My Application Form Status

Check the status of your application form with Angel Broking.
Arq - The Hyper Intelligent Investment Engine By Angel Broking
Moodys and ICRA: Indian banks weak asset quality continues to pressure profitability and capitalization profile
Jan 09,2017

Moodys Investors Service and its Indian affiliate, ICRA, see subdued prospects for Indias banks, with both identifying asset deterioration as a key challenge over the medium term.

Asset quality will remain a negative driver of the credit profiles of most rated Indian banks and the stock of impaired loans. Non-performing loans (NPLs) and standard restructured loans will still rise during the horizon of our outlook, says Alka Anbarasu, a Moodys Vice President and Senior Analyst.

According to Moodys, such pressure on asset quality largely reflects the systems legacy problems, as relating to the strong credit growth seen in 2009-2012, when the investment plans of Indian corporates rose significantly.

Nevertheless, aside from these legacy issues, the underlying asset trend for Indian banks will be stable because of a generally supportive operating environment. While corporate balance sheets stay weak, a further deterioration in key credit metrics such as debt/equity and interest coverage ratios has been arrested.

We expect the pace of deterioration in asset quality over the next 12-18 months should be lower than what was seen over the last five years, and especially compared to FY2016, even as we consider those remaining problem loans which have not been recognized as such in several large accounts, says Anbarasu.

In this context, Moodys also considers the Reserve Bank of Indias (RBI) asset quality review (AQR) in 2015 as a particularly important catalyst in pushing banks to recognize some large accounts as being impaired. As a result, Moodys now estimates that the true level of impaired loans for Indian banks to be around 1-1.5 percentage points higher than the latest reported numbers.

Given the magnitude of stressed assets in the system, Moodys expects the banks to increase their focus on resolving some of the large problem accounts.

In this regard, we expect an increased pace of debt restructuring under the various schemes offered by the RBI, including the scheme for the sustainable structuring of stressed assets (S4A), strategic debt restructuring (SDR) and the 5:25 scheme, says Anbarasu. Nevertheless, weak reserving levels and continued pressure on profitability will limit the ability of the banks to proactively resolve problem assets under these schemes.

From ICRAs viewpoint, a muted level of credit off-take -- on the back of weak demand, increasing competition and greater disintermediation -- will continue to exert downward pressure on lending rates.

Such a development will be partly offset by the fall in the cost of funds, but stubbornly high operating expense levels and elevated credit costs will continue to dent profitability matrices for the banks, says Karthik Srinivasan, an ICRA Senior Vice President.

And while bank profitability is not expected to be as weak as the levels seen in FY2016, the weakness in asset quality will continue to drag on profitability indicators, with return on equity remaining in the single digits for FY2017 and FY2018, says Srinivasan.

ICRA further notes that, as of September 30, 2016, while all the public sector banks had met the minimum common equity tier 1 (CET 1) requirement of 6.75% applicable by March 2017, six also reported Tier 1 capital of less than 8.25%, the regulatory minimum. Furthermore, the overall capitalization levels of most of the public sector banks remains moderate to weak, given that they need to attain the regulatory minimum Tier 1 requirement of 9.5% by March 2019.

The Indian governments current plan of infusing INR450 billion during FY2017-FY2019 -- of which INR164.14 billion have been already infused in the current year -- is below ICRAs estimates of capital requirements of INR1,500-1,800 billion until FY2017-FY2019.

According to ICRA, of this total of INR1,500-1,800 billion, the banks can raise around INR800-950 billion by issuing AT1 instruments, with public sector banks having issued AT1 aggregating to around INR200 billion in the current year.

ICRA believes that the continued level of investor appetite will remain the key factor determining future AT1 issuances, as the risk of servicing the coupon payments on these bonds has increased considerably, especially for the weaker public sector banks. This is because substantial losses in this sector in the last few quarters have significantly depleted revenue reserves.

In this context, the government may need to materially increase the quantum of capital infusions into the public sector banks, in view of the fact that investor appetite for common equity remains subdued, as evidenced by weak share price multiples.

Powered by Capital Market - Live News

India may get caught in cross fire of US-China trade war: ASSOCHAM
Jan 09,2017

In an escalating trade war triggered by the US President elect Donald Trump with Mexico and China, India may find itself in the cross fire with collateral damage to its economy, particularly to sectors such as information technology and select goods exports to the American market, an ASSOCHAM Paper has said.

n++Though China and Mexico are in direct firing line of Donald Trump, India needs to watch out and must build bridges with the upcoming American administration and assuage the concerns about the American jobs,n++ the chamber said on a status paper on the regime change in the US.

