GDP growth likely edged up to 4.6% last quarter

New Delhi: India's economic growth likely picked up slightly in the July-September quarter as improved manufacturing activity steered it from a four-year low in the previous three months, a Reuters poll showed on Tuesday.

Any improvement would be welcome news for the government as a string of opinion polls forecast a poor performance for the ruling party in general elections which must be held by next May.

Economic growth virtually halved in two years to 5 percent in the last fiscal year - the lowest level in a decade - and most economists surveyed by Reuters last month expect 2013/14 to be worse.

The consensus of 40 economists showed gross domestic product expanded 4.6 percent year-on-year in the last quarter, better than the 4.4 percent in the previous three months, which was the lowest since the global financial crisis.

"It is only a marginal improvement with much of the support from a slight recovery in manufacturing sector," said Upasna Bhardwaj, an economist at ING Vysya Bank.

A moderate recovery in Indian factories and exports were probably the main drivers for an increase in overall growth in the quarter through September. Annual industrial output picked up 2 percent in September, driven by an uptick in export and domestic orders.

Stronger global demand for India's exports also led to an increase in production, with exports growing 11.15 percent annually in September.

Also, a good monsoon should have boosted rural income and perked up flagging consumer demand.

However, a dearth of investment lies at the heart of India's economic malaise.

Little improvement is expected ahead of the general election, with investors doubting whether Prime Minister Manmohan Singh's minority government can force through any bold actions between now and then.

Radhika Rao, an economist at DBS in Singapore, said euphoria surrounding Singh's earlier reform plans had eased after they failed to materialise.

"It is not surprising that the private sector keeps expansion plans on ice," Rao added.

With wholesale price inflation moving back above the Reserve Bank of India's perceived comfort level of 5 percent and consumer inflation quickening to more than 10 percent, there is little expectation the central bank will act to ease policy boost growth.

In face, new RBI chief Raghuram Rajan has hiked interest rates twice in as many months since September, tackling rising prices head on.

Indian rupee up 6 paise against US dollar, at 62.44

 
The Indian rupee appreciated by six paise to 62.44 against the US dollar in early trade at the Interbank Foreign Exchange market on selling of the US currency by exporters.

The rupee had gained 37 paise to end at 62.50 on Monday after global crude oil prices dropped following a nuclear deal between Iran and world powers.

Forex dealers said strength in other currencies against the Greenback overseas, after fresh figures showed pending US home sales slowed for the fifth straight month in October, also supported the rupee. They said, however, a lower opening in the domestic equity market capped the gains on Tuesday.

Meanwhile, the BSE Sensex fell by 66.06 points, or 0.32 per cent, to 20,539.02 in early trade on Tuesday.

Doubt and hope cloud Ajay Piramal and Rahul Bajaj's expectations of India's 26/11-preparedness

 
The trauma is receding, but India's industry leaders still feel a lack of confidence on the fifth anniversary of November 26. Frontline leaders feel that while the government has taken some steps, a lot still needs to be done before confidence comes back.

Five years since the attack, memories of the incident in which over 160 people were killed does not instil confidence among business leaders that such an act will not happen again.

"No significant measures to restore confidence come to mind. I am not confident that it won't take place, again," says Ajay Piramal, chairman, Piramal Group.

In 2008, when Business Today asked the question: will this be enough to kick-start a reversal in confidence and in activity? Industry leaders responded with hope, and expectation. "I feel the entire issue of security and governance will, in fact, be revisited and hopefully we will see improvements," Adi Godrej, Chairman, Godrej Group had said then. Ness Wadia, Joint MD, Bombay Dyeing had said, "This is a long-awaited wake-up call."

Today, Rahul Bajaj, chairman, Bajaj Group, says he is still not confident enough. "I can only hope that my government has taken steps and will continue to ensure that such an event will not happen again on Indian soil".

On November 26, 2008, at around 9.30 pm, Mumbai came under siege by 10 gunmen who launched simultaneous attacks on key business and tourist locations. These included five-star hotels The Taj, Oberoi and Trident hotels, Leopold Cafe, a restaurant in the shopping district of Colaba famous for being a haunt of foreign tourists, the crowded Chatrapati Shivaji Terminus, Nariman House, and Cama Hospital.

Mumbai's businesses were hit right in their nerve centre in the event. Ashok Kapur, then chairman of YES Bank was one of the victims. His funeral at Baanganga in South Bombay was attended by CEOs from all over the country, including those from the Tata Group and elsewhere. Anand Bhatt, a senior partner of Wadia, Ghandy & Company, a leading legal firm, lost his life as well.

While the hotels lost close to a year of business due to renovation (actual losses of which still remain unknown), business sentiment towards India had also taken a beating. Media reports suggest while Taj incurred a loss of around Rs 400 crore, Oberoi Group spent close to $40 million (Rs 170 crore then) in renovating the two properties overlooking the Arabian Sea. The 60 hours of terror spread over four days, had resulted in a loss of roughly Rs 4,000 crore to Mumbai, industry body Assocham estimated in 2008 after talking to companies and industries in the city.

Even today, the Taj Mahal palace has a barricade all around it. Most large office complexes are gated and have high, electronically monitored walls. Private security firms have proliferated, and metal detectors and frisking is mandatory, even at shopping malls and theatres.

Terrorist have struck in India after 26/11. People have died in bakeries and on trains. Questions are being asked, and inevitable comparisons are coming out. "It has been thirteen years since 9/11. Since then in the US, no major incident has occurred. But terrorist attacks have happened here," says Piramal.

BSE Sensex trades in red as investors book profits

 
The BSE Sensex fell over 66 points in early trade as investors booked profits after on Monday's strong rally amid a mixed trend on other Asian bourses.

The 30-share index of the Bombay Stock Exchange fell by 66.06 points, or 0.32 per cent, to 20,539.02, led by losses in stocks of FMCG, IT, banking, realty and oil and gas sectors.

The Sensex had gained nearly 388 points in the previous session.

Similarly, the wide-based National Stock Exchange index Nifty shed 17.15 points, or 0.28 per cent, to 6,098.20.

In the Asian region, Japan's Nikkei Index was down by 0.69 per cent, while Hong Kong's Hang Seng index gained 0.09 per cent in early trade on Tuesday.

The US Dow Jones Industrial Average ended 0.05 per cent higher on Monday.

BSE Sensex snaps 3-day losing streak on fund buying

 
The BSE Sensex snapped its three-day losing streak, recovering over 223 points in early trade on Monday, on emergence of buying by funds.

Brokers said a firming trend in other Asian bourses, after US markets hit another record high on Friday, also buoyed the trading sentiment on Dalal Street.

Besides, expectations of a drop in import bill after crude oil prices fell in the overseas markets, following a key deal between world powers and Iran on its controversial nuclear programme, also triggered buying activity, they said.

The 30-share index of the Bombay Stock Exchange, which had lost nearly 674 points in the previous three sessions, recovered 223.26 points, or 1.10 per cent, to 20,440.65.

The 50-share National Stock Exchange Nifty moved up by 68.75 points, or 1.15 per cent, to 6,064.20.

Stocks of banking, realty, oil and gas and FMCG sectors led the recovery.

Stocks of state-run oil marketing companies too rose. Indian Oil shares gained 1.99 per cent to Rs 204.70. Hindustan Petroleum rose 4.25 per cent to Rs 211 and Bharat Petroleum gained 2.68 per cent to Rs 341.60.

Reliance Industries shares also gained 1.27 per cent to Rs 854.65.

In other Asian markets, Japan's Nikkei index rose by 1.36 per cent while Hong Kong's Hang Seng gained 0.56 per cent in early trade on Monday.

The US Dow Jones Industrial Average had surged to yet another high by gaining 0.34 per cent on Friday.

ONGC Videsh eyes Chevron gas block in Vietnam

State-owned Oil and Natural Gas Corporation's (ONGC) overseas arm ONGC Videsh (OVL) plans to buy a stake in US super major Chevron's $4.3-billion Block B gas project in Vietnam.

Chevron has called for expression of interests from international firms willing to farm in (or buy stake), said sources adding that OVL is keen to take part or whole of the stake in the block, which has 4 trillion cubic feet of inplace reserves, of which 63 per cent can be recovered or produced.

Chevron holds 42.38-per cent stake in Blocks B and 48/95 in Malay-Tho Chu Basin of Vietnam. It can produce up to 490 million cubic feet of gas and 6,000-7,000 barrel of condensate per day.

Others who are reported to be interested in picking up the stake include Gazprom of Russia. Hanoi is seeking to involve Russia and India to counter the influence of China, with whom it has a territorial dispute. It has offered OVL five offshore oil and gas exploration areas in South China Sea and its Kossor block in Uzbekistan without bidding.

Sources said that OVL feels Vietnam will support its bid for Chevron stake by giving necessary approval and waiving its first right of refusal. OVL already has 45-per cent stake in Block 06.1, which produces about 12.8 million standard cubic metres per day of gas and 1,896 barrels per day of condensate.

OVL feels it can get the Chevron stake as it has an experience in operating at the offshore Vietnam.

Sources said that Chevron has prepared a development plan to produce gas from the block but hasn't started work over a dispute with Vietnam's national oil firm PetroVietnam about the price of gas.

