Financial focus Weekly Newsletter InFINeeti ISSUE 7 2013 VOLUME 2 TOP STORIES….…........1 MARKET ACTIVTY ….....2 ECONOMICS ....... …... 3 TERM OF THE WEEK ….4 TRADING CALLS ..…….5 A one stop guide to know about all the recent happenings in the finance world TOP STORIES : INDIA RAJYA SABHA CLEARS COMPANIES BILL The much-awaited Companies Bill aimed at protecting the interest of employees and small investors, was passed in the Rajya Sabha on Thursday amid much din. The Lok Sabha had passed the Companies Bill in 2012. Corporate affairs minis- ter Sachin Pilot said the legislation was progressive, forward-looking, encourages more disclosures and better governance. "After 100 years, this is the second time that a new companies law has been legislated," he said. Around 193 recommen- dations have been included in the Companies Bill. The new Companies Bill also paves the way for early winding up of entities and a quick merger process. Financial focus SERVICES PMI FALLS TO LOWEST SINCE APRIL 2009 Services PMI contracted to 47.9 pts in July from 51.7 pts in June on drop in new biz on weak economic sentiment, hurting chances of recovery. Companies in India's vast services sector suffered a fall-off in activity for the first time in near- ly two years in July, according to a survey released on Monday, hurting chances for a recovery in growth in Asia's largest economy. The latest PMI is the first time since October 2011 the headline index has fallen below the 50 mark that divides growth from contraction, and the lowest since April 2009, dashing hopes of a quick turnaround for Asia's third-largest economy. ECONOMIST IS TAPPED TO RUN INDIA'S CENTRAL BANK Raghuram Rajan, a former chief economist at the International Monetary Fund who gave advance warning of the 2008 financial crisis, will run the Reserve Bank of India for the next three years. The University of Chicago professor warns that he has no "magic wand" to make India's economic problems go away quickly. As an adviser to the Finance Ministry, Rajan has suggested the issuance of bonds denominated in foreign currencies to strengthen India's ability to support the ru- pee.
Transcript
Financial focus Weekly Newsletter
InFINeeti
ISSUE 7 2013 VOLUME 2
TOP STORIES….…........1 MARKET ACTIVTY ….....2
ECONOMICS ....... …... 3
TERM OF THE WEEK ….4 TRADING CALLS ..…….5
A o n e s t o p g u i d e t o k n o w a b o u t a l l t h e r e c e n t h a p p e n i n g s i n t h e f i n a n c e w o r l d
TOP STORIES : INDIA
RAJYA SABHA CLEARS COMPANIES BILL
The much-awaited Companies Bill aimed at protecting the interest of employees
and small investors, was passed in the Rajya Sabha on Thursday amid much din.
The Lok Sabha had passed the Companies Bill in 2012. Corporate affairs minis-
ter Sachin Pilot said the legislation was progressive, forward-looking, encourages
more disclosures and better governance. "After 100 years, this is the second time
that a new companies law has been legislated," he said. Around 193 recommen-
dations have been included in the Companies Bill. The new Companies Bill also
paves the way for early winding up of entities and a quick merger process.
Financial focus
SERVICES PMI FALLS TO LOWEST SINCE APRIL 2009
Services PMI contracted to 47.9 pts in July from 51.7 pts in June on drop in new
biz on weak economic sentiment, hurting chances of recovery. Companies in
India's vast services sector suffered a fall-off in activity for the first time in near-
ly two years in July, according to a survey released on Monday, hurting chances for a recovery in growth in Asia's largest economy. The latest PMI is the first
time since October 2011 the headline index has fallen below the 50 mark that
divides growth from contraction, and the lowest since April 2009, dashing hopes
of a quick turnaround for Asia's third-largest economy.
ECONOMIST IS TAPPED TO RUN INDIA'S CENTRAL
BANK
Raghuram Rajan, a former chief economist at the International Monetary Fund
who gave advance warning of the 2008 financial crisis, will run the Reserve Bank
of India for the next three years. The University of Chicago professor warns that
he has no "magic wand" to make India's economic problems go away quickly. As an adviser to the Finance Ministry, Rajan has suggested the issuance of bonds
denominated in foreign currencies to strengthen India's ability to support the ru-
Most stock markets rose Friday in Asia-Pacific amid cautious trading, reacting to
positive economic reports from China. Japan's Nikkei 225 edged up 0.1%. Hong
Kong's Hang Seng Index gained 0.7%. Australia's S&P/ASX 200 slid 0.2%. China's
Shanghai Composite rose 0.4%. South Korea's Kospi dropped 0.2%. India's Sensex
was up 0.7%.
