Rupee rallies, Sensex surges as foreign funds pour in dollars

The rupee closed at 59.91 on Friday rising to a level above 60 to a dollar for the first time in eight months, and equities continued to scale new peaks as Indian markets hit a sweet spot aided by a gush of dollars on expectations of a stable, investor-friendly government after the Lok Sabha polls.

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The rupee's closing on Friday was the highest in eight months, and it hit an intra-day high of 59.68, bringing relief for the government battling to contain prices and push the economy out of a slowdown.
A stronger rupee will make most imported goods such as crude oil cheaper raising hopes of a cut in transport fuel, particularly of petrol where retail prices are already aligned with global crude prices.

The rupee's rise against the dollar will aid the government's and the Reserve Bank of India's (RBI's) efforts to cool prices.
However, a strong rupee also hurts exports as it makes Indian goods pricier in dollar terms compared to other competitors.
Forex traders told HT that the RBI, which is widely speculated to maintain a status quo on interest rates next Tuesday, has likely bought $3 billion this week to prevent a further rise in the domestic currency's value.
Equities scaled new peaks on sustained buying by foreign institutional investors (FIIs).
The 30-share BSE Sensex gained by 125.60 points or 0.57% to close at 22,339.97 points, and the NSE Nifty gained 54.15 points or 0.82% to close at 6,695.90 points, after briefly crossing 6,700 for the first time ever.


vijay yadav
pgdm-2sem
source- hindustan times

RBI keeps repo rate unchanged at 8% in monetary policy review

By Agencies | 1 Apr, 2014, 11.04AM IST

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Around the world in finance news

• 10 hours ago April 01, 2014 7:40AM

US stocks pushed higher with technology stocks heavily sold last week showing a rebound, helped by Janet Yellen's assurance the Federal Reserve will continue to support the economy. Source: AP

A ROUNDUP of trading on major world markets:

NEW YORK — US stocks pushed higher with technology stocks heavily sold last week showing a rebound, helped by Janet Yellen's assurance the Federal Reserve will continue to support the economy. By late morning, the Dow Jones Industrial Average was up 87.76 points (0.54 per cent) to 16,410.82.
The broadbased S&P 500 had added 10.82 (0.58 per cent) at 1,868.44.
Meanwhile, the tech-rich Nasdaq Composite gained 39.29 (0.95 per cent) to 4,195.04, as investors pushed back into shares that fell out of favour last week amid worries of both a bubble in the sector and tensions over Ukraine.
Federal Reserve Chair Yellen gave the markets support in a speech in which she underlined that unemployment was still a big challenge for the economy and that the Fed will maintain its extraordinary measures until the jobless rate falls a lot more.
LONDON — Europe's main stock markets slid, with traders saying many investors stayed on the sidelines ahead of a European Central Bank interest rate decision.
London's FTSE 100 ended down 0.26 per cent at 6,598.37 points. In Paris, the CAC 40 fell 0.45 per cent to 4,391.50 points as official figures showed the French public deficit and debt in 2013 were higher than previous government estimates — dealing a fresh blow to President Francois Hollande a day after disastrous local polls.
Meanwhile the DAX 30 in Frankfurt shed 0.33 per cent to 9,555.91 points news that German retail sales, a closely watched measure of household confidence, increased in February.
HONG KONG — Asian markets mostly rose following a Wall Street rally as attention turns to the release of key data from Japan and the US later in the week.
Tokyo jumped 0.90 per cent, or 131.80 points, to 14,827.83, Sydney climbed 0.52 per cent, or 27.9 points, to 5,394.8 and Seoul added 0.23 per cent, or 4.61 points, to 1,985.61.
Hong Kong rose 0.39 per cent, or 85.53 points, to finish at 22,151.06, but Shanghai slipped 0.41 per cent, or 8.41 points, to 2,033.31.
Investors were unmoved by news that North and South Korea had traded live artillery fire across their disputed maritime border on Monday, forcing South Korean islanders to take shelter. The exchange came a day after the North drove up tensions by threatening a new nuclear test.
WELLINGTON — The NZX 50 Index fell 2.914 points, or about 0.1 per cent, to 5139.982.

Manish saini

PGDM

2nd SEM

RBI keeps repo rate unchanged at 8.00%, reverse repo rate stays at 7.00%

 

The Reserve Bank of India on Tuesday left its policy interest rate unchanged, as expected, and said it does not expect further near-term policy tightening if headline inflation continues to ease towards the bank's targeted level.
The RBI kept its key repo rate at 8.00%, in line with the forecast of all 53 economists in a Reuters poll last week. Since taking office in September, RBI Governor Raghuram Rajan has raised the repo rate three times by a total of 75 basis points.
India's consumer price index inflation eased to 8.10% in February, near the RBI's January 2015 target of 8%, while the wholesale price index slowed to a 9-month low of 4.68%. The RBI wants CPI inflation to ease further to 6% by January 2016.

"If inflation continues along the intended glide path, further policy tightening in the near term is not anticipated at this juncture," Rajan said in his policy statement.

muntazir alam
2nd sem
iimt college of management

 

Sebi ordinance brings continuity and a curious change

One curious change is to allow the regulator to supersede an order issued by an adjudicating officer 

Since July 2013, Securities and Exchange Board of India (Sebi) has been armed with more investigative and enforcement powers thanks to the Securities Laws (Amendment) Ordinance that was promulgated by President Pranab Mukherjee. The regulator has also been given powers to go after collective investment schemes of over Rs.100 crore, and to its credit Sebi has passed orders against quite a few such schemes during the time the ordinance has been in force.

The ordinance, however, lapsed in mid-January and in what is perhaps a first, it got promulgated for the third time on 28 March by the President. Why are these powers so important for the regulator to have? And why not just wait for new laws to be passed in this regard when a new government is formed and Parliament is in session? An ordinance is typically in force for a period of six months, unless it lapses owing to the reassembly of Parliament.

 

The reason it was important for the government to push for a re-promulgation was so that Sebi could continue to exercise the powers it has started using when the ordinance was in force between July 2013 and January this year. For perspective, consider a scenario where the regulator had attached the property of a person who hadn’t paid a penalty. If the ordinance, which allows Sebi to attach the property, ceases to be in operation for a long time, the person will be free to dispose his/her property. The re-promulgation does help with respect to continuity.

At the same time, there are some changes compared with the ordinance issued in 2013. One curious change is to allow the regulator to supersede an order issued by an adjudicating officer if “it considers that the order is erroneous to the extent that it is not in the interest of the securities market”. In such cases, Sebi has been allowed to make a fresh inquiry and enhance the quantum of penalty proposed by the adjudicating officer. According to Sebi rules, while the chairman and/or whole-time board members issue orders relating to debarment etc., monetary penalties are decided by adjudicating officers.