In association with Mail Today

Rupee, FIIs to set the trend for stock markets this week

 
The monthly derivatives contract would expire on Thursday followed by announcement of GDP data for the second quarter on Friday.

The movement of the rupee, which has been under pressure in the last few days, and action of foreign institutional investors (FIIs), who seem to have turned cautious last week, would be the main drivers this week.

Besides, hints by the US Federal Reserve on timing of the stimulus tapering would also affect the market.

Key levels for this week will be 19,910 and 20,625 on the Sensex and 5,915 and 6,145 on the Nifty.

Markets rallied on the first two days and lost on the next two while remaining flat on the fifth day. Markets tested important levels when the Sensex turned just before the low of November 13 while the Nifty took support at the same level. This technical set-up could trigger a rally. The October series futures had expired at 6,164.35 points. The current market is lower by 169 points, or 2.74 per cent.

The bulls are having an upper hand and unlikely to give way so easily. This week will be volatile with sharp intra-day moves but an upward bias.

Investment by FIIs in the last three trading days of the last week was virtually flat. This could be attributed to them turning cautious post the Federal Open Market Committee meeting, minutes of which indicate that tapering may happen earlier than expected. FIIs were net buyers of equity worth Rs 1,924 crore while domestic institutions were net sellers of Rs 813 crore.

The special window for foreign currency non-resident deposits opened by the Reserve Bank of India will close on November 30. It has has attracted remittance of $22.7 billion so far.

Dow Jones continued to rally and closed at 16,064 points, a gain of 103 points, or 0.64 per cent. Gold prices have been falling internationally and closed at $1,243 an ounce, quite close to the low made in June, $1,211.

In India, the price of gold is Rs 31,000 - courtesy the periodical import duty, which has been levied, and the depreciating rupee, which has fallen from 55-56 to 63.

National Hydroelectric Power Corporation (NHPC) will buy back up to 10 per cent of fully paid-up equity capital, which works out to 123 crore equity shares at Rs 19.25 apiece payable in cash, for an aggregate amount of Rs 2,367.89 crore through tender offer.

These shares were issued at Rs 36 in August 2009.

RBI extends special forex windows for banks till December 31

After getting a good response to the double forex swap windows - aimed to shore up forex buffer and prop up the rupee - the Reserve Bank of India (RBI) has allowed banks to utilise the special window till December 31 to borrow forex against their core capital, but with riders.

The other swap window was to draw in NRI funds through the FCNR-B deposit route.

Under the facility, banks were permitted to borrow from international banks/multilateral agencies up to 100 per cent of their core capital and swap the amount with the Reserve Bank at a concessional rate of 3.5 per cent.

However, it is not known how many banks have availed of this facility so far, barring a few like YES Bank, which said it raised $255 million early October.

"It has been decided that if any bank is being sanctioned any loan from any international/multilateral financial institutions and is receiving a firm commitment in this regard on or before November 30, it will be allowed to enter into a forward-forward swap under the first leg of which the bank will sell forward the contracted amount of forex corresponding to the loan amount for delivery up to December 31," RBI said in a statement on Friday.

However, the regulator clarified that the window will remain open till December 31 only to those banks which are negotiating loans or are close to closing the deal.

"If the bank is not in a position to deliver the contracted forex amount on the contracted date, it will have to pay the difference between concessional swap rate contracted and the market swap rate plus 100 basis points," RBI said.

"It is reiterated that the above relaxation is available only for the contracts entered into up to November 30, and not thereafter and that all the other terms and conditions for the swap will remain unchanged as notified earlier," the RBI said.

Both the windows till Wednesday had netted in $22.5 billion and are to be tapered off on November 30.

Inflation indexed bonds worth Rs 1,000 cr to be sold on Nov 26

 
The Reserve Bank of India (RBI) will sell inflation-indexed bonds worth Rs 1,000 crore through price-based auction on November 26.

This is the second round of inflation bonds, after the maiden offering in June.

RBI would allot up to 20 per cent of the notified amount of the bonds to eligible individuals and institutions according to the scheme for non-competitive bidding facility.

Interest at the rate of 1.44 per cent per annum will accrue on the indexed principal value of the bonds from the date of original issue and will be paid half yearly on December 5 & June 5, the central bank said in a release.

The bids for the auction should be submitted in electronic format on RBI's core banking solution on November 26, the release said.

The central bank will announce result of the auctions on November 26 and payment by successful bidders will be on November 27, it added.

Indian rupee up 31 paise against US dollar

The Indian rupee strengthened by 31 paise to 62.56 against the US dollar in early trade at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks.

Forex dealers said strengthening euro against the dollar and fall in oil prices overseas following a key deal between world powers and Iran on its controversial nuclear programme and a higher opening in the domestic equity market also supported the local currency.

The rupee had gained six paise to end at 62.87 on Friday after the Reserve Bank of India was said to have stepped in to stem the fall.

Meanwhile, the BSE Sensex recovered by 223.26 points, or 1.10 per cent, to 20,440.65 in early trade on Monday.

FIIs invest net Rs 7,500 crore in Indian stocks in November

 
New Delhi: Overseas investors poured in over Rs 7,500 crore (USD 1.2 billion) in the equity market since the beginning of the month amid renewed optimism about the Indian economy.

Total foreign investment in the stock market has reached Rs 96,461 crore (USD 17.4 billion) so far in 2013, according to data from the Securities and Exchange Board of India, the capital market regulator.

Foreign institutional investors (FIIs) bought equities worth Rs 39,572 crore and sold Rs 32,045 crore of shares during November 1-22 -- a net inflow of Rs 7,527 crore.

On November 22, FIIs were net sellers of equity for the first time since October 3 and sold Rs 40 crore of shares on renewed uncertainty about the US Federal Reserve tapering its stimulus programme.

They invested a net Rs 28,700 crore in stocks during the past two months (September-October).

Overseas investors pulled out Rs 4,569 crore from debt securities so far this month. They have withdrawn a net Rs 54,723 crore from the debt market since the beginning of 2013.

FII inflows into the stock markets have been buoyant since September 2013 on the back of continued global liquidity.

Finance Minister P Chidambaram had said earlier this month that the current account deficit has been under control, the fiscal deficit target will be met, export growth is expected to continue and a bumper harvest is likely after the good monsoon.

Industrial production and trade data released earlier this month gave an impetus to foreign investors.

Industrial output rose 2 percent in September from a dismal 0.43 percent in August. India's exports rose 13.47 percent to USD 27.27 billion in October while imports dipped 14.5 percent, helping to narrow the trade deficit.

The benchmark 30-stock S&P BSE Sensex closed at a record 21,239.36 on November 3.
Since the end of October, the index has declined 947 points, or 4.47 percent, to 20,217.39 points on Friday.

As of November 22, the number of registered FIIs in the country stood at 1,743 and the total number of sub-accounts at 6,406.

Sensex gains over 223 points to snap three-day losing streak

Mumbai: Snapping its three-day losing streak, the BSE benchmark Sensex recovered over 223 points in early trade Monday on emergence of buying by funds amid a firming trend in other Asian markets.

The 30-share index, which had lost nearly 674 points in the previous three sessions, recovered 223.26 points, or 1.10 percent, to 20,440.65, with stocks of banking, realty, oil and gas and FMCG sectors leading the recovery.

The National Stock Exchange Nifty moved up by 68.75 points, or 1.15 percent, to 6,064.20.

Brokers said emergence of buying by funds and retail investors amid a firming trend in other Asian bourses, after US markets hit another record high on Friday, mainly buoyed the trading sentiment here.

Besides, expectations of a drop in import bill after crude oil prices fell in the overseas markets, following a key deal between world powers and Iran on its controversial nuclear programme, also triggered buying activity, they said.

Stocks of state-run oil marketing companies such as Indian Oil rose 1.99 percent to Rs 204.70. Hindustan Petroleum rose 4.25 percent to Rs 211 and Bharat Petroleum gained 2.68 percent to Rs 341.60.

Reliance Industries shares also gained 1.27 percent to Rs 854.65.

In other Asian markets, Japan's Nikkei index rose by 1.36 percent, while Hong Kong's Hang Seng gained 0.56 percent in early trade today.

The US Dow Jones Industrial Average surged to yet another high by gaining 0.34 percent on Friday.

Cabinet likely to decide on FDI in pharma, housing today

 
New Delhi: With serious concerns being raised from various departments regarding the acquisition of Indian drug firms by global multinational entities, the government is likely to consider reducing the foreign direct investment cap in the pharma sector.

According to reports, the Cabinet is likely to take up the decision Monday to reduce the FDI cap in critical areas of the pharma sector to 49 percent.

Led by DIPP, several departments have raised concern about the continuous acquisition of Indian drug firms by foreign firms.

The Cabinet is also expected to relax FDI norms in the housing sector.

"The Cabinet will review the FDI policy in pharmaceutical and housing tomorrow (Monday)," an official said on Sunday.

With the current FDI cap in pharma sector at 100 percent, the Department of Industrial Policy and Promotion (DIPP) has proposed to reduce it to 49 percent in the "rare or critical pharma verticals".