Those who thought the Trump threat to the American companies against job outsourcing to China and Mexico, particularly in the manufacturing, was only an election rhetoric are in a for a rude shock. n++The Trump threat to protect the US interest in an inward looking manner is for real now. The manner in which Ford has announced scrapping of its USD 1.68 billion plan to set up a manufacturing plant in Mexico shows that Trump means business when it comes to carrying out the threat of heavy border tax on the US firms which, as he calls it, ship the jobs abroad,n++ the paper said.

ASSOCHAM said, n++India should not sit and watch the trade war among the big economies, mainly the US and China from the sidelines. We must take pro-active steps to ensure that we remain on the right side of the upcoming US administration; or else the impact could be on the Indian services exports to the American firms.n++

According to the paper, the collateral damage for India would not only come from the US but also from China. n++With its economy being aggressively export driven, particularly in manufacturing, China would look for alternative export destinations outside the US in Europe and Asia. In the coming months, after inauguration of Trump to the White House, China would double up dumping of its goods to countries like India as it gets entangled with the US over trade barriers,n++ it said.

The dumping from China has been quite severe in the recent few years in areas like steel aggravating the problems of the Indian industries.

Under the given circumstances, the Indian government along with trade bodies like apex business chambers, influential think tanks, opinion leaders and a large diaspora must work for an effective lobbying to explain to the US policy makers as to how free trade, more so, in services would help both the US and the Indian companies.

n++If the US gives jobs to Indians in back-end operations, India gives a huge market to the giants like Google, Microsoft and Intel who are all now looking at the digital expansion in the Indian economy. So, it is a win-win situation for both the countries,n++ the ASSOCHAM Secretary General said. India imports as significantly as it exports to the US in goods and services.

Powered by Capital Market - Live News

Agent/sales person least trustworthy for those buying insurance: ASSOCHAM study
Jan 09,2017

Insurance agent is taken as the least trustworthy source in the sales process of an insurance policy across different policy segments both among the financially literate and financially non-literate consumers, an ASSOCHAM study has found.

Among the first set of people with no specific knowledge of insurance and finance and those who fall in the age group of 18 to 60 years, 72 per cent of those covered in the study said their agent/sales person was the least trustworthy source in the sales process of an insurance policy.

The second least trustworthy source in the sales process was the insurance company itself, though the percentage on this count was much less at 29 per cent.

The second set of people who are financially savvy and can get better interpretations of the insurance policies find their agent and sales person as the least trustworthy in the sales value chain. As many as 34 per cent of this set of people, aged 25 -40 years, found the agents lacking on trust, followed by the insurance company itself.

Likewise, misrepresentation of benefits was also an area of concern. On this count, the more let down was felt by those who are financially savvy and are in the age group of 25-40 years. As many as 65 per cent of them, who were covered in the ASSOCHAM study, found the issues on this score. Besides, those in the age group of 18-60 years and those who are not so financially savvy, also found the problem of misrepresentation of benefits. Forty three per cent of them said there are problems with regard to misrepresentation of benefits.

n++There is a need for simplification of processes and procedures of insurers to take away the awe and fear of the common man on different products. Demystification of insurance concept is a necessary requirement for people to take to this in a large way, particularly, in the background of low financial literacy,n++ ASSOCHAM said.

He said the industry also needs to do a few things to hasten up the process of insurance inclusion. The product space is cluttered with a large number of complex policies. n++There must be simple, standard vanilla products in personal products.n++

The study suggested that since the insurance agent or the sales person is the face of industry, n++It is of utmost importance that we select these ambassadors very cautiously. Right from spreading the awareness to conducting the need analysis for a sale, to servicing the customers request in time, to explaining and supporting customers in times of claim, sales representative must do it.n++

The lack of information of our customers is what creates the disconnect; once that is taken care of all, apprehensions will slowly begin to disappear.

Powered by Capital Market - Live News

2 Lakh Street Lights Replaced in the South Delhi Municipal Corporation Area
Jan 09,2017

Union Minister of Power, Coal, New & Renewable Energy and Mines, Shri Piyush Goyal will dedicate the Street Lighting National Programme (SLNP), currently running in the South Delhi Municipal Corporation (SDMC) area, to the Nation in New Delhi on 9th January, 2017. It is the Worlds Largest Street Light Replacement Programme, which is being implemented by the Energy Efficiency Services Limited (EESL), a joint venture under the Ministry of Power, Government of India.

