Nifty, Sensex may dip and then rally – Weekly closing report-The Total Investment & Insurance Solutions

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23 March  2018

 

Weekly Indices (The Total Investment & Insurance Solutions)

I had mentioned in last Friday’s closing report that Nifty, Sensex were in a downward spiral. The major indices of the Indian stock markets were volatile during the week’s trading and closed with weekly losses over last Friday’s close. The trends of the major indices in the course of the week’s trading are given in the table below:Bottom of Form

On Monday, the major indices of the Indian stock markets suffered a further correction (after last Friday) and closed with losses over Friday’s close. On the NSE, there were 276 advances, 1,472 declines and 287 unchanged. 

Key Indian equity indices on Monday were under consistent selling pressure as metals, banking and oil and gas stocks fell. According to market observers, negative Asian cues on the prospect of global trade wars, along with the country's widening fiscal deficit and caution ahead of the US Federal Reserve's meet on March 20-21, dented investors' risk-taking appetite. BSE Sensex and Nifty traded in negative territory for the fourth straight session, as the trade deficit widens sharply due to higher imports, said market analysts.

Securities market regulator Sebi has fined media organisation NDTV, and four individuals for lapses in mandatory disclosure. According to a Sebi order dated March 16, NDTV has been fined Rs10 lakh. Besides the firm, the regulator has fined -- Prannoy Roy, Radhika Roy, Vikramaditya Chandra and Anoop Singh Juneja -- Rs3 lakh each.

The major indices of the Indian stock markets made a minor rally on Tuesday after a morning dip and closed with small gains over Monday’s close. On the NSE, there were 684 advances, 1,036 declines and 303 unchanged. Buying was observed in IT (information technology), Teck (technology, media and entertainment) and auto stocks.

On Tuesday, UltraTech Cement said it has concluded a commercial understanding with Binani Industries to buy over 98% stake in its cement manufacturing subsidiary Binani Cement Ltd (BCL) which is facing insolvency proceedings. UltraTech, which was one of the resolution-plan applicants in the insolvency proceedings of BCL, agreed to issue a "comfort letter" to the debt-ridden cement manufacturer, confirming that it will provide funds amounting to Rs7,266 crore to acquire the firm. "The company has in-principle concluded commercial understanding with BIL (Binani Industries Ltd) for purchase of 98.43% of the shareholding of BCL subject to termination of IBC proceedings, entering into definitive agreement and other customary and regulatory approvals, a the company said in a regulatory filing. 

The initial public offer (IPO) of Bandhan Bank has been oversubscribed 14.63 times on the closing day of bidding on Monday. The Rs4,473 crore IPO received bids for over 122.16 crore equity shares against the offer size of over 8.34 crore shares. The reserved portion of qualified institutional buyers (QIBs) has oversubscribed 38.67 times while the portion for non-institutional investors witnessed subscription of 13.89 times and retail 1.20 times. The Kolkata-based lender planned at raising upto Rs4,473 crore at the higher price band of Rs375 per share. Of the total size, it allocated over 3.57 crore equity shares at a price of Rs375 a piece aggregating to Rs1,341.91 crore to 65 anchor investors. The bank will not receive any proceeds from the offer for sale.

The major indices of the Indian stock markets were range-bound on Wednesday and closed with small gains over Tuesday’s close. On the NSE, there were 706 advances, 760 declines and 80 unchanged. Global cues and value buying pushed the Indian equity markets higher on Wednesday. According to market observers, buying was witnessed in capital goods, banking and oil and gas stocks.

Automobile manufacturers have announced that they will hike vehicle prices, effective April 1, 2018 due to rising input costs. 

The Supreme Court on Wednesday directed the Jaypee Associates to deposit Rs200 crore as a part payment of the amount required to pay the principal amount to 2,800 home buyers seeking refund. A bench of Chief Justice Dipak Misra, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud said that Rs100 crore would be deposited by April 15 and the remaining Rs100 crore by May 10.

The major indices of the Indian stock markets were range-bound on Thursday and closed with small losses over Wednesday’s close. On the NSE, there were 309 advances, 1,149 declines and 29 unchanged. The indices had opened on a higher note following the US Federal Reserve's raising the benchmark interest rate by 25 basis points, signalling two more rate hikes in 2018. ICICI Bank, Mahindra and Mahindra, State Bank of India, Wipro and Yes Bank were the top losers on the BSE. Market analysts pointed out that continued foreign institutional investors' fund inflows will support local equities to trade higher.