Cairn India to spend $1 billion on buyback: Report

Bangalore: Cairn India Ltd, oil and gas unit of London-listed Vedanta Resources, is set to spend about USD 1 billion to buy back shares, Bloomberg reported on Sunday citing two people familiar with the matter.

The share purchase will include buying back Cairn Energy Plc's 10.3 percent stake in the company, Bloomberg said citing one of the sources.

Mining conglomerate Vedanta, controlled by billionaire Anil Agarwal, acquired a majority stake in Cairn India for almost USD 9 billion in 2011. Since then, Cairn India played a pivotal role in boosting revenue and production even as Vedanta's mining business in India faced regulatory hurdles and mining restrictions.

The plan may help Sesa Sterlite Ltd and Agarwal's other subsidiaries increase ownership in Cairn India to more than 65 percent from 59 percent, the source told Bloomberg.

Cairn India's board is expected to meet on November 26 to consider a buyback.

Vedanta and Cairn Energy could not immediately be reached for a comment outside regular business hours.

Earlier this month, Vedanta said Cairn India was on track to hit its 2014 production target, previously put at 225,000 barrels of oil equivalent per day.

Sensex recovers 109 points in early trade

Mumbai: The BSE benchmark Sensex recovered by almost 109 points in early trade on Friday on emergence of buying by funds and retail investors in realty, capital goods, banking and metal sector stocks.

The 30-share index, which had lost 661.77 points in the previous two sessions, rose by 108.91 points, or 0.54 percent, to trade at 20,337.96.

The National Stock Exchange index Nifty gained 29.95 points, or 0.50 percent, to trade at 6,029.00.

Brokers said fresh buying by funds, tracking a firming trend on other Asian bourses after the US Dow Jones closed above the 16,000 level for the first time on the back of a slew of upbeat economic data, influenced the trading sentiments here.

Among other Asian markets, Hong Kong's Hang Seng index was up 0.52 percent, while Japan's Nikkei gained 1.23 percent in early trade today.

The US Dow Jones Industrial Average ended at a new record high by gaining 0.69 percent yesterday.

Nokia hands over headquarters to Microsoft

 
Helsinki: Finnish telecom equipment maker Nokia said on Thursday it would hand over its headquarters outside Helsinki to US software giant Microsoft, which has acquired the group`s mobile business.

The building is located in Espoo, a suburb of the capital.

According to Nokia, most of the staff in the building work for the mobile division, which explains why it will house the Microsoft offices after the transaction is completed.

The employees who remain at Nokia, now focused on the telecom business, will be transferred to other buildings in Espoo.

Nokia`s headquarters, a symbol of Finnish economic success in the 1990s and 2000s, will now also be a reminder of the fall of what was once the world`s biggest mobile phone maker.

Dubbed the "Nokia House", the building was built by the Baltic Sea in the 1990s, at a time when the booming mobile phone market seemed to grant the company a promising future.

In December last year, loss-making Nokia sold it to a real estate company, but agreed to lease it back on a long-term basis.

On Tuesday, Nokia`s shareholders approved the sale of the mobile phone business to Microsoft for 5.44 billion euro (USD 7.30 billion), hoping that the deal will get the company back on the profit track.

US jury awards Apple $290 mn in retrial Vs Samsung

New York: A US jury awarded Apple Inc about USD 290 million in a damages retrial against Samsung Electronics Co Ltd, restoring a large chunk of a historic verdict the iPhone maker won last year.

After a week long trial, the jury deliberated for nearly two days before reaching a decision on Thursday in a San Jose, California federal court. Apple had requested USD 379.8 million, while Samsung argued that it should have to pay USD 52.7 million.

Apple and Samsung have been fighting in the courts for over two years. Apple was awarded over USD 1 billion last year after it convinced a jury that Samsung copied various iPhone features - like using fingers to pinch and zoom on the screen - along with design touches like the phone's flat, black glass screen.

Earlier this year U.S. District Judge Lucy Koh upheld nearly USD 640 million of that verdict but ordered a retrial on the rest, ruling that the previous jury had made some errors in its calculations. Combined with the retrial verdict of USD 290.5 million on Thursday, Apple has now been awarded USD 929.8 million in the case.

Apple called its marketing chief Phil Schiller to testify during the trial. Samsung did not call any senior executives, a fact hammered on by Apple attorneys during closing argument. Juror Barry Goldman-Hall, 60, said the six-woman two-man jury discussed the disparity.

"We felt like we had way more information from Apple and we were left wondering why we hadn't gotten other information from Samsung," said Goldman-Hall, a therapist.

Samsung spokeswoman Lauren Restuccia said the company is disappointed by the verdict, especially because one of the patents in the case has been recently deemed invalid by the U.S. Patent and Trademark Office. Apple is contesting that finding.

Apple spokeswoman Kristin Huguet said it was grateful to the jury for imposing costs on Samsung, though she said the case has been more about protecting innovation than winning money.

Samsung manufactures phones that use the Android operating system, which is developed by Google (GOOG.O). In addition to the fight over money, Apple is seeking a permanent injunction against several older Samsung phones. Koh had previously rejected such a sales ban, but earlier this week the U.S. Court of Appeals for the Federal Circuit ordered her to reconsider.

Nick Rodelli, a lawyer and adviser to institutional investors for CFRA Research in Maryland, said injunctions are much more important in these legal battles than monetary awards. Still, he said, the verdict shows that Apple's narrative was persuasive to a second jury drawn from Silicon Valley.

"A jury award on the high end of the range is a modestly positive signal for Apple," Rodelli said.

Colleen Allen, the jury forewoman, said Apple did not enjoy a home field advantage from having the trial so close to the iPhone maker's headquarters in Cupertino. Both companies are global players, she said, and while Apple engineers may be based in Northern California, its products are manufactured overseas.

The jurors based their decision on the evidence, said Allen, a 36-year old nurse.

"Samsung could've come up with a little more evidence," Allen said.

The case is likely to drag on as Samsung appeals both verdicts, said Brian Love, a professor at Santa Clara Law in Silicon Valley.

"Litigation between the parties is far from over, and there is no end in sight," Love said.

The case in U.S. District Court, Northern District of California is Apple Inc vs. Samsung Electronics Co Ltd, 11-1846.

Rupee fall not to trigger rating action: Fitch

 
Effects of the rupee depreciation have not been significant enough to impact India's credit rating so far, said global agency Fitch on Thursday, attributing the decline to low growth, high inflation and widening current account deficit (CAD).

Economic growth in the current fiscal is expected to decline to 4.8 per cent, from 5 per cent in 2012-13 but it could recover to 5.8 per cent in 2014-15, it said.

"The spillover effects of a weaker rupee have not significantly hurt India's creditworthiness, and hence would not trigger any rating action at this point," Fitch said in its report, 'India: Repercussions from the emerging markets sell-off'.

The agency has a 'stable outlook' on India's 'BBB-' sovereign rating.

The rupee declined close to 30 per cent against the US dollar between April and August. It touched a record low of 68.85 against the American currency on August 28, but has recovered since then. It closed at 62.93 on Thursday.

The sharp depreciation of the Indian rupee in mid-2013 highlights the country's difficult transition following an extended period of low growth, high inflation and a widening in the CAD, Fitch said.

The ability to implement fiscal consolidation and continue with the overall economic adjustment process would be supportive developments for ratings, it said.

However, the government's resolve "to implement both tighter fiscal and monetary policies may still be tested as the general election approaches", it said. The election are due by May 2014.

Fitch said the government will heavily cut expenditures in the second half of the fiscal to trim fiscal deficit to 4.8 per cent of the gross domestic product (GDP). The fiscal deficit in the first half of the fiscal has crossed 76 per cent of budget estimates.

Fitch forecast CAD to decline to 3.1 per cent of GDP in 2013-14. This fall, however, will not be enough to shield India from further pressures related to the eventual start of Fed tapering, it added.

The government expects to bring down CAD to below $56 billion, from last year's $88 billion.

CAD, which is the difference between the inflow and outflow of foreign currency, touched a high of 4.8 per cent of GDP in 2012-13. The government has taken a host of measures, including gold import curbs, to bring it down.

Overall, Fitch said: "The modest economic recovery, however, will continue to undermine India's banking sector, which is facing a combination of weakening asset quality, eroding profit and declining capital.

"Nonetheless, these factors are likely to have only a moderate effect on the banking sector's ability to supply credit to the economy."

Retail banking grows despite economic slowdown Anand Adhikari

 
Leading banks in India continue to grow their retail banking business. A report by the Reserve Bank of India on 'Trends and Progress of Banking in India 2012-13' says that "… even in a period of overall slowdown in credit growth, retail credit maintained its growth."

SBI, ICICI Bank, HDFC Bank and Axis Bank , among others, are aggressive in retail banking. In fact, retail banking is actually compensating for the lower credit growth in the corporate book.

There appears to be little hope of recovery in corporate loans for banks in the near future. Many corporates have already built large capacities but demand has been hit because of the economic slowdown.    

The share of retail loans in the total loans has risen from 18.4 per cent in 2011/12 to 18.8 per cent in 2012/13. In absolute terms, the retail loan portfolio expanded 15 percent, from Rs 4,11,800 crore in 2011/12 to Rs 4,75,400 crore in 2012/13.  