The SLNP programme is presently running in Punjab, Himachal Pradesh, Uttar Pradesh, Assam, Tripura, Jharkhand, Chhattisgarh, Telangana, Andhra Pradesh, Kerala, Goa, Maharashtra, Gujarat and Rajasthan. A total of 15.36 lakh street lights have already been replaced in the country with LED bulbs, which is resulting in energy savings of 20.35 crore kWh, avoiding capacity of 50.71 MW and reducing 1.68 lakh tonnes of greenhouse gas emissions per annum. The energy efficiency market in India is estimated at US$ 12 billion that can potentially result in energy savings of up to 20 per cent of current consumption, by way of innovative business and implementation models.

Under the SLNP, SDMC area alone accounts for over 2 lakh street light replacements. The cumulative annual energy savings in SDMC through this programme is 2.65 crore kWh which has helped to avoid capacity addition of 6.6 MW, resulting in a daily reduction of 22,000 tonnes of greenhouse gases. Additionally in Delhi, under Phase II of the street lighting programme, EESL has signed a tripartite agreement with BSES and SDMC to install 75,000 more street lights with more focus on installation in parks.

In the SDMC Project, EESL is addressing complaints from various sources viz., registered from BSES helpline, night patrolling team by EESL, mobile vans, e-mails, social media and other sources including Ward Councilors. Additionally, EESL is putting stringent complaint redressal mechanism and Centralized Control and Monitoring System (CCMS) to enable remote operation and monitoring of the street lights. CCMS provides real time information on energy consumption and remote monitoring of the street lights.

On the occasion, Shri Goyal will also launch the mobile app called EESL SL Complaint App for SDMC, wherein users can now lodge complaints about faulty street lights. These complaints will be addressed to within a period of 48 hours.

Powered by Capital Market - Live News

Income-tax Rules amended to provide- bank shall obtain & link PAN or Form No. 60 in all existing bank accounts (other than BSBDA) by 28 February 2017
Jan 09,2017

Income-tax Rules have been amended to provide that bank shall obtain and link PAN or Form No. 60 (where PAN is not available) in all existing bank accounts (other than BSBDA) by 28 February 2017, if not already done. In this connection, it may be mentioned that RBI vide circular dated 15 December 2016 has mandated that no withdrawal shall be allowed from the accounts having substantial credit balance/deposits if PAN or Form No.60 is not provided in respect of such accounts. Therefore, persons who are having bank account but have not submitted PAN or Form No.60 are advised to submit the PAN or Form No. 60 to the bank by 28.2.2017.

The banks and post offices have also been mandated to submit information in respect of cash deposits from 1 April 2016 to 8 November 2016 in accounts where the cash deposits during the period 9 November 2016 to 30 December 2016 exceeds the specified limits.

It has also been provided that person who is required to obtain PAN or Form No.60 shall record the PAN/Form.No.60 in all the documents and quote the same in all the reports submitted to the Income-tax Department.

Powered by Capital Market - Live News

The Automotive Sector Can Transform South Asia Economically
Jan 07,2017

A new World Bank study that examines a range of factors affecting South Asian++s competitiveness in the automotive sector, notes that the region has the potential for greater global competitiveness in many different sectors but must pursue multiple policies to perform as well as other comparable regions, such as East Asia.

With more than 19 million jobs connected directly and indirectly to the automotive sector, India is the South Asian leader in that industry. (Pakistan follows with 2.5 million automotive-related jobs.) India-based auto parts manufacturers have acquired the technical and managerial skills from leading original equipment manufacturers (OEMs) established in India and a growing ability to meet the needs of disparate and discerning customers in competitive export markets. Increased opportunity to co-locate with their global customers for the right reasons will deepen these skills.

India has done very well in the past decade but has a distance to travel before it can fully contend with other major global exporters in the auto sector. It is the worlds sixth largest auto producer by volume, but it owns less than 1 percent of global export markets compared with more than 3 percent for China, 4.5 percent for Korea and 7 percent for Mexico. The average auto firm in India exported only 5 percent of its total sales, compared to 16 percent in China, said Priyam Saraf, Lead Author of the automotive case study.

A few leading global automotive parts manufacturers have already moved their research and development (R&D) centers to India, such as Bosch, which conducts most of its global R&D with 15,000 workers in Bangalore. Others- including BMW, Mercedes, Renaultn++\Nissan, Volvo, GM, Ford and Honda- are gaining the confidence to do the same soon. As they do, there is likely to be further growth and sophistication in the countrys related electronics, machining and tooling sectors, as well.

Powered by Capital Market - Live News

The IMF will assess a range of financial systems in 2017: large ones such as China and Japan
Jan 07,2017

In 2017, IMF will assess financial stability of Indian economy jointly with the World Bank. Others Economies whose financial stability the IMF will assess during 2017 jointly with the World Bank include Bulgaria, China, Guyana, Indonesia, Saudi Arabia, Turkey, Zambia. However, Economies whose financial stability the IMF will assess during 2017 include-Bahrain, Japan, Luxembourg, Netherlands, New Zealand, and Spain.

