Nifty, Sensex on an Uptrend- Monday closing report-The Total Investment & Insurance Solutions

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24 July 2017

I The major indices of the Indian stock markets were range-bound on Monday and closed with gains over Friday’s close. The trends of the major indices in the course of Monday’s trading are given in the table below: The Total Investment & Insurance Solutions

 

Major Indices (The Total Investment & Insurance Solutions)

The key equity indices -- the BSE Sensex and the NSE Nifty -- traded at record highs during the mid-afternoon session on Monday, with the wider Nifty of the National Stock Exchange (NSE) trading close to the 10,000-level. According to market observers, investors' sentiments were boosted by hopes of healthy quarterly results from index heavyweights such as Ambuja Cements and HDFC Bank, and buying in consumer durables, banking, IT (information technology)  and FMCG (fast moving consumer goods) stocks. On the NSE, there were 807 advances, 860 declines and 308 unchanged. Reliance Industries hit new all-time high, with shares of the Mukesh Ambani-led firm up as much as 2.4%.

Finance Minister Arun Jaitley on Monday introduced a bill under which the Centre may authorise the Reserve Bank of India to direct banks to initiate recovery proceedings against loan defaulters. The Banking Regulation (Amendment) Bill will replace an ordinance that earlier enabled this. The Total Investment & Insurance Solutions

The recovery proceedings would be under the Insolvency and Bankruptcy Code, 2016 that provides for a time-bound process to resolve defaults. The S & P BSE Bankex closed at 27,634.67, up 0.50% on the BSE. The Total Investment & Insurance Solutions

With global economic recovery remaining on track on the back of better performing emerging economies, growth in India is expected to pick up further in 2017 and 2018, the IMF has said. "Growth in India is forecast to pick up further in 2017 and 2018, in line with the April 2017 forecast," the International Monetary Fund (IMF) said in its latest World Economic Outlook (WEO) report on Monday. "Pick-up in global growth anticipated in the April World Economic Outlook remains on track," the IMF report said. "While activity slowed following the currency exchange initiative, growth for 2016 -- at 7.1% -- was higher than anticipated due to strong government spending and data revisions that show stronger momentum in the first part of the year," it said, referring to India's demonetisation measure as well as to the base year revisions in GDP calculations made by the Central Statistics Office. "Growth out-turns in the first quarter of 2017 were higher than the April WEO forecasts in large emerging and developing economies. “Inflation in advanced economies remains subdued and generally below targets; it has also been declining in several emerging economies such as Brazil, India and Russia," it added. Market analysts forecast a long term bull market in Indian stock markets based on projected growth in the Indian economy over the next two years.

Financial services major Reliance Capital on Monday said its shareholders have approved the demerger scheme for Reliance Home Finance. According to the company, the demerger scheme -- which will facilitate in the independent listing of Reliance Home Finance -- was approved by 99.59%  votes in favour of the "Scheme of Arrangement" at the Tribunal-convened General Shareholders Meeting held on Monday. "The demerger will facilitate the independent listing of Reliance Home Finance on the stock exchanges in the next few months," said Anmol Ambani, ED, Reliance Capital. "The proposal will unlock substantial value for our shareholders, who will be allotted one share free of cost in Reliance Home Finance for every share held in Reliance Capital," he added. As per the scheme, Reliance Capital will hold 51% stake in Reliance Home Finance, and will be adequately capitalised to grow the lending book multi-fold in the next 18 months. Reliance Capital shares closed at Rs650.30, down 0.02% on the BSE.

