Posts Tagged ‘European Commission’

Weekly Update 4th – 8th October 2010

Global markets closed on a mixed note in the week gone by, with Indian markets closing in positive on weekly basis. To send a message to China to raise value of its currency, the U.S. House of Representatives this week approved a bill that would let domestic companies petition for duties on imports from China to compensate for the effect of weak yuan. U.S. Treasury Secretary Timothy F. Geithner said he is confident that tensions over China’s currency, the yuan, won’t lead to escalating trade sanctions or feed into a broader global currency conflict.

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European confidence in the economic outlook unexpectedly improved this month. An index of executive and consumer sentiment in the 16 euro nations rose to 103.2, the highest since January 2008, from a revised 102.3 in August. The European Commission forecasted a more “moderate” expansion in the second half of the year as governments from Ireland to Portugal step up spending cuts to push down deficits. ECB President Jean-Claude Trichet said that there is “continuing uncertainty” about the outlook.

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China’s manufacturing expanded at the fastest pace in four months in September. According to China’s logistics federation and statistics bureau, the purchasing managers’ index rose to 53.8 from 51.7 in August. The data is viewed very positively by the market as it shows that China’s economic momentum may counter weakness in the global recovery. It is believed that growth may be further aided in coming months as government plans to speed the completion of stimulus projects and boost public housing construction.

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In Japan, the jobless rate fell to 5.1 percent from 5.2 percent. After intervening few days back in the foreign exchange market in order to stem the yen appreciation, Japan’s Finance Minister reiterated that Japan is ready to keep intervening after selling yen for the first time in six years last month.

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Core infrastructure industry that account for 26.7 percent of industrial output in India slowed to 3.7 per cent in August, as compared to 6.4 per cent in the same month last year. Going forward we expect the markets would remain firm as it is supported by strong portfolio investments. The best strategy to ride the tide would be stay invested. Nifty has support between 5940-5870 and Sensex between 19640-
19200 levels.

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Bullions may continue to lead the charge in the commodities counter as both silver and gold recently tested life time highs in MCX. The latest boon to the metal has been increasing expectations that the Federal Reserve will further ease monetary policy with measures including the purchase of Treasuries. Jitters about European sovereign debt problems have also supported gold higher as a safe-haven investment. Better jobless claims data and a revised upward GDP in US supported the crude counter which can make further gains in next coming week. Base metals will take cues from LME as China markets will remain closed for a week. In agro counter pulses along with oilseeds may trade in range while spices can get some support from upcoming festive season. Mentha oil firm export demand and low crop will assist the prices to make fresh high in MCX.

Foreign Investors Protest India’s Tax Regime

Foreign Investors Protest India’s Tax Regime

Foreign Investors Protest India’s Tax Regime

In a demonstration of solidarity in economic diplomacy, the ambassadors and high commissioners of seven rich countries have jointly protested against features of, what they term, India’s “retrograde’’ tax regime.

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The ambassadors of the US, the Netherlands and Spain, high commissioners of the UK, New Zealand and Australia and the head of the European Commission delegation have expressed their anxiety over the “growing unpredictability in India’s tax policies’’ and written to finance minister Pranab Mukherjee seeking an appointment.

They said India’s policies were creating an “unquantifiable risk in investment planning’’.

The letter has been marked to commerce minister Anand Sharma, deputy chairman of Planning Commission Montek Singh Ahluwalia and cabinet secretary K M Chandrasekhar, among others.

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The concern pertains to the application of punitive tax liabilities on deals with retrospective effect.

Their anxiety was triggered by the $2 billion tax controversy involving Vodafone’s $12 billion buyout of Hong Kong-based Hutchison’s stake in Hutch-Essar.

And now include tax troubles in deals such as

SabMiller’s acquisition of Foster’s Indian beer business,

Aditya Birla Nuvo’s acquisition of shares in Idea Cellular from AT&T Mauritius,

transfer of GECIS Global (Luxembourg) shares by GE to a consortium of US private equity funds and,

Vedanta’s acquisition of Sesa Goa shares held by Mitsui through a UK holding firm.

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In other words, what was until now seen as a problem between tax authorities and Vodafone has now escalated into a standoff between the governments of seven nations, including the US and the EU.

Source : Times Of India 14/10/09