The Financial Sector Assessment Program remains the IMFs principal tool for assessing countries financial stability. It identifies weaknesses in a countrys financial system that could threaten its stability, as well as strengths that make the system resilient. The IMF tailors country stability assessments to analyze issues of particular interest or concern in each country.

In 2017, IMF teams of experts will focus on systemic risks, the health of banks, and contagion and spillover risks. For each economy, the IMF will make policy recommendations about how to:

n++Strengthen the monitoring of risks to the financial system as a whole

n++Improve financial oversight and the macroprudential framework for financial system safety, and

n++Prepare for stressful financial conditions

We have this handy factsheet that explains the why and how of our financial assessments. You can also read more about why we assess the 29 systemically important financial sectors every five years.

Some highlights for countries under review in 2017 include:

China

Since the global financial crisis, Chinas growth has relied increasingly on credit, especially in the corporate sector, including state-owned enterprises, and in recent months also on mortgage lending. Tensions between sustaining growth and the need to contain indebtedness, together with certain financial sector innovations, have led to increased financial sector complexity and the risk of gaps in supervision. The IMF will examine these issues from a systemic point of view.

Indonesia

Financial conglomerates play a dominant role in the financial system and the economy, and account for 70 percent of the assets of financial institutions. The IMF will look closely at the oversight of financial conglomerates, and seek to identify areas for improvement in the newly implemented integrated supervisory framework, and the recently adopted law on crisis management and resolution.

Japan

Since the 2012 assessment, the profitability of financial institutions domestic operations has weakened. This has prompted large banks and insurers to expand overseas in a search for higher yields, and smaller banks to increase their exposure to real estate and small and medium-sized enterprises. Against this background, the IMF will assess vulnerabilities associated with the international expansion of banks and insurers, as well as longer-term prospects for the financial sector in the context of demographic changes and low growth.

Luxembourg

Home to a key international central securities depository, Luxembourg has the worlds second largest investment fund industry, and the profitability of its banking industry is tied to the general health of these funds. To address some of the systemic vulnerabilities, the IMF will use stress tests and spillover analysis to assess the ability of Luxembourgs financial institutions to absorb liquidity and/or solvency shocks.

Saudi Arabia

An extended period of low oil prices is affecting the Saudi economy. Although the bank-dominated financial sector has so far been resilient, this episode is an opportunity to complete the financial reform agenda and make improvements in the functioning of the interbank market that would also help banks diversify their funding sources over the longer term. These are the key issues the IMF will explore with officials.

Spain

The assessment will look at progress and improvements made since the crisis. It will tackle banks ability to adjust to low profits due to their business models, and their ability to manage the post-crisis recovery. The IMF will also examine the emerging needs of the institutional framework, and apply enhanced methods to capture cross-border financial shocks, and account for the linkages between the economy and the financial system as a whole.

Zambia

Against a backdrop of declining economic growth due to sharply lower copper prices and an unsustainable fiscal deficit, the IMF will focus on how to maintain financial stability, including the adequacy of supervisory resources. It will also examine the adherence to international norms of the legal and regulatory framework for financial sector oversight.

Powered by Capital Market - Live News

India Ratings Affirms India Dyeing Mills at GÿIND AG; Outlook Stable
Jan 07,2017

India Ratings and Research (Ind-Ra) has affirmed India Dyeing Mills Pvt. Ltd.s (IDMPL) Long-Term Issuer Rating at GIND A. The Outlook is Stable. Instrument wise rating actions are given below: Instrument TypeDate of issuanceCoupon RateMaturity DateSize of the issue (million)Rating/OutlookRating ActionTerm loans---INR259.8 (increased from INR221)IND A/StableAffirmedFund-based working capital---INR50IND A/StableAffirmedFund-based working capital---INR50IND A1AffirmedNon-fund-based working capital---INR91.9 (increased from INR70)IND A1Affirmed

Key Rating Drivers

Strong Linkages with Eastman Group: The affirmation continues to reflect IDMPLs assured business with Eastman Exports Global Clothing Pvt Ltd (EEGCPL; GIND A; Outlook Stable), which contributes around 80% to the companys revenue. Since IDMPL was set up as a backward integration for EEGCPL, the companys strategy and operations are closely guided by those of EEGCPL, thus reflecting strong operational linkages. Hence, the ratings will continue to move in tandem with EEGCPL.