Hinduja Group's flagship company Ashok Leyland on Monday said that it has bagged an order for 3,019 buses worth Rs650 crore. According to the company, the order has come from the Karnataka State Road Transport Corporation (KSRTC). "This order, one of the largest from a state transport undertaking for a single OEM (original equipment manufacturer), would be executed in the current financial year, which would help Ashok Leyland in furthering its leadership position in buses," the company said in a statement. Ashok Leyland shares closed at Rs104.05, up 0.87% on the BSE. The Total Investment & Insurance Solutions

State-run Vijaya Bank Ltd on Saturday reported a Rs255 crore net profit for the first quarter of fiscal 2017-18, registering a 57% annual growth from Rs162 crore in the same period a year ago. Sequentially, net profit grew 25% from Rs204 crore a quarter ago. Operating profit for the quarter under review (Q1) also zoomed 64% annually to Rs753 crore from Rs459 crore in the like period a year ago but only 7% sequentially from Rs703 crore a quarter ago. "Total income, however, grew 6.5% yearly to Rs3,510 crore in Q1 from Rs3,295 crore in the same period year ago and was flat sequentially (0.14%) from Rs3,505 crore quarter ago," said the bank in a statement here. The bank's provisioning for non-performing assets (NPAs) shot up 63 per cent annually to Rs411 crore in Q1 from Rs253 crore in the like period a year ago and 19% sequentially from Rs345 crore a quarter ago. CASA deposits increased 30% annually to Rs36,318 crore, with Current Accounts forming Rs7,998 crore and Saving Accounts Rs28,320 crore during the quarter under review. "Focus on assets quality resulted in net NPA declining marginally to 5.24% from 5.42% a year ago," added the statement. Vijaya Bank shares closed at Rs72.70, down 0.82% on the BSE. The Total Investment & Insurance Solutions

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: The Total Investment & Insurance Solutions

Asian Indices (The Total Investment & Insurance Solutions)

Government introduces Banking Regulation Bill -The Total Investment & Insurance Solutions

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24 July 2017

Finance Minister Arun Jaitley on Monday introduced a bill under which the Centre may authorise the Reserve Bank of India to direct banks to initiate recovery proceedings against loan defaulters. The Total Investment & Insurance Solutions

The Banking Regulation (Amendment) Bill will replace an ordinance that earlier enabled this. 

The recovery proceedings would be under the Insolvency and Bankruptcy Code, 2016 that provides for a time-bound process to resolve defaults. The Total Investment & Insurance Solutions

Trinamool Congress member Saugata Roy opposed the introduction of the Bill. "It is a desperate step by a desperate government," Roy said. The Total Investment & Insurance Solutions

"The same RBI is being authorised to regulate banks which has till date not been able to give (the total) amount of money deposited in banks after demonetisation," Roy said.

He demanded the bill to be sent to a parliamentary committee.

Jaitley responded saying that the objections raised by Roy had nothing to do with the introduction of the bill. The Total Investment & Insurance Solutions

"The issues raised by him can be discussed when the bill comes up for discussion," the Minister said, after which it was introduced in the House.The Total Investment & Insurance Solutions

Government nominees on RBI MPC to get Rs 1.5 lakh a meeting -The Total Investment & Insurance Solutions

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24 July 2017

The government nominees on the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) are to be paid Rs 1.5 lakh per meeting along with air travel and other reimbursements, according to a decision taken by the RBI. The Total Investment & Insurance Solutions

The six-member MPC, constituted last year, has three persons appointed by the government while the others, including the Governor, are from the RBI. The Total Investment & Insurance Solutions

The central government appointed members would "receive a remuneration of Rs 1,50,000 for devoting time and work for each meeting of the committee which they attend, and other expenses relating to air travel, local transportation and accommodation as may be decided by the central board from time to time," according to the RBI's latest regulations on the MPC's functioning.

The regulations stipulated that all the MPC members will need to observe a "silent period" seven days before and after the monetary policy review meeting for "utmost confidentiality".