The growth in the retail portfolio was lead by a double-digit growth in housing loans . Auto loans also saw healthy growth.  Meanwhile, the number of credit cards issued grew 10 per cent, from 17.7 million in 2011/12 to 19.5 million in 2012/13. The private banks were the most aggressive in issuing more cards and their numbers improved from 9.7 million to 11.1 million. The credit card transaction value witnessed a rise of 27.3 per cent in 2012/13 at Rs 1, 23,000 crore.  Debit cards have been a more popular mode of electronic money than credit cards in India, according to the report. The total number of debit cards increased from 278.4 million to 331.2 million. The debit card transaction value saw a jump of 39 per cent in 2012/13 at Rs 74,300 crore.

Don't use retro amendment of tax laws to raise revenue: Parthasarathi Shome

Amid long-pending dispute between the UK-based telecom giant Vodafone and the tax authorities, finance minister's advisor Parthasarathi Shome on Wednesday said the government should not use retrospective amendment of tax laws to raise revenues. "We have to take away risk and uncertainty. We can't use retrospective amendment of tax laws to raise revenue. I have always given example of Brazil and Sweden where they have constitutionally removed retrospective taxation," said Shome without referring to the tax dispute between Vodafone and the Income Tax department. He is also the chairman of the Tax Administration Reform Commission and was speaking at a CII event in New Delhi. Vodafone is facing a tax liability of over Rs 11,200 crore, along with interest, for its 2007 acquisition of Hong Kong-based Hutchison Whampoa's stake in Hutchison Essar, an Indian telecom company. Vodafone has expressed keenness to reach an amicable settlement of the matter. Its India chief Analjit Singh had met Finance Minister P Chidambaram to settle the dispute. A committee was set up under Shome to recommend measures to deal with the retrospective amendment of income tax laws and suggest ways of treating taxation cases which involve indirect transfer of Indian assets, of the likes of the Vodafone-Hutchison deal. The committee had recommended last year that either the retrospective tax amendment should be withdrawn or penalty/ interest, if covered under taxes should be waived off.

Indian rupee down 37 paise at 62.94 vs US dollar

The Indian rupee extended its losses for the second day in a row, declining by 37 paise to 62.94 against the US dollar in late morning trade, on sustained demand for the US currency from banks and importers. The rupee resumed lower at 62.85 per dollar against the last closing level of 62.57 at the Interbank Foreign Exchange (Forex) Market and dropped further to 62.98 before quoting at 62.94 at 10.40 am. It hovered in a range of 62.79 and 62.98 per dollar during the late morning deals. Banks and importers preferred to increase their dollar position on the back of firm dollar in overseas market. In New York market, the US dollar rose against the euro on Wednesday after the Federal Reserve minutes suggested more willingness among officials to slow its bond buys, at the same time the European Central Bank is mulling a potential deposit-rate cut into negative territory if more economic stimulus is needed. The BSE Sensex dropped by 245.43 points, or 1.19 per cent, to 20,389.70 at the same time.

BSE Sensex trades higher on sustained buying by funds, retail investors BT Online Bureau

 
The BSE Sensex gained over 69 points in early trade on Tuesday on sustained buying by funds and retail investors amid a strengthening rupee.

The buying took place mainly in realty, metal, capital goods, oil and gas and IT sector stocks.

Brokers said sentiments remained firm on sustained buying by participants driven by the Reserve Bank of India's (RBI) plans to inject Rs 8,000 crore into the financial system to ease liquidity and further strengthen the rupee.

Rising for the third straight session, the 30-share index of the Bombay Stock Exchange gained 69.59 points, or 0.33 per cent, to 20,920.33.

In the past two sessions, the Sensex had gone up by 656.34 points.

The 50-share Nifty of the National Stock Exchange traded 18.80 points, or 0.30 per cent, higher at 6,207.80.

In the Asian region, Hong Kong's Hang Seng rose 0.53 per cent while Japan's Nikkei shed 0.73 per cent in early trade on Tuesday.

The US Dow Jones Industrial Average ended 0.09 per cent higher after crossing 16,000 points for the first time in Monday's trade.

Indian rupee leads Asia forex gains against dollar

Singapore: The rupee led gains among emerging Asian currencies on Monday as investors cut bearish bets on regional units, with the dollar softer amid uncertainty over how long the US Federal Reserve will keep up its policy stimulus.

The rupee rose nearly 1 percent on demand from foreign banks.

The won strengthened to 1,057.8 per dollar in the local trade, its strongest since October 24. Against the yen, the won touched 10.5603, its highest since September 2008.

Exporters` bids led offshore and onshore investors to cover short positions to stop losses in the South Korean currency. The positions had been built up on caution over possible intervention, traders said.

The Malaysian ringgit gained as the economy picked up pace in the third quarter on resilient domestic demand and a recovery in exports.

The ringgit found more support from demand by oil exporters demand and stop-loss dollar selling.

The Indonesian rupiah, however, eased on month-end dollar demand from local corporates. The rupiah is the worst performing Asian currency this year.

Tata Steel shares gain over 3% on earnings, China reforms

Mumbai: Shares of Tata Steel on Monday gained over 3 percent after the company last week posted a consolidated net profit of Rs 916.77 crore for the second quarter ended September 30.

Tata Steel's scrip settled for the day 2.86 percent higher at Rs 386.05 on the BSE, adding to Thursday's 4.58 percent gain. In intra-day, the stock rallied 3.25 percent to Rs 387.50.

At the NSE, the stock climbed 3.29 percent to close at Rs 387.70.

In terms of volume, 12.13 lakh shares of the steel major changed hands on the BSE, while over 73 lakh scrips were traded at the NSE during the day.

The turnaround, from a Rs 363.93 crore net loss in the same quarter last fiscal, was driven by steady ramp-up of Indian operations and improved performance at the European and South East Asian operations, the company had said on Wednesday.

Besides, sentiment also got a boost from expectations of a higher demand for steel after China's government said it would carry out broad reforms.

Meanwhile, the broader market was also strong with the benchmark Sensex surging 451.32 points to close at 20,850.74.

Fund raising via debt placement dips 25% to Rs 1.22 lakh cr

 
New Delhi: Fund-raising by Indian companies through private placement of debt securities or bonds dropped 25 percent to Rs 1.22 lakh crore in the first half of the current fiscal (2013-14).

According to a report by Prime Database, firms garnered a total of Rs 1,22,091 crore during April-September period of the current fiscal, a slump from Rs 1,62,352 crore mobilised in the same period of 2012-13.

The report attributed slump in funds mop-up to less capital raised by the financial institutions and banks.

In debt private placements, firms issue debt securities or bonds to institutional investors to raise capital.

In the entire 2012-13, Indian companies had raked in a staggering Rs 3.5 lakh crore, the highest in 12 years.

As per Prime Database, financial Institutions and banks mobilised Rs 58,744 crore in the six months ended September 30, 2013, a plunge of 31 percent from the year-ago period.

Funds garnered by private sector firms also declined 14 percent to Rs 51,271 crore.

"Mobilisation by State Financial Institutions also went down by 39 percent to Rs 1,251 crore, mobilisation by PSUs was also lesser by 12 percent at Rs 9,692 crore and mobilisation by State Level Undertakings saw a major fall by 75 percent to Rs 1,133 crore," the report said.

Sector-wise, financial services segment continued to dominate the market, collectively raising Rs 84,879 crore or 69 percent of the total amount; power ranked second with a 10 percent share (Rs 12,025 crore).

The highest mobilisation through debt private placements during the period was by Power Finance Corp (Rs 12,158 crore), followed by LIC Housing Finance(Rs 9,822 crore), HDFC (Rs 9,610 crore), Rural Electrification Corp (Rs 8,150 crore) and Power Grid (Rs 7,092 crore).

Nikkei off 0.5%, retreats from 6-month high

Tokyo: Japan's Nikkei share average stepped back from six-month highs on Tuesday morning, with a bounce in the yen denting exporters while financials retreated after their recent earnings-led rally.

The Nikkei dropped 0.5 percent to 15,082.35 in mid-morning trade, moving away from 15,273.61 hit on the previous day, the highest since May 23 when it reached a 5-1/2 year high of 15,942.60.

The broader Topix shed 0.5 percent to 1,236.06.

"Investors have started becoming risk on, but the market has risen too fast so they are staying cautious until there are more cues about Fed's tapering," said Takuya Takahashi, a strategist at Daiwa Securities.

Markets continue to watch out for any clues as to when the U.S. Federal Reserve will start unwinding its $85 billion-a-month stimulus programme, although many in the markets now see any move unlikely until March.

Financials lost ground after rising on Monday on their recent strong earnings. Sumitomo Mitsui Financial Group (8316.T) shed 1.7 percent, while Mitsubishi UFJ Financial Group (8306.T) declined 0.9 percent and Mizuho Financial Group (8411.T) slid 0.5 percent.

Exporters were weaker after the dollar pulled back against the yen, reflecting expectations the Fed will maintain its easy-money policy for a while longer after dovish comments last week from incoming Fed chief Janet Yellen.

Toyota Motor Corp (7203.T) dropped 0.5 percent and Advantest Corp (6857.T) fell 1.7 percent.

