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Posts Tagged ‘FDI’
26 Feb
Points Discussed in Budget :)
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28 Dec
Global Market Outlook 2009 and 2010 :)
SMC Market Outlook
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With markets giving returns on investment more than 79% in 2009 and showing a strong sign of recovery from mid 2009 on the back of strong domestic demand, policy reforms and stimulus packages, 2009 calendar year emerged as the best year for investors since 2000.
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FII’s have once again proved to be the front runners in terms of the inflow, pumping more than Rs 82,000 crore in the Indian market this calendar.
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But 2010 promises to be another testing year as fiscal and monetary stimulus in many of the world’s major economies begins to wane.
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After being in consolidation for most of the month, in the week gone by the domestic markets suddenly jumped back to life and closed at their highest in 19 months as investors rushed to buy stocks on renewed optimism, after foreign direct investment into the nation jumped 60% in the first eight months of this fiscal year.
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The FM`s comments on GDP growth and encouraging cues from global markets also boosted the market.
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Both the indices, Sensex and Nifty made a new high for 2009 on the eve of Christmas, rekindling the festive spirit.
Bulls were in a mood of rejoice as Christmas took Nifty to a new high of 5,197.90.
The year ends with more than a spark of hope, and next year seems to be a stable and profitable one.
However, we believe that markets would continue to be volatile and hence it is important to manage risk in the coming year too.
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For the forthcoming week, markets may remain volatile as traders will roll their positions in the derivative segment from December 2009 series to January 2010 series ahead of the expiry of the near month December 2009 contracts on Thursday, 31 December 2009.
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On the flip side higher advance tax figures by India Inc which suggests better Q3 December 2009 results, may support the market.
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Corporate advance tax payments for the quarter were up 44% to Rs 48,300 crore against a 3.7% decline in April-June quarter and a 14.7% increase in July-September quarter.
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The global developments also need to be seen for any further directions.
Furthermore, food price index data for the year to 19 December 2009 will be closely watched which is going to release on Thursday, 31 December 2009.
The high food price inflation is a major worry for the policymakers as they contemplate a right approach to tame hike in inflation which seems to be more of a supply side issue.
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The next quarterly review of monetary policy is scheduled on 29 January 2010 which may also give some direction to the markets.
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On the global economic front, the US economy grew at a revised annual growth rate of 2.2% in the third quarter, much slower than initially projected.
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Japan’s unemployment rate rose to 5.2 percent from 5.1 percent in October, for the first time in four months in November, an indication job growth may not be strong enough to support the economy’s recovery from its deepest postwar recession.
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The world stock markets are not ready to react on the downside and after every consolidation they are moving up only.
4960 on nifty is strong support as was mentioned in last week magazine and the nifty touched there and moved up sharply.
Even the base metals and stocks are not reacting to the strong dollar.
Till the trend of stock markets is up, one should be playing from the long side of it.
Nifty has support between 5050-4970 and Sensex between 17100-16700 levels.
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New Year celebration may result in thin trading this week.It may impact domestic bourses as well.
Regarding outlook, dollar index will give next direction to precious metals. If it notices a pause in its rally then precious metals may trade in a range or vice a versa.
Base metals will remain volatile.
Gap between lead and zinc should shrink gradually.
Fresh buying in steel may keep nickel at higher side.
If US crude and other inventories continue to decline then fresh buying will stimulate in crude oil.
However, it already saw spiky moves hence upside is limited.
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12 Dec
RBI not in favour of 3-yr lock-in in realty FDI
The Department of Industrial Policy and Promotion (DIPP) proposal made last month to remove the three-year lock in period for foreign direct investment (FDI) in real estate has not found favour with the Finance Ministry or with the Reserve Bank of India (RBI). Both entities have written to the DIPP to this effect.
The developers were asking for a removal of the lock-in period in order to encourage speculation in realty. CNBC-TV18’s Latha Venkatesh reports.