"Members shall observe a silent or blackout period starting seven days before the voting/decision ray and ending seven days after the day policy is announced. During this period, they will avoid public comment on issues related to monetary policy other than through the MPCs communication framework," the regulations said. The Total Investment & Insurance Solutions

Moreover, members cannot reveal outside the committee any confidential information accessed during the monetary policy deliberations, the RBI said. The Total Investment & Insurance Solutions

The three government nominees to the panel are Chetan Ghate, Professor at the Indian Statistical Institute, Pami Dua, Director at the Delhi School of Economics, and Ravindra H. Dholakia, Professor at the Indian Institute of Management, Ahmedabad. The Total Investment & Insurance Solutions

The RBI also asked MPC members to be mindful of any conflict between their personal and public interest while interacting with profit-making organisations or making personal financial transactions,

"While interacting with profit-making organisations or making personal financial decisions, they shall be mindful of, and weigh carefully, any scope for conflict between personal interest and public interest," it said. The Total Investment & Insurance Solutions

All members need to disclose their assets and liabilities and update this information once a year.

The RBI normally holds its monetary policy review once every two months and the latest regulations said the schedule of the MPC meetings for the entire financial year needs to be announced in advance. 

Normally, at least 15 days of notice is required for convening a meeting, but an emergency meeting can be called with 24 hours notice for each member, while technology-enabled arrangements need to be made for meetings called at even shorter notice. The Total Investment & Insurance Solutions

In this connection, the central bank has earlier said that the decision to demonetise Rs 1,000 and Rs 500 currency notes was taken by the RBI board at 5.30 p.m. on November 8, which was less than three hours before Prime Minister Narendra Modi announced the measure to the nation.

Following the RBI's latest policy review last month, Governor Urjit Patel told reporters here that the RBI Monetary Policy Committee had turned down the Finance Ministry's invite for a discussion ahead of the panel's policy review meeting. The Total Investment & Insurance Solutions

The RBI maintained its key interest rate at 6.25 per cent for its fourth successive monetary policy review, dashing the government's hopes of a reduction.The Total Investment & Insurance Solutions

Europe Concerned At Impact Of US Energy Sanctions On Russia-The Total Investment & Insurance Solutions

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24 July 2017

European Union officials are "activating all diplomatic channels" to press home their concerns that looming U.S. energy sanctions against Russia could affect Europe's energy supplies, a spokesman said Monday. The Total Investment & Insurance Solutions

U.S. lawmakers are scheduled to consider the sanctions package as early as Tuesday, and the bill could be sent to President Donald Trump before Congress breaks for the August recess. The measures are aimed at punishing Moscow for meddling in the presidential election and its military aggression in Ukraine and Syria. The Total Investment & Insurance Solutions

EU member states Germany and Austria have criticized the penalties, saying they could affect European businesses involved in piping in Russian natural gas. The Total Investment & Insurance Solutions

In a joint statement last month, Austria's Chancellor Christian Kern and Germany's Foreign Minister Sigmar Gabriel cited a section of the sanctions bill that calls for the United States to continue to oppose the Nord Stream 2 pipeline that would pump Russian gas to Germany beneath the Baltic Sea.

European Commission spokesman Margaritis Schinas said Monday that the EU's executive arm is "following this process with some concern regarding the European Union's energy independence and our energy security interests." The Total Investment & Insurance Solutions

He would not speculate on any possible EU retaliation should European businesses be hurt by U.S. sanctions. The Total Investment & Insurance Solutions

"We in the European Union will have interests in this discussion and we expect this interest to be addressed by the ongoing pre-legislative process" in the United States, Schinas said.

His comments came despite senior Republicans saying Saturday that revisions to the package have resolved fears that the sanctions could have unintentionally complicated Europe's access to energy resources outside of Russia.The Total Investment & Insurance Solutions

US Stock Indexes Dip Ahead Of Busy Earnings Week-The Total Investment & Insurance Solutions

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24 July 2017

U.S. stock markets (The Total Investment & Insurance Solutions)

U.S. stock indexes dipped Monday, ahead of a busy week of corporate earnings reports and a meeting of the Federal Reserve. Global stock markets were mixed, while the price of oil rose.

KEEPING SCORE: The Standard & Poor's 500 index fell 4 points, or 0.2 percent, to 2,468, as of 11:30 a.m. Eastern time. The Dow Jones industrial average fell 69 points, or 0.2 percent, to 21,511. The Nasdaq composite dipped 1 point, or less than 0.1 percent, to 6,386.