The new model envisaged in the ordinance is strange and avoidable, to say the least. The adjudicating officer is expected to be independent and decide on the quantum of penalty after hearing the investigation arm of Sebi and the person against whom the charge is brought. If Sebi is aggrieved with the order passed by the officer, the right approach would be for it to challenge the order at the Securities Appellate Tribunal (SAT). Allowing Sebi to make a fresh inquiry and pass a fresh order puts in question the independent role of the adjudicating officer. With Sebi being given these overriding powers, such officers may find it convenient to consult Sebi on what the quantum of penalty should be. One can argue that from the perspective of the person against whom the case is being fought, there is always the option of moving SAT. However, the ordinance adds an unnecessary level of adjudication.

Another change is the government’s decision to add a safeguard to allay concerns about regulatory overreach. It has done this by stating in the ordinance that the Sebi chairman must record in writing its reasons for authorizing a search and seizure operation. Sebi had issued a detailed procedure for search and seizure operations in January this year, which included, among other things, a request in writing from the investigating officer to the Sebi chairman for a search warrant. The added safeguard in the ordinance is welcome, as the responsibility for ordering a search warrant lies with the chairman—it makes sense for the issuing authority to record reasons. The ordinance also provides for Sebi to take the assistance of a police officer or a central government officer in its search and seizure operations.

While the above two are welcome measures, the option to override the decision of the adjudicating officer is best left unused. Hopefully when these laws are enacted through Parliament, the provision would have found its way out.

Source- Livemint.com

Shah Mohammad Abdul Qadir

         PGDM 1st Year

IIMT College Of Management

      GReater Noida, U.P.

Monetary policy review: Guv Raghuram Rajan keeps RBI rates unchanged, says 'only surprise is lack of surprise'

SUMMARY :-Rajan's RBI to announce in-principle approval of new bank licences after consulting EC 

Raghuram Rajan-led Reserve Bank of India (RBI) on Tuesday left its policy interest rate unchanged, as expected, and said it does not expect further near-term policy tightening if headline inflation continues to ease towards the bank's targeted level.
RBI indicated today that it will announce in-principle approval of new bank licences after consulting Election Commission.
However, Raghuram Rajan added that RBI to give bank licences on tap.
While inflation is a concern, Raghuram Rajan said he was not moved by vegetable prices.
The RBI kept its key repo rate at 8.00 percent, in line with the forecast of all 53 economists in a poll last week. Since taking office in September, RBI Governor Raghuram Rajan has raised the repo rate three times by a total of 75 basis points.
India's consumer price index inflation eased to 8.10 percent in February, near the RBI's January 2015 target of 8 percent, while the wholesale price index slowed to a 9-month low of 4.68 percent. The RBI wants CPI inflation to ease further to 6 percent by January 2016.
"If inflation continues along the intended glide path, further policy tightening in the near term is not anticipated at this juncture," Raghuram Rajan said in his policy statement

TANAY TAPAS 
PGDM 1st

Religare Health Insurance in talks for PE funding

 

 

The general insurance sector is expected to grow at an average annual rate of 16% to about Rs.194,000 crore by fiscal year 2020 from Rs.57,964 crore in fiscal year 2012.

Mumbai: Religare Health Insurance Co. Ltd has initiated stake sale talks with domestic and global private equity (PE) firms to raise capital, according to three people, including two directly involved with the transaction. None of the three wished to be identified.

“The transaction includes raising of about Rs.200 crore in lieu of a minority stake,” said one of the two people directly involved in the negotiations. “The talks have just begun and the final contours of the deal are yet to emerge.”

“It’s a PE deal and the company could raise capital from both domestic and global investors,” said the second person. “If any of the foreign funds buy a stake in the company it should not be less than 26%. But since Religare Health Insurance is willing to sell more than 26% stake, domestic funds too have been approached.”

The company is in talks with global investors including LeapFrog Investments, TPG Capital and General Atlantic, among others, said the third person.

In a 5 February press note, the department of industrial policy and promotion clarified that the 26% cap on overseas investments in insurance companies would include foreign direct investment (FDI), foreign institutional investor (FII) investments and investments from non-resident Indians (NRIs). Many private insurers have demanded that India raise the FDI cap to 49%, but a draft law that proposes the change is still to be approved by Parliament.

According to Religare Health’s website, its existing shareholders are Religare Enterprises Ltd, Union Bank of India and Corporation Bank. The exact proportion of stake held by these entities isn’t known.

A spokesperson for LeapFrog said: “We never comment on speculation.” LeapFrog Investments specializes in investments in financial services firms in Africa and Asia and has invested in Indian firms such as Mahindra Insurance and Shriram Credit Co Ltd. On Monday, LeapFrog said it invested $29 million in IFMR Capital, a non-banking financial company based in Chennai. General Atlantic India managing director Sandeep Naik declined comment. TPG Capital could not be immediately reached for comment.

A spokesperson of Religare said: “The information is incorrect and baseless.”

Currently, there are 28 general insurers in India, including five stand-alone health insurance companies such as Cigna TTK Health Insurance Co.
 Ltd, Max Bupa Health Insurance Co. Ltd, Apollo Munich Health Insurance Co. Ltd and Star Health and Allied Insurance Co. Ltd.

Gross direct premium of Indian general insurers has grown at an average annual pace of 17.6% to Rs.57,964 crore in the year ended March 2012 from Rs.11,446 crore in fiscal year 2002, according to a KPMG report released in May. The growth in the general insurance industry has kept pace with the nation’s nominal gross domestic product (GDP) growth rate, resulting in general insurance penetration remaining stable in the range of 0.55-0.75% over the past 10 years. The general insurance sector is expected to grow at an average annual rate of 16% to about Rs.194,000 crore by fiscal year 2020 from Rs.57,964 crore in fiscal year 2012, according to the same report.

The retail segment within the health insurance market is expected to grow at a robust pace driven by increased penetration in smaller cities, substitution of out-of-pocket expenditure with health insurance spends, increasing urbanization, demographic shifts and increasing costs of medical procedures, the report said.

Tata Capital Growth Fund and Alpha TC Holdings Pte Ltd invested $20.41 million in Star Health and Allied Insurance in the only PE deal in the sector last year, according to VCCEdge, which tracks investment activity in the country. There were three insurance deals worth $24.1 million in 2012.

Though the banking, financial services and insurance sector is generating strong interest amongst investors, the FDI cap of 26% in insurance is making investments unattractive, according to an investment banker.

“For existing investors, exits are a challenge as public offerings markets have dried up. PE (firm) to PE (firm) sales are a challenge due to the FDI cap as investors prefer primary stake too,” said Vineet Toshniwal, managing director of Equirus Capital Pvt. Ltd, adding that there are very few local firms that can invest in large transactions.d

jawed
2nd sem

Govt makes rotation of auditors mandatory under new companies law

 

 

New Delhi: The corporate affairs ministry on Monday notified rules making the rotation of auditors mandatory for listed companies, unlisted companies with a share capital for more than Rs.10 crore, all private companies with paid-up capital of Rs.20 crore or more, and all companies with public deposits of a minimum of Rs.50 crore.

since the requirement applies even to suspected frauds where the investigation may not have been completed by the company within the timeline of 60 days,” said Khatri.

“he said.

