‘Modest growth is expected in Indian exports’-The Total Investment & Insurance Solutions

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16 February 2017

Trade deficit in January  stayed  stable  at  USD10 billion,  the same as in the previous  month,  with  oil  deficit  deteriorating  but  non‐oil  balance improving. Barring engineering goods, which are showing good traction, helped by a favourable base, several other categories, such as leather goods, garments, gems and jewellery moderated during the month. 

These are the primary observations of a research note from Edelweiss. Meanwhile, non‐oil/non‐gold imports maintained pace at 6% year-on-year. Going ahead, Edelweiss expects trade balance to hover around current levels. Recovery in the global economy is a boost to exports, but base effect is turning adverse. Thus, stable to modest improvement is the most likely scenario for exports. The Total Investment & Insurance Solutions

    

A similar trend was observed in imports. Overall, imports growth improved to 7% in January 2017, compared to 6% in December 2016. Non‐oil and non‐gold imports showed a similar pattern. Just as with exports, base effect and rebound in global commodity prices seems to be at play. Specifically in January, gold imports were flat at USD2 billion, while crude oil imports jumped, reflecting rising prices. The Total Investment & Insurance Solutions

Edelweiss observe that it is worth noting that while global industrial activity has picked up, one is yet to see visible pick up in global trade volumes. If one looks at global trade, it has recovered in nominal terms in the past 3‐4 months, but world trade volumes have barely improved.  The Total Investment & Insurance Solutions

Cabinet nod for merging SBI with 5 associate banks-The Total Investment & Insurance Solutions

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16 February 2017

The Union Cabinet on Wednesday approved the merger of State Bank of India and its five associate banks, Finance Minister Arun Jaitley announced.

"The cabinet approved the merger into SBI of its five subsidiaries, namely, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Travancore, State Bank of Mysore and State Bank of Patiala," Jaitley told reporters following the cabinet meeting.

"The merger will lead to far greater operational efficiency and synergy of operations within these banks," he said. The Total Investment & Insurance Solutions

"Obviously, with greater efficiency if cost of operations are reduced, the cost of funds will also come down," he added. The Total Investment & Insurance Solutions

The Finance Minister said the merged entity will create a banking behemoth, "a very large bank, not only from the domestic point of view but also globally". 

SBI is the country's largest lender with about 16,500 branches, including 191 foreign offices spread across 36 countries. The Total Investment & Insurance Solutions

"The merger is likely to result in recurring savings, estimated at more than Rs 1,000 crore in the first year, through a combination of enhanced operational efficiency and reduced cost of funds," a cabinet communique said. The Total Investment & Insurance Solutions

"Existing customers of subsidiary banks will benefit from access to SBI's global network. The merger will also lead to better management of high value credit exposures through focused monitoring and control over cash flows instead of separate monitoring by six different banks," it added. The Total Investment & Insurance Solutions

Jaitley said the proposed merger of Bhartiya Mahila Bank into SBI is still under consideration and the cabinet did not take a decision on the matter on Wednesday.

Last year, SBI had announced that it would merge its five subsidiaries and Bharatiya Mahila Bank on receipt of government approval for the same.The Total Investment & Insurance Solutions

Bajaj Auto demands no extension of deadline for BS IV norms-The Total Investment & Insurance Solutions

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16 February 2017

Bajaj Auto on Wednesday said all its two- and three-wheelers manufactured from January 2017 are compliant with BS IV norms and demanded no amnesty be granted in meeting the deadline of April 1, 2017. The Total Investment & Insurance Solutions

The Environment Pollution Control Authority (EPCA) directed neither the sale nor the registeration of any pre- BS IV vehicle from April 1, 2017.

"As a responsible corporate, we have complied with this directive and had already commenced manufacturing of BS IV complaint vehicles from October 2016. Moreover, with effect from January 2017, all products from all our three plants are BS IV compliant," said automaker's MD Rajiv Bajaj. The Total Investment & Insurance Solutions

"We have thus ensured that all vehicles presented for registration from April 1 onwards will be BS IV compliant," he said, adding that tightening emission norms to meet BS IV standard comes at a substantial cost. The Total Investment & Insurance Solutions

The Central Pollution Control Board had earlier confirmed that BS III compliant vehicles could not be sold or registered anywhere in the country from April 1, 2017. However, some automobile companies have requested that this deadline be extended.