If the S&P 500 ends the day lower, it would mark the first three-day losing streak for the index in a month. The recent declines have been mostly modest though, and the S&P 500 remains within a quarter of a percent of its record close. The Total Investment & Insurance Solutions

EARNINGS WAVE: More than a third of the companies in the S&P 500 are scheduled to report their second-quarter earnings this week, including many big technology names.

Analysts are expecting another round of strong reports this quarter and are calling for overall growth of 7.5 percent in earnings per share, according to S&P Global Market Intelligence. They've been ratcheting up their forecasts in recent weeks - the call was for 6.1 percent growth a month ago - due to higher forecasts for technology and industrial companies.

If the stronger earnings do come through, it would help justify the big move stock prices have made to record highs this year. The Total Investment & Insurance Solutions

FED FACTOR: The Federal Reserve's policymaking committee begins a two-day meeting on Tuesday, following its decision last month to raise short-term interest rates for the third time since December. The central bank also announced plans to start gradually paring its bond holdings later this year, a move that could cause rates to rise. Investors in recent weeks have questioned whether the European Central Bank will begin to tap the brakes on its own stimulus for the economy.

NERFED: Hasbro fell $10.32, or 8.9 percent, to $105.63 for the deepest loss among stocks in the S&P 500, despite reporting stronger-than-expected earnings for the latest quarter. The stock had already been up nearly 50 percent for the year before the earnings release, and analysts said some investors may have been nervous after Hasbro cited some softness in its Brazil and U.K. markets.

IMF'S FORECASTS: The International Monetary Fund raised its forecast for economic growth this year in Europe, Japan and China. But it also cut its outlook for the United States after Washington has had a more difficult time than expected in pushing through corporate tax cuts and other pro-business legislation. On the whole, the IMF left its forecast for worldwide economic growth at 3.5 percent.

MARKETS ABROAD: Japan's Nikkei 225 lost 0.6 percent, and South Korea's Kospi inched up 0.1 percent. Hong Kong's Hang Seng added 0.5 percent, and India's Sensex added 0.7 percent.

In Europe, France's CAC 40 rose 0.2 percent, Germany's DAX fell 0.2 percent and the FTSE 100 in London dropped 1.2 percent. The Total Investment & Insurance Solutions

COMMODITIES: Benchmark U.S. crude rose 59 cents, or 1.3 percent, to $46.36 per barrel. Brent crude, the standard for international oil prices, rose 49 cents to $48.80.

Natural gas fell 7 cents to $2.91 per 1,000 cubic feet, while heating oil and wholesale gasoline were both close to flat. The Total Investment & Insurance Solutions

Gold rose $1.50 to $1,256.40 per ounce, silver gained 3 cents to $16.4 per ounce, and copper added a penny to $2.73 per pound. The Total Investment & Insurance Solutions

YIELDS: The yield on the 10-year Treasury note was close to flat at 2.24 percent, and the two-year yield held steady at 1.34 percent. The Total Investment & Insurance Solutions

CURRENCIES: The euro dipped to $1.1647 from $1.1677 late Friday, and the British pound rose to $1.3030 from $1.3007.The Total Investment & Insurance Solutions

Nifty, Sensex Could Be Headed Lower – Thursday closing report-The Total Investment & Insurance SolutionsMajor Indices (The Total Investment & Insurance Solutions)

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20 July 2017

I had mentioned in Wednesday’s closing report that Nifty, Sensex were trading in a narrow range. The major indices of the Indian stock markets were range-bound on Thursday and closed with small losses over Wednesday’s close. The trends of the major indices in the course of Thursday’s trading are given in the table below: The Total Investment & Insurance Solutions

Major Indices (The Total Investment & Insurance Solutions)