Gupta said that in the case of fraud detection and reporting, guidelines from Institute of Chartered Accountants of India are requirwhere an individual auditor, or the audit firm, are due to complete the maximum term in office of five years and 10 years, respectively, (they) will have to (be) rotated out at the end of the 3-year transitional period starting from 1 April,” Yogesh Sharma, partner, assurance at Grant Thornton India LLP, said in an emailed statement.


“This implies that for situations where an individual auditor, or the audit firm, are due to complete the maximum term in office of five years and 10 years, respectively, (they) will have to (be) rotated out at the end of the 3-year transitional period starting from 1 April,” Yogesh Sharma, partner, assurance at Grant Thornton India LLP, said in an emailed statement.Analysts and experts are divided on the impact of the clause to make rotation mandatory. While some see the new rules ushering in a significant consolidation in the profession of auditing, others think it could spell trouble, at least for some firms.While auditor rotation is gaining momentum in the EU (European Union) and many other parts of the world, extending the requirement to unlisted companies is unusual,” Jamil Khatri, global head of accounting advisory services, KPMG in India, said in an emailed statement. “This may be particularly troublesome for unlisted Indian subsidiaries of global multinational companies since the rotation period and requirements in their home countries may be different from those prescribed in India resulting in challenges in audit of the consolidated financial statements

J.N. Gupta, a former executive director with Securities and Exchange Board of India said that auditor rotation will “stop the monopoly of the ‘big four’”—a reference to global audit firms Deloitte Touche Tohmatsu Ltd, PricewaterhouseCoopers, EY (formerly Ernst & Young) and KPMG.

Gupta further said that the new stipulations will “make the audit process more serious”.

Gupta said that while the rules were still being finalized, several top audit firms had set up several new companies to circumvent the new stipulations. “But the rules that have finally been notified do not allow for this,” he said.

The new rules also require auditors to get a response from a company’s board or the audit committee before reporting a fraud to the Union government. The fraud has to be reported within 60 days.
ISHWAR SINGHAL
PGDM IST

Asian shares hit four-month high on China data, Yellen 

yahoofinance

TOKYO (Reuters) - Asian shares hit four-month high on Tuesday after China's official PMI survey showed manufacturing managed to continue expanding in March, and dovish comments from Federal Reserve Chair Janet Yellen.

MSCI's broadest index of Asia-Pacific shares outside Japan rose by up to 0.3 percent to reach its highest level since early December.

China's official Purchasing Managers' Index increased to 50.3 in March from February's 50.2, in line with economists' forecasts. Above 50 indicates expansion, below 50 signifies contraction.

While the PMI figure alone is unlikely to dispel concerns of a slowdown in China, investor sentiment has improved on China in recent weeks as they expect Beijing will adopt a stimulus plan to achieve its growth target.

Shares were also supported after Fed chair Yellen reinforced the need for "extraordinary" commitment to support the U.S. economy, seemingly tempering expectations of a sooner-than-expected start to the rate-hike cycle.

Yellen gave a strong defense of the Fed's easy-money policies in her first public speech since becoming Fed chair two months ago, saying there remains "considerable" slack in the economy and job market.

"It seems like she expressed her own dovish ideas. There's nothing really new and the outlook of the Fed's policy has not changed that much but the markets like her remarks," Makoto Noji, senior strategist at SMBC Nikko Securities.

Emerging markets, which suffered a sharp selloff earlier this year on concerns about a turn in Fed policy, slowdown in China and political instability in some countries, appeared to have regained some stability.

MSCI emerging market index (.MSCIEF) hit a three-month high on Monday, having outperformed S&P 500 since late March. Among them, Brazilian shares hit four-month high (.BVSP).
Rising risk appetite undermined low-return assets that had attracted safety bids last month at the height of the Ukrainian crisis.
Gold hit a seven-week low of $1,282.04 per ounce on Monday, despite Yellen's dovish comments while the yen also slipped to a three-week low against the dollar of 103.44 yen and a nine-month low against the risk-sensitive Australian dollar at 95.75.
The euro bounced back against the U.S. dollar to fetch $1.3773 even as softer-than-forecast inflation numbers put more pressure on the European Central Bank to act against the threat of deflation.
Euro zone inflation dropped to 0.5 percent in March, its lowest level since November 2009, having been in the ECB's "danger zone" of below 1 percent for six consecutive months.
However, not many market players expect the ECB to act at its policy meeting on Thursday, partly because of comments from ECB council member and Bundesbank President Jens Weidmann on Saturday.
Weidmann said that the euro zone is not in a deflationary cycle and that the ECB should not over-react to a slowdown in inflation caused largely by cyclical factors which should prove temporary.
Crude futures were off three-week highs following news Russia was withdrawing some troops on the Ukrainian border. U.S. crude futures stood at $101.41, off Friday's high of $102.24 

Prince bikram shah

pgdm 2nd sem

Sensex hits 22,386 pts, mkts close 2013-14 on new record highs 

MUMBAI: India’s equity markets hit an all-time high for the sixth day running, closing financial year 2013-14 on a positive note, with the Bombay Stock Exchange Sensex gaining by 46.30 points or 0.21% to end at 22,386.27 points.
The broader National Stock Exchange Nifty gained by 8.30 points or 0.12% to end at 6,704.20 points.
The markets had risen even higher during intraday trading, with the Sensex touching 22,467.21 points.

“The markets remained positive despite an overbought situation, on the back of positive global cues and of the strong buying seen by the FIIs (foreign institutional investors) and retailers,” said Alex Mathews, head research, Geojit BNP Paribas Financial Services.
The Sensex has gained 1,266.15 points this March, the best monthly gain since October last year. For the full financial year, the index saw a rise of 3,550.50 points or 18.8% from the closing level on March 28 last year.
Metal and Realty sectors were the major sectoral gainers for the day, gaining 3.87% and 2.83% respectively. Major declines were seen in the FMCG and power sectors at 0.64% and 0.60% respectively.
“Investors are now eyeing Tuesday’s RBI policy meet and its outcome would trigger the next directional move,” said Jayant Manglik, president, retail distribution, Religare Securities.

  NAME- RAJ GAURAV

                PGDM 2 SEM

 

ADB raises India’s 2014 growth forecast to 5.5% from 4.7% earlier

 

Manila: India’s growth is forecast to accelerate to 5.5% in 2014, much faster than the 4.7% forecast in December, the Asian Development Bank (ADB) said on Monday in its Asian Development Outlook 2014.

 

Further ahead, India’s GDP will probably expand 6% in 2015 compared with 5.5% in the previous year, said ADB, adding that the third largest Asian economy was still operating below potential which can be solved by clearing investment bottlenecks. 

 

Developing Asia is poised to sustain its current growth momentum and is well positioned to manage risks coming from a slightly slower Chinese economy and possible uneven demand from major industrialized nations, ADB said.

 

Asian nations can undertake preemptive measures to protect the region’s growing economy from unpredictable capital inflows, said the Manila-based lender as it unveiled its forecasts for the region for 2014 and 2015.

 

The bank said it expects the region, grouping 45 counties in Asia-Pacific, to grow 6.2% this year, slightly faster than its most recent estimate of 6% in December, before accelerating further to 6.4% in 2015.

