Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 31.50 points at the opening bell tracking weakness in Asian markets and sharp fall in US markets overnight.
Shares of natural gas utility companies will be in focus after the Minister of State (I/C) for Petroleum & Natural Gas Dharmendra Pradhan informed the Rajya Sabha in a written reply yesterday, 10 December 2014, that Petroleum & Natural Gas Regulatory Board (PNGRB) has envisaged a phased roll out plan for development of city/local natural gas distribution network in the country, which includes 8 districts of Bihar.
PSU banks will be in focus after the Union Cabinet chaired by the Prime Minister, Narendra Modi, on Wednesday, 10 December 2014, gave its approval for allowing Public Sector Banks (PSBs) to raise capital to meet their additional capital requirements under BASEL-III by diluting Government holding upto 52% in a phased manner. Out of 27 PSBs, Government of India controls 22 through majority holding. In the remaining 5 banks, SBI holds majority stake. These 27 PSBs control 70% of total branches, deposits and credit in the Indian banking system. Gol has regularly been infusing incremental capital in PSBs. Basel-Ill capital adequacy norms will be fully phased in and applicable by 31 March 2019. Capital requirements of banks have increased under Basel-Ill.
As per Basel-Ill norms the minimum Tier-1 has to be 7%. In addition, Banks require another 2.5% of Common Equity as Capital Conservation Buffer. In all, Banks need a total of 9.5%. The quantum of capital support needed by banks is huge, which cannot be funded by budgetary support alone. The main concern of Gol primarily pertains to Common Equity Tier-I capital of 5.5%.
Insurance stocks will be watched. The Union Cabinet, chaired by the Prime Minister Narendra Modi yesterday, 10 December 2014, approved the officials Amendments to the Insurance Laws (Amendment) Bill, 2008 and introduction in the Rajya Sabha when the Bill is taken up for consideration and passing. The Bill is aimed at removing archaic and redundant provisions in the relevant legislations and to enable the insurance sector to work for the betterment of the insured with greater efficacy.
NTPC, NHPC, and Coal India will be in focus. The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi, has approved the scheme for setting up of 1000 MW of Grid-Connected Solar PV Power Projects with VGF (Viability Gap Fund) support of Rs 1000 crore, by CPSUs under various Central/State Schemes, in three years period from 2015-16 to 2017-18. The Scheme will have a mandatory condition that all PV cells and modules used in solar plants set up under this Scheme, will be made in India. The CPSUs and Government of India organisations like NTPC, NHPC, CIL, IREDA, Indian Railways, etc. are coming forward to set up solar power projects. The scheme has a provision of VGF support of Rs 1000 crore for setting up of Grid-connected solar PV power projects of 1000 MW aggregate capacity to be developed by CPSUs under various central/state schemes by using cells and modules made in India.
PSU OMCs will be in focus. The CCEA, chaired by the Prime Minister Narendra Modi, has approved a mechanism for procurement of ethanol by Public Sector oil marketing companies (OMCs) to carry out the ethanol blended petrol (EBP) program. The CCEA approved replacing the current procedure on ethanol viz. delivered price of ethanol may be fixed in the range of Rs 48.50 per litre to Rs 49.50 per litre, depending upon the distance of sugar mill from the depot/installation of the OMCs. The rates proposed would be delivered price at depot location and inclusive of all central and state taxes, transportation costs, etc which would be borne by the ethanol suppliers. The OMCs will incorporate "Supply or Pay" clause duly backed up with bank guarantee in their supply agreement with ethanol suppliers. OMCs will sign MOU with the state governments for a comprehensive system for uninterrupted inter-depot transfer of ethanol within a State. This may include annual excise permits to OMCs for movement of ethanol and other relevant measures.
With respect to media reports titled "Maruti bags army order for 4,000 Gypsys, its largest yet", Maruti Suzuki India after market hours yesterday, 10 December 2014, clarified that the company has received an order for supply of 4,141 Gypsy vehicles from the Indian Army in the ordinary course of business. Maruti said that the company sells about 12 lakh vehicles per annum with a turnover close to Rs 45000 crore. Keeping in view such a large scale of operations of the company, this particular order is approximately 0.34% of the total number of vehicles sold by the company in a year. Over the last 30 years or so, the company, from time to time, has been supplying Gypsy to the Indian Army and other para security forces, Maruti said. Hence, this event is neither unprecedented nor material enough to have a bearing on the operations/performance of the company, Maruti Suzuki India said.
Jindal Steel & Power (JSPL) after market hours yesterday, 10 December 2014 said it has commissioned the Billet Caster plant as part of the 6 MTPA integrated steel project at Angul, Odisha.
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Aurobindo Pharma after market hours yesterday, 10 December 2014 said that its board of directors resolved subject to the approval of the shareholders of the company and of other applicable laws, regulations etc., issuance of equity shares through a qualified institutions placement (QIP) to qualified institutional buyers (QIB) provided that the aggregate amount to be raised by issue of Securities shall not exceed a sum of $350 million or rupee equivalent thereof.