The yen was up 0.1 percent at 99.925 yen to the dollar, adding to a 0.2 percent rise overnight to end a two-day run of losses.

Last week, the yen hit a two-month low of 100.315 yen to the dollar, driven by a risk-on mode in global markets and comments from Finance Minister Taro Aso that Tokyo should retain currency intervention as a policy tool. The Nikkei gained 7.7 percent last week, it's biggest weekly rise in four years.

A weaker yen sharpens Japanese exporters' competitiveness overseas and bumps up their dollar earnings when repatriated.

The Nikkei has rallied 45 percent this year, driven by the government's expansionary fiscal and monetary policies.

Ratan Tata elected to East-West Centre board

Washington: Noted Indian business leader Ratan N. Tata has been elected to the Board of Governors of the East-West Centre, a US think tank promoting better relations and understanding among people of US and Asia Pacific.

Tata, Chairman Emeritus of Tata Sons, is returning to the board after serving several terms between 1993 and 2004, the Honolulu, Hawaii-based centre announced Monday. He takes the place of Tarun Das, former chief mentor of Confederation of Indian Industry (CII).

Tata was elected with Takeshi Niinami, CEO of Japan`s Lawson, Inc. Both will serve three-year terms.

Tata, who headed the Indian industrial powerhouse the Tata Group until his retirement in 2012, chairs two of the largest private-sector philanthropic trusts in India and is a member of the Indian Prime Minister`s Council on Trade and Industry.

He also serves on the board of trustees of Cornell University and the University of Southern California, as well as the board of directors of Alcoa, among numerous other board positions.

Established by the US Congress in 1960, the East West Centre serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.

Nokia shareholders expected to approve Microsoft deal

Nokia shareholders are expected to approve the sale of its mobile phone business to Microsoft on Tuesday, with the deal's financial benefits likely to outweigh resistance from a minority of investors upset over the sale of a Finnish national icon.

Nokia agreed in September to sell its devices and services business and license its patents to Microsoft for 5.44 billion euros after failing to recover from a late start in smartphones.

The sale, which is expected to close in the first quarter of next year after regulatory approvals, is set to boost Nokia's net cash position to nearly 8 billion euros from around 2 billion in the third quarter and allow it to return cash to shareholders, possibly through a special dividend.

Without the loss-making handset business, the remaining company will earn over 90 percent of sales from telecom equipment unit Nokia Services and Networks (NSN) and will also include a navigation software business and a trove of patents.

Since the Microsoft deal was announced, Nokia shares have doubled, closing at 6.00 euros on Monday.

Last year, they fell as far as 1.33 euros, a level not seen since 1994, on worries the mobile phone business would burn through cash before it could ever catch up with rivals such as Samsung Electronics (005930.KS) and Apple Inc (AAPL.O).

Billionaire and activist investor Daniel Loeb said in October that he had taken a position in Nokia and that he expects a "meaningful portion of the excess" cash from the Microsoft deal to be returned to investors.

While approval from shareholders is considered a done deal, Tuesday's meeting, which starts at 2:00 p.m. (1200 GMT) in Helsinki's Ice Hall arena, will also be a chance for some shareholders to vent their dissatisfaction.

The sale of the mobile phones business, Finland's biggest brand and at one point worth 4 percent of national GDP, came as a shock to many Finns. The company's success helped to transform Finland from a backwater economy in the shadow of the Soviet Union into a high-tech powerhouse.

At Nokia's last regular shareholders' meeting, many shareholders took to the microphone to question CEO Stephen Elop's strategy, particularly his 2011 decision to adopt Microsoft's Windows Phone software over Nokia's own Symbian or Google's (GOOG.O) widely popular Android operating system.

Elop stepped down when he announced the agreement with Microsoft, his former employer, and is due to return to the Redmond, Washington company when the deal closes.

Finnish tabloids have called him a "Trojan horse", although most analysts have been sympathetic, saying there were few good options for the company by the time he was hired in late 2010.

One Finnish businessman and former Nokia manager had set up a group called Nokita, translated as "bet higher" in Finnish, in an attempt to outbid Microsoft. He said on Monday that he failed to find enough investors.

"Of course there was a bit of a patriotic idea behind my plan, but there was also the calculation," said Juhani Parda, who believed Nokia's devices business could be worth around 23 billion euros in three years by adopting Android in addition to Windows Phone. "I think 5.44 billion is definitely good for Microsoft. I'm not sure it's the best deal for shareholders."

RBI mulling merits of FII limits in govt bonds

 
New Delhi: The Reserve Bank of India is examining the pros and cons of relaxing limits for foreign institutional investors (FII) in government bonds, a senior finance ministry official said on Wednesday.

The comment by Arvind Mayaram, the economic affairs secretary at the finance ministry, came in response to a question from reporters about whether India was considering lifting FII limits in order to qualify for inclusion into benchmark global bond indices.

India will also consider allowing local companies to issue rupee-denominated bonds abroad, marking a new step in the internationalisation of the rupee. International Finance Corp, the private sector arm of the World Bank, last month launched a $1 billion rupee-linked bond.

RBI Governor Raghuram Rajan had earlier said that Indian official are speaking to the index compilers about potential inclusion of domestic debt.

RBI pegs CAD at $56 bn, says no reason for rupee decline

Mumbai: Seeking to reassure investors, RBI Governor Raghuram Rajan Wednesday said there is no fundamental reason for rupee to fall again, and pegged the current account deficit for 2013-14 at USD 56 billion, much lower than the quantum estimated earlier.

He also said the Reserve Bank will not rush to close the special window opened for dollar purchase by oil companies.

The Governor also expressed the optimism that the second half of the current financial year will see better growth numbers on the back of good monsoon and the associated pick-up in consumption and healthy exports.

Referring to the recent decline in the value of rupee, the RBI chief said: "There is no fundamental reason for volatility in the exchange rate."

"At some time, it makes sense to take a deep breath and examine the fundamentals. I hope you all will do that," he said in the hurriedly called press meet.

Pegging a much lower CAD for the fiscal, Rajan said: "Our estimate now is that CAD this year will be USD 56 billion, less than 3 percent of GDP and USD 32 billion less than last year. Of course, some of that compression comes of our strong measures to curb gold import."

The current account deficit (CAD), which is the difference between outflow and inflow of foreign exchange, touched an all-time high of USD 88.2 billion or 4.8 percent of the GDP in 2012-13.

Earlier, the government had projected the CAD in the current fiscal at USD 70 billion, which was revised downwards to USD 60 billion by Finance Minister P Chidambaram on back of declining gold imports and recovery in exports.

"It's important that RBI clarifies interpretation of economic events and the likely direction of economic policies at times of uncertainty so that the market worries about the right things and does not get into a tizzy about the wrong ones. That is my quote today," Rajan said.

His remarks seemed to have calmed currency markets as the rupee gained 41 paise against dollar to close at 63.30, after declining in the previous five days in a row.

"We have no intention of rushing this process (of closing the special window for OMCs)," Rajan said.

The Reserve Bank in August had opened a special window to help the three state-owned oil marketing companies -- IOC, HPCL and BPCL -- to meet daily foreign exchange requirements and buy dollars directly from RBI.

The rupee, it may be mentioned, fell to a record low of 68.85 to the dollar on August 28.

Rajan said since October 14 most of dollar demand from oil marketing companies has been met from the market only.

The PSU oil companies are the biggest buyers of dollars, requiring USD 8-8.5 billion every month for import of an average 7.5 million tonne crude oil.

Expressing comfort at declining core inflation,narrowing CAD and better growth prospects in the second half on good monsoon, Rajan sought to reassure investors who fear India will be hit again as and when the US ends easy money policy.

Ruling out any major threat from the external front to rupee as well as the economy, Rajan said even if there is no more fresh FII inflows this year, there will not a problem to finance CAD as he country will have USD 32 billion less of CAD to finance this year.

"Last year FII inflows, both debt and equity, accounted for USD 26 billion. Let me assume that we get no inflow this year, and in fact outflows equal the inflows we got last year. In other words, there is a USD 52-billion turnaround in FII flows," the Governor said.

"Remember though that we have USD 32 billion dollars less of CAD to finance this year, and till yesterday, we raised USD 18 billion through new swap channels. So, if other financing remains the same as last year, which it seems on track, even if foreign investors pull out significantly more money this year than they have so far, we still can break even on capital flows," Rajan said.

Noting that OMCs have entered a swap arrangement whereby they will have to repay dollars to the RBI on various dates from February 2014 till April 2014, Rajan said: "One worry expressed by market participants is whether OMCs will add to further downward pressure on the rupee when it comes time for them to repay dollars to the RBI."

"This to my mind is a non-issue because we have three ways of managing the repayment. One is, of course, for the OMCs to buy dollars in the market. If exchange markets are calmer, this additional demand should be absorbed," he added.

Rajan said, "But if they are not calmer, we could roll over some portion of the swaps so they mature at a calmer time. But perhaps the easiest option would be for us to settle the swap with the OMCs by making net payments in rupees, and avoid the need for them to go back to the market for dollars. When the time comes, we will choose the most appropriate combination".