 

“Most regional economies have strengthened their economic fundamentals. Looking ahead, strengthening macroprudential measures before the boom can help avert sudden capital reversals that accompany the bust,” ADB said in its Asian Development Outlook 2014.

 

While risks to the region’s growth outlook have eased, further shock to global financial markets from the US tapering of stimulus and expected policy tightening, an uneven recovery in developed economies, and the possibility of slower growth in China as it aims to curb credit expansion would weigh on the region’s economic uptrend, the bank said.

 

Growth in China is expected to be 7.5% this year, ADB said, slower than its December forecast of 7.7%, and will likely lose momentum further to 7.4% in 2015 as the country pursues policies aimed at more equitable, balanced and sustainable growth.

 

Improving global trade conditions will help lift Southeast Asia’s growth to 5% this year, slightly higher than a previous estimate of 4.8%, with Malaysia, Singapore and Vietnam leading the way. Political unrest will continue to restrain growth in Thailand, with the economy picking up speed only in 2015, ADB said.

 

The bank also said inflation in Asia is expected to be largely steady with global commodity prices remaining soft. Possible upside risks are likely from adjustments in subsidised fuel and power rates

Ranjay Kumar

Pgdm,1st Year

Source:-mint

RBI keeps repo rate unchanged at 8% on easing inflation

 

Mumbai: The Reserve Bank of India (RBI) on Tuesday opted for a status quo in the key policy rate, in line with market expectations, taking comfort from easing inflation in the backdrop of slowing growth in Asia’s third largest economy.

 

RBI governor Raghuram Rajan, in the bi-monthly monetary policy review, ruled out further tightening in the near term if inflation continued along the “glide path”.

 

RBI also said the FY15 gross domestic product (GDP) growth is expected to be 5-6%. 

 

 

 

RBI kept the repo rate, at which it lends short-term funds to banks, at 8%. The cash reserve ratio (CRR), or the portion of deposits banks need to park with the central bank on which they earn no interest payment, was also kept unchanged at 4%.

 

Out of the 39 economists polled by Bloomberg, 36 had forecast a status-quo in the repo rate.

Since September, RBI has hiked the repo rate thrice by a total of 75 basis points (bps), refusing to lower its guard against inflationary threats, which have been a major concern for the central bank in the past few years.

 

One bps is one-hundredth of a percentage point.

 

Inflation measured by wholesale prices eased to 4.68% in February from 5.05% in January, while retail inflation, the preferred price indicator of an RBI expert panel for policy formation, too eased to 8.1% in February from 8.79% in January.

 

Economists said the decline in inflation gave room to the central bank to take a pause on rate hikes and wait for further cues to decide the course of monetary policy.

 

In January, an expert panel, headed by one of RBI’s deputy governors, Urjit Patel, had proposed making retail inflation the key price indicator for monetary policy formation. The panel had charted out a roadmap to bring down consumer inflation to 8% by January 2015 and 6% by January, 2016.

Rahul kumar gupta

PGDM,1st Year

Source:-Mint

 

FTIL opposes preferential allotment of shares by MCX

 

Mumbai: Financial Technologies (India) Ltd (FTIL) on Monday said it opposes a plan by Multi Commodity Exchange of India Ltd (MCX) to consider a preferential allotment of shares at the latter’s board meeting on 3 April.

“MCX is fully aware that FTIL has initiated action to divest its stake up to 24%. Such a move is vindictive in nature to support certain vested interest and deprive FTIL of its level playing field to sell its shares,” FTIL said a statement.

FTIL plans to take legal action against MCX in the interest of its own shareholders. It holds 26% of the shares in MCX and is in the process of reducing its holding.

MCX had notified BSE about the board meeting on Monday.

In February, MCX’s board asked promoter FTIL to cut its current holding of 26% in the commodities exchange to 2% in keeping with an order by the commodity futures market regulator Forward Markets Commission (FMC). FMC is likely to bar MCX from launching fresh contracts if it fails to bring down FTIL’s stake to 2% by 30 April.

“MCX is under strict orders by regulators to bring down FTIL’s shareholding to 2%. MCX might be considering preferential allotment of shares to comply with such directives of regulator. Such an issue will automatically result in dilution of FTIL’s shareholding and increase shareholding of the non-FTIL group as FTIL can’t subscribe to such shares since it has to divest its shareholding in MCX,” said Rajnikant Patel, a former managing director of BSE Ltd. “This may also adversely affect the pricing of FTIL shares.”

FMC on 17 December said FTIL was unfit to run an exchange. The order to reduce stake to 2% followed a probe into the operations of National Spot Exchange Ltd (NSEL), also promoted by FTIL, following a Rs.5,574.34 crore payments crisis at the commodities spot exchange.

Irregularities at NSEL came to light on 31 July when the exchange abruptly suspended trading in all but its e-series contracts. These, too, were suspended a week later. The closure of trading may have been prompted by an instruction from the ministry of consumer affairs asking the exchange not to offer futures contracts. A spot exchange isn’t supposed to do so, but NSEL was doing that.

NSEL tried to implement the change, but because its appeal was to investors and members who were not interested in spot trades, it eventually had to suspend all trading. It later emerged that all the trading on NSEL happened in paired contracts, with investors, through brokers, buying a spot contract and selling a futures one for the same commodity.

The entities selling on spot and buying futures were planters or processors and members of the exchange. It turned out there were only 24 of them, and they used the paired contracts as a way to raise easy money. When the trading was suspended, the investors were left holding contracts that the members couldn’t buy because they didn’t have the money to do so.

On 14 August, NSEL proposed a pay out plan, but it has been unable to stick to the schedule and has not made a single successful pay out.

Meanwhile, FTIL is going ahead with the process of finding a buyer for its 24% of stake in MCX. “Non binding bids from interested parties are likely to be submitted by April 10th and the idea is to complete the process by the end of April,” said a person involved in the transaction.

More than 10 domestic and international investors have expressed an interest in picking up stake in MCX, added the person. On March 27, The Economic Times had reported that a number of global and local bidders had expressed interest in FTIL’s share in MCX.

On Monday, shares of MCX rose 0.93% to Rs.490.10 on BSE, while the exchange’s benchmark Sensex rose 0.21% to 22,386.27 points. FTIL shares fell 0.44% to Rs.373.35

 md. aquil alam 

pgdm 

source .live mint

.

RBI keeps repo rate unchanged at 8% on easing inflation

 

 

RBI also keeps the cash reserve ratio (CRR) unchanged at 4%. Photo: Priyanka Parashar/Mint

Mumbai: The Reserve Bank of India (RBI) on Tuesday opted for a status quo in the key policy rate, in line with market expectations, taking comfort from easing inflation in the backdrop of slowing growth in Asia’s third largest economy.

RBI governor Raghuram Rajan, in the bi-monthly monetary policy review, ruled out further tightening in the near term if inflation continued along the “glide path”.

RBI also said the FY15 gross domestic product (GDP) growth is expected to be 5-6%.

