Union cabinet approves agricultural export policy-The Total Investment & Insurance Solutions

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06 December 2018

Agricultural(The Total Investment & Insurance Solutions)

The union cabinet today approved the agricultural export policy, thereby, removing export restrictions on most organic and agro processed products.

 In its first ever policy for agricultural exports, the cabinet also decided to give high value, value added and perishable products a special reference. The Total Investment & Insurance Solutions

New agricultural export policy is in-line with PMs stated commitment of doubling farmers' income. Policy has been formulated after extensive consultations with state governments, said Commerce minister Suresh Prabhu.

 The government also asked states to remove restrictions such as mandi tax. Several ports have also been identified as being nodal points for exports

The cabinet also cleared Power Finance Corporation NSE -2.44 % 's takeover of Rural Electrification Corporation. Deal will fetch the government around Rs 14,000 crores, stated Arun Jaitley in a press conference. The Total Investment & Insurance Solutions

Pakistan-India trade much below full potential of $37 billion: World Bank -The Total Investment & Insurance Solutions

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06 December 2018

 

Trade (The Total Investment & Insurance Solutions)

The current level of trade between Pakistan and India is valued at a little over $2 billion, but it could be as high as $37 billion if both neighbours agree to tear down artificial barriers, the World Bank said in a report. The report, "Glass Half Full: Promise of Regional Trade in South Asia", was released here on Wednesday.The Total Investment & Insurance Solutions

The bank also estimated Pakistan's potential trade with South Asia at $39.7 billion against the actual current trade of $5.1 billion, Dawn online reported. In order to achieve the real potential of regional trade, the bank suggested the removal of unnecessary non-tariff barriers within the region, increase people to people contacts, improve road and air connectivity and liberalize trade within South Asia.

Sanjay Kathuria, lead economist and author of the document, talking to the media at the World Bank office here said trust promotes trade, and trade fosters trust, interdependency and constituencies for peace. In this context, he added, the opening of the Kartarpur Corridor by governments of Pakistan and India would help minimise trust deficit, the daily reported

For realising the trade potential between Pakistan and India, Kathuria said the two countries should start with specific products facilitation in the first phase. Calling connectivity a key enabler for robust regional cooperation in South Asia, Kathuria said Pakistan had least air connectivity with South Asian countries, especially India. Pakistan has only six weekly flights each with India and Afghanistan, 10 each with Sri Lanka and Bangladesh and only one with Nepal, but no flight with the Maldives and Bhutan.

Compared to this, India has 147 weekly flights with Sri Lanka, followed by 67 with Bangladesh, 32 with the Maldives, 71 with Nepal, 22 with Afghanistan and 23 with Bhutan. 12/6/2018 Pakistan-India trade much below full potential of $37 billion: World Bank Kathuria said reducing policy barriers, such as eliminating the restrictions on trade at the Wagah-Attari border, or aiming for seamless, electronic data interchange at border crossings, will be major steps towards reducing the high costs of trade between Pakistan and India.

He added that the costs of trade were much higher within South Asia compared to other regions. World Bank Country Director for Pakistan Illango Patchamuthu said the country was sitting on a huge trade potential that remained largely untapped. "A favourable trading regime that reduces the high costs and removes barriers can boost investment opportunities that are critically required for accelerating growth in the country," he said.

World Shares Skid As Huawei CFO Arrest Revives Trade Jitters-The Total Investment & Insurance Solutions

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06 December 2018

financial markets (The Total Investment & Insurance Solutions)

World financial markets took another plunge Thursday on concerns that the arrest of a senior official at Chinese telecoms equipment maker Huawei could hinder progress in China-U.S. trade talks.

The price of oil also fell even though OPEC was expected to agree on a production cut to support the energy market.

KEEPING SCORE: The DAX in Germany fell 2.4 percent to 10,933 and France's CAC 40 dropped 2.2 percent to 4,836. The FTSE 100 in Britain lost 2.2 percent to 6,767. U.S. futures also augured a downbeat start for Wall Street after markets were closed Wednesday to mourn the death of former President George H.W. Bush. The contract for the Dow lost 1.6 percent and that for the S&P 500 declined 1.5 percent.

ASIA'S DAY: Hong Kong's Hang Seng index tumbled 2.5 percent to 26,156.38 and Japan's benchmark Nikkei 225 fell 1.9 percent to 21,501.62. Australia's S&P/ASX 200 lost 0.2 percent to 5,657.70, while South Korea's Kospi sank 1.6 percent to 2,068.69. The Shanghai Composite index dropped 1.7 percent to 2,605.18. Shares also fell in Taiwan and all other regional markets.

