, the ever-changing policies on FDI, taxation and development, coupled with a lack in transparency in the system and a high amount of friction in approval mechanisms, have led to an uncertainty in yields and tenure of lock-in for investments in real estate," he added. 

AIR INDIA EXPRESS ON DOMESTIC EXPANSION

State-run Air India is mulling expanding operations of its international low-cost arm AI Express in the domestic market, where three budget carriers dominate the space and AirAsia India also expected to compete by year-end with launch of its operations here. The flag-carrier has recently set up a three-member committee to explore the feasibility of such an expansion plan and also review the routes of the two carriers, to leverage synergies and avoid eating into each other's market shares, they say. "Air India has set up a committee and mandated it to explore the possibilities of Air India expanding its operations in the LCC (low-cost carrier) segment," highly placed AI sources told PTI. Air India regained the third slot with 19.2 per cent market share beating budget carrier SpiceJet (17.5 per cent) in July. At the same time, the Delhi-based IndiGo continues to retain its leadership with 29.5 per cent market share in the month. However, the three low cost carriers-IndiGo, SpiceJet and GoAir combined enjoy 55.5 per cent market share as against 44.5 per cent of the two full service carriers -- Jet Airways group and Air India. Air India Express, which began operations as the international budget arm of Air India in 2005, today operates 172 flights a week across Southeast Asia and the Gulf region with a fleet of 21 Boeing 737-800s, and commands 5-6 per cent market share. Of its planes, 17 are owned, and the remaining leased and majority of its flights originate from Kerala, which contributes over 50 per cent of its income. However, Air India too operates on some of the routes catered to by it LCC arm, thereby affecting the revenue of both the carriers. Besides, the committee has also been asked to review the routes catered by these two carriers and examine the feasibility of bringing synergy into their operations, sources said. "The committee will also review the business model of AIE," they said, adding that the committee has been asked to submit its report within three weeks time. According to a report by Centre for Asia Pacific Aviation (CAPA), the domestic traffic is expected to expand by 4-6 per cent this fiscal, with most of it occurring in the second half. "AirAsia's likely entry towards the end of the year could also provide some further growth although the airline will still be relatively small even by the end of the forecast period. These factors could potentially push growth above 6 per cent subject to market conditions from Q3 onwards. "We expect that by the end of FY14, domestic traffic will match or slightly exceed the previous high water mark of just over 60 million annual domestic passengers reported in FY12," the CAPA report said.

TECHNICAL GLITCH HALTS NASDAQ TRADE

A technology glitch earlier today shut down trade on the Nasdaq for more than three hours, an unprecedented halt on the second-largest US stock exchange. Full trading resumed around 3:25 pm. The tech-rich exchange at around 12:15 pm halted trade in all "Tape C" securities, which includes options and securities due to a problem with its SIP, or securities information processing, system, which interfaces with other exchanges on stock quotes. The suspension froze values on big technology stocks like Apple, Google and Facebook as well as the value of the Nasdaq Composite index. The Nasdaq index was up 0.87 per cent at 3,631.17 when trading was halted. Shortly after it resumed, the index was up 0.95 per cent at 3,633.92. The glitch promises to increase scrutiny on Nasdaq, which came under fire following technical difficulties with Facebook's initial public offering in May 2012. After that debacle, Nasdaq paid the Securities and Exchange Commission a USD 10 million penalty, following a series of missteps that included a design glitch in Nasdaq's system to match IPO buy and sell orders. An SEC spokesman said the US securities regulator was monitoring the situation and was "in close contact with the exchanges." Treasury Secretary Jacob Lew was briefed on the issue, officials said. The shutdown came on a quiet day for Nasdaq, with no major economic news events or earnings from major Nasdaq companies. But analysts said such a stoppage could cause significant problems on a busier news day. "We're still investigating this. It's a technical problem on the UTP SIP system, halting all the Nasdaq options" said Nasdaq spokesman Ryan Wells. Because other exchanges could not see price quotes from Nasdaq, that meant other exchanges that trade Nasdaq-listed stocks, such as the New York Stock Exchange, could not continue to trade Nasdaq stocks. Art Hogan, head of product strategy at Lazard Capital Markets, said the halt was "frustrating, but you don't lose any money. You just lose time." He said the stoppage was unprecedented. "I've never seen an entire exchange shut down for 1 1/2 hours for technical issues during the middle of the day," Hogan said earlier in the afternoon.