Comfortable Credit Metrics: Net adjusted leverage improved to 1x in FY16 (FY15: 1.2x) and interest cover to 10x (9.4x), owing to an increase in revenue, coupled with a fairly stable EBITDA margin and a marginal decline in debt. Ind-Ra expects revenue to grow at a moderate pace in the near term, with EBITDA margin sustaining at the current level. Additionally, debt which comprises primarily of term loans is likely to decline with no significant debt-funded capex on the anvil. These factors are likely to aid in a gradual improvement in the credit metrics during FY17-FY19.

Adequate Liquidity: IDMPL has consistently generated positive cash flow from operations, despite an increase in working capital cycle. The companys working capital cycle increased to 29 days in FY16 (FY15: 22 days) on account of stretched payments from EEGCPL. However, free cash flow turned positive to INR44 million (FY15: negative INR178 million) on the back of higher EBITDA and moderate capex. Ind-Ra expects the free cash flow to be positive over the medium term given the absence of major capex and strong cash flow from operations.

Strong Track Record: The ratings continue to be supported by IDMPLs founders over 30-year-long track record in the textile business. Strong pollution control system in IDMPLs dyeing facility, which makes it attractive to exporters, also continues to be a positive factor.

Rating Sensitivities

Positive: Future developments that could lead to a positive rating action include an upgrade in EEGCPLs ratings, coupled with IDMPL maintaining the current credit profile.

Negative: Future developments that could, individually or collectively, lead to a negative rating action include:

-+ - any substantial debt-financed capex or margin reduction leading to the financial leverage exceeding 2x

-+ - a downgrade of EEGCPLs ratings

Powered by Capital Market - Live News

India Ratings Affirms India Dyeing Mills at IND A; Outlook Stable
Jan 07,2017

India Ratings and Research (Ind-Ra) has affirmed India Dyeing Millss (IDMPL) Long-Term Issuer Rating at IND A. The Outlook is Stable. Instrument wise rating actions are given below: Instrument TypeDate of issuanceCoupon RateMaturity DateSize of the issue (million)Rating/OutlookRating ActionTerm loans---INR259.8 (increased from INR221)IND A/StableAffirmedFund-based working capital---INR50IND A/StableAffirmedFund-based working capital---INR50IND A1AffirmedNon-fund-based working capital---INR91.9 (increased from INR70)IND A1Affirmed

Key Rating Drivers

Strong Linkages with Eastman Group: The affirmation continues to reflect IDMPLs assured business with Eastman Exports Global Clothing (EEGCPL; IND A; Outlook Stable), which contributes around 80% to the companys revenue. Since IDMPL was set up as a backward integration for EEGCPL, the companys strategy and operations are closely guided by those of EEGCPL, thus reflecting strong operational linkages. Hence, the ratings will continue to move in tandem with EEGCPL.

Comfortable Credit Metrics: Net adjusted leverage improved to 1x in FY16 (FY15: 1.2x) and interest cover to 10x (9.4x), owing to an increase in revenue, coupled with a fairly stable EBITDA margin and a marginal decline in debt. Ind-Ra expects revenue to grow at a moderate pace in the near term, with EBITDA margin sustaining at the current level. Additionally, debt which comprises primarily of term loans is likely to decline with no significant debt-funded capex on the anvil. These factors are likely to aid in a gradual improvement in the credit metrics during FY17-FY19.

Adequate Liquidity: IDMPL has consistently generated positive cash flow from operations, despite an increase in working capital cycle. The companys working capital cycle increased to 29 days in FY16 (FY15: 22 days) on account of stretched payments from EEGCPL. However, free cash flow turned positive to INR44 million (FY15: negative INR178 million) on the back of higher EBITDA and moderate capex. Ind-Ra expects the free cash flow to be positive over the medium term given the absence of major capex and strong cash flow from operations.

Strong Track Record: The ratings continue to be supported by IDMPLs founders over 30-year-long track record in the textile business. Strong pollution control system in IDMPLs dyeing facility, which makes it attractive to exporters, also continues to be a positive factor.

Rating Sensitivities

Positive: Future developments that could lead to a positive rating action include an upgrade in EEGCPLs ratings, coupled with IDMPL maintaining the current credit profile.

Negative: Future developments that could, individually or collectively, lead to a negative rating action include:

-+ - any substantial debt-financed capex or margin reduction leading to the financial leverage exceeding 2x

-+ - a downgrade of EEGCPLs ratings

Powered by Capital Market - Live News

Rabi crops sowing crosses 602 lakh hactare
Jan 06,2017

As per preliminary reports received from the States, the total area sown under Rabi crops as on 6 January 2017 stands at 602.75 lakh hectares as compared to 565.89 lakh hectare this time in 2016. The Rabi crop sowing has increased 6.5% above last year level.