Minister of State for Finance, Jayant Sinha yesterday, 10 December 2014, said India needs to develop alternative model of economic growth based on mix of policies including market driven entrepreneurship innovations, scope for larger private investment and free market economy in democratic polity among others. He was delivering the Inaugural Address after inaugurating the two day Delhi Economic Conclave 2014. The theme of the two day Conclave is Structural Reforms and Growth in India. Stressing on the non-inflationary, inclusive and sustainable growth, Sinha said that structural reforms shall keep taking place at gradual intervals as being done by the present government so that as overall net result, these gradual reforms lead to transformation of India into an economy with a sustainable growth of 7-8% and inflation in the range of 4-6%. Delivering the Key Note Address on this occasion, Tharman Shanmugaratnam, Deputy Prime Minister and Finance Minister, Singapore said that India does not have time on its side and will have to race against competitive countries, intelligent machines among others. He said that India has very highly talented people including scientists, IT experts, academicians, entrepreneurs, but there is a gap at the middle and lower level in comparison with other competitive countries like China.
Piyush Goyal, Minister of State (IC), Power, Coal and NRE, said that there is need for change of mind set of policy makers, policy implementers, stakeholders including private entrepreneurs among others to achieve the goal of high and sustainable growth. He said that the present government is focusing on bringing transparency and honesty in allocation of natural resources including coal blocks, iron ore and other minerals as well in time to come. Goyal specifically mentioned about e-auction of coal blocks which will bring more transparency, competitiveness and efficiency in the system.
Shares of power generation companies will be in focus after Minister of State (IC), Power, Coal and NRE Piyush Goyal yesterday, 10 December 2014, said that there will be no increase in power tariff post e-auction of coal mines and the focus will be outcome oriented. Goyal said that new Electricity Amendment Bill would be introduced soon in the parliament. Goyal was speaking as the lead speaker in the First Plenary Session on 'Infrastructure and Growth' at the two-day Delhi Economic Conclave 2014.
The Ministry of Consumer Affairs, Food & Public Distribution yesterday, 10 December 2014, said that the Centre has asked state government to expedite implementation of National Food Security Act. They have been urged to complete all the preparatory work by March next year so that the Act can be roll-out all over the country in April 2015, the Ministry of Consumer Affairs, Food & Public Distribution said in a statement. Addressing the Conference of State Food Secretaries, Minister of Consumer Affairs, Food & Public Distribution Ram Vilas Paswan said that the time-limit of one year provided in the National Food Security Act for identification of eligible households had to be extended twice as several state governments were unable to do so in the prescribed time limit.
The government plans to introduce the Coal Mines (Special Provisions) Bill, 2014 to replace the Coal Mines (Special Provisions) Ordinance, 2014 in Lok Sabha this week. The government is also likely to introduce the constitutional amendment bill for the goods & services tax during the ongoing winter session of parliament. The government also plans to bring the MMDR Amendment Bill, 2014 during the ongoing session of parliament.
The government also intends to get the Insurance Laws Amendment Bill that seeks to enhance FDI limit in capital starved insurance sector passed during the ongoing winter session of parliament.
On the domestic macro front, inflation is seen easing further in November 2014 and growth in industrial production is seen improving a bit in October 2014. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India is seen easing further to 4.4% in November 2014, from 5.52% in October 2014, as per the median estimate of a poll of economist carried out by Capital Market. The government will release the data on CPI inflation for November 2014 after trading hours tomorrow, 12 December 2014.
The annual rate of inflation based on the wholesale price index (WPI) is seen easing further to 1.2% in November 2014, from 1.77% in October 2014, as per the median estimate of a poll of economist carried out by Capital Market. The government will release the inflation data based on wholesale price index (WPI) for November 2014 at 12.15 noon on 15 December 2014.
Growth in industrial production is seen inching up to 2.7% in October 2014, from 2.5% in September 2014, as per the median estimate of a poll of economist carried out by Capital Market. The government will unveil industrial production data for October 2014 after trading hours on tomorrow, 12 December 2014. Industrial production growth improved to 2.5% in September 2014, from 0.5% in August 2014.
After alternately swinging between gains and losses in intraday trade, key benchmark indices eked out small gains yesterday, 10 December 2014. The S&P BSE Sensex gained 34.09 points or 0.12% to settle at 27,831.10, its highest closing level since 8 December 2014.
Foreign portfolio investors bought shares worth a net Rs 5.39 crore yesterday, 10 December 2014, as per provisional data.
Asian bourses were lower today, 11 December 2014, after Wall Street finished sharply lower overnight on the back of further oil price declines, while a worse-than-expected machinery orders report from Japan accelerated the market's slide. Key indices in China, Hong Kong, Japan, Singapore, Indonesia, and South Korea were off 0.13% to 1.36%. In Taiwan, the Taiwan Weighted index was up 0.08%.
Japan's core machinery orders, a leading indicator of capital spending, snapped a four-month rising streak in October, data released yesterday, 10 December 2014 showed. Core machinery orders fell 6.4% on month, On year-on-year, machinery orders fell 4.9% in October.
US stocks closed sharply lower yesterday, 10 December 2014, furthering the week's losses, as the price of crude fell to a new five-year low and the Organization of Petroleum Exporting Countries cut its demand outlook for next year.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 16-17 December 2014. The policy meeting will be keenly watched for any hints on the timing of interest rate increases in the world's biggest economy.
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