HUAWEI: The news of Huawei CFO Meng Wanzhou's arrest sent shares sharply lower. Shares had rallied Monday following President Donald Trump's agreement with his Chinese counterpart Xi Jinping over the weekend to hold off on further retaliatory moves in a festering trade war. But they've since fallen back amid confusion over what the two sides agreed to and whether the deal will enable Beijing and Washington to resolve longstanding, profound differences over technology policy and other issues. China demanded Meng's immediate release.

ANALYST'S TAKE: "We are closely watching the developments in Asia after reports that Canada has arrested the Huawei CFO facing U.S. extradition for allegedly violating Iran sanctions. This headline is quite significant as the U.S. government is attempting to persuade allies to stop using Huawei equipment due to security fears, and this headline could weigh negatively on tech stocks," said Stephen Innes, head of trading at Oanda in Singapore.

OPEC'S MOVE: OPEC countries gathered Thursday to find a way to support the falling price of oil, with analysts predicting the cartel and some key allies, like Russia, would agree to cut production by at least 1 million barrels per day. OPEC heavyweight Saudi Arabia indicated it was in favor of such a cut. The expectation did not keep the price of oil from falling, however, as investors focused on the potential economic disruption from any escalation in the U.S.-China trade war. Benchmark U.S. crude lost $1.45 to $51.44 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, dropped $1.48 to $60.08 per barrel.

CURRENCY: The dollar slipped to 112.80 yen from 113.20 yen. The euro was flat at $1.1345.The Total Investment & Insurance Solutions

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

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05 December 2018

I had mentioned in Tuesday’s closing report that Nifty, Sensex were in no man’s land. The major indices of the Indian stock markets suffered a correction on Wednesday and closed with losses over Tuesday’s close. On the NSE, there were 467 advances, 1,242 declines and 353 unchanged. The trends of the major indices in the course of Wednesday’s trading are given in the table below: The Total Investment & Insurance Solutions

In its penultimate monetary policy review of the current fiscal, the RBI (Reserve Bank of India) on Wednesday kept its key lending rate for commercial banks unchanged at 6.5% for the second time in succession. The Reserve Bank of India also made no changes to its stance of "calibrated tightening" adopted in the policy review of October India's central bank keeps key lending rate intact at 6.5%. The Total Investment & Insurance Solutions

Caution on account of the monetary policy and broadly negative global stock markets dragged the key Indian equity indices lower on Wednesday. All sectoral indices on BSE and NSE traded in the red led by metal, auto and healthcare stocks. According to analysts, the markets on Wednesday are affected more from the global factors rather than the RBI monetary policy. The Total Investment & Insurance Solutions

In addition, crude oil prices remained volatile amid expectations of supply cuts by OPEC (Oil and Petroleum Exporting Countries), the group of 15 of the world's top oil producers which is to meet on December 7. Brent crude traded lower at $61.02 per barrel. The rupee continued to depreciate and traded at Rs70.53 to a US dollar from its close of Rs70.49.

A Delhi court on Wednesday sentenced former Coal Secretary H.C. Gupta and two other former government officials to three years in jail in a coal block allocation case. CBI Special Judge Bharat Parashar also slapped a fine of Rs50,000 on Gupta and former officials K.S. Kropha and K.C. Samria. He also sentenced Vikash Metal and Power Ltd (VMPL) Managing Director Vikash Patni and authorised signatory Anand Mallick to four years in jail. Last week the court convicted all five of conspiring to get the Moira-Madhujore coal block of West Bengal in favour of VMPL. It was the sixth judgment by the Special Central Bureau of Investigation (CBI) court that is exclusively dealing with the coal block allocation cases. Coal India shares closed at Rs245.30, down 2.76% on the NSE.

The Enforcement Directorate has attached Rs117.09-crore movable and immovable properties of Prakash Industries in connection with its ongoing probe against it in allocation of Fatehpur coal block in Chhattisgarh in 2008, the agency said on Tuesday. Prakash Industries shares closed at Rs85.60, down 7.61% on the NSE.

Lupin reported that the US FDA (Food and Drug Administration) completed inspection carried out at the company's Mandideep location with 4 observations for Unit-2, cardiovascular "Pril" API facilities, 10 observations for Unit-1, Cephalosporin facilities and 8 observations for Cephalosporin Solid Oral Dosage Form facility. Lupin shares closed at Rs858.45, down 3.29% on the NSE. The Total Investment & Insurance Solutions

Larsen & Toubro reported that the construction arm of L&T has won orders worth Rs2,106 crore across its businesses. A major order of Rs1,954 crore has been secured by its Water & Effluent Treatment business from Andhra Pradesh Capital Region Development Authority (AP CRDA). L & T shares closed at Rs1,397.05, down 1.61% on the NSE.