The CBI (Central Bureau of Investigation) on Thursday said that it was questioning the directors of Kanishk Gold Pvt. Ltd. (KGPL) in connection with its ongoing probe into the alleged defrauding a consortium of 14 banks led by the SBI to the tune of Rs824 crore.

The central government allowed defence communication major ITI Limited to go in for a "prospectus based" Further Public Offer (FPO) to raise working capital and to reduce its debt obligations. The development follows Cabinet Committee on Economic Affairs' approval for a Department of Telecommunication's proposal to allow ITI Limited to go in for the FPO. Besides, the CCEA's move will allow ITI Limited to meet Sebi's requirement of minimum 25% public shareholding. According to the CCEA, the FPO will provide "the much needed working capital to the company and help it to timely execute the orders that it has in hand and improve its margins". "This, in turn, will help in protecting the current employment and generating more job opportunities in the company particularly in the field of new telecom technologies," the CCEA said in a statement. As on December 31, 2017, the issued and subscribed equity capital of the company stood at Rs760 crore (76 crore of equity shares of face value of Rs10 each) out which 92.59% equity is held by the central government. The company is a listed schedule "A" CPSE, under the administrative control of Ministry of Communications, epartment of Telecommunication.

On Friday, a global sell-off following escalating fears of trade war spooked domestic investors and pulled the Nifty50 of the National Stock Exchange (NSE) below the 10,000-level, while the BSE Sensex tumbled over 500 points.

According to market observers, selling pressure was observed across all sectors led by banking, metals, automobile, capital goods and healthcare stocks.

Index heavyweights like Tata Steel, Axis Bank, Yes Bank, State Bank of India and Bajaj Auto were amongst the top losers on the BSE during the mid-afternoon trade session.

With global interest rates hardening and trade skirmishes increasing, major stock market indices are likely to be under pressure.The Total Investment & Insurance Solutions

Government would complete its PMAY target much before 2022: Hardeep Puri -The Total Investment & Insurance Solutions

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23 March  2018

 

PMAY (The Total Investment & Insurance Solutions)

Admitting that India's urban infrastructure was under "extreme strain", Union Minister of State for Housing and Urban Affairs Hardeep Singh Puri has said the government was committed to bringing holistic transformation in the country's infrastructure development, including providing 12 million houses in urban areas by 2022.

Sanctioning at a rate of 3 lakh to 5 lakh affordable houses per month under the Pradhan Mantri Awas Yojana (PMAY), Puri said the government is committed to providing "12 million houses in urban areas by 2022 as part of its home-for-all campaign". He said this capacity building was imperative as the urban population was expected to rise from the present 30 per cent to an estimated 50 per cent by 2030. 

"I was able to get cabinet approval for a new urban affordable housing fund and a provisioning of Rs 60,000 crore for the four-year period," the Minister said while delivering a special lecture on Thursday evening on '2022: The India We Seek', organised jointly by the Society for Policy Studies and India Habitat Centre. 

The ministry has also come out with eight models to promote private sector participation in the affordable housing sector. Six of these are based on leveraging government land and two are based on private land ownership. The cost of land can be as high as 40 per cent to 80 per cent of the house being provided. Both the central and state governments are also providing outright subsidies, and the typical cost of a home is about Rs 6.5 lakh. "PMAY is getting high traction. There can no more generous scheme for social transformation like this," he said.

Suggesting that the current government has a powerful, positive and growth-oriented agenda, he said: "In order to achieve the new India, the Indian state must be strengthened to deliver the goods and services required. You cannot deliver the goods and services if the state is enfeebled." He also laid emphasis on cooperative federalism for the effective execution of various flagship schemes aimed at planned urbanisation.

The Minister said that though India was one of the most successful examples of post-colonial reconstruction, it has several issues to address. "Millions of our people still suffer in poverty, we must still overcome deep-rooted social prejudices and satisfy the demand for shelter, food, clothing and opportunity for the rapidly growing population," he said.

The government plans to achieve 100 per cent open defecation-free India and 100 per cent solid waste management in the country by the 150th birth anniversary of Mahatma Gandhi on Oct 2, 2019. Even Gandhi, in 1916, a year before his Champaran movement that heralded our freedom struggle, had called for a cleanliness campaign before striving for political freedom, said the minister. He stressed the need for a change in mindset among the people to achieve a "transformed India".

"Building toilets and meeting the physical targets is the easier part but it will also require behavioural change," he said and added that Prime Minister Narendra Modi has been successful in transforming the attitude towards toilets, which was a taboo till recently. "The PM has created a Jan Andolan (mass movement) where governments, corporates, civil society and public have all got on to the campaign," he said.

