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Economy & Markets
Much anticipated financial budget was presented on
10 July 2014 by the Finance Minister. Budget speech
evoked confused response with wild swings in the
stock markets. There was a feeling among certain
sections of the market that bolder reforms were
warranted given the strength of this govts mandate.
Although details were missed, the broad picture was
conveyed reasonably well
Key Budget 2014-15 Highlights
Fiscal deficit target of 4.1% for 2014-15
Stable and more investor friendly taxation regime
FDI in Defence & Insurance raised to 49%
Rs 7,060 crores for developing 100 smart cities
4 AIIMS, 5 IIMs and IITs have been proposed
Mission for low-cost affordable housing
Scheme for development of new airports
Rs 4,200 crore set aside for project on river Ganga
connecting Allahabad to Haldia, over 1,620 km
Bank will be encouraged to give long-term
funds and loans to the infrastructure sector
PPF ceiling raised to Rs 1.5 lakh
Min. tax exemption increased to 2.5 lakhs
80C deduction increased to Rs 1.5 lakh
Housing loan rebate hiked to 2 lakhs
10-year tax holiday for power generation
and transmission companies
Custom duty on LCD, LED panels reduced
Excise duty on tobacco and aerated water
products with added sugar increased
Industrial output, as measured by the Index
of Industrial Production (IIP), rose 4.7% in
May from 3.4% in the previous month, the
sharpest increase since October 2012, as
per data released by the Central Statistics
Office. The latest data got a push from
base effect as well
Global Markets
Index 7-Jul 11-Jul Change
U
S
A
Dow Jones 17,024 16,944 (0.47%)
NASDAQ 4,452 4,415 (0.81%)
E
u
r
o
p
e
FTSE 100 6,824 6,690 (1.95%)
DAX 9,906 9,666 (2.42%)
A
s
i
a
Hang Seng 23,541 23,233 (1.31%)
Nikkei 225 15,379 15,164 (1.40%)
Commodities 7-Jul 11-Jul Change
INR / USD 59.60 59.73 0.22%
Crude ($) 110.24 106.66 (3.25%)
MCX Gold (INR) 27,557 28,496 3.41%
Silver (INR) 45,048 46,242 2.65%
Crude: per barrel | Gold: per 10 g | Silver: per kg
6 Jul 13 Jul
Commodities & Forex Economy & Markets
Global stock markets were rattled on Thursday on
fears of a run on the eurozone's debt-ridden banking
sector after shares of Banco Esprito Santo fell 19%
due to its credit rating downgrade. Banks in Italy,
Spain and Portugal saw their shares dive as
investors betted they may be hiding bad debts
dating back to the 2008 financial crisis
Major global equities markets steadied and the yen
stabilized against the U.S. dollar on Friday as
worries about Portugal's banking sector eased with
Banco Espirito Santo, stating that loan losses that
hit its founding family would not put the bank at risk
of running short of capital
U.S. Treasury bond prices rose on safe-haven
demand stemming partly from lingering worries
about Portugal
Indias forex reserves rose $614.6 million to
touch $316.4 billion in the week to July 4,
on account of rise in currency assets
according to the weekly statement of RBI.
Foreign currency assets (FCAs), a major
constituent of the overall reserves, rose
$760.6 million to $289.6 billion.
As tensions in the Middle East showed little
sign of abating, brent crude oil was off
$2.01 and closed at $106.66 on Friday
continuing its losing streak during the week
26,100
25,582
25,445
25,373
25,024
24,400
24,850
25,300
25,750
26,200
7-Jul-14 8-Jul-14 9-Jul-14 10-Jul-14 11-Jul-14
Sensex performance during the week
6 Jul 13 Jul
M&M plans 2 new launches next year
Utility vehicle maker Mahindra & Mahindra (M&M), struggling to increase sales over the past year,
plans to introduce two new vehicles in 2015. The compact sports utility vehicle codenamed S101 will
be pitted against Renault's Duster and Ford EcoSport and the multipurpose vehicle codenamed U301
will take on Maruti Suzuki's Ertiga and Honda's soon-to-be launched Mobilio.
Auto industry welcomes budget, expects boost in demand
The Indian automobile industry is expecting a boost in demand with the government hiking savings
options for taxpayers that is likely to increase sale of entry level cars and two wheelers. The
government has also extended the interim excise-duty concessions for automobile manufacturers until
December, giving much-needed relief to the auto mobile industry.