Alembic Pharma has received approval from the US FDA for its ANDA for Candesartan Cilexetil Tablets USP. Candesartan cilexetil tablets are indicated for the treatment of hypertension in adults and in children 1 to 17 years of age. The company’s shares closed at Rs619.15, up 0.52% on the NSE. The Total Investment & Insurance Solutions

NTPC has won 85 MW Solar capacities from the 550 MW tender floated by Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) for grid-connected solar projects. The bid tariff rate is Rs3.02/unit, applicable for 25 years. NTPC shares closed at Rs140.70, down 1.75% on the NSE. The Total Investment & Insurance Solutions

Kridhan Infra reported that the Vijay Nirman Company has received a LoI (Letter of Intent) worth Rs105 crore for construction of major and minor bridges etc. for Package 4 of the Mumbai-Nagpur Super Communication Expressway in Maharashtra. The project is expected to be completed over a period of 12 months. Kridhan Infra shares closed at Rs48.40, up 2.76% on the NSE. The Total Investment & Insurance Solutions

TCS has launched its intelligent power plant solution - TCS IP2. The solution combines AI (artificial intelligence), IoT (Internet of Things), and Digital Twin Technologies to support critical power plant assets, enhance reliability, improve flexibility, cut emissions and reduce operating costs by 2%-3%. TCS shares closed at Rs2,003.90, down 0.35% on the NSE.

Absconding liquor baron Vijay Mallya, wanted in a Rs9,000 crore bank loan default case, on Wednesday offered to pay back "100% of the principal amount" as speculations over his extradition were raised after AgustaWestland middleman Christian Michel was brought to Delhi for interrogation. State Bank of India shares closed at Rs280.20, down 0.83% on the NSE. The Total Investment & Insurance Solutions

US stocks plunged on Tuesday with all three major indices erasing more than 3%, amid worries over inverted yield curve signalling a possible economic slowdown. The Dow Jones Industrial Average decreased 799.36 points, or 3.10%, to 25,027.07. The S&P 500 decreased 90.31 points, or 3.24%, to 2,700.06. The Nasdaq Composite Index fell 283.09 points, or 3.80%, to 7,158.43. The US three-year treasury note yield stood at 2.805%, higher than the five-year note on Tuesday. The inverted yield curve caught investors' attention because historical statistics showed that when short-term yields trade above longer-term rates a recession could follow. Fears of a possible economic slowdown were also spurred by weaker-than-expected quarterly guidance from Toll Brothers. The US leading builder reported its first fall in quarterly orders in more than four years, hit by rising interest rates and higher home prices. The company's results are the latest evidence of slowing housing demand, after years of steady recovery following the housing crash a decade ago. The US Census data showed new home sales have declined for 11 straight months.

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

The closing values of the major Asian indices are given in the table below: The Total Investment & Insurance Solutions

Major Indices (The Total Investment & Insurance Solutions)

Strong domestic demand pushes services PMI to four-month high in November -The Total Investment & Insurance Solutions

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05 December 2018

 

PMI (The Total Investment & Insurance Solutions)

Lifted by a significant rise in domestic demand, service activity in India expanded in November at the quickest pace in four months, a private survey showed on Wednesday.

 The Nikkei India Services Business Activity Index rose from 52.2 in October to 53.7 in November, signalling a solid upturn in output that was the strongest since July. A reading of over 50 on this survey-based index indicates expansion, below that contraction.

A sister index on Monday had shown manufacturing activity gain momentum and PMIrising to 54 in November from October’s 53.1.The Total Investment & Insurance Solutions

Put together, the seasonally adjusted Nikkei India Composite PMI Output Index rose from 53.0 in October to 54.5 in November, pointing to the fastest expansion in private sector activity since October 2016. The Total Investment & Insurance Solutions

 “November saw India’s economy spring back to life, as manufacturers and service providers registered stronger increases in business activity amid an upsurge in demand,” the survey report said.The Total Investment & Insurance Solutions

De Lima added that the twin data sets so far suggest that the private sector economy will provide impetus to the third quarter growth. India’s gross domestic product expanded 7.1% in the second quarter of FY19, down from 8.2% in the April-June period. The Total Investment & Insurance Solutions

RBI keeps rates on hold, moves to spur lending -The Total Investment & Insurance Solutions

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05 December 2018

 

Repo Rate (The Total Investment & Insurance Solutions)

The Reserve Bank of India (RBI) on Wednesday maintained status quo on repo rate (short-term lending) at 6.5% in its fifth monetary policy review for 2018-19.Following the move, the reverse repo rate (short-term borrowing) stands at 6.25%. Subsequently, the marginal standing facility (MSF) and the Bank Rate have also remain unchanged at 6.75%. The Total Investment & Insurance Solutions

In a statement, the Reserve Bank said, "The decision of the monetary policy committee (MPC) is consistent with the stance of calibrated tightening of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2 per cent, while supporting growth."