Wheat has been sown/transplanted in 303.16 lakh hectares as on 06 January 2017 compared with sowing of 281.7 lakh hectares same time last season. The area under pulses also moved up 13.4% to 152.63 lakh hectares, while that under oil seeds also increased 8% to 80.63 lakh hectares.

However, the area under rice has declined 27.4% to 12.74 lakh hectares, while that under coarse cereals also fell 6.6% to 53.60 lakh hectares as on 06 January 2017 over a year ago.

Powered by Capital Market - Live News

GDP growth pegged at 7.1% for FY2017: First Advance Estimates
Jan 06,2017

As per the first advances estimates of Real GDP or Gross Domestic Product (GDP) released by the Central Statistics Office (CSO), the GDP growth at constant (2011-12) prices is estimated at 7.1% for FY2017, showing moderation from 7.6% in FY2016..

Real GVA, i.e, GVA at basic constant prices (2011-12) is anticipated to increase 7.0% in FY2017 against 7.2% growth in FY2016.

The sectors which registered growth rate of over 7.0% are, public administration, defence and other services, financial, real estate and professional services and manufacturing. The growth in the agriculture, forestry and fishing, mining and quarrying, electricity, gas, water supply and other utility services, construction and Trade, hotels, transport, communication and services related to broadcasting is estimated to be 4.1%, (-) 1.8%, 6.5%, 2.9% and 6.0% respectively.

The per capita income in real terms (at 2011-12 prices) during FY2017 is likely to attain a level of Rs 81805 as compared to Rs 77,435 for the year FY2016. The growth rate in per capita income is estimated at 5.6% during FY2017, as against 6.2% in the previous year.

The per capita net national income during FY2017 is estimated to be Rs 103,007 showing a rise of 10.4% as compared to Rs 93,293 during FY2016 with the growth rate of 7.4%.

Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs 89.72 lakh crore in FY2017 as against Rs 80.78 lakh crore in FY2016. At constant (2011-12) prices, the PFCE is estimated at Rs 67.13 lakh crore in FY2017 as against Rs 63.01 lakh crore in FY2016. In terms of GDP, the rates of PFCE at current and constant (2011-12) prices during FY2017 are estimated at 59.1% and 55.2%, respectively, as against the corresponding rates of 59.5% and 55.5%, respectively in FY2016.

Government Final Consumption Expenditure (GFCE) at current prices is estimated at Rs 18.61 lakh crore in FY2017 as against Rs 14.39 lakh crore in FY2016. At constant (2011-12) prices, the GFCE is estimated at Rs 13.95 lakh crore in FY2017as against Rs 11.27 lakh crore in FY2016. In terms of GDP, the rates of GFCE at current and constant (2011-12) prices during FY2017 are estimated at 12.3% and 11.5%, respectively, as against the corresponding rates of 10.6% and 9.9%, respectively in FY2016.

Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 40.39 lakh crore in FY2017 as against Rs 39.72 lakh crore in FY2016. At constant (2011-12) prices, the GFCF is estimated at Rs 35.35 lakh crore in FY2017 as against Rs 35.41 lakh crore in FY2016. In terms of GDP, the rates of GFCF at current and constant (2011-12) prices during FY2017 are estimated at 26.6% and 29.1%, respectively, as against the corresponding rates of 29.3% and 31.2%, respectively in FY2016. The GFCF is expected to register growth rate of 1.7% at current prices and (-) 0.2% at constant prices.

The next release of second advance estimates of national income for the year FY2017 and quarterly GDP estimate for the quarter April-December, 2016 (Q3 of FY2017) will be on 28 February 2016.

Powered by Capital Market - Live News

Dr. Jitendra Singh release 2017 Calendar of North Eastern Council
Jan 06,2017

The Union Minister of State (Independent Charge) for Development of North Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances, Pensions, Atomic Energy and Space, Dr Jitendra Singh released the 2017 Calendar of the North Eastern Council here today. The North-East Council Calendar for 2017 carries the theme of n++seasonal fruitsn++ in different parts of the year.

Dr. Jitendra Singh announced the formation of exclusive n++North-Eastern Tourism Development Counciln++ (NETDC) on a public-private partnership (PPP) mode under the auspices of Union Ministry of DoNER. He said that this is for the first time that the Government has decided to set up a separate tourism development agency, devoted to a particular region of the country. The Minister said that the setting up of an exclusive North-Eastern Tourism Council is also a reflection of the high priority that the Union Government accords to the development of the peripheral States of Northeast.