INDIAN EQUITY RATING DOWNGRADES

Global financial services major HSBC has downgraded Indian equities from "overweight" to "neutral" citing that the country would struggle to defend a falling currency and declining growth. "We lower our weighting in India from overweight to neutral. In our view, India will continue to struggle with the trade-off between defending a currency and supporting growth," HSBC said in a research note today. According to HSBC, the volatility in Indian markets since May can be attributed to the initial talk about tapering of bond purchase by the US Federal Reserve but the catalyst for recent volatility in Indian equities was when policymakers decided to tighten liquidity to stem capital outflows. Since the beginning of the current fiscal in April 2013, though the rupee valuation of Indian stock market has fallen by 6.55 per cent, its dollar valuation has plunged 22 per cent. The rupee has depreciated by over 16 per cent during this period. "...the issue is that in many cases the authorities have taken only incremental steps to improve financing of the current account deficit in recent years. In India, the lack of structural reforms is well documented," it said. According to the report, India faces the most difficult situation as the country's growth is slowing, inflation remains elevated and it has a sizeable current account deficit. "It is the 'impossible trinity' – a country cannot have both in the current environment. Growth will likely suffer," HSBC said. The report further noted that the current inflation situation is also not helping. Imported inflation will further reduce the possibility of looser monetary conditions in the near future.

EGG EXPORTS UP ON RUPEE VOLITA;LITY

Egg exporters from Tamil Nadu have doubled their shipments, mainly due to rupee volatility and increase in demand from overseas markets. Namakkal, considered as one of the export hub for white shell eggs in India, produces high quality white and brown eggs.From this town, eggs are exported to countries like Afghanistan, the Middle East, officials of Namakkal Egg Merchant Traders Association said. "Rupee depreciation against the US Dollar is also one of the reasons. Last month, I shipped about 30 containers. Each container has a capacity of 7.20 lakh eggs. This month we will be shipping about 80 containers..", one of the representatives of the Association and Namakkal-based NS Exports, Managing Director, S Kesavan told. He said most of the exports were made to Afghanistan, Oman, Bahrain.
Season for egg demand in countries like Afghanistan begins this month and it will be on till December this year. "So, along with demand and rupee volatility we are seeing an increase in exports", he added. Given the beginning of season in increasing egg demand, he said the company was also looking to export into newer markets. "I will say we are also look at entering European and West African markets during this season", Kesavan said. The increase in exports of egg was despite huge competition from Pakistan, China, Iran and Bangladesh among other countries, he added. 

PHISHING ATTACK ON RISE IN INDIA

Facing over 1,200 phishing attacks every month, India is the fifth most targeted country for such attacks, a report by leading IT services firm EMC said. Globally, 1,81,600 phishing attacks were identified in the first half of 2013, with May witnessing the maximum 36,966 attacks, says the Anti-Fraud Command Center's (AFCC) fraud report for the first half of 2013, prepared by EMC's security division RSA. Phishing is the illegal practice of sending e-mails, purporting to be from legitimate companies or organisations in order to lure individuals to reveal personal information. "RSA announced the findings of its H1 2013 Fraud Report, ranking India fifth most targeted country for phishing attacks, receiving 4 per cent of the total attack volume," EMC said in a statement. The US was the most targeted country, accounting 52 per cent of the attacks followed by the UK (11 per cent), South Africa (6 per cent) and Canada (5 per cent), it added. "RSA identified 1,81,600 phishing attacks in H1 2013 globally with May witnessing maximum number of 36,966 attacks. This is 27 per cent increase in the total number of global phishing attacks as compared to the month of April," it said. News on hacking of over 40,000 Facebook accounts in the month of May contributed to the attack surge in the first half of 2013, it added. AFCC is a 24x7 war-room that detects, tracks, blocks and shuts down phishing, pharming and Trojan attacks perpetrated by online fraudsters. RSA is a provider of security, risk and compliance management solutions for business acceleration.