It has been a long standing demand of the real estate companies that this lock-in of FDI into real estate projects should be removed because that restricts the number of investors into real estate projects. But this proposal even historically has never found favor with the RBI and the Finance Ministry. When the proposal was mooted around November 22-23 and was sent by the DIPP to Finance Ministry and related ministries—the urban development ministry as well as the RBI, what we now gather is that both the Finance Ministry and the RBI have raised their descent note against this proposal, their argument more or less similar is that allowing this lock in to be removed would mean a free flow of money coming in and parking in, pushing up real estate prices and then cashing out and booking a quick profit.
Primarily to avoid such speculative boosting of asset prices is the reason why both the Finance Ministry and the RBI are opposed to it. But sources who told us that this descent note has been sent, have added that they do not have any final authority over this kind of a proposal and that their descent in the past has been overruled. We know of the various press notes which have been opposed by various sections in the Finance Ministry and in the RBI in very recent cases and their descent need not necessarily be taken in by the Commerce Ministry or the DIPP. But a descent has been put on the record.
20 Nov
Govt Not to Impose Restrictions on Foreign Borrowings
Govt Not to Impose Restrictions on Foreign Borrowings
The government ruled out limiting companies from borrowing money from overseas market stating that the rise in foreign money is not a matter of concern at present and there is no such proposal.
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However, companies are permitted to raise $500 million annually under the automatic route while infrastructure firms under the approval route can remit up to $100 million for rupee expenditure and for other companies the cap on approval route remittance is set at $50 million.
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Meanwhile, capital inflows reached record levels as investors borrow cheap from advanced countries and invest in high-yielding assets in developing countries while this led to speculations that government may put in place a system of auctioning ECBs.
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In India, foreign inflows through foreign institutional investors (FIIs), ECBs and foreign currency convertible bonds (FCCBs) have been on the rise, while FDI is not picking up as fast.
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On the other hand, on a quarterly basis, the funds raised through ECBs and FCCBs increased by 70% in the September quarter to $4.61 billion while FIIs have put in a record over Rs 71,900 crore in the equities market.
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5 Oct
India Crossed the $100 Billion Mark in FDI :)
Amidst of the global crisis, India crossed the $100 billion milestone in foreign direct investment (FDI)
Amidst of the global crisis, India crossed the $100 billion milestone in foreign direct investment (FDI) through equity confirming its rising profile as a safe and sound investment objective.
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However, 44% of the money came through Mauritius as investors wanted to take advantage of India’s double taxation avoidance treaty with the island nation.
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Moreover, the cumulative FDI inflows since 2000 and up to July 2009 amounted to $100.33 billion while the inflows in the first 4 months of the current fiscal were $10.49 billion and the other big investors included Singapore, the US, UK and the Netherlands.
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Additionally, it is said that FDI’s main impact comes from new technology, new managerial capabilities and new benchmarks in corporate functioning whereas India reached the $100 billion mark at a time when the global financial crisis has had a dampening impact on FDI flows which are expected to fall this year.
Further, it is said that the global FDI flows will decline by 30% in 2009 reviving only marginally during the next year.
Although declining, FDI flows to developing countries proved to be more flexible than other capital flows such as portfolio investment and bank lending, the main reasons being that FDI is more of a long term nature than capital flows.
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On the other hand, India’s services sector received 23% of the cumulative equity FDI inflows followed by computer software, hardware, telecommunication and real estate.
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12 Sep
India’s FDI Inflows Surge in July :)
The government has revealed that despite a global financial crisis, the flow of foreign direct investment (FDI) to India during the month of July 2009 has been registered at $3.52 billion, impressive 56.5% higher than the $2.25 billion registered last year.
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However, the inflows in July have been against $2.58 billion during the month of June 2009 and $2.10 billion received during the month of May 2009.
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Moreover, it is said that this raise is an optimistic one if the present fiscal situation of India and world is taken into consideration.
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In addition, it is said that a non-profit company will be encouraging FDI into India and this will act in association with the central and state governments as well as the Federation of Indian Chambers of Commerce and Industry.