Tata Motors global sales down 10.4% in June
Tata Motors has reported a 10.46 per cent decline in global sales, including that of Jaguar Land Rover
(JLR), to 75,623 units in June. The company had sold 84,458 units in the same month last year. The
decline is mainly due to the reduced sales of commercial vehicles that have declined 24.51 per cent in
June to 31,384 units from 41,577 units a year ago.
Maruti to launch smallest 800 cc diesel engine with 30 km/l mileage; to be used on Celerio
Looking to kick-start a dampening diesel car market, Maruti Suzuki is planning to launch an 800 cc
diesel engine Celerio in the current financial year. Both Celerio and the company's Light Commercial
Vehicles (LCVs) will use this engine. The 800 cc diesel engine will be the smallest in the market.
Currently Chevrolet Beat's 1,000 cc diesel engine is the smallest.
6 Jul 13 Jul
Credit growth overtakes bank deposits; grows at 13.3 per cent
After almost a year, bank credit overshot deposits and grew by 13.28% to Rs 61,22,531 crore for the
week ended June 27, while deposits grew at 12.44% to Rs 79,52,160 crore during the same period,
according to RBI's data. Demand deposits was up 9.7% and time deposits rose 12.75%
Budget proposals will benefit major public sector banks
Proposal to set up new debt recovery tribunals and issuing of senior long-term bonds provided in the
Budget 2014-15 will improve recovery of NPAs and correct asset liability mismatch in the banks.
Financial performance of major public sector banks has been impacted due to rise in stressed loans
and further these banks also need Rs 2.40 lakh crore for meeting Basel III norms by 2018
International Finance Corporation to infuse Rs 160 crore into Bandhan
IFC, an arm of the World Bank, will infuse Rs 160 crore as Tier II capital into Bandhan Financial , which
is to be transformed later into a full-fledged bank. IFC already holds 11% stake in Bandhan. Bandhan's
Tier I capital (core capital) at present stood at Rs 1,200 crore, while Tier II would be Rs 160 crore after
the infusion. IFC would give the money as long term debt for a period of seven years
ICICI Bank to open China, South Africa branches this fiscal
With an eye on 'India-linked' business expansion on foreign shores, ICICI Bank is all set to start full-
fledged branches in China and South Africa in the current fiscal. The bank has got regulatory approvals
to convert its representative offices in these nations into branches. The bank is looking into expansion
in its current foreign markets. All foreign operations are in profit and ROE of overseas branches are
more or less similar to the domestic operations
6 Jul 13 Jul
Tata Starbucks forays into Chennai; takes tally of stores to 50
Tata Starbucks, the 50:50 joint venture between Starbucks Coffee Company and Tata Global
Beverages Ltd, today opened its first store in Chennai, taking the total number of company's outlets in
the country to 50. Starbucks entered the Indian market in October 2012 and currently operates stores
across Mumbai, Delhi NCR, Pune, Bengaluru and Chennai.
Prices of fizzy drinks, flavoured water, juices and energy drinks to increase by Rs 2-10
Prices of fizzy drinks and sugary aerated flavoured waters, specially big packs, will increase by
anywhere between Rs 2-5 per bottle, with the government levying an excise hike of 5% on aerated
sugary drinks, similar to developed markets where governments have levied soda taxes over the years
in an attempt to curb consumption of colas which are blamed for increasing obesity among consumers.
Measures initiated to boost local electronics industry
The FM announced a plethora of measures aimed at consumer electronics industry to encourage local
production and deter imports. This includes reduction of customs duty on LED TV panels below 19
inches from 10% to nil, impose education cess of 3% along with secondary and higher education cess
of 1% on imported electronic products to provide parity between domestically produced and imported
goods, and exempt CRT television picture tubes from customs duty of 10% to make them cheaper.
Genesis Luxury in tie-up with G-Star RAW for India market
Genesis Luxury has signed a distribution and marketing deal with Dutch clothing brand G-Star RAW,
popular for its denim-wear, for the Indian market. The brand - which specializes in making raw, or
unwashed and untreated denim, will target young consumers. Genesis plans to open 30 PoS for G-Star
in the next five years. A pair of denim will be priced anywhere between Rs 6,000 and Rs 14,000.
6 Jul 13 Jul
Centre sanctions Rs 100 cr to AP to establish SCADA
In order to provide qualitative power supply and improve overall energy efficiency, the Centre has
sanctioned Rs 100 crore to establish in four towns of the state. SCADA, approved by the Union Ministry
of Power, will come up in Vizag, Vijayawada, Guntur, and Nellore under the Re-structured Accelerated
Power Development and Reforms Programme (R-APDRP) Scheme.
