Archive for October 3rd, 2009

NRI’s Deposits Surge $1.8 Billion in Q1 :)

NRI deposits in Q1

Overseas Indians continue to set great store by deposits with banks in India due to the upward revision in the interest rate ceiling while the Non-resident Indian (NRI) deposits with banks increased by $1.8 billion in Q1 of FY2010.

However, in order to counter foreign exchange outflows, the RBI revised the ceiling rate of foreign currency non-resident deposits to LIBOR/SWAP rates plus 100 basis points for the respective currency /corresponding maturities (as against LIBOR/SWAP rates plus 25 basis points).

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Moreover, in the case of repatriable NRE deposits, the ceiling rate on NRE deposits was raised to LIBOR/SWAP rates plus 175 basis points.

Further, private transfer receipts which constitutes of remittances from Indians working overseas and local withdrawals from NRI rupee deposits, remained buoyant and rose by 9.4% to $13.3 billion during Q1FY2010 from $12.2 billion in Q1FY2009.

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On the other hand, during Q1FY2010, invisibles receipts, comprising services (travel, transportation, insurance, software, etc), transfers and income (investment income and compensation of employees), decreased by 0.7% to $38.684 billion due to reduction in all categories of services except insurance and financial services and a decline of 20.3% in investment income receipts.

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However, invisibles payments rose by 11.9% to $18.505 billion on account of growth in payments under services and income account.

The trade deficit declined to $25.986 billion and net invisibles was lower at $20.179 billion whereas merchandise exports recorded a decline of 21% in Q1FY2010 and imports declined by 19.6% as against a positive growth of 42.9% in Q1FY2009.

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Coming ‘Diwali’ – Gold Prices Set to Reach Over, Rs 16,000 level :)

Gold prices are again ready for a good rally and is likely to reach over Rs 16,000 level before 'Diwali'.

Gold prices are again ready for a good rally and is likely to reach over Rs 16,000 level before 'Diwali'.

After taking a brief consolidation, gold prices are again ready for a good rally and is likely to reach over Rs 16,000 level before ‘Diwali’.

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According to experts, gold prices have declined for a short period last week as the precious metal dipped following a counter rally taken by the dollar.

However, the US dollar index has again started showing weakness and today dipped by 0.6 per cent at 76.54 level, which will be positive for the gold price, SMC Global’s Rajesh Jain said.

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He said gold is likely to reach 1,020 dollar an ounce (28.34 grams) level in the international markets before ‘Diwali’.

However, in the domestic market the rising trend is likely to be capped with strengthening of Rupee against the US dollar, he added.

In the domestic market the prices are likely to be slightly over Rs 16,000 per 10 grams level, Jain said.

He said, the Rupee will keep on strengthening as the equity markets are performing well, which will encourage the Foreign Institutional Investors (FIIs) to bring in more money.

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Today, the gold was trading at Rs 15,585 per 10 grams, while in the global markets it was at $1,001 an ounce.

Meanwhile, independent analysts have remarked that the bull run in gold will continue as the various monetary and fiscal stimulus programs have failed to boost the world economy, feeding through to a dis-inflationary conditions.

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The US dollar, which is considered a safe haven, softens due to the weakening economic condition.

As dollar declines, many investors and central banks continue to hold gold as their safe haven to protect themselves from unforeseen global economic shocks, boosting the demand for the yellow metal.

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Bharti Airtel Shares Shot Up, Ended 4% Higher :)

Bharti Scrip ended 4 percent higher, a day after the firm had to terminate the proposed $24-billion equity-swap-cum strategic tie-up with South Africa’s telecom major MTN.

Bharti Scrip ended 4 percent higher, a day after the firm had to terminate the proposed $24-billion equity-swap-cum strategic tie-up with South Africa’s telecom major MTN.

Bharti Airtel shares, which opened on a firm note Thursday, ended 4 percent higher than its previous close, a day after the firm had to terminate the proposed $24-billion equity-swap-cum strategic tie-up with South Africa’s telecom major MTN.

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The deal, if it had materialized, would have created the world’s third largest mobile phone firm, but had led to analysts worrying that the consequent debt burden would have made its stock unattractive.

Upon collapse of the talks, the company’s shares opened at Rs. 435 Thursday on the Bombay Stock Exchange (BSE) as against the previous day’s close at Rs. 418.55.

It shut shop at Rs. 435.35, a gain of Rs.16.80 or 4.01 percent over the previous day’s close.

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The scrip had shot up to an intra-day high of Rs.467, moving up Rs.27.30 or 6.52 percent.

It had hit a 52-week high of Rs.990 on May 19 and an annual low of Rs.360.10 on Aug 11.

The company has been a laggard on the stock exchanges over the past month, falling 3.74 percent on the BSE even as the benchmark index of the bourse, the Sensex, rose 7.56 percent during the same period.

Analysts had been viewing the stock negatively owing to Bharti’s persistent sweetening of its offer for MTN.

In the last quarter, the scrip fell 4.36 percent, while the Sensex rose 18.17 percent.

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However, with the deal off, the scrip is back in favour with traders and is expected to take off.

‘In a way this is good news for the Bharti scrip; had this deal happened it would have burdened the company’s balance sheet which is currently low on leverage,’ said SMC Capitals equity head Jagannadham Thunuguntla.

‘Analysts have been wary of the deal because of past acquisitions like the Tata Corus deal, which turned Tata’s balance sheet into a heavily leveraged one,’ added Thunuguntla.

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Late Wednesday, Bharti Airtel and South Africa’s MTN said they were terminating their talks for the proposed deal that could have created a large mobile phone entity, just behind China Mobile and Vodafone Group, with a subscription base of 207 million.

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According to Bharti, the proposed deal was called off after the South African authorities declined to accept certain regulatory constraints on the part of both sides.

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