Archive for the ‘RBI’ Category

RBI in Favour of Deregulating Savings Rate

Mr. K C Chakrabarty, Deputy Governor of Reserve Bank of India (RBI) has said that RBI is also in support of deregulating savings bank deposit rates of banks.

.

Mr. Chakrabarty said already a debate in this regard was held, but the decision will be taken after having adequate debate on the issue.

.

He said that the savings bank rates are not likely to move in a wide range after the deregulation.

.

He added at this highly competitive market scenario. Prices do not vary much, but what will be the rate, what customers will get, will depend on market conditions.

.

Currently, the savings bank rate is at 3.5 % and is the only administered rate in the banking system as of now.

.

The banks offer this rate to the savings bank customers, which form a major part of their low-cost deposit base.

.

He said further that the RBI has started to deregulate administered interest rate from 1991 as a part of financial reforms.

.

OUR Websites:  http://www.smcindiaonline.com,http://www.smccapitals.com, http://www.smctradeonline.com,http://www.smcwealth.com

Advertisements

Weekly Update 14th – 18th June

The global Markets reacted in a negative fashion with the onset of the week due to concerns arising from small increase in non-farm payrolls in U.S. & default risk from Hungarian Economy. The investors concerns subsided after Germany factory orders surged for a second consecutive month in April.

.

European debt crisis which has pushed down Euro 20 percent against the dollar seems to be helping the industry as the demand for goods from emerging economies like China is encouraging companies to add workers. Bernanke statement that the recovery is moderate-paced in U.S. further helped the market in recouping the losses. Although he said that Unemployment may remain high for some time. He also said that “We have right now a very accommodative, very easy monetary policy”. “We can’t wait until unemployment is where we’d like it to be” or inflation gets “out of control” to tighten credit, giving signals that hike in interest rate may come sooner.

.

IMF is of the view that the risk to the growth has risen significantly and policy makers around the globe are left with little or no room to provide support to the growth. China surprised the markets as the economy withstood the European crisis after showing that exports grew close to 50 percent in the month of May from a year earlier and new loans were 630 billion Yuan ($92 billion), beating the expectations.

.

In the monetary policy, Bank of England remained committed to the record low interest rates to stave off the threat of contagion from the euro region’s sovereign debt crisis. Coming back home, India’s Index of Industrial Production showed a significant growth of 17.6% compared to a year before. The seventh consecutive double digit growth complemented by double digit growth in capital goods & consumer durables may tempt RBI to raise interest rates with the Inflation hovering close to double digits. High inflation & more likely pick up in credit offtake due to strong Industrial Production activity may induce RBI to give signals to banks to raise the interest rates by making an increase in policy rates.

.

Trend of world stock markets is still down though all markets took a sharp counterrally from lower levels. If the rally sustains this week, then we can say that temporarily they have made a bottom. But the fear of Euro zone would still linger on in the back of our mind. Nifty faces resistance between 5150-5180 levels and Sensex between 17200-17400 levels

.

At present there are lots of opportunities for traders to take advantage of volatility in the commodity prices, but this is also the fact that money may not be consistently made on only one side. Last week, we saw a smart recovery in metals and energy complex while bullions fell. However, the movement was not so confident that we can say that downside is overdone and now we can see rally from the current levels. However, one can expect a gradual recovery in base metals prices. In bullions, rally may get tired but buying is still intact and any bad news can stimulate buying with limited upside. If positive data comes further as last week then base metals may see further recovery and vice a versa.

.

OUR Websites: http://www.smcindiaonline.com ,http://www.smccapitals.com , http://www.smctradeonline.com ,http://www.smcwealth.com

.

Weekly Update 31st May – 4th June

Markets posted gains in the week gone by as the investors felt that stocks are battered down harshly in the short run. Buying came in Asian stocks on speculation that China will rein its effort to cool its economy as European debt crisis threatens a global recovery. Concerns also rose that the banks in Spain may face further losses after IMF urged Spain to do more to overhaul its ailing banking sector. The regulator is pushing ailing banks to merge with stronger partners.

.