Read more at:
[Link]
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Government readies Rs 50,000 crore equity fund for power sector
The government is readying a mega Rs 50,000 crore equity fund for the power sector as it looks at
24x7 electricity supply in villages in at least those states that are ruled by BJP. The initial corpus is
expected to flow in from state-run banks and power sector FIs such as Rural Electrification
Corporation and Power Finance Corporation
Standard Chartered to invest Rs 500-crore in Sterlite Power Grid
Power transmission solutions provider, Sterlite Technologies has entered into an agreement to raise
Rs 500 crore through equity infusion from Standard Chartered Private Equity for funding its existing as
well as new projects. SPGVL, a subsidiary of Sterlite, focused on the development and operations of
power transmission projects will issue convertible securities to Standard Chartered for a minority share.
World Bank to invest $775 million in clean energy projects across India
The World Bank plans to invest $775 million in clean-energy projects across India. Gevorg Sargsyan,
manager for climate investment fund at the bank, said it had approved two projects for investment - a
$100 min Himachal Pradesh development policy loan and the $200 min Rajasthan renewable energy
transmission investment programme implemented by the Asian Development Bank.
6 Jul 13 Jul
Lupin, Unichem Laboratories among global companies fined by European Commission
The European Commission's antitrust authorities have slapped a fine of 427.7 million euros on a group
of pharmaceutical companies including Lupin, Unichem Laboratories and the local unit of Mylan,
accusing them of working to block the generic entry of a blood-pressure [Link] Pharmaceutical
Industries and Slovenian Krka are the other two companies named by the antitrust authorities.
Read more at:
[Link]
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Sun Pharmaceutical Industries recalls Venlafaxine Hydrochloride after failing a dissolution test
Sun Pharmaceutical Industries, India's largest drug maker by sales, on Friday recalled about 40,000
bottles of anti-depressant Venlafaxine Hydrochloride for failing a dissolution test.
The recall was made by Sun Pharma's US subsidiary Caraco Pharmaceutical Laboratories for drugs
manufactured in the company's Indian facility.
Glenmark to launch anti-hypertension drug in US, gets USFDA nod
Glenmark Pharmaceuticals will launch generic version of anti-hypertension drug telmisartan tablets in
the US market following receipt of approval from the country's health regulator.
Glenmark Generics Inc., USA a subsidiary of Glenmark Generics Ltd has been granted final
abbreviated new drug approval ( ANDA) from the United States Food and Drug Administration (US
FDA) for Telmisartan Tablets .
USFDA enforcements to push up costs for Indian pharma
Stricter norms by American drugs regulator USFDA will lead to higher compliance costs for Indian
pharma, although these enforcements are not country specific but more on account of "cultural
differences. In general, the cost of compliance of drug makers has doubled over the past 5 years.
About 30 per cent - or USD 4 billion worth - of India's pharma exports are to the US.
6 Jul 13 Jul
Finance Minister Arun Jaitley puts infrastructure on growth highway
The government kicked off initiatives to develop smart cities, airports and highways, and announced
big energy investments along intent to decontrol diesel in a year. Infrastructure development, which has
suffered due to slow approvals, disputes and scandals in the past, was a key plank of the budget.
Government proposes tax incentives for REITs, InvITs
The government has proposed tax incentives for two new investment instruments, Real Estate
Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), to help attract long term funds
from foreign and domestic investors, including the NRIs. These instruments can be listed on stock
exchanges like shares of a company and allow retail and institutional investors to trade on them.
6 Jul 13 Jul
NTPC to set up 4,000 Mw projects in Telangana, AP
NTPC Limited chairman and managing director Arup Roy Choudhury met chief ministers of Telangana
and Andhra Pradesh and has agreed to set up a 4,000-Mw power plant adjacent to its existing power
station in the power-starved Telangana on a priority basis. In return, the government has promised
NTPC it would provide whatever extent of land required to establish the project.
Integrated textile park proposed for Odisha
To give a boost to the textile sector an integrated textiles park (ITP) is proposed in Mayurbhanj district
under the Scheme for Integrated Textiles Park (SITP) of Union ministry of Textiles. The project cost
include Rs 18 crore for land, Rs 65.5 crore for common infrastructure, Rs 25 crore for common
business centre, Rs 5 crore each for common maintenance facility and common service equipment.