"All those who do not change on time will commercially benefit by selling their products at a lower price in case the amnesty is granted. Therefore, the manufacturers who have followed all directives in letter and spirit will actually end up being penalised," he said.

The automaker also said that the authorities should send strong message by "not giving any amnesty" and if at all any short-term amnesty is given, "it should be accompanied by a sizeable financial penalty on a per vehicle basis on all BS III vehicles registered after April 1, 2017" to discourage this practice in future.The Total Investment & Insurance Solutions

Aequs setting up Rs500 cr aerospace facility in Goa-The Total Investment & Insurance Solutions

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16 February 2017

Leading aerospace precision engineering firm Aequs would invest Rs500 crore to set up a dedicated manufacturing facility at Tuem in Goa for the Indian defence sector, said a top company official here on Thursday. The Total Investment & Insurance Solutions

"Our new facility will make high-end components and systems for the Indian defence industry and support the government's 'Make in India' initiative," said Aequs Chief Executive Officer Aravind Melligeri at the Aero India 2017 expo here.

As a tier-1 supplier of aerospace components to Indian and global majors, Aequs has a $100 million (Rs.667 crore) machining facility in its 250-acre Special Economic Zone (SEZ) at Belagavi, about 500 km away from here. The Total Investment & Insurance Solutions

The Belagavi facility makes titanium machined parts for the A-320 new engine programme of the global aerospace major Airbus SAS. The Total Investment & Insurance Solutions

The new facility will be built by February 2019 in Goa's industrial cluster, about 30 km from Panaji, where the Goa government has given the company 50 acres of land on lease at a minimum cost. The Total Investment & Insurance Solutions

"The facility will have multi-capability with CNC (Computer Numeric Control) machines and new age technology to design and make precision components for the Indian defence firms," Melligeri. The Total Investment & Insurance Solutions

The company plans to hire about 2,000 engineers for the facility and hopes to get technology transfers from global aerospace majors. The Total Investment & Insurance Solutions

"We will also support the government's 'Skill India' initiative to enhance the skills of our engineers in precision manufacturing and new-age technologies," noted Melligeri.

As the Indian defence sector is import-dependent for products and technologies, the new facility is aimed at increasing the local content and minimising imports.

"The company's new facility will provide impetus to our defence sector and promote the government's 'Make in India' programme," said IT Secretary and Director Ameya Abhyankar on the occasion. The Total Investment & Insurance Solutions

Foraying into defence manufacturing in 2013, the eight-year-old company has been working with the state-run Hindustan Aeronautics Ltd (HAL) on machined structural parts for its various platforms, including the Light Combat Aircraft (LCA) Tejas, Sukhoi-30MKI fighter and Advance Light Helicopter (ALH). The Total Investment & Insurance Solutions

"Our Goa facility will manufacture high-end aerospace and defence equipment to reduce import costs and add in-country value to the sector," added Melligeri.

The company's SEZ unit at Belagavi has facilities for fabrication, machining, treatment, assemblies and warehousing for production value chain.

Besides Airbus, the company's global customers include UTAS, Bosch, Eaton, Baker Hughes and Halliburton, among others. The Total Investment & Insurance Solutions

The company is showcasing its products and technologies at the 11th edition of the five-day biennial expo at the Yelahanka base of the Indian Air Force (IAF).The Total Investment & Insurance Solutions

Nifty, Sensex turning weak – Wednesday closing report-The Total Investment & Insurance Solutions

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15 February 2017

I had mentioned in Tuesday’s closing report that Nifty and Sensex still lack direction. The major indices of the Indian stock markets suffered a correction on Wednesday and closed 0.65%-0.77% lower than Tuesday’s close. The trends of the major indices in the course of Wednesday’s trading are given in the table below: The Total Investment & Insurance Solutions

 