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On the other hand, the distinctive feature is the partnership between a private sector organization, the Government of India and state governments is unlike anywhere else in the world.
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However, in order to attract more foreign investments, Indian government on Thursday announced formation of a not-for-profit company ‘Invest India’.
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31 Aug
Weekly Equity Update 21st-28th August :)
After closing almost flat in penultimate week, in the week gone by markets closed in green terrain following the global markets which rallied to 10-month highs buoyed by renewed hopes that the global economic recovery is gathering pace and is pulling out of its deepest recession since the 1930s.
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Closer home, revival of monsoon rains, fresh buying by FIIs and firm European market boosted sentiment.
Moreover the statement made by FM that government expects GDP growth to accelerate to over 8% in 2010-11, with the economy showing signs of recovery, acted as a booster to markets.
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However it is expected that higher food prices will lead to WPI inflation accelerating to 6% in the fiscal year to March 2010.
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On the world economic front, the US economy shrank at an annual pace of 1% between April and June 2009, unchanged from an initial estimate released last month.
From the United Kingdom, its economy contracted 0.7% in the second quarter as the recession prompted companies to cut investment and inventories while consumers scaled back spending.
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Japan‘s exports tumbled and stood at 35.7% for a tenth straight month in July as demand from all of the nation’s major markets deteriorated.
Trend of all markets is up though Shanghai has topped out and moving down which is a cause of concern.
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Nifty has support between 4600-4500 and Sensex between 15500-15000.
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Once again commodities have shown the buoyancy that they can hold the support.
One or two day’s correction in the prices couldn’t break the trend of commodities. However upside is limited.
Resembling last week, current week as well is jam-packed of event risk as GDP data of many countries will release which will make commodities volatile throughout the week accordingly.
Precious metals may trade in a range with upward bias.
Back at home, to see more upside it has to trade above the level of 15000 in MCX.
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In agro commodities, buying may return in spices as recent fall in the prices has made Indian parity more competitive in international market.
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MARKET OUTLOOK
Trend of all markets is up though Shanghai has topped out and moving down which is a cause of concern.
It seems that currently US markets are determining the overall trend and our markets might be linked up with US markets now as we have broken above 4730 Nifty.
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If US markets don’t react, then we should be seeing higher levels ahead.
Nifty has support between 4600-4500 and Sensex between 15500-15000.
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EQUITY TABLES :
1. Indian and Sectoral Indices :
2. BSE Movers and Shakers & IA Equity Figures
3. NSE Movers and Shakers :
4. MONEY MARKET & ECONOMIC INDICATORS :
5. GLOBAL INDICES :
From the United Kingdom, its economy contracted 0.7% in the second quarter as the recession prompted companies to cut investment and inventories while consumers scaled back spending.
24 Aug
Weekly Equity Update 14th-21st August :)
The week gone by started on a weak note and domestic market nosedived deep into red terrain on huge selling pressure over the ground as unsatisfactory US consumer sentiment report weakened concerns about the recovery in global economy.
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In addition, weak Asian markets along with negative European markets also took huge beating on the bourses.
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Furthermore a poor monsoon rattled the markets, raising fears it could hurt economic prospects of corporates. However it is expected that market may remain volatile next week.
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In this year poor rains have raised worries about growth in India’s domestic-demand driven economy.
But a ray of hope was shown by FM saying that the government will take all the required steps to control drought.
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India has attracted 8% higher FDI to $2.58 billion in June 2009, from $2.39 billion in June 2008.
FII inflow in calendar year 2009 totaled Rs 35,773.40 crore. Inflation for the week ended 8th August stood at -1.53%with the previous week’s annual decline of -1.74%.
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MARKET OUTLOOK
Trend of world markets is still up. US and Europe were holding strong whereas a correction had come in Asia, but overall they are all up.
Shanghai looks to have topped out but till we are holding above 4450-4350 zone in Nifty, there is no need to worry.
Sensex has support between 15000-14700 levels and Nifty between 4450-4350 levels. 🙂
However it is expected that market may remain volatile next week!!