Even as inflation projections have been revised downwards significantly and some of the risks pointed out in the last resolution have been mitigated, especially of crude oil prices, the MPC felts that several uncertainties still cloud the inflation outlook.

"First, inflation projections incorporate benign food prices based on the realised outcomes of food inflation in recent months. The prices of several food items are at unusually low levels and there is a risk of sudden reversal, especially of volatile perishable items. Secondly, available data suggest that the effect of revision in minimum support prices (MSPs) announced in July on prices has been subdued so far. However, uncertainty continues about the exact impact of MSP on inflation, going forward."

"Thirdly, the medium-term outlook for crude oil prices is still uncertain due to global demand conditions, geo-political tensions and decision of OPEC which could impinge on supplies. Fourthly, global financial markets continue to be volatile. Fifthly, though households' near-term inflation expectations have moderated in the latest round of the Reserve Bank's survey, one-year ahead expectations remain elevated and unchanged. Sixthly, fiscal slippages, if any, at the centre or state levels, will influence the inflation outlook, heighten market volatility and crowd out private investment. Finally, the staggered impact of housing rent allowance (HRA) revision by state governments may push up headline inflation. While the MPC will look through the statistical impact of HRA revisions, it will be watchful of any second-round effects on inflation," it added.

While the decision on keeping the policy rate unchanged was unanimous, Dr Ravindra H Dholakia voted to change the stance to neutral. The Total Investment & Insurance Solutions

The next meeting of the MPC is scheduled between 5th to 7 February 2019.

Here are the latest policy rates following MPC review… 

Repo Rate: 6.50%

Reverse Repo Rate: 6.25%

Bank Rate: 6.75%

Heavy Industries Ministry proposes import duty cuts on more electric vehicles parts -The Total Investment & Insurance Solutions

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05 December 2018

 

The Heavy Industries(The Total Investment & Insurance Solutions)

The Heavy Industries Ministry has proposed reducing customs duty on parts of electric vehicles which are currently not exempted from import tariff to the Department of Revenue, according to senior officials. The Total Investment & Insurance Solutions

 With an aim to boost production of electric vehicles (EVs) in the country, the ministry has also suggested defining semi knocked down and completely knocked down kits used for assembling EVs for streamlining of customs duty. The Total Investment & Insurance Solutions

At present, key components for EVs, including battery, controller, charger, converter, energy monitor, electric compressor and motor, attract zero customs duty. On the other hand, parts including metals and plastics attract 28 per cent basic customs duty.

"We have proposed a definition for completely knocked down (CKDs) and semi knocked down (SKDs) kits for EVs along with a tax structure conducive to increasing their presence on Indian roads. However, we will not touch the parts attracting zero per cent duty," a senior government official told.

The tax structure entailing a one-year sunset clause was proposed by the Heavy Industries Ministry to the Finance Ministry in a meeting last week and is likely to be introduced along with the Rs 5,500 crore FAME India scheme entailing subsidies for all categories of electric vehicles, strong hybrid cars and for establishing charging infrastructure.

The policy to boost EV adoption in the country will also entail a long-term road-map and vision to encourage domestic manufacturing of lithium-ion batteries. The Total Investment & Insurance Solutions

"The idea is to encourage big original equipment manufacturers to bring CKD and SKD kits in India so that they can be assembled here and enhance the visibility of EVs. In order that Make in India gets a boost and does not suffer we have suggested sunset clauses," said an official.

The Heavy Industries Ministry had drawn up the blueprint for the second phase of FAME India scheme and received the nod for sanction of Rs 5,500 crore from the expenditure finance committee (EFC) under the Finance Ministry in September

However, according to sources, the Prime Minister's Office had emphasised incentives for domestic manufacturing of lithium-ion batteries as they are mostly imported from China.

The government presently is not in favour of supporting battery swapping as a means to encourage adoption of electric vehicles owing to fears of dumping of batteries from China and the high cost of establishing battery swapping infrastructure, officials said.

While government think-tank NITI Aayog is coordinating among related ministries for the proposals with regard to FAME-II, the Heavy Industries Ministry will implement the scheme once it is approved by the Union Cabinet.