Major Indices (The Total Investment & Insurance Solutions)

The increased chances of an upcoming US rate hike, along with disappointing quarterly results, dragged the Indian equities markets lower on Wednesday. The key domestic indices closed more than half a per cent down, as selling pressure was witnessed in automobile, healthcare and consumer durables' stocks. The BSE market breadth was skewed in favour of the bears -- with 2,143 declines and 698 advances. On the NSE, there were 298 advances, 1,361 declines and 73 unchanged. The Total Investment & Insurance Solutions

State-run Hindustan Aeronautics Ltd (HAL) is set to go public soon to sell 10% of equity shares of Rs10 face value, a top official said on Sunday. "We will soon make Initial Public Offering (IPO) to sell 36.1 million shares, which are equivalent to 10% of the holding by the government. The draft prospectus is ready for filing with the market regulator (Sebi) and have appointed the book-running lead managers," HAL Chairman T Suvarna Raju told reporters. 

The government, which owns the defence behemoth, has diluted 25% (120.5 million shares) of its full holding through buy-back and collected Rs5,265 crore, including Rs981 as tax from the company, during the last fiscal (2015-16). Post-IPO, the government holding in the company will be 65%. "The valuation process is underway to fix the issue price for the IPO. We hope to do so by the end of this fiscal (2016-17) or during the ensuing fiscal (2017-18)," asserted Raju. The cash-rich firm paid Rs750 crore as dividend to the government for fiscal 2015-16. These shares are also likely to be attractive to foreign institutional investors post-listing on the stock exchanges. The Total Investment & Insurance Solutions

Inflation in Britain has reached a record high of 1.8% since 2014 in January, on the rising fuel price, the Office for National Statistics (ONS) has said. The latest ONS data showed on Tuesday that annual level of inflation as measured by the Consumer Prices Index (CPI) hit 1.8% last month, compared to 1.6% in December, making the first month of this year the fourth consecutive month that the CPI rate has risen. "The latest rise in CPI was mainly due to rising petrol and diesel prices, along with a significant slowdown in the fall in food prices," Xinhua news agency quoted Mike Prestwood, head of inflation at ONS, as saying. "The costs of raw materials and goods leaving factories both rose significantly, mainly thanks to higher oil prices and the weakened pound," said Prestwood. "Both house prices and rents continue to grow over the year but with some signs of a slowdown in recent months." Chris Williamson, chief business economist at IHS Markit, said the Bank of England's 2% target for inflation looks likely to be breached in the months ahead. "Further upward pressure on prices looks inevitable in coming months as energy costs continue to climb and firms pass rising costs on to customers, pushing inflation up towards 3% in the second half of the year," Williamson said. As the British economy gets over-heated on account of inflation, there is likely to be an adverse effect on the Indian stock markets. 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)

Indian PSLV rocket lifts off with 104 satellites-The Total Investment & Insurance Solutions

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15 February 2017

Indian rocket Polar Satellite Launch Vehicle (PSLV) on Wednesday morning lifted off successfully with a record 104 satellites, including the country's earth observation satellite Cartosat-2 series. The Total Investment & Insurance Solutions

The PSLV-XL variant rocket standing 44.4 metre tall and weighing 320 ton tore into the morning skies at 9.28 a.m. with a deep throated growl breaking free of the earth's gravitational pull. The Total Investment & Insurance Solutions

The earth observation satellite Cartosat-2 series weighs 714 kg.

The co-passenger satellites comprise 101 nano satellites, one each from Israel, Kazakhstan, The Netherlands, Switzerland, the UAE and 96 from the US, as well as two nano satellites from India. The Total Investment & Insurance Solutions

The total weight of all the satellites carried on-board is about 1,378 kg.

By the 28th minute of the rocket's mission all the 104 satellites would be put into orbit.

The PSLV rocket is a four stage/engine rocket powered by solid and liquid fuel alternatively.