Despite positive global cues, the Indian equity markets erased their morning gains to trade in the red during the mid-afternoon session on Thursday, as selling pressure was witnessed in metal, auto and IT (information technology) stocks.  On the NSE, there were 648 advances, 779 declines and 45 unchanged. The Total Investment & Insurance Solutions

Equity benchmarks erased early gains in the morning trade. Ahead of June quarter earnings, Kotak Mahindra Bank, Reliance Industries and Wipro gained up to 1.7%, while Bajaj Auto fell 0.4%, pointed out market analysts. Reliance Industries is slated to announce its earnings for the April-June quarter (Q1) on Thursday and hold its AGM (annual general meeting) the day after. Analysts expect the focus, both in terms of the June quarter numbers and the AGM, would be on the company's telecom business. The Total Investment & Insurance Solutions

Reliance General Insurance on Thursday said it closed the first quarter with its gross written premium going up by 41% year-on-year and 22% growth in its profit after tax. The company board also approved listing of the shares in the stock exchanges to unlock value for the shareholders. In a statement issued here, the company said it has booked a gross written premium of Rs1,278 crore and an after tax profit of Rs44 crore for the quarter ended June 30. Reliance General Insurance is a wholly owned subsidiary of Reliance Capital Ltd. According to the insurer, its combined ratio for the period under stood at 104% down from 114% during the corresponding period of the previous year. Investment book increased to Rs6,888 crore - a year-on-year increase of 22%. Reliance General Insurance received mandates for Pradhan Mantri Fasal Bima Yojna in five states -- Maharashtra, West Bengal, Chhattisgarh, Uttar Pradesh and Jammu and Kashmir, the statement said. The company is also authorized under the Restructured Weather Based Crop Insurance Scheme in Uttar Pradesh and Maharashtra. According to the company, listing of the shares was expected to be completed by FY18, subject to regulatory approvals. Reliance Capital shares closed at Rs660.00, down 0.08% on the NSE.

State-run Canara Bank reported Rs252 crore net profit for first quarter of 2017-18, registering 10% annual growth over Rs229 crore in the same period last year. "Net interest income for the quarter under review, grew 18% year-on-year to Rs2,713 crore and non-interest income 33% to Rs2,109 crore," said the city-based bank in a statement here. The bank's global business, however, grew 5.4% to Rs8.3 lakh crore, with Rs.4.9 lakh in deposits, up 4.4% from last year and Rs3.4 lakh crore in net advances, up 6.7%. "Net Interest Margin for the domestic business was 2.6% and 2.3% for overseas operations," said the statement. With Rs1,331 crore cash recovery during the quarter, gross non-performing assets (NPA) ratio stood at 10.6% and net NPA at 7.1%. "We have resolved that the current fiscal would be a 'year of recovery and growth'. Efforts are being made to improve the bank's financial health, as reflected in the first quarter results," said Managing Director Rakesh Sharma in the statement. The NPA ratios have, however, shown an increase due to time lags in resolution. The bank’s shares closed at Rs352.40, down 5.08% on the NSE. The Total Investment & Insurance Solutions

Bajaj Finance reported a surge of 41.98% in its standalone net profit after tax (PAT) to Rs602 crore for the first quarter (Q1) of the 2017-18. On a standalone basis, the company's net PAT for Q1 stood at Rs602 crore as compared to Rs424 crore reported during the corresponding quarter of last fiscal. During the quarter under review, the company's total income stood at Rs3,165 crore -- up 39% -- up from Rs2,282 crore reported during the same period of 2016-17. The company’s shares closed at Rs1,587.25, up 2.94% on the NSE.