He also announced a bond purchase worth Rs 8,000 crore next Monday to inject liquidity in markets.

He further said the major outflows in the recent past following the tapering talks were debt outflows.

"Though that money has not come back, indeed our FII debt exposure, both corporate and sovereign, has come down from USD 37 billion on May 21 to USD 19 billion today. I presume what is left is more patient money, but given its diminished size, I do not see it is possible exit as a huge risk," the governor said.

Rajan's address came after stronger-than-expected US jobs data last week had sparked concerns about an early end to the Federal Reserve's stimulus, hitting the rupee and sending domestic bonds and shares tumbling. This led to FIIs pulling out more than USD 13 billion from bonds and over USD 2 billion from equities between end May and early September.

Though he termed food inflation "worryingly high", which rose to 10.09 percent in October, Rajan said he was comforted by a downward trend in the core consumer price index, which declined from 8.5 percent to 8.1 percent in the month.

"I am somewhat more heartened by the outcome of core CPI inflation, which declined to 8.1 percent from 8.5 percent in September. The momentum for core inflation is also on the decline," Rajan said.

Philanthropy list: Azim Premji the most generous Indian with donation of Rs 8,000 cr

 
New Delhi/Mumbai: When it comes to generous donations, Indians are no less than anyone. India’s Azim Hashim Premji has topped 2013 Hurun India Philanthrophy list prepared by China based Hurun Report Inc.

Azim Premji emerged as the most generous Indian with a donation of Rs 8,000 crore in the past year.

HCL group Chairman Shiv Nadar is the second highest contributor in the list with a donation of Rs 3,000 crore.

The Shiv Nadar Foundation, which completed 20 years in philanthropy this year, works towards educational initiatives and expansion programmes, directly benefiting 15,000 students across India.

G M Rao, through GMR Varalakshmi Foundation, donated Rs 740 crore for the education of underprivileged children, becoming the third biggest philanthropist in India's corporate world.

Nandan and Rohini Nilekani stand fourth in the list with a contribution of Rs 530 crore.

Ronnie Screwvala, whose initiatives are housed under the Swadesh Foundation (UTV group), contributed Rs 470 crore for achieving rural empowerment through the best practices and modern technology values.

'Biotech Queen' Kiran Mazumdar Shaw made a donation worth Rs 330 crore, while Ratan Tata donated Rs 310 crore to various charitable organisations for the underprivileged through the JRD Tata Trust and Sir Ratan Tata Trust.

London-based mining major Vedanta Resources Chairman Anil Agarwal donated Rs 290 crore to support the cause of healthcare.

PNC Menon of Sobha Developers and DLF Chairman Kushal Pal Singh contributed Rs 270 crore and Rs 200 crore, respectively for programmes like adoption of villages and skill training of the youth.

Hurun India Philanthropy List is a ranking of 31 Indians who donated more than Rs 10 crore (equivalent to USD 1.6 million) in cash or cash equivalent during April 1, 2012 till March 31, 2013.

Hurun Report included donations made by companies in which an individual had a significant share, by applying the percentage the individual has of the company on the donations.

Education was the most important area for the Indian philanthropists with a total contribution of Rs 12,200 crore.

It was followed by social development (Rs 1,210 crore), healthcare (Rs 1,065 crore), rural development (Rs 565 crore), environmental cause (Rs 170 crore) and agriculture (Rs 40 crore).

"This list demonstrates the responsibility taken by entrepreneurs," Rupert Hoogewerf, Chairman and Chief Researcher of Hurun Report said.

The average age of the philanthropists in the list is 62 years while the average age of the top 10 donors is 64 years.

Region-wise, the report said, south Indians showed the way for making contributions with a cumulative donation of Rs 10,000 crore while north Indians pitched in with contributions of Rs 4,865 crore.

The Companies Bill, 2013 mandates companies, with a net worth of more than Rs 500 crore or revenue of more than Rs 1,000 crore or net profit of more than Rs 5 crore, to earmark at least two percent of their average net profits of the preceding three years for CSR activities.

"This amendment to the Companies Bill should provide more transparent reporting of corporate donations," said Anas Rahman Junaid, Publisher-at-Large of Hurun Report India.

SBI posts worst quarterly profit in 2 years; net plunges 35%

 
Mumbai: State Bank of India on Wednesday reported its worst quarterly profit in over two years with a sharp 35 percent drop in earnings at Rs 2,375 crore in the three months to September, hit hard by higher provisions for staff expenses, bad loans and investment depreciation.

Standalone total income was Rs 37,199.92 crore as against Rs 32,953.47 crore in the same period a year ago.

"Provisions for loan losses, provision for the staff wage hikes, provision for pensions and of course the investment depreciation were the reasons for dip in the net profit in the quarter," the newly-appointed SBI chairman and managing director Arundhati Bhattacharya said.

This is the worst quarterly performance of the nation's biggest lender since the massive 90 percent plunge which brought the bank's net profit to just Rs 20.88 crore for the March 2011 quarter. Pratip Chaudhuri had taken over as chairman in April, 2011.

"Also, the fact that we have really not been able to book that kind of income on sale of investments as we had been able to do in the first quarter, due to the fact that interest rates have actually hardened. All of this accounted for lower bottomline," Bhattacharya said.

This is Bhattacharya's maiden earnings report after she took over charge on October 7 as the first woman head of SBI which controls nearly a quarter of country's banking assets.

SBI's total provision rose 6.53 percent to Rs 3,937 crore as against Rs 3,696 crore in the same period last year.

Despite the poor set of numbers, the market lapped up the SBI counter, which is down around 50 percent from its lifetime high. Today, the SBI counter closed 1.34 percent higher at Rs 1697.85 on the BSE, whose benchmark Sensex shed 0.45 percent.

Saday Sinha, banking analyst at Kotak Securities said the bank's net interest margin (NIM) at 3.2 percent was ahead of his expectations on the back of a 19 percent loan growth.

However, the profit after tax (PAT) came a shade below expectations due to higher-than-expected operational expenditure and Non-Performing Assets (NPA) provisions, he added.

During the quarter, major slippages came from the power sector (Rs 1,700 crore), iron and steel (Rs 600 crore) and infrastructure (Rs 700 crore), said SBI chief financial officer and deputy MD RK Saraf.

Although the bank's slippages of 3.1 percent is lower than the previous quarter, asset quality pain persists for the stock with net addition to impaired assets remaining at elevated levels, Kotak's Sinha said.

Staff expenses jumped 36 percent to Rs 5,819 crore from Rs 4,280 crore in the same period last year, while salary expenses jumped 26.74 percent to Rs 4,536 crore.

Provisions for pension rose 108.62 percent to Rs 1,054 crore in the quarter as against Rs 505 crore a year ago.

"The staff expenses have gone up quite sharply on account of the fact we have to make 15 percent provisions for the wage negotiation. We are also having to make additional provision on account of the fact that the LIC has changed the mortality table," Bhattacharya said.

According to LIC's new mortality table, the life expectancy has increased to 81 years.

At the end of the reporting quarter, the bank's gross non-performing assets (NPAs) rose to 5.64 percent of gross advances, compared with 5.15 percent year a year ago. Net NPAs also rose to 2.91 percent from 2.44 percent. However, on a sequential basis, NPAs declined by 39.23 percent.

Net interest income in second quarter increased 11.64 percent to Rs 12,251 crore from Rs 10,974 crore a year earlier.

Domestic net interest margin (NIM) increased sequentially to 3.51 percent in the quarter from 3.44 percent last year.

Deposits grew 14.01 percent to Rs 12,92,456 crore in quarter as against Rs 11,33,644 crore, while gross advances jumped 19.18 percent to Rs 11,39,326 crore.

"Right now, our deposit growth on year-on-year basis is at 15 percent and we expect to be able to grow at the same manner on the deposit side. On the credit side, we have to see how it happens, but currently we will maintain between 16 to 18 percent," Bhattacharya said.

The domestic credit deposit ratio increased from 76.64 percent in September 12 to 80.54 percent this quarter, a jump of 390 basis points.

SBI had seen an investment depreciation of Rs 8 crore as against loss of Rs 260 crore in the year-ago quarter with the depreciation on domestic banking side being Rs 237 crore as against a loss of Rs 257 crore.

The bank had booked a loss of Rs 229 crore in investment depreciation on foreign banking side as against a loss of Rs 3 crore.

"We were able to amortise the dip that has come on the treasury side. While on the domestic side there was a write in where as on foreign offices side there has been a write back. The net figure which has come is only Rs 8 crore," Bhattacharya said.

"This means for the next two quarters we will have amortised an amount of market-to-market, that will have to be taken, which will be in the range of Rs 700 crore."

During the quarter SBI shifted Rs 56,000 crore of SLR securities to held-to-maturity category.

Bank's provisions for income tax declined by 51.45 percent to Rs 908 crore as against Rs 1,870 crore.

Provisions for loan loss jumped 43.99 percent to Rs 2,646 crore as against Rs 1,837 crore.

Interest on loans rose 12.60 percent to Rs 25,379 crore as against Rs 22,538 crore. Interest on resources jumped 20.64 percent Rs 8,243 crore as against Rs 6,833 crore.

Total interest income rose 14.58 percent to Rs 33,922 crore as against Rs 29,607 crore.