Dr Jitendra Singh said that North-Eastern Tourism Council is yet another addition to several new initiatives undertaken with regard to North East. For instance, setting up of n++Venture Fundn++ as initial capital assistance for any young entrepreneur or start-up who wishes to launch an establishment or venture in the North-Eastern region and setting up of n++Dr A.P.J. Abdul Kalam Centre for Policy Research & Analysisn++ at the Indian Institute of Management (IIM), Shillong, he added.

The Minister said that the n++North-East Road Sector Development Schemen++ (NERSDS) is also region-based road development programme in India which has proved to be a great blessing for maintenance, construction and upgradation of such roads, which remain neglected either because of being low in the priority or being interconnecting roads between two States as a result of which they remain un-owned and had thus gained the dubious distinction of being described as n++orphan roadsn++.

Powered by Capital Market - Live News

Money Supply: Currency in circulation declines
Jan 06,2017

The money supply (M3) registered growth of 7.1% as on 09 December 2016. The growth was lower than 8.5% in the month of November 2016. Meanwhile, on annual basis the M3 growth was lower than in December 2015, amid fall in currency with public and deceleration in other deposits with RBI, while demand deposits with banks and time deposits with banks accelerated. In a historic move, the government, on advice of RBI, announced that existing notes of Rs 500 and Rs 1000 denomination ceased to be legal tender from 09 November 2016. A new series of Rs 500 and Rs 2000 notes were introduced by RBI from 10 November 2016. Accordingly, old notes that have been demonetised can be deposited in bank accounts (without limit till 31 December 2016) or can be exchanged for legal tender.

This move reduced the currency in circulation drastically and increased the deposits with banks.

Meanwhile, the M3 decreased by Rs 559.5 billion or 0.5% fortnightly, led by fall in currency with the public, while time deposits with banks, demand deposits with banks and other deposits with RBI increased.

Components

M3 recorded growth of 4.3% till 09 December in 2016-17 compared with the 7.2% rise in the same period a year ago. Meanwhile, on annual basis the M3 growth was lower than in December 2015, amid fall in currency with public and deceleration in other deposits with RBI, while demand deposits with banks and time deposits with banks accelerated.

The growth rate in time deposits with banks accelerated to 14.2% from 10.8% a year ago, demand deposits with banks, another major component of broad money, increased at 29.4% from 13% a year ago while currency with public fall 48% from 12.4% rise a year ago.

Meanwhile, the M3 decreased by Rs 559.5 billion or 0.5% fortnightly, led by fall in currency with the public, while time deposits with banks, demand deposits with banks and other deposits with RBI increased.

Demand deposit with banks increased 21% till 09 December 2016 compared with a rise of 3.8% in the corresponding period a year ago. The annual growth rate stood at 29.4% as on 09 December 2016 compared with a rise of 13% a year ago. On other hand, time deposits increased at 12.3% till 09 December in 2016-17 compared with 7.4% growth a year ago. The annual growth rate stood at 14.2% as on 09 December compared with a 10.8% increase a year ago.

One of the major components of M3, that is currency with the public, fell 48% annually as on 09 December 2016 compared with 12.4% increase a year ago. It recorded 51.1% fall till 09 December in 2016-17 compared with a 8.4% increase in the same period a year ago. Meanwhile, fortnightly the currency with the public fall 14.4% or by Rs 1309.6 billion.

Sources

The net bank credit to government declined by Rs 944.6 billion in the fortnight ended 09 December 2016 but increased 22% till 09 December in 2016-17. This is higher than the rise of 12.4% growth a year ago. The annual growth rate accelerated to 16.9% as on 09 December 2016 compared with 7.2% a year ago. The growth in net foreign exchange assets of the banking sector stood at 2.7% till 09 December 2016 in 2016-17 lower from 9.4% growth a year ago. Meanwhile, the annual growth rate also decelerated 5.7% as on 09 December 2016 compared with a rise of 19.9% a year ago.

Reserve money

The reserve money growth declined annually in December 2016 compared with an annual rise in December 2015. The annual growth rate declined 29.6% as on 23 December 2016 compared with the 14.3% growth a year ago. The fall in currency in circulation led to fall in reserve money growth, while Bankers Deposits with RBI and other deposits with RBI decelerated. The fall in currency in circulation was 40% as on 23 December 2016 compared with a rise of 13% rise a year ago. The bankers deposit with the RBI decelerated at 6.5% compared with a rise of 17.9% rise a year ago and the other deposits with RBI also decelerated annually to 6.4%.