Even the Smart Cities campaign is not just about infrastructure but about bringing a change in the mindset, he said. "The India we seek is where the public consciousness itself has been transformed, where there is housing for all, dignified existence for every citizen and protection from exploitative practices," said Puri.

It will be a transformed India by 2022, Puri asserted. 

"GST, demonetisation, the insolvency bill, infrastructure status to housing and RERA have helped clean, reform and revive the real estate sector and has made the valuation more realistic," he said.The Total Investment & Insurance Solutions

Tata Steel declared successful 'resolution applicant' to buy Bhushan Steel-The Total Investment & Insurance Solutions

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23 March  2018

 

Tata Steel(The Total Investment & Insurance Solutions)

Tata Steel on Friday said it has been declared the successful "resolution applicant" by the Committee of Creditors (CoC) of Bhushan Steel Ltd (BSL).

In a regulatory filing to the BSE, the company said the decision was subject to obtaining regulatory approvals from the National Company Law Tribunal (NCLT) and the Competition Commission of India (CCI).

"Tata Steel hereby informs that it has been declared as the successful resolution applicant by the Committee of Creditors of Bhushan Steel Limited on March 22, 2018, subject to obtaining necessary regulatory approvals, including approval from the NCLT and the Competition Commission of India," the BSE filing said. 

The filing added that Tata Steel has accepted the Letter of Intent for BSL under the Corporate Insolvency Resolution Process (CIRP) of the Insolvency and Bankruptcy Code 2016 (IBC).The Total Investment & Insurance Solutions

Australia abolishes skilled expat workers’ visas popular with Indians-The Total Investment & Insurance Solutions

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23 March  2018

Working Visa (The Total Investment & Insurance Solutions)

The most popular route to Australia—the subclass 457 visa category for skilled overseas workers— has been abolished by the Australian government. Instead, a new Temporary Skill Shortage (TSS) visa has been introduced from March 18.

The abolished visa was a popular route for Indians headed to work Down Under. Of the 90,000-odd holders of the 457 visas, 22% were Indians.

While TSS will continue to enable overeseas workers to be hired, the bad news for Indians eyeing permanent residency is that the new norms are restrictive. Further, new job entrants, including Indian students who have qualified from Australian varsities, may find it more challenging to get a job as a minimum work experience of two years is required. Hiring overseas workers will be comparatively more costly as it is proposed that sponsoring firms must contribute additionally to a skilling fund.

Labour testing norms, aimed at ensuring locals are given the first opportunity for a job vacancy, are expected to be more stringent, even as final rules have not yet been announced.

Australia lists occupations where there is a skill shortage and for which overseas workers can be hired. The migration reform process began several months ago, in January an updated list for skilled migration visas was issued with significant pruning of occupations and some reshuffling of skill categories. Another list may follow in the coming months. For the year ended September 30, 2017, cooks, resident medical officers and restaurant managers were the top three occupations to be allotted the 457 visas.

The 457 visa had a maximum duration of four years. According to the Australian Department of Home Affairs, TSS visa has two main streams. A short-term stream that enables hiring of temporary expat skilled workers in occupations included on the Short term Skilled Occupation List (STSOL). The duration of this visa is a maximum of two years, it can be extended to up to four years, only if an international trade obligation applies. The second stream is a medium-term stream where expats can be hired for occupations included in the Medium and Long-term Strategic Skills List (MLTSSL) and its duration is for up to four years.

Dan Engles, Managing Director, Visa Solutions Australia says, “Short term TSS visa holders are not eligible to apply for permanent residence. The medium or long term TSS visa holder may apply for permanent residence, after having held the TSS visa for a minimum period of three years.” He adds, “Unless you (i.e your occupation) are on the correct list, options for permanent residency are restrictive.”

Perth based, Cyrus Mistry, director at Easy Migrate Consultancy Services, explains: “In some cases, the permanent residency pathway through company sponsorship has been removed. To illustrate: There were a lot of applications in the hospitality industry (cooks, restaurant and hotel managers) under the 457 visa category. Many of them came from the international student stream who, after qualifying, found Australian employers to sponsor their visa. These occupations are now on the STSOL list which means they can’t apply for company-sponsored permanent residency.”

“On the flip side, a management consultant was moved from STSOL to MLTSSL list, which means they can now apply for permanent residency pathways,” adds Mistry. TOI’s review of the occupation lists for IT workers shows that computer network and system engineers, and software engineers are on the MLTSSL list, but software testers and hardware technicians fall in the STSOL list, eligible only for a short duration TISS visa.