The Union Cabinet gave its in-principle approval to the merger of oil marketer Hindustan Petroleum Corp Ltd (HPCL) with state-run explorer Oil and Natural Gas Corp. (ONGC), official sources here said. The cabinet approved the sale of the government's stake in HPCL to ONGC. Under the arrangement, the exploration giant will not have to make an open offer after buying the 51.11% government stake in HPCL, the sources added.  The HPCL board will continue to be in place, while it will be listed as a subsidiary of ONGC after the merger. Earlier on Wednesday, Petroleum Minister Dharmendra Pradhan had informed Parliament that ONGC had sent a proposal to acquire HPCL and that the "process for in-principle approval for this proposal has been initiated".  Presenting the Union Budget 2017-18 in February, Finance Minister Arun Jaitley had proposed the setting up of an integrated oil company by merger of upstream and downstream entities.  "We propose to create an integrated public sector oil major which will be able to match the performance of international and domestic private sector oil and gas companies," Jaitley said. ONGC shares closed at Rs165.50, up 1.53% on the NSE and HPCL shares closed at Rs368.10, down 4.07% 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:The Total Investment & Insurance Solutions

Asian Indices (The Total Investment & Insurance Solutions)

India not taken adequate steps to ensure firms obey anti-money laundering laws: US-The Total Investment & Insurance Solutions

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20 July 2017

 

Indian Money (The Total Investment & Insurance Solutions)

The US has commented on Prime Minister Narendra Modi's demonetisation move, saying that while one of the purposes cited by him was to counter terrorist activity funded by counterfeit currency, India has yet to implement laws effectively on criminal convictions or take steps to ensure companies are adhering to anti-money laundering rules.

The US State Department, in its Country Reports on Terrorism, under the section Countering the Financing of Terrorism, says: "In November, Prime Minister Modi announced the demonetisation of 500 and 1,000 rupee currency notes and asserted that one purpose of this initiative was to curb terrorist activity funded by counterfeit notes, black money, and stockpiled cash reserves. The Total Investment & Insurance Solutions

"Although the Government of India aligned its domestic anti-money laundering/countering the financing of terrorism (AML/CFT) laws with international standards by enacting amendments to the Prevention of Money Laundering Act in 2012, and in 2016 initiated a National Risk Assessment for anti-money laundering/countering the financing of terrorism to assess the countrya�s terrorist financing risk, it has yet to implement the legislation effectively, especially with regard to criminal convictions."

It said law enforcement agencies in India acetypically open criminal investigations reactively and seldom initiate proactive analysis and longa'term investigations.

"While the Indian government has taken action against certain hawala financing activities, prosecutions have generally focused on non-financial businesses that conduct hawala transactions as a secondary activity. Additionally, the government has not taken adequate steps to ensure all relevant industries are complying with AML/CFT regulations.

"The reporting of terrorism-related Suspicious Transaction Reports (STRs) has shown an increasing trend in recent years, with India's Financial Intelligence Unit receiving 112,527 STRs between July 2015 and May 2016. The Total Investment & Insurance Solutions

In another criticism, it said that the degree of training and expertise in financial investigations involving transnational crime or terrorism-affiliated groups varied widely among the federal, state, and local levels and depended on the financial resources and individual policies of various jurisdictions. The Total Investment & Insurance Solutions

It said that US investigators "have had limited success in coordinating the seizure of illicit proceeds with Indian counterparts". The Total Investment & Insurance Solutions

"While, in the past, intelligence and investigative information supplied by US law enforcement authorities led to numerous seizures of terrorism-related funds, a lack of follow-through on investigative leads has prevented a more comprehensive approach."

The report also said that India is a member of the Financial Action Task Force (FATF) and two FATF-style regional bodies -- the Eurasian Group on Combating Money Laundering and Financing of Terrorism and the Asia/Pacific Group on Money Laundering.

India's Financial Intelligence Unit-India is a member of the Egmont Group of Financial Intelligence Units. The Total Investment & Insurance Solutions

The government regulates the money services business (MSB) sector, requiring the collection of data for wire transfers and the filing of suspicious transaction reports (STRs) by non-profit organizations. The Total Investment & Insurance Solutions

"While the Indian government supervised, regulated, and monitored these entities to prevent misuse and terrorist financing, a large unregulated and unlicensed MSB sector remained vulnerable to exploitation by illicit actors," it noted.The Total Investment & Insurance Solutions