The net foreign exchange assets of the banking sector decelerated to 5.4% as on 23 December 2016 compared with a rise of 15.4% a year ago. Meanwhile, the growth rate was 2.5% till 23 December in 2016-17 compared with 9% rise in the same period a year ago. Net non-monetary liabilities of the RBI decreased 0.8% till 23 December 2016 in FY17 compared with a rise of 14.7% in the same period a year ago. The annual growth rate accelerated by 5.2% as on 23 December compared with rise of 4.5% a year ago.

Outlook

The growth of money supply in the economy slipped to 7% from 12% in the near term, and may slip further if 25-30% of unaccounted currency does not flow back into the banking system post demonetisation move. The demonetization led to massive influx of currency into the banking system with system liquidity turning into huge surplus as currency in circulation fell and deposit base grew by same amount. In a short period, the banking system will have to carry out a massive exercise of accepting old, demonetized notes and issuing new legal tender. This will be later followed by a massive outflow of currency back into the system.

Powered by Capital Market - Live News

India and Kazakhstan sign Protocol to amend the Double Taxation Avoidance Convention (DTAC)
Jan 06,2017

India and Kazakhstan signed here today in the national capital a Protocol to amend the existing Double Taxation Avoidance Convention (DTAC) between the two countries which was earlier signed on 9th December, 1996 for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income.

Salient features of the Protocol are as under:

(i) The Protocol provides internationally accepted standards for effective exchange of information on tax matters. Further, the information received from Kazakhstan for tax purposes can be shared with other law enforcement agencies with authorisation of the competent authority of Kazakhstan and vice versa.

(ii) The Protocol inserts a Limitation of Benefits Article, to provide a main purpose test to prevent misuse of the DTAC and to allow application of domestic law and measures against tax avoidance or evasion.

(iii) The Protocol inserts specific provisions to facilitate relieving of economic double taxation in transfer pricing cases. This is a taxpayer friendly measure and is in line with Indias commitment under Base Erosion and Profit Shifting (BEPS) Action Plan to meet the minimum standard of providing Mutual Agreement Procedure (MAP) access in transfer pricing cases.

(iv) The Protocol inserts service PE provisions with a threshold and also provides that the profits to be attributed to PE will be determined on the basis of apportionment of total profits of the enterprise.

(v) The Protocol replaces existing Article on Assistance in Collection of Taxes with a new Article to align it with international standards.

Powered by Capital Market - Live News

ADB Sells Dual-Tranche $3 Billion 3-Year and $1 Billion 10-Year Global Benchmark Bonds
Jan 06,2017

The Asian Development Bank (ADB) returned to the US dollar bond market with the pricing of a dual-tranche $3 billion 3-year and $1 billion 10-year global benchmark bond issues, proceeds of which will be part of ADBs ordinary capital resources.

n++The first week of January has traditionally been an extremely busy issuance period with clear first-mover advantages and New Year cash flows we were keen to capitalize on. As the supply picture unfolded, there was a clear window to navigate the building pipeline with a maturity differentiating 3/10-year dual-tranche transaction. This format allows us to respond to demand in the front and back-end of the curve and I am pleased to see the solid investor response for ADBs credit and support of its mission in the region,n++ said ADB Treasurer Pierre Van Peteghem.

The 3-year bond, with a coupon rate of 1.750% per annum payable semi-annually and a maturity date of 10 January 2020, was priced at 99.942% to yield 28.05 basis points over the 1.375% US Treasury notes due December 2019. The 10-year bond, with a coupon rate of 2.625% per annum payable semi-annually and a maturity date of 12 January 2027, was priced at 99.451% to yield 23.75 basis points over the 2.000% US Treasury notes due November 2026.

The transactions were lead-managed by Citi, Goldman Sachs, J.P. Morgan, and Nomura. A syndicate group was also formed consisting of Bank of America Merrill Lynch, BMO Capital Markets, BNP Paribas, Credit Agricole CIB, Daiwa Securities, DBS Bank, Mizuho International, RBC Capital Markets, SMBC Nikko, and TD Securities.

Both issues achieved wide primary market distribution with 40% of the 3-year bonds placed in Asia, 29% in Europe, Middle East, and Africa, and 31% in the Americas. By investor type, 72% of the bonds went to central banks and official institutions, 8% to banks, and 20% to fund managers and other types of investors. For the 10-year bonds, 27% were placed in Asia, 20% in Europe, Middle East and Africa, and 53% in the Americas. By investor type, 47% of the bonds went to central banks and official institutions, 11% to banks, 42% to fund managers and other types of investors.

ADB plans to raise around $25-30 billion from the capital markets in 2017.

Powered by Capital Market - Live News