RBI kept the repo rate, at which it lends short-term funds to banks, at 8%. The cash reserve ratio (CRR), or the portion of deposits banks need to park with the central bank on which they earn no interest payment, was also kept unchanged at 4%.

Out of the 39 economists polled by Bloomberg, 36 had forecast a status-quo in the repo rate.

Since September, RBI has hiked the repo rate thrice by a total of 75 basis points (bps), refusing to lower its guard against inflationary threats, which have been a major concern for the central bank in the past few years.

One bps is one-hundredth of a percentage point.

Inflation measured by wholesale prices eased to 4.68% in February from 5.05% in January, while retail inflation, the preferred price indicator of an RBI expert panel for policy formation, too eased to 8.1% in February from 8.79% in January.

Economists said the decline in inflation gave room to the central bank to take a pause on rate hikes and wait for further cues to decide the course of monetary policy.

In January, an expert panel, headed by one of RBI’s deputy governors, Urjit Patel, had proposed making retail inflation the key price indicator for monetary policy formation. The panel had charted out a roadmap to bring down consumer inflation to 8% by January 2015 and 6% by January, 2016.
LOVELY SAMAL
PGDM IST

SpiceJet brings back Rs1 fare sale

SpiceJet has announced another three-day airfare sale for travel from 1 July 

 

A Delhi-Mumbai ticket all-inclusive was going for Rs.864 starting from the first week of July. Photo: Ramesh Pathania/Mint

New Delhi: India’s second largest budget airline SpiceJet Ltd has announced another three-day fare sale for travel from 1 July, bringing back the kind of sale once offered by Air Deccan seven years ago .

SpiceJet said fares will start at Rs.1 (not including statutory taxes and fees) for travel starting 1 July.

A Delhi-Mumbai ticket all-inclusive was going for Rs.864 starting from the first week of July. Before the sale, the ticket for 3-month advance booking was going for Rs.3,900. The ticket usually sells for Rs.10,000 one way for immediate travel. July to September is considered to be a lean period for airline industry.

Before it was taken over by Kingfisher Airlines in 2007, Air Deccan did offer such cheap fares.

“We have been at the forefront in the Indian market in stimulating demand by offering discounted fares. These offers have served as a catalyst for travel for many potential flyers willing to plan and book early,” said Kaneswaran Avili, chief commercial officer at SpiceJet, who assumed his role as CCO on Tuesday.

“These fares will allow families to plan their vacations and weekend trips at fares lower than train fares with joy and freedom now that the pressure of March school exams is finally over. But they need to move fast as seats are limited”.

“Our market stimulation efforts have had a significant positive impact on the entire travel ecosystem at a time when the economy has slowed. We are now happy to start the new financial year and summer schedule with such an attractive offer. We have received overwhelming response to our previous offers and I am confident this sale too will attract many new flyers,” added Sanjiv Kapoor, chief operating officer at SpiceJet.

The SpiceJet sale is the latest in a series of discounted tickets airlines in India have been offering over the last few months in an effort to stimulate demand and fill empty flights.

 

NITESH KUMAR SINGH

PGDM 2ND 

SOURCE-- MINTLIVENEWS

Sensex, Nifty hit record high; mark best month since Oct

the BSE Sensex and Nifty edged higher on Monday, hitting a sixth consecutive record high and their best monthly gain since October as strong foreign buying has sparked a rally in blue chips, especially those dependant on the domestic economy.

 







  The benchmark BSE Sensex provisionally closed up 0.21% at 22,386.27 while the broader Nifty closed 0.12% higher at 6,704.20 points.
The Nifty provisionally rose 6.8% in March, its best performance since a 9.8% gain in October.



anand maurya
pgdm-2sem

Asian shares hit four-month high on China data, Yellen

TOKYO (Reuters) - Asian shares hit four-month high on Tuesday after China's official PMI survey showed manufacturing managed to continue expanding in March, and dovish comments from Federal Reserve Chair Janet Yellen.

MSCI's broadest index of Asia-Pacific shares outside Japan rose by up to 0.3 percent to reach its highest level since early December.

China's official Purchasing Managers' Index increased to 50.3 in March from February's 50.2, in line with economists' forecasts. Above 50 indicates expansion, below 50 signifies contraction.

While the PMI figure alone is unlikely to dispel concerns of a slowdown in China, investor sentiment has improved on China in recent weeks as they expect Beijing will adopt a stimulus plan to achieve its growth target.

Shares were also supported after Fed chair Yellen reinforced the need for "extraordinary" commitment to support the U.S. economy, seemingly tempering expectations of a sooner-than-expected start to the rate-hike cycle.

Yellen gave a strong defense of the Fed's easy-money policies in her first public speech since becoming Fed chair two months ago, saying there remains "considerable" slack in the economy and job market.

"It seems like she expressed her own dovish ideas. There's nothing really new and the outlook of the Fed's policy has not changed that much but the markets like her remarks," Makoto Noji, senior strategist at SMBC Nikko Securities.

Emerging markets, which suffered a sharp selloff earlier this year on concerns about a turn in Fed policy, slowdown in China and political instability in some countries, appeared to have regained some stability.

MSCI emerging market index (.MSCIEF) hit a three-month high on Monday, having outperformed S&P 500 since late March. Among them, Brazilian shares hit four-month high (.BVSP).

Rising risk appetite undermined low-return assets that had attracted safety bids last month at the height of the Ukrainian crisis.

Gold hit a seven-week low of $1,282.04 per ounce on Monday, despite Yellen's dovish comments while the yen also slipped to a three-week low against the dollar of 103.44 yen and a nine-month low against the risk-sensitive Australian dollar at 95.75.

The euro bounced back against the U.S. dollar to fetch $1.3773 even as softer-than-forecast inflation numbers put more pressure on the European Central Bank to act against the threat of deflation.

Euro zone inflation dropped to 0.5 percent in March, its lowest level since November 2009, having been in the ECB's "danger zone" of below 1 percent for six consecutive months.

However, not many market players expect the ECB to act at its policy meeting on Thursday, partly because of comments from ECB council member and Bundesbank President Jens Weidmann on Saturday.

Weidmann said that the euro zone is not in a deflationary cycle and that the ECB should not over-react to a slowdown in inflation caused largely by cyclical factors which should prove temporary.

Crude futures were off three-week highs following news Russia was withdrawing some troops on the Ukrainian border. U.S. crude futures stood at $101.41, off Friday's high of $102.24.

(Editing by Shri Navaratnam and Eric Meijer)

View 

Pradeep shukla

pgdm 2

 

 

No point in tinkering with interest rates

 Tokyo: Japan’s industrial production fell in February, undershooting all forecasts by economists surveyed by Bloomberg News, as the first sales-tax increase since 1997 risks stalling recovery in the world’s third-biggest economy.

Output fell 2.3% from the previous month, the steepest drop in eight months, the trade ministry said in Tokyo on Monday. The median estimate of 28 economists was for a 0.3% . A separate gauge of manufacturing fell in March for a second straight month.

While the weakness partly reflected disruptions from heavy snowfall, the data showed manufacturers are bracing for a slump in demand following Tuesday’ s sales tax increase. Inventories fell for a seventh straight month, lessening the likelihood of even sharper output cuts as the higher consumption levy pushes the economy into a one-quarter contraction in April-June.