Further more Global markets will also play a pivotal role in setting the direction. Inadequate monsoon rains may continue to weigh on investor sentiment. 😦
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TABLES :
1. Indian and Sectoral Indices :
2. BSE Movers and Shakers & IA Equity Figures :
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3. NSE Movers and Shakers :
4. MONEY MARKET & ECONOMIC INDICATORS :
5. GLOBAL INDICES :
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NEWS ROUND UP
Economy
After falling for three weeks in a row, inflation rate rose to -1.53 per cent for the week ended August 8, primarily due to dearer primary articles, especially food items.
The inflation rate for the previous week ended August 1 was -1.74 per cent and stood at 12.82 per cent during the corresponding period in 2008.
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Oil & Gas
·Reliance Industries may sell part of its stakes in some of the overseas oil and gas blocks to lower its exploration risk.
RIL, through its wholly-owned subsidiary Reliance Exploration and Production DMZ, holds interests in 15 overseas exploration blocks and is considering farming-out a part of its stake.
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Realty/ Infrastructure
DLF, the country’s largest realty firm, bagged a 350-acre plot for Rs 1,750 crore in Haryana for developing a recreation and leisure project, making it one of the costliest land deals in recent times.
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Information Technologies
·Geometric Ltd has announced the release of version 2.0 of its visualisation product, 3DPaintBrush.
This is an innovative visualisation and rendering tool that helps create near photo-realistic images, animations, and videos from 2D models in real-time.
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Trend of world markets is still up. US and Europe were holding strong whereas a correction had come in Asia, but overall they are all up. Shanghai looks to have topped out but till we are holding above 4450-4350 zone in Nifty, there is no need to worry.
10 Jun
Market continues its thrust on 10/6/2009:)
Market continues its thrust
After a spectacular opening, the key benchmark indices extended gains on sustained buying by foreign funds.
Foreign funds bought shares worth Rs. 955.31 crore on Tuesday 9 June 2009.
Indian stocks roared on expectations that ample liquidity in pipeline and a return of risk appetite will nudge India Inc corporate profits. India Inc has already raised almost Rs. 5,000 crore from three qualified institutional placements (QIPs) so far in 2009 and announced plans to raise another Rs 20,000 crore.
On the sectoral front, out of 13 Indices, all were traded in green.
Oil stocks advanced as crude oil surged towards $71 a barrel for the first time in seven months on a larger-than-expected fall in crude oil stocks and a view that falling oil demand may have bottomed.
IT stocks fell on stronger rupee.
Banking stocks gained on reports the Reserve Bank of India may standardize the way banks calculate their prime lending rates (RLRs) and bar them from lending below their respective PLRs for more transparency.
Metal stocks gained as six metals traded on the London Stock Exchange jumped 3.8% overnight.
The Market breadth, indicating the overall strength of the market, was strong.
On BSE, out of 2,717 stocks traded so far, 1,411 shares advanced while 1,241 shares declined. Nearly 65 shares are unchanged.
Major gainers from the BSE Sensex pack are
Wipro Ltd 5.96% to Rs. 449.00, along with,
Tata Power Ltd spurted 5.70% to Rs. 1,205.35,
HDFC Bank Ltd spurted 5.66% to Rs. 1,495.50,
Larsen & Toubro 4.97%% to Rs. 1,652.00,
Reliance Infrastructure Ltd by 4.76% to Rs. 1,204.00,
Sterlite Industries Ltd by 4.61% to Rs. 684.00,
ONGC Ltd by 4.30% to Rs. 1,180.00,
Hindustan Uniliver Ltd rose 3.74% to Rs. 266.00 and
Bharti Airtel Ltd 3.17% to Rs. 838.55 among others.
Losers from the BSE Sensex Pack are
DLF Ltd plunged 0.98% to Rs. 398.75 along with
Tata Motors Ltd fell 0.68% to Rs. 366.00,
State Bank of India 0.41% to Rs. 1,756..00 and
Sun Pharmaceuticals Ltd by 0.36% to Rs. 1,331.00 among others.
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