Hiring expats will be more costly. “A ‘Skilling Australia Fund’ (SAF) Bill is being debated in the Parliament. Once passed, the sponsoring company may need to contribute to the SAF at about Australian $ 1,200 per employee nomination, for each year of the visa tenure. So if a company wants to hire an expat software engineer for four years, they may have to pay a levy of Australian $ 4,800,” says Mistry.

Engles sums up the migration reform process, “The new rules are more stringent and are aimed at paving the way for higher skilled, higher qualified individuals to permanently migrate to Australia. We are already seeing a higher numbers of refusals across all visa subclasses—not just work visas. The Department of Home Affairs has been adopting a stricter approach over the past six months or so, visa applications are being refused without prior warning or communication.”The Total Investment & Insurance Solutions

World Markets Roiled By Fears Of US-China Trade War-The Total Investment & Insurance SolutionS

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23 March  2018

China financial markets (The Total Investment & Insurance Solutions)

 Fears of a trade war are roiling financial markets Friday, with stocks under pressure around the world and the dollar in retreat.

A day after the Trump administration imposed tariff hikes on Chinese goods, Beijing has threatened import duties on U.S. goods including pork, apples and steel pipes, accentuating fears of a global trade war.

"For a person who's been obsessed with stock market gains since his election victory 16 months ago, President Donald Trump doesn't appear too concerned about the impact his tariffs are having at the moment," said Craig Erlam, senior market analyst at OANDA.

Though the European Union has been granted a possible exemption, stock markets across the region have fallen sharply. In early afternoon trading, Germany's DAX was down 1.7 percent at 11,900 while the FTSE 100 index of British shares fell 0.6 percent to 6,910. France's CAC-40 was 1.5 percent lower at 5,089.

In Asia, markets ended sharply lower after a stomach-churning ride. Japan's benchmark Nikkei 225 index plunged 4.5 percent to 20,617.86, its second-biggest daily decline in a year, and South Korea's Kospi tumbled 3.2 percent to 2,416.76. Hong Kong's Hang Seng lost 2.5 percent to 30,309.29 and the Shanghai Composite in mainland China sank 3.4 percent to 3,152.76. Australia's S&P/ASX 200 skidded 2 percent to 5,820.70.

A day after the Dow Jones industrial average dropped more than 700 points, Wall Street was poised for a steadier session. Dow futures and the broader S&P 500 futures were down a modest 0.2 percent.

Trump is planning to impose tariffs of 25 percent on imported steel and 10 percent on aluminum. The move is aimed at China, which has been flooding the world with cheap steel and aluminum, but would hurt many other countries, including close allies like the European Union. Trump's administration gave some countries, including the EU, Canada and Mexico, an exemption until May 1, pending negotiations.

EU Trade chief Cecilia Malmstrom said the plans for steel and aluminum tariffs "are a highly unfortunate unilateral action, which goes against agreed international rules."

In a separate case, the Trump administration approved a possible tariff hike on Chinese imports worth up to $60 billion over its complaint that Beijing steals or forces foreign companies to hand over technology.

China gave no indication of a possible response but a foreign ministry spokeswoman said Beijing was "fully prepared to defend" its interests.

"Everybody's pushing each other around to do some negotiating," said David Collins, chief operations officer at CMC China Manufacturing Consultants, which advises companies on setting up factories in China. "Trump is negotiating. He's pushing back on the Chinese, and the Chinese will push back."

On Thursday, investors fled stocks and bought bonds, which sent bond prices higher and yields lower. With interest rates falling, banks took some of the worst losses. Technology and industrial companies, basic materials makers and health care companies also fell sharply.

Peter Donisanu, an investment strategy analyst for the Wells Fargo Investment Institute, said the risk of a damaging trade war is still low because the Trump administration is targeting specific goods that aren't central to China's economy. That could change if it puts tariffs on products like electronics or appliances imported from China.

"If the Trump administration really wanted to hurt China and start a trade war, then they would go after those larger sectors," he said.

The risk of a U.S-China trade war is a regional concern, given the myriad supply chains and other ties across Asia. For example, South Korea's largest trading partner is China. The U.S. is its second biggest.

"I'm worried that it would affect the national economy," said S. E. Kim, an employee at a construction company in Seoul. "If the U.S. imposes tariffs on China like that, I think there would be some damage on us in the long term as well."