“Companies are already cutting production and managing their inventory well, so the fall-off in the second quarter should be modest,” said Kiichi Murashima, chief economist at Citigroup Inc. in Tokyo.

The 3 percentage-point increase in the sales tax is forecast to cause the economy to shrink at an annualized 3.5% in the second quarter, before a rebounding growth of 2.1% in the following three months, according to a separate Bloomberg survey.

Prime Minister Shinzo Abe gave the go-ahead for the sales tax increase to help deal with the world’s biggest debt burden, even as he pushes reflationary policies to spur growth and end 15 years of deflation.

Front-loaded budget

The yen was little changed in Tokyo, trading at 102.86 per dollar at 11:53am. The Topix index was up 0.6%, rising for a sixth day after data last week showed household spending in the US rose in February.

Finance minister Taro Aso last week outlined plans to front-load spending in next fiscal year’s budget to help the economy weather the blow from the higher levy. The Bank of Japan (BoJ) has also signaled that it’s ready to boost record easing if needed to drive inflation toward its 2% target.

A survey of manufacturers by the trade ministry pointed to a sluggish rebound following Feburary’s decline. Companies plan to boost production by 0.9% in March and cut it by 0.6% in April, the trade ministry said.

History lessons

Japanese manufacturers appear to be in better shape now than in 1997 when the last sales-tax increase precipitated a tumble in production that later developed into a recession.

“Companies are making long-term demand projections and keeping production and inventory under control before the higher levy takes effect,” Yasushi Ishizuka, director of economic analysis office at the trade ministry’s research and statistics department, said after the release.

“They’ve told us they’ve learned their lesson,” Ishizuka said. “The projections are limited to a smaller decline compared to the drop in production when the sales tax was last increased.”

The seasonally adjusted index of inventories was at 103.8 in February, compared with 124.1 in March 1997, METI data show. Output fell 2.6% in April 1997.

A purchasing managers’ index (PMI) showed slowing expansion in the manufacturing sector in March, with the gauge compiled by Markit Economics and Japan Materials Management Association falling to 53.9 in March from 55.5 in February. A reading above 50 indicates expansion.

The BoJ is under pressure from the markets and politicians to ease further, said Masamichi Adachi, a senior economist at JPMorgan Chase and Co. in Tokyo.

Production forecasts of economists polled by Bloomberg ranged from an increase of 1.2% to a decline of 1.5% in February.

Heavy snowfall

At least 20 centimeters of snow fell in Tokyo on 14 and 15 February, with accumulations 10 times higher in some other parts of the nation. The previous weekend brought the heaviest snowfall in Tokyo in 45 years, public broadcaster NHK reported.

Toyota Motor Corp., Honda Motor Co. and Suzuki Motor Corp. suspended output in some factories in Japan in February after snowstorms disrupted shipments of parts from suppliers. Panasonic Corp. said it experienced supply-chain bottleneck due to the snow.

SHYAM KISHOR SINGH
PGDM 2 sem

Gas row: Supreme Court appoints foreign arbitrator in Reliance Industries-Oil ministry dispute

Summary Centre had opposed Reliance Industries's plea for a presiding arbitrator from foreign country.


The Supreme Court on Monday appointed former Australian Supreme Court judge James Spigelman as a presiding arbitrator in a dispute between Mukesh Ambani-owned Reliance Industries (RIL) Ltd and the oil ministry over reimbursement of full cost of developing its KG-D6 gas field.
A bench headed by Justice SS Nijjar appointed foreign arbitrator James Spegelman, the former chief justice of New South Wales Supreme Court, to avoid any confusion.
Reliance Industries wanted the third presiding arbitrator be appointed from “a country other than India, UK or Canada”, as its other contract partners - Cayman Islands-based Niko (NECO) Ltd and BP Exploration (Alpha) Ltd - are foreign companies.
Reliance Industries and Niko (NECO) had requested the apex court to appoint the umpire arbitrator as the two arbitrators – former chief justices S.P. Barucha, (nominated by RIL in November 2011) and V.N. Khare (nominated by the oil ministry in June 2012) have failed to agree on a third and presiding arbitrator. 
 Senior counsel Harish Salve, appearing for Reliance Industries, had contended that considering that its consortium partners “are foreign companies, who are directly affected by any determination in the present case, it would be appropriate if a third arbitrator is appointed from a Country other than India, UK or Canada. It is submitted that there is no paucity of names of eminent arbitrators from other jurisdictions from countries such as U.S.A, Singapore and Australia, which names are available from the various reputed international arbitration institutions... One way of doing this is to follow the list procedure as set out in the UNCITRAL Rules.”
While Reliance Industries holds a 60% interest in KG-D6, the UK's BP holds 30% and Niko – which was party to the PSC – holds the remaining 10%.
However, the Centre had opposed RIL's plea for appointing a presiding arbitrator from a foreign country, saying that the matter between two of them is within the exclusive domain of the arbitral tribunal in India.
It had sought appointment of a former Supreme Court judge as the umpire arbitrator to resolve disputes relating to cost

TANAY TAPAS
PGDM 1st

 

Sensex hits sixth straight record high; blue-chips gain

Mon Mar 31, 2014 11:00am IST

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• re thi

A bronze bull sculpture is seen as an employee walks out of the Bombay Stock Exchange (BSE) building in Mumbai August 22, 2013.

Credit: Reuters/Danish Siddiqui/Files

• Business »

Stocks

 

Bharti Airtel Ltd

BRTI.NS

Rs325.1

+7.75+2.44

5%

11:21:00 IDT

 

Hindalco Industries Ltd

HALC.NS

Rs132.95

+2.05+1.57%

11:21:00 IDT

 

Reliance Industries Ltd

RELI.NS

Rs918.70

+2.55+0.28%

Reuters Market Eye - The Sensex hit record highs for a sixth consecutive session on Monday on the back of continued gains in blue-chips.
The BSE Sensex is up 0.27 percent, after earlier gaining as much as 0.6 percent to a record high of 22,467.21 points, while the Nifty is up 0.14 percent after earlier touching an all-time high at 6,730.05 points.
The Nifty is up around 6.9 percent so far this month, headed for its biggest gain since October 2013. For the quarter, the index is up around 6.5 percent, its second consecutive monthly increase after a 9.9 percent rise in October-December.
Blue-chips lead gains. Bharti Airtel (BRTI.NS) gains 2.6 percent, Hindalco Industries (HALC.NS) up 1.8 percent and Reliance Industries (RELI.NS) gains 0.52 percent.
Foreign institutional investors bought Indian shares worth 13.63 billion rupees on Friday, provisional exchange data showed.
Overseas investors have so far ignored everything negative globally, with overseas funds purchasing a net $3.2 billion so far this month, exchange and regulatory data showed.
(Reporting by Indulal P               
MITHILESH CHAUBE
PGDM 2nd

Sensex, Nifty on record-hitting spree; banks rally

 

tMumbai: The Sensex and Nifty hit a record high for a sixth straight session on Monday on the back of srong inflows from foreign institutional investors and supportive cues from Asian stock markets.

