The market may open higher on firm Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 8.50 points at the opening bell. Volatility may remain high on the bourses this week as traders roll over positions in the futures & options (F&O) segment from the near month February 2013 series to March 2013 series. The February 2013 F&O contracts expire on Thursday, 28 February 2013.
Indian stocks enter a crucial week, with the Railway Budget for 2013-2014 to be presented tomorrow, 26 February 2013, to be followed by the Economic Survey of India on Wednesday, 27 February 2013 and Union Budget 2013-14 on Thursday, 28 February 2013.
State Bank of India (SBI) before trading hours today, 25 February 2013, said that the Executive Committee of Central Board (ECCB) of the bank at its meeting held on Saturday, 23 February 2013, has approved preferential allotment of equity shares to the Government of India (GoI) to the tune of up to Rs 3004 crore to enable the bank to support national and international banking operations undertaken through its Subsidiaries and Associates. The preferential issue has been priced at Rs 2,312.78 per share.
Infosys on Saturday, 23 February 2013, announced the launch of a state-of-the-art Central Processing Center for the Income Tax Department (ITD) for efficient administration and processing of tax deducted at source (TDS). The TDS facility will process more than 400 million tax deduction submissions filed by nearly 1 million entities annually, Infosys said. Commenting on the development, C. N. Raghupati, Head - India Business, Infosys said: "The launch of the new CPC will play a key role in increasing the efficiency of tax filing for entities and processing of TDS for the Income Tax Department. We are delighted to partner with the ITD in their endeavor to improve the tax-payer experience in India."
Infosys has been processing tax returns filed online by Indian citizens since 2008. Till date, the company has successfully processed more than 30 million tax filings and related refunds, Infosys said. In 2011, ITD selected Infosys as its managed services provider to facilitate central processing of TDS filings by business entities. As part of this new agreement, Infosys provides comprehensive services to the department including technology infrastructure, maintenance, and upgrade of applications for the Tax Deduction Reconciliation, Analysis, and Correction Enabling System, better known as TRACES.
Shares of telecom service providers will be in focus after the Cellular Operators Association of India, which represents operators who employ the global system for mobile communications, or GSM, technology released the monthly subscriber data for January 2013 on Friday, 22 February 2013. Bharti Airtel added about 2.29 million subscribers in January 2013 and Idea Cellular got 2.45 million new customers in January 2013. Videocon Industries' telecom venture lost almost 1.4 million users in January 2013.
FMCG and agri-sector stocks will be in focus after the Centre after trading hours on Friday, 22 February 2013, said that the total rabi sown area currently stands at 629 lakh hectares (LH), higher than 627.5 lakh hectare sown at this time last year and also higher than 619.9 lakh hectare sown on average at this time in the last five years. While wheat has been sown in approximately the same area as last year, there has been improvement in area under coarse cereals, pulses and oilseeds, the Ministry of Agriculture said in a statement. FMCG firms derive substantial revenue from rural India.
In its final guideline on licensing of new banks in the private sector, the Reserve Bank of India (RBI) after trading hours on Friday, 22 February 2013, said entities/groups in the private sector, entities in public sector and non-banking financial companies (NBFCs) will be eligible to set up a bank in India through a wholly-owned Non-Operative Financial Holding Company (NOFHC). The entities/groups should have a past record of sound credentials and integrity, be financially sound with a successful track record of 10 years, the RBI said. For this purpose, RBI may seek feedback from other regulators and enforcement and investigative agencies, the central bank said. Existing NBFCs, if considered eligible, may be permitted to promote a new bank or convert themselves into banks.
The NOFHC shall be wholly owned by the promoter/promoter group, the RBI said. The NOFHC shall hold the bank as well as all the other financial services entities of the group, the central bank said. The initial minimum paid-up voting equity capital for a bank shall be Rs 500 crore. The NOFHC shall initially hold a minimum of 40% of the paid-up voting equity capital of the bank which shall be locked in for a period of five years and which shall be brought down to 15% within 12 years, the RBI said. The bank shall get its shares listed on the stock exchanges within three years of the commencement of business by the bank, the central bank said. The NOFHC and the bank shall not have any exposure to the promoter group. The bank shall not invest in the equity/debt capital instruments of any financial entities held by the NOFHC, the RBI said.
The bank will be governed by the provisions of the relevant Acts, relevant Statutes and the Directives, Prudential regulations and other Guidelines/Instructions issued by RBI and other regulators. The NOFHC shall be registered as a non-banking finance company (NBFC) with the RBI and will be governed by a separate set of directions issued by RBI.
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The aggregate non-resident shareholding in the new bank shall not exceed 49% for the first 5 years after which it will be as per the extant policy, the RBI said. At least 50% of the directors of the NOFHC should be independent directors. The corporate structure should not impede effective supervision of the bank and the NOFHC on a consolidated basis by RBI.