"The Cartosat satellite is the fourth one in the Cartosat-2 series of earth observation satellites. Already three are in the orbit and two more will be launched. Once all the six Cartosat-2 series satellites are launched the Cartosat-3 series would begin," an ISRO official told IANS preferring anonymity.The Total Investment & Insurance Solutions

NPS private subscriptions grew 60% till January: PFRDA-The Total Investment & Insurance Solutions

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15 February 2017

The Pension Fund Regulatory and Development Authority (PFRDA) on Wednesday said the number of private sector subscribers of New Pension Scheme (NPS) saw a 60 per cent increase during the April 2016 to January 2017 period due to exemptions provided in the earlier Budget.

"Private sector subscribers have gone up by 60 per cent till January in 2016-17. We are currently at 8.82 lakh NPS subscribers in the private sector. We expect the figure to reach 10 lakh by March 31," PFRDA Chairman Hemant Contractor said here. 

Contractor was speaking on the sidelines of the full-day programme to train the trainers of the IL&FS Skill Development Corporation on NPS.

This agency has been recently hired by the regulator to train its intermediaries on NPS and Atal Pension Yojana. The Total Investment & Insurance Solutions

In Budget 2016, the government had given additional tax exemption up to Rs 50,000 for contribution to NPS apart from the Rs 1.5 lakh ceiling provided under Section 80C. 

The total corpus of NPS currently stands at Rs 1.66 crore with more than 1.47 crore subscribers, which includes central and state government employees for whom the subscription is mandatory. The Total Investment & Insurance Solutions

In the Budget 2017-18, government has announced another sop and allowed tax-free partial withdrawal of 25 per cent of employee's contribution.

"... it has been proposed to provide exemption on partial withdrawals not exceeding 25 per cent of the employee's contribution in accordance with the terms and conditions specified under the Pension Fund Regulatory and Development Authority Act, 2013," the Finance Ministry said earlier. The Total Investment & Insurance Solutions

The benefit would be effective on partial withdrawals made after April 1.

"This will be another attractive feature. In emergency if we have to withdraw then why should it be taxed. Partial withdrawl has been given as relaxation. I am expecting major boost in terms of the NPS subscribers in 2017-18 as well," he said.

"But I would like to keep the growth target at 40 per cent as to grow even 40 per cent on a larger base is not easy for 2017-18," he added. The Total Investment & Insurance Solutions

Business correspondents through the banks, cooperative banks, regional rural banks, post offices, private and public sector banks will all be contributing towards an increase in the number of NPS subscribers, Contractor said. The Total Investment & Insurance Solutions

The NPS is a voluntary contribution retirement scheme. It enables systematic savings during the subscriber's working life and aims to find a sustainable solution to provide enough retirement income to every Indian citizen.The Total Investment & Insurance Solutions

80% of Indian millennials work harder than bosses: Survey-The Total Investment & Insurance Solutions

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15 February 2017

Over 80 per cent of India's millennials -- those born between 1980-2000 -- say they work harder than their bosses, as their work hours stretch longer than their managers', a survey revealed on Wednesday. The Total Investment & Insurance Solutions

According to the survey conducted by Talentedge, a Delhi-based Ed-Tech firm, more than than 12 hours are spent at work by 16 per cent of the millennials aged 21-24, whereas only two per cent of their superiors are spending the same time at work. 

"We are constantly finding surprising insights in our interaction with young professionals of India and these findings reflect an inability in corporate India to marry productivity with efficiency," Aditya Malik, CEO and MD at Talentedge, was quoted as saying in a statement. 

While overwhelming evidence suggests that a workweek of more than 40 hours leads to a dip in the productivity, there are many professionals heralding long workweeks as a measure of their effectiveness. The Total Investment & Insurance Solutions

In addition, up to 87 per cent millennials think that they should get an increment even if their bosses do not get one. The Total Investment & Insurance Solutions

"We hope these findings will bring some realistic and honest discourse in corporate India over work hours and productivity," Malik added. The Total Investment & Insurance Solutions

The survey, that included over 1,000 young professionals across eight metros, was conducted via social media and one-on-one calling, giving an insight into how the young working professionals feel about work hours versus productivity and their contribution towards the organisation's growth.The Total Investment & Insurance Solutions