In the morning trade, the Sensex touched an all-time high of 22,467.21, up 0.57% or 127.24 points. Nifty, too, hit a lifetime high of 6,730.05, up 0.51%, or 34.15 points.

The gainers included NTPC Ltd that jumped 1.9% to Rs.123.15 and State Bank of India (SBI) that rose 1.52% to Rs.1,931.20.

Among the losers, Wipro Ltd shares lost 0.43% to Rs.549.15, while Tata Consultancy Services Ltd (TCS) fell 0.34% to Rs.2,098.4.

The BSE power index was the top sectoral gainer, up 1.31%. The oil and gas index and the metal index were up 0.9% and 0.86%, respectively. The IT index was top loser on BSE, down 0.47%.

State-run banks extended recent gains after the Reserve Bank of India (RBI) on Thursday extended the deadline for banks to implement Basel III capital rules by a year to 31 March 2019, due to concerns from the industry on potential stress to asset quality.

Bank of India rose 7.73%, Canara Bank jumped 6.55%, Punjab National Bank (PNB) soared 6.42%, Bank of Baroda was up 5.14%, Yes Bank Ltd rose 3.54%, Federal Bank of India Ltd jumped 2.45% and Axis Bank Ltd rose 2.24%.

Suzlon Energy Ltd was trading at Rs.11.35 on BSE, up 15%, after media reported that the company is planning to raise Rs.10,000 crore via share sale in Senvion unit.

GMR Infrastructure Ltd was trading at Rs.22.30 on BSE, up 3% from its previous close, after it reported that it had filed a draft red hearing prospectus with the Securities and Exchange Board of India (Sebi) for initial public offering (IPO) of its unit GMR Energy Ltd.

Since the beginning of this year, BSE Sensex has gained 6.04%, while foreign institutional investors have bought $3.61 billion during the period from local equity markets.

Investors says RBI is likely to keep interest rate unchanged in the annual monetary policy on 1 April as the retail inflation is yet to show definite signs of moderation.

US markets ended higher on Friday after a report showed consumer spending rose 0.3% from a month earlier in February. All eyes are on the US employment report for March due this week which is expected to show an improvement. The S&P 500 gained 0.5%, Nasdaq Composite was up 0.1% and Dow Jones Industrial Average gained 0.4%.

Asian markets were trading higher on Monday cheering data released on Friday that gave hopes of a recovery in US consumer spending. Japan’s Nikkei Stock Average was up 0.43%, while Hong Kong’s Hang Seng marginally up 0.07% and China’s Shanghai Composite was marginally down 0.02%.

 

JAWED EQBAL

PGDM 2ND SEM.

Japan industrial output unexpectedly drops 2.3% as tax hike looms

 

Tokyo: Japan’s industrial production fell in February, undershooting all forecasts by economists surveyed by Bloomberg News, as the first sales-tax increase since 1997 risks stalling recovery in the world’s third-biggest economy.

 

Output fell 2.3% from the previous month, the steepest drop in eight months, the trade ministry said in Tokyo on Monday. The median estimate of 28 economists was for a 0.3% . A separate gauge of manufacturing fell in March for a second straight month.

 

While the weakness partly reflected disruptions from heavy snowfall, the data showed manufacturers are bracing for a slump in demand following Tuesday’ s sales tax increase. Inventories fell for a seventh straight month, lessening the likelihood of even sharper output cuts as the higher consumption levy pushes the economy into a one-quarter contraction in April-June.

 

“Companies are already cutting production and managing their inventory well, so the fall-off in the second quarter should be modest,” said Kiichi Murashima, chief economist at Citigroup Inc. in Tokyo.

 

The 3 percentage-point increase in the sales tax is forecast to cause the economy to shrink at an annualized 3.5% in the second quarter, before a rebounding growth of 2.1% in the following three months, according to a separate Bloomberg survey.

 

Prime Minister Shinzo Abe gave the go-ahead for the sales tax increase to help deal with the world’s biggest debt burden, even as he pushes reflationary policies to spur growth and end 15 years of deflation.

 

Front-loaded budget

 

The yen was little changed in Tokyo, trading at 102.86 per dollar at 11:53am. The Topix index was up 0.6%, rising for a sixth day after data last week showed household spending in the US rose in February.

 

Finance minister Taro Aso last week outlined plans to front-load spending in next fiscal year’s budget to help the economy weather the blow from the higher levy. The Bank of Japan (BoJ) has also signaled that it’s ready to boost record easing if needed to drive inflation toward its 2% target.

 

A survey of manufacturers by the trade ministry pointed to a sluggish rebound following Feburary’s decline. Companies plan to boost production by 0.9% in March and cut it by 0.6% in April, the trade ministry said.

 

History lessons

 

Japanese manufacturers appear to be in better shape now than in 1997 when the last sales-tax increase precipitated a tumble in production that later developed into a recession.

 

“Companies are making long-term demand projections and keeping production and inventory under control before the higher levy takes effect,” Yasushi Ishizuka, director of economic analysis office at the trade ministry’s research and statistics department, said after the release.

 

“They’ve told us they’ve learned their lesson,” Ishizuka said. “The projections are limited to a smaller decline compared to the drop in production when the sales tax was last increased.”

 

The seasonally adjusted index of inventories was at 103.8 in February, compared with 124.1 in March 1997, METI data show. Output fell 2.6% in April 1997.

 

A purchasing managers’ index (PMI) showed slowing expansion in the manufacturing sector in March, with the gauge compiled by Markit Economics and Japan Materials Management Association falling to 53.9 in March from 55.5 in February. A reading above 50 indicates expansion.

 

The BoJ is under pressure from the markets and politicians to ease further, said Masamichi Adachi, a senior economist at JPMorgan Chase and Co. in Tokyo.

 

Production forecasts of economists polled by Bloomberg ranged from an increase of 1.2% to a decline of 1.5% in February.

 

Heavy snowfall

 

At least 20 centimeters of snow fell in Tokyo on 14 and 15 February, with accumulations 10 times higher in some other parts of the nation. The previous weekend brought the heaviest snowfall in Tokyo in 45 years, public broadcaster NHK reported.

 

Toyota Motor Corp., Honda Motor Co. and Suzuki Motor Corp. suspended output in some factories in Japan in February after snowstorms disrupted shipments of parts from suppliers. Panasonic Corp. said it experienced supply-chain bottleneck due to the snow.

Ranjay kumar

PGDM,1st Year

Source:-mint

TCS to invest more in developing more software platforms

The IT firm’s BPO business is looking to step up automation by up to 40-50%

• As bets sour, firms rethink overseas mining assets

With increased automation, TCS aims to improve revenue earned per employee in its BPO business. Photo: Hindustan Times

Bangalore: T ata Consultancy Services Ltd (TCS) may increase investments in developing more software platforms that help in automating increasingly routine and commoditized tasks in its business process outsourcing (BPO) business, as it looks to improve revenue earned per employee.