Interest on deposits increased 13.96 percent to Rs 19,277 crore from Rs 16,916 crore, while interest on borrowing jumped 106.30 percent to Rs 1,468 crore as against Rs 711 crore due to increase in MSF rates and tight liquidity condition.

The bank's total restructured accounts stood at Rs 52,437 crore and has debt restructuring pipeline of Rs 6,000 crore which could be implemented in rest of the two quarters or may be next year, Bhattacharya said.

Talking about the outlook, Bhattacharya said the bank will continue to face tough situation as "we are not seeing those indicator that say things are beginning to look brighter".

However, she said the bank is seeing robust demand on the retail loan side. "But if you look at the stresses in the account, the stresses continue and we are not seeing stresses to have lessened to very great extent, specially in the mid cap and the large SME segments."

Rupee falls further on strong dollar demand

 
Continuing its slide for the sixth straight day, the rupee on Wednesday lost 17 paise to trade at a fresh two-month low of 63.88 in early trade on strong dollar demand from importers amid weak local equities.

At the Interbank Foreign Exchange (Forex) market, the local currency opened lower at 63.88 a dollar from its previous close of 63.71.

Forex dealers said besides sustained demand for the US currency from importers and a lower opening in the domestic equity market also put pressure on the rupee but dollar's weakness against euro in the global markets capped the fall.

The rupee had depreciated by 47 paise to close at 63.71 against the dollar in the previous session. Meanwhile, the BSE benchmark Sensex fell by 53.97 points, or 0.27 per cent, to 20,227.94 in early trade on Wednesday.

Vodafone bets big on India 3G, to invest Rs 7,100 cr

 
Vodafone has drawn up ambitious plans to invest 700 million pound ( about  Rs 7,100 crore) in India during the next 2- 3 years mainly on rolling out 3G networks.

This amount will be in addition to  Rs 4,000- Rs 6,000 crore annual investments the company has been making in recent years, Vodafone India CEO Marten Pieters said on Tuesday.

The investment will be part of the cash- rich British company's Project Spring under which the Vodafone Group will invest 7 billion pound by March 2016, to establish stronger network and service differentiation in major global markets.

"The Indian investment is about 10 per cent of pound 7 billion in the next 2- 3 years. It depends also on what is available. The investment will be above the normal level of investment we would have done so it's like a catch up investment," Pieters said.

Riding on a strong growth in data usage and voice calls, Vodafone India said it has posted 13.5 per cent jump in revenue at  Rs 20,476.3 crore for the first half ( April- September period) of 2012- 13.

The company had logged Rs 17,581.3 crore in revenue during the same period in the last fiscal.

Pieters said, India has become the third largest contributor to the UK- based Vodafone Group's services revenues.

" We are also focused on growing the use of mobile Internet. Our data continues to contribute strongly to business, accounts for 9 per cent of service revenue in Q2, 2013- 14 fiscal," said Pieters.

He said most of the subscribers in India would use  Internet via mobile phones but the company doesn't have 3G spectrum in all the circles.

"We will try to get spectrum in all the circles next year. We count on pending approval for spectrum trading and the fresh 2100 Mhz auction in 2014," he pointed out.

On revenue growth, he said it is driven by hardening of rates, exponential growth in data and good subscriber base. "These, however, were partially offset by the effect of seasonality and regulatory changes," he added.

"The service revenue has grown 13.5 per cent to Rs 18,481 crore during the 6- month period from  Rs 16,282.6 crore in the corresponding period last fiscal, but our data revenue has grown much faster at 76.5 per cent. The data growth has been driven by high smartphones usage, he added.

Vodafone India's operating profit or EBITDA ( earnings before interest, taxes, depreciation and amortization) improved by 30.6 per cent to  Rs 6,519.1 crore in H1, 2013- 14, compared to  Rs 4,993 crore in the same period of last fiscal.

Pieters said the environment in the country is more positive these days as the regulatory clarity is emerging. However, at the same time he pointed out that that all is still not fine on the regulatory front.

Meanwhile, Vodafone Group chief Vittorio Colao at a meeting in London on Tuesday said the company will only consider an IPO in India once the $ 2- billion tax dispute is resolved.

"We don't have to do it… because we don't need the money. We need to resolve the tax issue first," said Colao.

Colao added that there was " no real change" to discussions on the tax dispute. " We have had talks and continue to have talks. It's complicated and honestly, we have to see where it goes."

Vodafone posted a 13.5% jump in revenue at  Rs 20,476.3 cr for the first half of 2012- 13.

Apple's new retina display iPad Mini hits stores without fanfare

Apple Inc has begun selling its new iPad Mini, the one with its famed retina display feature, without the usual fanfare.

The company usually announces the availability date in advance, allowing loyal customers to line up at stores overnight to be among the first to buy one. This time, Apple quietly issued a news release on its immediate availability.

Supplies also are limited. People had to order them online to pick them up at Apple's retail stores. This suggests the company may be having problems producing enough iPad Minis.

Apple CEO Tim Cook acknowledged during a conference call two weeks ago that "it's unclear whether we will have enough for the quarter or not."

The new Mini is the first version of the smaller iPad to feature the high-resolution display that Apple calls Retina. It also includes a power-efficient A7 chip, along with faster wireless and expanded LTE cellular connectivity.

The new iPad Mini is available in silver or gray. Wi-Fi-only models will start at $399 for a 16-gigabyte gigabyte model while cellular-capable models will start at $529 for the 16-gigabyte model. It's available in the US and several other markets.

Sensex trading flat on IIP, inflation data

 
Extending its losing streak, the BSE benchmark Sensex on Wednesday fell 53 points in early trade on sustained selling by funds after weak cues from CPI and IIP data .

The retail inflation measured in terms of consumer price index (CPI) rose to 10.09 per cent in October, entering double digits after seven months. Meanwhile, industrial production grew by two per cent in September, mainly on account of better performance by power and mining sectors.

The 30-share index fell by 53.97 points, or 0.27 per cent, to 20,227.94 in first five minutes of trading. The Sensex has lost 957.45 points in past six sessions.

 At 10: 42 am, the Sensex was trading 40 points higher at 20,318 points.

Stocks of power, capital goods, metal, consumer durable and banking sectors declined due to profit booking.

Similarly, the wide-based National Stock Exchange index Nifty fell by 19.90 points, or 0.33 per cent, to 5,998.15.

At 10:42 am, the Nifty was trading 6 points higher at 1024 levels.

Brokers said sustained selling by funds amid weakening trend on other Asian bourses mainly influenced the trading sentiment. In the Asian region, Japan's Nikkei Index was down 0.09 per cent, while Hong Kong's Hang Seng index shed 1.31 per cent in early trade. The US Dow Jones Industrial Average ended 0.21 per cent down in Tuesday's  trade.

RCom stock rises on Q2 earnings

 
Reliance Communications on Wednesday rose after the firm reported  over six-fold jump in its net profit at Rs 675 crore for the quarter ended September 30. The company had reported a net profit of Rs 102 crore in the corresponding period last financial year, it said in a statement on Tuesday.

The company said the net profit includes Rs 441 crore from a write back provision.

"The company has, during the quarter, reassessed the requirement of maintaining balance of Rs 441 crore of provision for business restructuring created pursuant to the schemes of amalgamation approved by High Court in financial year 2006-07 and as determined by the board, credited to other income as no longer required," it said.

At 11: 00 am , RCom stock was trading 4.37 per cent higher to Rs 134.80 on the BSE.

Rupee will settle down: Chidambaram

New Delhi: With the rupee declining to a two-month low of 63 to a dollar, Finance Minister P Chidambaram Monday assured the domestic currency will stabilise.

"Rupee will settle down," he told reporters here.

In early trade today, the rupee fell to 63.33 to a dollar, its weakest since September 18.

The Indian currency started weakening since last week after the dollar purchase by oil companies was partly shifted to the market.

"Rupee weakness is due to OMC forex demand being moved to market. 30-40 percent of OMC demand has moved to market," Economic Affairs Secretary Arvind Mayaram had said last week.

The PSU oil companies are the biggest buyers of dollars, requiring USD 8-8.5 billion every month for the import of an average 7.5 million tonne of crude oil.

In August, the Reserve Bank had opened a special window to help the three state-owned oil marketing companies -- IOC, HPCL and BPCL -- to meet daily foreign exchange requirements and buy dollars directly from RBI.

The rupee has recovered over 8 percent since August 28, when it fell to a record low of 68.85 to the dollar. The gain in rupee had followed optimism that the US Federal Reserve would delay the tapering of its bond buying programme.

World Bank says expanded access to banking services comes with risks

In Brazil, bank customers can access their accounts aboard a floating bank on the Amazon River. In Mexico, rural residents find banking services inside popular stores like Walmart or 7-Eleven, or at their local pharmacy.

Mobile technology and regulatory reforms have made it easier and cheaper for private and public companies around the world to offer banking services to the poor, youth, women and rural residents, and others who lacked access.

But in a new report released on Monday, the World Bank warns that while some services, like low-fee accounts, clearly benefit the poor and small firms, others - such as microcredit, microinsurance, and debt relief - can do more harm than good.