The dollar has suffered on concerns over a possible trade war. The euro was up 0.4 percent at $1.2345 while the dollar fell 0.2 percent at 105.08 yen.The Total Investment & Insurance Solutions

Nifty, Sensex under continuous selling pressure – Thursday closing report-The Total Investment & Insurance Solutions

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22 March  2018

I had mentioned in Wednesday’s closing report that Nifty, Sensex might head higher if the day’s lows hold. The major indices of the Indian stock markets were range-bound on Thursday and closed with small losses over Wednesday’s close. On the NSE, there were 309 advances, 1,149 declines and 29 unchanged. The trends of the major indices in the course of Thursday’s trading are given in the table below:

 

Major Indices (The Total Investment & Insurance Solutions)

Key Indian equity indices traded on a flat-to-negative note during the mid-afternoon trade session on Thursday with selling pressure observed in capital goods, banking and auto stocks. The key indices had opened on a higher note following the US Federal Reserve's raising the benchmark interest rate by 25 basis points, signalling two more rate hikes in 2018. ICICI Bank, Mahindra and Mahindra, State Bank of India, Wipro and Yes Bank were the top losers on the BSE.

Market analysts pointed out that continued foreign institutional investors' fund inflows will support local equities to trade higher.

Reliance Infrastructure Ltd (RInfra) on Thursday said it has filed an application in a North Goa commercial court seeking direction for the payment of the Rs292 crore arbitration award it has won recently against the state government. "In its application filed under section 9 of the Arbitration and Conciliation Act, 1996, Reliance Infrastructure Limited has sought the Court's direction to Goa Government to pay an amount of Rs278.29 crore with interest totalling to Rs292 crore, which was awarded by the Arbitration Tribunal in its award on February 16, 2018," RInfra said in a statement. According to the company statement, the Tribunal had ordered payment of interest at 15% per annum on the total award amount if the Government of Goa fails to pay the entire award amount by April 15, 2018. The development followed RInfra's winning a Rs292 crore arbitration award in a case against the Goa government heard by a Joint Electricity Regulatory Commission-constituted tribunal in February. Reliance Infra shares closed at Rs430.40, down 4.35% on the NSE.

The CBI on Thursday said that it was questioning the directors of Kanishk Gold Pvt. Ltd. (KGPL) in connection with its ongoing probe into the alleged defrauding a consortium of 14 banks led by the SBI to the tune of Rs824 crore. State Bank of India shares closed at Rs241.55, down 2.62% on the NSE.

The central government on Wednesday allowed defence communication major ITI Limited to go in for a "prospectus based" Further Public Offer (FPO) to raise working capital and to reduce its debt obligations. The development follows Cabinet Committee on Economic Affairs' approval for a Department of Telecommunication's proposal to allow ITI Limited to go in for the FPO. Besides, the CCEA's move will allow ITI Limited to meet Sebi's requirement of minimum 25% public shareholding. According to the CCEA, the FPO will provide "the much needed working capital to the company and help it to timely execute the orders that it has in hand and improve its margins". "This, in turn, will help in protecting the current employment and generating more job opportunities in the company particularly in the field of new telecom technologies," the CCEA said in a statement. As on December 31, 2017, the issued and subscribed equity capital of the company stood at Rs760 crore (76 crore of equity shares of face value of Rs10 each) out which 92.59% equity is held by the central government. The company is a listed schedule "A" CPSE, under the administrative control of Ministry of Communications, Department of Telecommunication. The company’s shares closed at Rs118.65, up 0.77% on the NSE.

The top gainers and top losers of the major indices are given in the table below:

 

Top Gainer (The Total Investment & Insurance Solutions))

The closing values of the major Asian indices are given in the table below:

 

Asian Indices (The Total Investment & Insurance Solutions)

Farmers owe Maharashtra Rs 17,000 crore in power bills for agriculture pumps: Devendra Fadnavis -The Total Investment & Insurance Solutions

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22 March  2018

 

CM Devendra Fadnavis (The Total Investment & Insurance Solutions)

Farmers owe the Maharashtra exchequer Rs 17,000 crore in the form of outstanding power bills for the agriculture pump sets, Chief Minister Devendra Fadnavis today told the Legislative Assembly.

Fadnavis also said though the government had initiated the process to recover the pending dues, it has stopped the drive temporarily taking into consideration various hardships being faced by the farmers.

“The state government was directed by the MERC (Maharashtra Electricity Regulatory Commission) to recover the amount from farmers and the process had begun. However, considering the hardships faced by the farmers, the recovery process has been stayed,” the chief minister said.

Fadnavis was responding to NCP leader Ajit Pawar’s charge that electricity connections of farmers were being disconnected and that the government was “unjust” to the farmers who have not been able to pay the power bills.

He demanded that the process to disconnect the electricity connections should be stopped.The Total Investment & Insurance Solutions