India’s largest software services firm’s back-office business is looking to step up automation by up to 40-50% and eliminate increasingly redundant business tasks by making use of robotic automation, the company’s global BPO head said in an interview.

“Even before automation, there is a process called elimination. So if I have a business process that was relevant 20-30 years ago but is no longer relevant, it still exists and people are still doing it because nobody takes the risk of removing the redundant process and eliminating it completely,” said Abid Ali Neemuchwala, global head of BPO services at TCS. “Firstly, I think there is an opportunity of eliminating processes altogether, then from whatever remains, there is an additional opportunity of 40-50% of automating it, compared to current levels.”

Neemuchwala said some of these automated services were already being delivered to existing customers and had resulted in the company taking out 20-30% of increasingly routine, manual tasks.

“We are investing and creating intellectual property and making significant investments across the board in robotics automation,” he said.

Robotics automation is considered to be the single biggest disruptive threat to India’s $118 billion information technology (IT) industry.

For years, India’s top software firms have hired thousands of engineering graduates and housed them in large campuses. The pyramid model that sees the entry of hundreds of engineering graduates every year brings down the cost of software development and maintenance projects.

But with the advent of software robots developed by new-age firms such as US-based IPsoft Inc. and Britain’s Blue Prism Ltd, the traditional pyramid model is increasingly under threat, as these software robots can perform tasks at one-fourth the billing rates and a fraction of the time it would take a human engineer to do.

“Service providers appear to be sitting on the fence as to how companies such as IPsoft and Blue Prism can accelerate automation and thus drive down costs. The caution of service providers is, in all likelihood, caused by the desire to avoid the socioeconomic implications of robotics and the potential elimination of labor,” Thomas Reuner, principal analyst at Ovum Research, wrote in a recent note.

With commoditization of low-end back-office services happening at an increasingly rapid pace, pure-play, stand-alone BPO firms are facing an ever-growing threat from robotics automation.

“When we had people on time and materials doing support for our systems, they didn’t have an incentive to automate support because it was based on people. When we changed this, the first thing our partners did was starting automate in-support. So I think that’s the phase we’re in now and we’re getting to a stage of maturity, so we can delegate more and more to our partners,” Jeroen Tas, chief executive of healthcare informatics, solutions and services at Royal Philips NV, said in a recent interview. Philips is one of the top customers of Indian IT.

Most top Indian IT firms have already taken the plunge towards increasing automation, as top customers such as Johnson and Johnson and Citigroup Inc. are opting for billing models that are not linked to the number of people per project.

Most top firms such as Infosys Ltd, Cognizant Technology Solutions Corp. and Wipro Ltd have signed revenue-sharing agreements with IPsoft to avoid losing business from existing top customers to the US-based firm.

In the 2014-15 financial year, industry lobby Nasscom expects software export revenues to grow 13-15%. Annually, TCS’s BPO business generates $1.5-2 billion in revenues currently.

nagesh dubey

UN panel sounds climate change warnings for Asia

New Delhi: Most of Asia will face extreme stress on drinking water resources as a result of changing climate that will also impact food grain production by 2050, the Intergovernmental panel on climate change (IPCC), a United Nations body said in a report launched on Monday.

The report titled Climate Change 2014: Impacts, Adaptation, and Vulnerability details the impact climate change has had to date, future risks, and the opportunities for effective action to reduce these risks.

The report says that the world is not well-prepared to deal with the risks that climate change will present. Though there are opportunities to manage these risks, the task will be made difficult by the high levels of that the world will experience.

Chris Field, co-chair of the IPCC working group that prepared the report, said that although countries were starting to take adaptation measures to reduce the risks from changing climate, they showed a stronger focus on reacting to past events than on preparing for the future.

“Climate-change adaptation is not an exotic agenda that has never been tried. Governments, firms and communities around the world are building experience with adaptation,” Field said in a press statement. “This experience forms a starting point for bolder, more ambitious adaptations that will be important as climate and society continue to change.”

“In many regions, changing precipitation or melting snow and ice are altering hydrological systems, affecting water resources in terms of quantity and quality. Glaciers continue to shrink almost worldwide due to climate change,” the report says, adding that this has prompted many species to shift their geographic ranges and migration patterns.

Many studies, which have been analysed by the panel, confirm that the impact of climate change on food crops has been more negative than positive.

Interlinking health impacts of climate change, the report says that local changes in temperature and rainfall have altered the distribution of some water-borne illnesses and disease vectors. “Until mid-century, projected climate change will impact human health mainly by exacerbating health problems that already exist,” it adds.

In terms of adaptability to climate change, the report says that governments at various levels are starting to develop adaptation plans and policies to integrate climate-change considerations into broader development plans. “In Asia, adaptation is being facilitated in some areas through mainstreaming climate adaptation action into subnational development planning, early warning systems, integrated water resources management, agroforestry, and coastal reforestation of mangroves,” the report says.

Talking about key risks in specific sectors, the report says that there is a risk of food insecurity and the breakdown of food systems linked to , drought, flooding, and precipitation variability and extremes, particularly for poorer people. It also says that there is risk of loss of rural livelihoods and income due to insufficient access to drinking and irrigation water and reduced agricultural productivity, particularly for farmers and pastoralists with minimal capital in semi-arid regions.

“The report concludes that people, societies, and ecosystems are vulnerable around the world, but with different vulnerability in different places. Climate change often interacts with other stresses to increase risk,” Field said.

The report says that risks related to availability of freshwater will increase significantly with increasing greenhouse gas concentrations in the atmosphere. “Climate change over the 21st century is projected to reduce renewable surface water and groundwater resources significantly in most dry subtropical regions.”

The report says that production of major crops, including wheat, rice and maize, which are grown in tropical and temperate regions, will be negatively impacted if no adaptation measures are taken.

It adds that climate change over the century is projected to increase displacement of people.

Andrew Steer, president and CEO of World Resources Institute, a US thinktank, said that climate change is not some distant threat—it’s happening now and being felt everywhere. “The warning signals went off long ago, and we are now suffering the consequences of our inaction,” he said.

“Around the globe, we’re seeing how climate change is driving increased water risks, massive wildfires, and rising seas. Unless we change direction, climate change will significantly reduce water resources, especially in subtropical regions. It will exacerbate health problems, including through heat waves and disease. It will destroy forests that are important for economic activity, biodiversity, and carbon storage. And it will decimate crops and interrupt food supplies necessary to feed the world’s growing population,” he said in an emailed statement.

The IPCC report has been produced by 309 authors and editors drawn from 70 countries.

This is the fifth assessment report of the panel, which has three working groups. The report of Working Group I was published in September last year. This is the report of Working Group II. The Working Group III will come out with its report next month.

Working Group I assesses the physical and scientific aspects of the climate system and climate change. Working Group II assesses the vulnerability of socio-economic and natural systems to climate change, negative and positive consequences of climate change, and options for adapting to it.

Working Group III assesses options for mitigating climate change through limiting or preventing emissions of harmful greenhouse gases and enhancing activities that remove them from the atmosphere.

 

ONIKA JAISWAL

PGDM 1ST YEAR 

2013-15