"We're very careful to make sure we're not saying that everyone should be borrowing," said Asli Demirguc-Kunt, the World Bank's director of research and co-author of the report.

Instead, the World Bank encourages governments to reduce regulatory barriers, legal hurdles or other factors that make financial services too expensive for some, such as boosting competition and protecting the rights of creditors.

Access to finance helps the world's poorest save so they can invest in education and improve standards of living, and enables small companies to borrow so they can grow. It also makes it easier for governments to target subsidies and financial assistance to the bank accounts of the neediest.

More than 50 governments have pledged to improve financial inclusion, or the number of people and companies that use financial services. World Bank President Jim Yong Kim last month also announced a target of universal financial access by 2020. Now, about 2.5 billion people, or half the world's adult population, lack access to financial services.

Microcredit, or tiny loans to the poor, came into vogue in the late 1990s as a way of providing banking services to the world's poorest in order to combat poverty and boost entrepreneurship.

But several studies in recent years have shown that microcredit, which often comes with very high interest rates, has little or no impact on the financial fates of people in nations such as Mexico, the Philippines, Morocco and India.

The World Bank said India in particular offers a cautionary tale about the overextension of credit, after reports of dozens of suicides by poor borrowers in 2010 in the southern state of Andhra Pradesh.

India lacked appropriate protection for consumers and legal provisions for personal bankruptcy, the bank said. In general, governments should avoid directed credit and lending through state-owned banks, as these interventions can become tied to politics, according to the World Bank.

Fingerprinting, Iris scans

But innovative financial instruments and new technology have made it easier to expand access, even in countries without strong institutions.

One experiment in rural Malawi collected the fingerprints of some farmers that wanted loans to grow paprika. The experiment showed that farmers who were at highest risk for default were more likely to pay back a loan if they were fingerprinted, since they worried they might not get another loan in the future.

The identification could also make lenders more likely to extend credit since they would have better information about borrowers.

"Recent research suggests that biometric identification (such as fingerprinting, iris scans, and so on) can substantially reduce information problems and moral hazard in credit markets," the World Bank said.

Other tools that can encourage people to save in formal bank accounts are commitment savings accounts, where people give up access to their money for a set period of time, or regular reminders of savings goals.

But the World Bank said it was important to have more educated consumers in addition to enabling government policies. For that, standard financial literacy classes generally fail at preparing people for major financial decisions.

"A person can learn the meaning of street signs, but this does not make him capable of driving in traffic," the bank said.

Instead, what seems to work better is providing information just as a person is starting a new job or purchasing a financial product.

"You need the right regulations in place, but also to educate consumers so that they watch out for themselves," Demirguc-Kunt said.

Gold prices fall below Rs 31,000 on selling, weak global cues

Gold prices dipped below Rs 31,000-mark after nearly one month, falling by Rs 350 to Rs 30,900 per ten grams in New Delhi on Monday.

Traders said heavy selling by stockists on the back of sluggish demand amid a weak global trend mainly pulled down the yellow metal's prices.

However, silver found some buying support from industrial units and ended higher by Rs 110 to Rs 49,010 per kg.

Gold in Singapore, which normally sets price trend on the domestic front, dropped by 0.4 per cent to $1,283.28 an ounce after data showed that US employers added more jobs than expected which reduced demand for the metal as an alternate investment.

On the domestic front, gold of 99.9 and 99.5 per cent purity plunged by Rs 350 each to Rs 30,900 and Rs 30,700 per ten grams, respectively. It had lost Rs 150 in the previous session. Sovereign also shed Rs 100 to Rs 25,000 per piece of eight gram.

On the other hand, silver ready recovered by Rs 110 to Rs 49,010 per kg and weekly-based delivery by Rs 160 to Rs 48,310 per kg. The white metal had lost Rs 200 in last trade.

Silver coins also spurted by Rs 1,000 to Rs 87,000 for buying and Rs 88,000 for selling of 100 pieces.

Govt will get over negativity, says Chidambaram

 
Finance Minister P Chidambaram has conceded that a potent mix of factors like slowdown of economic growth, dysfunction of the executive and corruption allegations has brought in a "high degree of negativity" but expressed confidence that the government would get over it.

"In the second five years of UPA, yes, there is, I can sense, I can see that the voter is at the moment negative. I can see that. I am blind if I don't see that. The reason is slowdown in economic growth , dysfunction of the executive, the cases of allegations of corruption, investigations that are going on, inflation and a slowdown in job creation. I think it is a potent and powerful mix, a potent mix of factors which has brought in a high degree of negativity. It is possible we may get over it."

"It is possible we don't get over it. It is a verdict we have to leave to the people. We have to accept whatever the verdict people will give," Chidambaram said at the "Thinkfest" event in Bambolim near Panaji.

Even in this slowdown in the last nine years, the country has clocked an average of 7.5 per cent growth.

"It is sad that at the end of the 10-year term, the growth has seen slowdown for a couple of years after having been high in the middle years and low in the last two years. I am doing my best. I will continue to do my best to see that there is an upturn before we go to polls," he said.

Chidambaram was replying to a question whether at the end of the second UPA term in the context of global pressures, CAG reports and high optimism in which the coalition was voted to power in 2009, there was today a lack of credibility for the government and that the prime minister was singularly lacking in leadership.

He shot back saying that he cannot remain in government and comment on the prime minister.

"That is not correct, that is not appropriate. I won't do it. He is the prime minister. I am a minister in his Cabinet. I have to accept his leadership and respect him. I am sorry, I cannot answer this question."

Indian rupee drops 83 paise against US dollar, breaches 63-mark

 
he Indian rupee dropped by 83 paise to 63.30 against the US dollar after a gap of nearly eight weeks on persistent dollar demand from importers and banks on the back of higher dollar overseas.

The domestic currency resumed lower at 63.00 per dollar as against the last weekend's level of of 62.47 per dollar at the Interbank Foreign Exchange (Forex) Market and dropped further to 63.32 per dollar before quoting at 63.30 per dollar at 10.40 am. It moved in a range of 62.94 per dollar and 63.32 per dollar during the morning deals.

Sustained dollar demand from importers and banks in view of firm dollar overseas mainly affected the rupee value against the dollar, a forex dealer said.

In New York, the American currency jumped last Friday after the US created twice as many jobs in October as Wall Street had expected, sparking yet another round of discussion about when the Federal Reserve could slow its bond buys.

Meanwhile, the BSE Sensex dropped further by 129 points, or 0.62 per cent, to 20,537.37 at 10.50 am.

Rupee will settle down, assures Chidambaram

 
Finance Minister P Chidambaram took to reassuring investors and traders after the rupee declined to a two-month low of 63 to a dollar, saying the currency will stabilise.

In early trade on Monday, the rupee fell to 63.33 a dollar, its weakest since September 18.

"Rupee will settle down," the finance minister told reporters in the national capital.

The Indian currency started weakening again last week after the dollar purchase by oil companies was partly shifted to the market.

The PSU oil companies are the biggest buyers of dollars, requiring $8-8.5 billion every month for the import of an average 7.5 million tonne of crude oil.

"Rupee weakness is due to OMC forex demand being moved to market... 30-40 per cent of OMC demand has moved to market," Economic Affairs Secretary Arvind Mayaram had said last week.

The rupee has recovered over 8 per cent since August 28, when it fell to a record low of 68.85 to the dollar.

The Reserve Bank of India had in August opened a special window to help the three state-owned oil marketing companies - Indian Oil, Hindustan Petroleum and Bharat Petroleum - to meet daily foreign exchange requirements and buy dollars directly from the central bank.

The gain in the rupee's value had also followed optimism that the US Federal Reserve would delay the tapering of its bond buying programme.

Bank licences: Sebi scans listed applicants, firms

As the Reserve Bank of India (RBI) gears up to issue new bank licences, capital markets regulator Sebi has also a job at hand that is of scrutinising all applicants coming under its jurisdiction directly or through group entities. Sebi's scrutiny follows detailed queries shot off by RBI to various regulators in India and abroad as part of its due-diligence of entities seeking to enter banking arena. According to a senior official, Sebi is looking into the capital market track-record of all the group entities of 26 banking aspirants, some of whom are either listed entities or have presence in Sebi-regulated businesses like mutual funds, brokerage and investment banks. The area of prime focus for the Securities and Exchange Board of India (Sebi) is action taken by or underway for violations to various market regulations, he added. The scrutiny is expected to be over this month itself. RBI is granting new bank licences for the first time in about a decade and preliminary screening process is underway for 26 entities that have submitted their applications. As part of this process, RBI has also asked the applicants to provide further details about their promoters, equity structure, financial inclusion programme, proposed banking model, among others, sources said. In addition to Sebi, RBI is also seeking details from other regulators such as insurance watchdog IRDA and pension regulator PFRDA, about the businesses of the applicant entities under their respective jurisdictions. With regard to some applicants, RBI has sought to know details about source of funds and compliance to the structural norms proposed for new banking players. Besides, RBI is seeking additional details from the concerned foreign regulators about those applicants whose group entities have operations, significant business dealings with foreign companies or overseas listings. Sources said this due diligence process involves information exchange with domestic and foreign regulatory authorities for all group entities of the applicants.