Silicon Valley team to invest $ 300 million in Odisha
A team of investors from US-based Silicon Valley today assured Chief Minister Naveen Patnaik of an
investment of $ 300 million in Odisha. A team of investors led by Ajit Monancha expressed interest to
invest in Information Technology and Electronics System Design and Manufacturing sector in Odisha's
Info Valley here.
Infosys Q1 profit up 21.6%
Country's second largest software firm Infosys on Thursday reported a flat net profit of $482 million as
against $487 million at the end of March 2014, hurt by a 5.4% increase in total operating costs to$253
million. Infosys reported 2% growth in revenue sequentially to $2,133 million, meeting its expectation
for the fiscal first quarter that ended June 30.
Budget 2014: New initiatives to boost investments in technology sector
Finance Minister proposed to set aside Rs 500 crore under the "national rural internet and technology
mission", intended to promote local manufacturing of hardware and software products, with a special
focus on "supporting software products startups". The technology sector can also look forward to the
opportunities created by the development of 100 smart cities initiative announced by the minister.
Rail Budget 2014: Host of opportunities for IT industry
Railway minister announced proposals including paperless offices in next 5 years, real-time tracking of
trains and rolling stock, mobile-based alerts for wakeup calls and destination arrival, station navigation
information system, improving the e-ticketing system to support 7,200 tickets per minute compared with
2,000 tickets per minute and increasing the number of simultaneous users at any point to 1,20,000.
6 Jul 13 Jul
Marks & Spencer India sales up 36.2 per cent in the first quarter
British retailer Marks & Spencer (M&S) today reported 36.2 per cent increase in sales in India in the
first quarter of this fiscal on the back of strong performance across its linen, beachwear, lingerie and
beauty segments. During the first quarter ended June, 2014, M&S' lingerie and beauty sales increased
by 33 per cent and 38 per cent respectively compared with the sales in the previous year.
Budget 2014: Foreign companies manufacturing products in India can now sell online
Finance Minister Arun Jaitley announced in the Budget that foreign companies manufacturing products
in India can sell their merchandise through the e-commerce route. This will help a host of foreign
retailers including Puma, Benetton, Marks & Spencer, Decathlon among others who source a portion of
their products within India.
Reliance Retail, Bharti in talks to buy Carrefour India assets
Reliance Retail and Bharti Enterprises are understood to be in talks to buy India assets of the world's
second largest retailer Carrefour that has decided to exit the country by closing its five stores.
According to industry sources, the availability of ready-made cash and carry stores and associated
infrastructure is drawing interest of the two leading Indian firms.
IKEA eyes Hyderabad for first India store
Swedish furniture company Ikea will set up its first Indian outlet in Hyderabad involving an investment
of at least $100 million (Rs 600 crore), apart from establishing backward integration for supplier
linkages. Telangana industries secretary said a MOU with Ikea will be signed in a month or two. The
store will come up on a 10-acre plot, offering direct employment to at least 1,000 people.
6 Jul 13 Jul
Reliance Jio Infocomm, Videocon Telecom sign deal for faster, affordable services
Reliance Jio Infocomm has signed an agreement to share 500 towers of Videocon Telecom in UP(W),
UP(E), Bihar and Jharkhand, as the Mukesh Ambani -owned company aims to roll out its high speed
data and voice services faster and at a lower cost across India.
Tata Teleservices & DoCoMo to split, setting stage for negotiations over valuation
Japan's NTT DoCoMo has decided to exit Tata Teleservices by selling its 26.5% stake in its telecom
joint venture with the Tata Group through a pre-agreed put option. As per the agreement, the Tata
Group needs to ensure that its partner in the JV gets the higher of either half the investment it made or
the stake's fair market price in case the company fails to perform at a certain level.
Government plans Rs 39k-crore capital infusion in BSNL, MTNL over 5 years
Acknowledging that both BSNL and MTNL are currently in financial distress, the government is trying to
restore the health of the two telecom services providers by adopting various measures like a whopping
Rs 39,458 crore fresh investment over five years, waiving off Rs 1,411 crore government loan to BSNL.
Bharti Airtel to sell 3,100 towers in 4 African nations to Helios Towers Africa
Bharti Airtel will sell over a fifth of its 15,000 telecom towers located in four African countries to Helios
Towers Africa, as the world's fourth largest telecom company raises funds to pare debt and reduce
costs in a bid to turn around its business in the continent. The deal is worth close to $400 million and
the towers are based in Tanzania, Democratic Republic of Congo, Republic of Congo and Chad.
6 Jul 13 Jul