"Battery swapping policy may lead to dumping of Li-ion batteries from China with no proper mechanism for their disposal. The duty on import of Li-ion battery is only going to increase so we are not going to encourage their imports," said another official.

 "Reduction in the SKD and CKD rates for electric vehicles will be a welcome step in the direction of moving towards a cleaner energy option. "However, we would be favourable towards promotion of local manufacturing of electric vehicles under the Make in India programme as such remedies would augment the adoption of EVs and showcase the government's long-term vision," said N Naga Satyam, Executive Director - Olectra Greentech Limited. The Total Investment & Insurance Solutions
Olectra Greentech manufactures electric buses in India in a strategic tie-up with BYD Auto Industry Co. Ltd, a leading China-based manufacturer of electric vehicles.
The government has already extended the first phase of the Faster Adoption and Manufacturing of Electric (and Strong Hybrid) Vehicles (FAME-India) scheme by two years until March 31 next year.The Total Investment & Insurance Solutions

Global Shares Tumble After Wall Street Sell-Off-The Total Investment & Insurance Solutions

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05 December 2018

financial markets (The Total Investment & Insurance Solutions)

Global stock prices tumbled Wednesday after Wall Street plunged amid confusion about what Washington and Beijing agreed to in a tariff cease-fire.

KEEPING SCORE: In early trading, London's FTSE 100 index fell 1.3 percent to 6,932.04 and German's DAX lost 1.1 percent to 11.207.49. France's CAC 40 retreated 1.2 percent to 4,951.74. On Tuesday, the DAX lost 1.1 percent, the CAC 40 shed 0.8 percent and the FTSE 100 slid 0.6 percent. On Wall Street, the future for the Standard & Poor's 500 index was up 0.45 percent and that for the Dow Jones Industrial Average gained 0.25 percent.

ASIA'S DAY: Hong Kong's Hang Seng index fell 1.6 percent to 26,819.58 and the Shanghai Composite Index declined 0.6 percent to 2,649.81. Tokyo's Nikkei 225 lost 0.5 percent to 21,919.33 and Sydney's S&P-ASX 200 shed 0.8 percent to 5,668.40. Seoul's Kospi gave up 0.8 percent to 2,101.31 and India's Sensex was 0.6 percent lower at 35,902.74. Benchmarks in Taiwan, New Zealand and Southeast Asia also retreated.

WALL STREET: Investor confidence in the U.S.-China agreement faltered after confusing and conflicting comments from President Donald Trump and some senior officials. That revived fears the disagreement between the world's two biggest economies could slow global growth. The Standard & Poor's 500 slid 3.2 percent to 2,700.06. The Dow Jones Industrial Average lost 3.1 percent to 25,027.07. The Nasdaq composite lost 3.8 percent to 7,158.43. Tech companies, banks and exporters including Boeing and Caterpillar all declined.

TRADE TURMOIL: The Trump administration raised doubts about the substance of a U.S.-China trade cease-fire. That revived fears their tariff battle could chill global economic growth. Trump previously said the agreement in Buenos Aires would lead to sales of American farm goods and cuts in Chinese auto tariffs, but Beijing has yet to confirm that. Trump renewed threats of tariff hikes on Tuesday, saying on Twitter that Washington would have a "real deal" with China or else would charge "major tariffs" on Chinese goods. That made the weekend agreement seem even less likely to produce a long-lasting settlement.

FED WATCH: Markets got jolt from remarks by the president of the Fed's New York regional bank. During a briefing with reporters, John Williams said given his outlook for strong economic growth, he expects "further gradual increases in interest rates will best sponsor a sustained economic expansion." That seemed to counter Fed Chairman Jay Powell's remarks last week. The jitters helped drive demand for government bonds. The yield on the 10-year Treasury note fell to 2.91 percent from 2.99 percent late Monday, a large move. The slide in bond yields, which affect interest rates on mortgages and other consumer loans, weighed on bank stocks.

ANALYST'S TAKE: "Positive sentiment from the China-U.S. trade war truce dissipated quickly," Eugene Leow and Radhika Rao of DBS Group said in a report. "Questions on trade, worries about US growth and perceived dovishness on the Fed all play a part in explaining these market moves. Concerns were also compounded by increasing news narrative on inverted curves and risks of a recession."

ENERGY: Benchmark U.S. crude fell 54 cents to $52.71 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 30 cents on Tuesday to close at $53.25. Brent crude, used to price international oils, lost 66 cents to $61.42 per barrel in London. It gained 39 cents the previous session to $62.08.

CURRENCY: The dollar gained to 112.96 yen from Wednesday's 112.78 yen. The euro fell to $1.1339 from $1.1343.The Total Investment & Insurance Solutions