The prudential norms will be applied to NOFHC both on stand-alone as well as on a consolidated basis and the norms would be on similar lines as that of the bank, the RBI said. The bank's business plan should be realistic and viable and should address how the bank proposes to achieve financial inclusion, the RBI said. The board of director of the bank should have a majority of independent directors. The bank shall open at least 25% of its branches in unbanked rural centres (population upto 9,999 as per the latest census). The bank shall comply with the priority sector lending targets and sub-targets as applicable to the existing domestic banks.
Banks promoted by groups having 40% or more assets/income from non-financial business will require RBI's prior approval for raising paid-up voting equity capital beyond Rs 1000 crore for every block of Rs 500 crore, RBI said. Any non-compliance of terms and conditions will attract penal measures including cancellation of licence of the bank, the RBI said.
Nestle India turns ex-dividend today, 25 February 2013, for interim dividend of Rs 12.50 per share for the year ended 31 December 2012.
Key benchmark indices edged lower on Friday, 22 February 2013, as index heavyweight ITC dropped and as another index heavyweight Reliance Industries (RIL) trimmed intraday gains in late trade. The S&P BSE Sensex lost 8.35 points or 0.04% to 19,317.01 on that day, its lowest closing level since 24 December 2012.
Foreign institutional investors (FIIs) bought shares worth a net Rs 280.30 crore on Friday, 22 February 2013, as per provisional data from the stock exchanges.
Investors' focus is now on Union Budget 2013-14 to be presented to the Parliament on Thursday, 28 February 2013. Investors will focus on changes, if any, in excise duty and service tax in the Budget. It remains to be seen if the government announces measures to revive weak investment growth. It also remains to be seen if the government announces more economic reforms. A key figure to watch out is the divestment target for 2013-14. It remains to be seen if the Budget contains a clear roadmap for the implementation of Goods and Services Tax (GST). There has been some debate over taxing the super-rich. It remains to be seen if the Budget provides a clear roadmap to cap the government's subsidy bill. It also remains to be seen if there are measures to increase agriculture production to rein in food inflation.
It remains to be seen if the Finance Minister announces measures to channelise savings into financial assets given the sharp fall in financial savings of the household sector and a corresponding rise in household savings in physical assets such as gold and property over the past two years or so.
The Budget Session of the Parliament which began on 21 February 2013 will conclude on 10 May 2013. In order to enable the Standing Committees to consider the Demands for Grants of Ministries/Departments and prepare their Reports, the two Houses will adjourn for recess on 22 March 2013 to meet again on 22 April 2013.
The Railway Budget for 2013-2014 will be presented to the Lok Sabha tomorrow, 26 February 2013 immediately after Question Hour. The Economic Survey of India will be laid in the Parliament on 27 February 2013.
The government has lined up a number of key bills for consideration and passing during the Budget session of the parliament, which include The Forward Contracts (Regulation) Amendment Bill, 2010, The Pension Fund Regulator and Development Authority Bill, 2011, The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, The National Food Security Bill, 2011 and The Insurance Laws (Amendment) Bill, 2008.
PSU disinvestment and reduction of promoter stake to meet the Securities & Exchange Board of India (Sebi) mandated minimum public shareholding of 25% for private companies and 10% for state-run firms will result in supply of equity in the market over the next few months. The government has set target of Rs 30000 crore from PSU divestment for the fiscal year ending 31 March 2013. Meanwhile, as per the Sebi mandated minimum public shareholding rule, private-sector companies must cut founders' stake to adhere to the rules by 13 June 2013, while the deadline for state-run firms is 13 August 2013.
Asian stocks rose on Monday as Japanese shares gained on speculation the next Bank of Japan governor will deploy aggressive monetary easing. Key benchmark indices in Singapore, Indonesia, Japan, Hong Kong and China rose by 0.05% to 1.9%. Key benchmark indices in South Korea and Taiwan fell by 0.06% to 0.16%.
China's manufacturing may expand this month at a slower rate, according to a private survey of companies. The preliminary reading of a Purchasing Managers' Index was 50.4 in February, according to a statement from HSBC Holdings Plc and Markit Economics today, 25 February 2013. HSBC and Markit will report the final February reading on Friday, 1 March 2013, the same day that a separate, government-backed purchasing managers' index will be released.
US stocks rallied on Friday after better-than-expected results from personal-computer maker Hewlett-Packard Co. and an upbeat report on German business confidence.
Moody's Investor Service late Friday cut its triple-A rating on the United Kingdom because of a weak growth outlook and the country's rising debt burden. Moody's lowered its rating on the UK's domestic and foreign-currency government bond ratings by one notch to Aa1 from Aaa. The outlook is stable. Explaining the main reason for the downgrade, Moody's said "the UK's economic growth will remain sluggish over the next few years due to the anticipated slow growth of the global economy and the drag on the UK economy from the ongoing domestic public- and private-sector deleveraging process."
Italians are voting in an election, with initial estimates of the result due in Rome later in the global day today, 25 February 2013.
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