US Treasury Secretary Geithner said that US, China along with India, Brazil and other emerging economies are experiencing stronger recovery as compared to earlier anticipation and are positioned well to face the challenges from the European Nations. The OECD revised India’s GDP growth forecast for 2010 to 8.2% from its earlier estimate of 7.3%. It also raised the growth forecast for 2011 to 8.5% from its earlier estimate of 7.6%. The OECD also said that underlying inflationary pressures are likely to persist given the strong outlook for demand. IMF pegged India’s GDP growth forecast at 8.75% in calendar 2010 and 8.5% in calendar 2011 on expectations of strengthening of domestic demand. Back at home, RBI in order to ensure optimum liquidity in the system so that the public and private sector credit demands are met, eased credit lines for the banks.

.

Banks can now borrow additional 0.5% of their net demand and time liabilities from the Central Bank under the repurchase agreement till 2 July 2010. In addition, RBI said that as an adhoc measure, banks can seek a waiver for any shortfall in maintenance of the prescribed 25% Statutory Liquidity Ratio (SLR) while availing the temporary facility. This step is taken by the RBI in view of the temporary liquidity pressure in the market because of the 3G auction and advance tax payments in the coming days. Talking about the much awaited Indian monsoon, the arrival is expected to be delayed by three days after tropical cyclone laila stalled its progress.

.

Inspite of the big rally in last three days, overall trend of world stock markets is still down. Even the base metal commodities including Crude saw a rally but could not sustain at higher levels. Rupee which had crossed 47.70 levels intraday week came down to 46.30. Volatility is expected to remain high. Nifty faces resistance between 5100-5150 levels and Sensex between 17000-17200 levels.

.

Persistent fear about the European region’s sovereign debt situation may keep buying intact in bullions. Commodity market is still volatile and jittery as crisis is still looming over EU nations. However, satisfactory first-quarter economic figures from the prominent Asian countries viz., China, Japan, Singapore, Taiwan and Malaysia will try to offset steep decline in base metals and energy complex.

.

Furthermore, the week is full of event risk as well as many nations are coming with their first quarter GDP data, if any improvement occurs, it will stimulate buying in base metal and energy section. Dollar index, which is on track to give its best monthly performance since October, 2008 is likely to trade in a range in short run.

Farm Production likely to Go Down

Farm Production likely to Go Down

.

Due to decline in kharif production on account of drought and floods in several parts of India,the output from agriculture sector is expected to decrease by 0.2% in the current fiscal against 1.6% growth in the previous year stated the Central Statistical Organization (CSO).

.

However, late last month, the RBI in its Q3 review of the monetary policy had projected that the agricultural GDP growth in 2009-10 is likely to be near zero.

.

Production of foodgrains and oilseeds is likely to decline by 8% and 5% in the 2009-10 crop year compared with the previous year.

.

The sugarcane output is likely to dip by 11.8% and that could add up to pressure on the sugar prices.

.

Meanwhile, among the horticultural crops, production of fruits and vegetables is expected to increase by 2.5% and 4.8%, respectively, in 2009-10.

.

Rice production is estimated to be 71.65 million tonnes in the 2009-10 kharif season as compared to the actual production of 84.58 million tonnes in the previous season.

.

On the other hand, production of coarse cereals is also likely to fall to 22.76 million tonnes from the actual production of 28.34 million tonnes in the 2008-09 kharif season.

.

🙂

Weekly Update of The Market (08th-12th February)

Hello Friends, here, we bring you the weekly overview of the Indian as well as of the Global economy and  latest global business and industry updates.

.

Weekly Update of The Market (08th-12th February)

.

After starting the year on a good note & Indices making fresh highs within few weeks many Asian markets have corrected between 7 to 10%.

.

The global sell off over sovereign debt problems in Europe and an unexpected rise in jobless claims in US put investors on the defensive mode.

.

The anxiety about sovereign debt in Greece, Portugal and Spain sparked a sell-off in the Euro & has led strength to US dollar.

.

Foreign investors sell off is an outcome of dollar-carry-trade unwinding as when they borrowed the dollar was cheap & now it is recovering.

.

Investors viewed the markets in year 2010 with confidence in view of recovery gaining momentum is now shaken over the debt problems, nascent economic recovery & confidence of the governments that stand behind the euro.

.

Efforts of China to curb lending preventing overheating in economy also pose a risk to derail the global recovery.

.

Back at home, the effect of turmoil in the international market also made government to think its strategy on ambitious disinvestment programme.

.

🙂

.

Lukewarm response to the NTPC, the much awaited issue managed to get subscription of just 1.2 times on its closing day.

.

The maximum bid of 20.87 crore shares was put by Indian institution under the first time adopted French Auction route.

.