SENSEX UP 125 PTS,SNAPS 2 DAYS OF LOSSES;RANBAXY UP 28%
Sensex ends at 18789.34, Nifty at 5565.65 helped by surge in Ranbaxy on upbeat
sales in U.S. Metals stocks like Tata Steel & Hindalco gained 5% each. Shardul
Kulkarni, senior technical analyst of Angel Broking expects the market should
move from the current levels to around 5,700-5,750, which is a relief rally. He
feels the bounce can last for seven-eight trading sessions, he adds.
TOP STORIES : WORLD JAPAN AIMS TO SLASH BUDGET DEFICIT BY FISCAL 2015
A government forecast suggests Japan might be able to deliver on an international
commitment to halve by fiscal 2015 its primary budget deficit of 6.6% of gross
domestic product from fiscal 2010. The total deficit for the central and regional
governments will decline to 17.1 trillion yen in fiscal 2015, the government says.
The forecast depends on revenue from a planned sales tax increase Prime Minister Shinzo Abe will decide whether to go ahead with the tax increase plan after look-
ing at the April-June GDP data
MEXICO READIES ENERGY REFORM TO ATTRACT PRI-
VATE CAPITAL
Mexican President Enrique Pena Nieto said he will present to Congress wide-
ranging reform aimed at bringing private investment into oil, gas and electricity
markets and boosting economic growth. His proposal would amend the constitu-
tion, which prohibits private involvement in the energy sector, lawmakers said The
government's energy reform bill, expected on Wednesday, is expected to open electricity generation to more private participation, while keeping both transmis-
sion and distribution under state control.
AMAZON'S BEZOS TO PAY $250M FOR THE WASHINGTON
POST
The $250 million sale of The Washington Post to Jeff Bezos, founder and CEO of
online retailer Amazon, puts the influential newspaper into the hands of an entre-
preneur described by many as a technological visionary. Bezos immediately as-
sured the publication's employees and readers that while he will bring innovation
to the 135-year-old newspaper, he will safeguard its journalistic traditions. The
deal ends the Graham family's 80-year ownership of the newspaper.
Greece, after six years in recession, is seeing 27.6% of its workforce un-employed, another record high. Among those ages 15 to 25, almost two-thirds are jobless. The central bank expects unemployment to peak at
28%, then begin to decline in 2015 .Ordinary Greeks are suffering the aus-
terity imposed by international lenders to slash government debt levels, but only austerity means a downward economic spiral.
ANALYSIS: CARNEY MUST ACT TO ENCOURAGE
BUSINESS LENDING
The most urgent task awaiting Bank of England Governor Mark Carney is making business lending more attractive to financial institutions, according to The Economist. "With the mortgage market in good health, the Funding for Lending scheme that gives banks access to cheap money should be restricted to those that provide fresh loans to firms," the magazine says. "The scheme could also cover more of the outstanding business loans on banks' books. A really radical Mr Carney would buy up pools of business debt.
YES BANK: EGO WAR COSTS PROMOTERS RS.2,000
CR Even as Yes Bank maintains that Shagun Gogia’s nomination is being rejected on professional grounds, the ongoing spat is eroding the bank’s stock value. he Yes Bank Ltd stock has lost at least 40% in the past few weeks, more than double the loss of BSE’s banking index Bankex. Close toRs.8,000 crore worth of investors’ wealth has evaporated, and the two promoters of the bank, Rana Kapoor and the successors of the lateAshok Kapur, have lost around Rs.2,000 crore.
DID YOU KNOW?
The Big Mac Index 2012 :The Big Mac index is burger -based measure of whether currencies are over or undervalued. It comes from the theory of purchasing-power parity, which says that exchange rates should even-tually adjust to make the price of a basket of goods same in each coun-try. Here, the basket contains just one item: the Big Mac hamburger, which is pretty much the same around the world. The index works by calculating the exchange rate that would leave a Big Mac costing the same in each country.
RUPEE AT 60.88/$, UP 42P; POSTS BEST GAIN IN TWO WEEKS
The currency posted its best single-day gain in 2 wks, as hopes of a package
from govt & RBI soon would help bring much needed dollar inflows. “ RBI's
earlier measures have not been sufficient to stop rupee's fall. The news that
finance minister is going to speak soon, especially after the rupee hit the lat-
est record low, is raising hopes for more steps," said Pramod Patil, assistant
vice president, forex and money markets at United Overseas Bank.