This has challenged the finance Ministry hopes on the proceeds from disinvestments to make up the sliding revenue & rising expenditure.

.

While it looks that PSU disinvestment may not yield desired results on market weakness, the 3G auction i.e. expected to garner Rs. 35,000 crore could be postponed to next fiscal year.

.

🙂

.

The fate of some of the IPO’s like NMDC, Satluj Jal Vidyut Nigam Ltd and Rural Electrification Corporation that are on the disinvestment agenda before March 31, looks tough to sail through, if the stock markets do not rise and big investors do not come back.

.

On the contrary, Banks like Bank of Baroda & Indian Bank that were expected to raise money overseas have put now their plans on hold.

.

🙂

.

The good news from the external sector continued as the data showed a 9.3% annual increase in exports in December to $14.6 billion, a second consecutive month rise.

.

While imports increased by 27.2% from a year earlier to $24.75 billion.

.

Food inflation remained at high levels & rose to 17.56% in the week ended 23 January 2010 from 17.40% in the previous week on the back of rising pulses & potato prices.

.

Markets are likely to take a closer view of the advance estimates on economic growth for the current fiscal ending March 2010 scheduled to be released on Monday.

.

🙂

.

In the days to come an activity in the sectors like railways, fertiliser, textiles, pharma, education, power and infrastructure may be seen on expected positive policy announcements and budgetary sops.

.

It was clearly mentioned last week that world markets are going in downtrend and one should be careful in such a scenario and that one should be moving in cash.

.

Now the markets have taken a very sharp fall last week due to rise in Dollar Index and fall in all asset classes.

.

🙂

.

The coming week might see some counter rally from lower levels.

Nifty faces resistance between 4900-5000 levels and Sensex between 16400-17000 levels.

.

🙂

.

If we talk about commodity markets then one can see that strengthening dollar and lack of firm global cues had pressurized commodities prices to move southward.

.

Investors are selling riskier assets and putting their money in dollar as a safe haven buying.

.

Debt concerns facing Greece, Portugal and Spain coupled with dollar index which is trading above the mark of 80 is most likely to compel commodities to trade lower.

.

French and euro zone GDP, USD advance retail sales, USD U. of Michigan Confidence will give further direction to commodities.

.

Investors should keep an eye on gold – silver ratio.

It was 58:1 few months back, now reached to 67:1 on MCX, heading towards the level of 70:1.

It is demonstrating more selling in silver.

.

🙂

.

Stay Tuned for More on weekly updates.

.

Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here

Moneywise…Be Wise ;)

.

If you find yourself asking the question –

.

Why should I Save ?

.

Why should I Invest ?

.

Where do I Invest ?

.

Who would Guide me to take informed decision on my Investments ?

.

…then look no further !

Why SMC?

.

SMC Group, a leading Financial services provider in India, a vertically integrated investment solutions company, with a pan-india presence is there to guide you and provide complete investment solutions to you.

.

SMC Group, having rich experience of more then two decades in financial markets, is one of the largest & most reputed investment solutions company that provides a wide range of services to its client base of more than 5, 50,000 clients with presence in more then 1500 cities.

.

SMC Online, an unit of SMC Group, is one stop financial investment portal for investor’s all financial needs.

Investors can trade online in Equities, FNO, Currency Futures, Commodities, apply online for IPOs, and invest online in Mutual Funds.

.

SMC is :

.

a) 4th Largest broking house of India in terms of trading terminals (Source: Dun and Bradsheet, 2008)

.

b) 5th largest distributor of Initial Public Offering (IPOs) in retail (Source: Prime Data Ranking)

.

c) Awarded ‘Fastest Growing Retail Distribution Network in Financial Services’ (Source: Business Sphere, 2008)

.

d) Recipient of ‘Major Volume Driver Award’ from BSE for last three years consecutively.

.

e) Nominated among the top three in the CNBC Optimix Financial Services Award 2008 under National Level Retail Category.

.

f) One of the largest Proprietary Arbitrage Desk doing risk free arbitrage in equities & commodities.

.

g) Commanding turnover of more then 3% in equity market, 4% in commodity market and 10% in DGCX.

.

h) Transparent and professional management.

.

j) Relentless focus on investor care.

.

k) World class in-house research facilities providing research support to investors.

.

l) All financial products and services under one roof.

.

🙂

.

Next Blog we would try to read more about the other SMC’s investment products and services.

Stay Tuned for more on this 🙂

.

To know more about the SMC Products and Services, click here.