Wednesday 12 October 2016

Gold to shine further on global risk factors -:- Equity Research

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Gold prices are likely to stay firm in the range of Rs 30,500-Rs 33,500 per 10 grams in the backdrop of global political and financial risks, says a study by industry body Assocham. The prices are currently ruling at Rs 31,000-31,500 (24 carat purity) in major Indian cities, even as festive demand seems to be picking up, it said. In the backdrop of continuous global political and financial risks coupled with revival in demand in the domestic market, gold prices are likely to stay firm in the range of Rs 30,500 -33,500 per 10 grams despite the yellow metal having had a golden run up of about 25 per cent since January this year, an Assocham paper said. "Going forward, the festive demand will get a further push from the wedding season, which is the main contributor to gold consumption in India. "The upside in the short term of a few months is seen between Rs 1,500-2,000 while the downside could be limited to Rs 1,000-2,000 per 10 grams," it said. While India has been among the two biggest consumers of gold in the world along with China with imports in the past going even up to 1,000 tonnes per annum, inflows this year have been quite low. As per the paper, gold imports between January and September aggregated 270 tonnes this year against 658 tonnes in the corresponding period of last calendar year. Assocham Secretary General D S Rawat said gold is finding strong support levels in the international markets and is expected to stay above USD 1,200 mark, as a starting point for the next possible rally. "All in all, given the state of play in equity, debt and properties, gold would stand out for quite some time," he said. The paper further said that the outlook for the precious metal remains upbeat taking into consideration several factors including reduced pace of the US Fed rate hikes, increased adoption of negative interest rates most recently in Japan , increased inflows in gold ETFs and decline in gold production.

Deutsche Bank's Asia Pacific wealth mgmt head joining UBS-:- Equity Research

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Deutsche Bank's Asia Pacific wealth management head Ravi Raju is leaving to join UBS, a source with direct knowledge of the move told Reuters on Tuesday, the latest senior departure from the bank in the region. The German bank later confirmed Raju's exit in a statement, adding its head of wealth management in North Asia Lok Yim would succeed him with immediate effect. It said Raju was leaving to pursue external opportunities, but gave no further details. It was not immediately clear what Raju's role would be at Swiss bank UBS, where he is expected to start in a few months, the source, who declined to be named, added. Raju, who joined Deutsche in 2007, played a key role in building its wealth management business in Asia, overseeing more than 700 employees in 15 locations. The region has emerged as a battleground for wealth managers as Western markets slow. His departure, the second by a high-profile Deutsche banker in Asia in the last few months, comes as Germany's biggest lender is battling to contain the damage from a US demand for a USD14 billion settlement over the sale of toxic mortgage bonds before the financial crisis. Concerns over Deutsche Bank have also shaken global markets. In June, Gunit Chadha, who joined Deutsche Bank as India CEO in 2003 and became a co-head for Asia Pacific in 2012, quit as regional head and was replaced a month later by the head of its global transaction banking, Werner Steinmueller. A UBS spokeswoman in Asia, and Hong Kong-based Raju declined to comment when contacted by Reuters.

IIP falls 0.7% in Aug, but hope floats on festival, rain & hikes -:- Equity Research

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India’s factory output fell (-)0.7 percent in August, the second successive monthly decline, but revival hopes floated on festive season sales, pay hike for government employees and greater rural spending on the back of good summer rains. Data released on Monday showed factory output growth has recovered marginally from an eight-month low of 2.4 percent in July, but only just, suggesting uneven recovery in the broader economy. The `manufacturing’ sector, which represents more than 75 percent of the index of industrial production (IIP), contracted -0.3 percent in August from -3.5 percent in the previous month. Mining production growth slumped (-)5.6 percent, pulled down primarily by fall in coal (-9.2 percent) and crude oil (-3.9 percent) output. Moreover, capital goods output, a metric to gauge capacity additions by companies, have contracted for 10 successive months mirroring faltering investment activity. It fell 22.2 percent in August from 29.5 percent in July. A pick up in festive season buying, which usually peaks between October to December, may not immediately result in greater investment because of idle capacities and large unsold stock. Banks have started reducing lending rates following last week’s 25 basis point cut in RBI’s repo rate—the rate at which the central bank lends to commercial banks. This should reduce companies’ cost of capital. India’s economy grew 7.1% during April to June, the slowest in 6 quarters, but analysts, policymakers and the RBI expects a revival in the coming months boosted by good rains, a pay bonanza for government employees and festive season buying. Consumer durables output grew 6.3 percent in August from 5.9 percent. It is expected to gather pace in between October to December reflecint greater household spending on goods such as cars, televisions and refrigerators.

Ashok Leyland to set up Rs 500 crore unit in Telangana -:- Equity Research

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Commercial vehicle maker Ashok Leyland today entered into an agreement with the Telangana government for setting up a 'body building unit' in the state with an investment of Rs 500 crore. The unit, to be established in phases with an investment of Rs 500 crore, would provide employment to 1,000 people directly and hundreds of others indirectly, a release from the Chief Minister's Office said. An MoU to this effect was exchanged by Chief Minister K Chandrasekhar Rao's Additional Principal Secretary Santhi Kumari and Ashok Leyland MD Vinod K Dasari, it said. Location of the proposed facility was not mentioned in the release. Speaking on the occasion, Rao said his government would extend all cooperation for the growth of manufacturing sector in the newly formed state. The government has brought out its industrial policy (TS-iPASS) to grant all necessary licences in 15 days to set up a unit, he said. The Chief Minister said the transport sector would continue to grow in the State, the release added.

Encounter in EDI building in Pampore-:- Equity Research

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A soldier was today injured in the exchange of fire between security forces and militants holed up inside a government building in Pampore area of Kashmir which had witnessed a suicide attack in February this year. Two to three militants are believed to have entered into the building of Entrepreneurship Development Institute (EDI) in the wee hours today. "One soldier has been injured in the exchange of fire with militants holed up inside the building at Pampore," a defence spokesman said here. He said further details were awaiting as the operation was in progress to flush out the militants. A building within the premises had caught fire this morning, a police official said. Fire tenders were rushed to the spot, but they were not allowed to enter the building due to security reasons, the official said. Militants had targeted the EDI building in February this year as well. Two soldiers, including an officer, a civilian employee of the Institute and three militants were killed in that operation that lasted 48 hours.

Tuesday 11 October 2016

PNB makes home, auto loans attractive for govt staff-:- Equity Research

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To cash in on the 7th Pay Commission payout to government employees, state-owned Punjab National Bank (PNB) is offering them home and auto loans at attractive rates of 9.3-9.8 per cent beginning this month. Besides, the bank said it will offer loans to these segments without any processing or upfront fee and no documentation charges will be levied on them. The rate of interest is with effect from October 1, 2016. The Delhi-based state lender said the objective of the drive -- christened as 'PNB Pride' -- is to "ensure availability of housing and vehicle loan at attractive rates and ensure a house and a car for all government employees". For housing loan, the floating interest rate has been fixed at marginal cost of lending rate (MCLR) for one year at 9.3 per cent. For those availing the housing loan on a fixed rate basis, it will be a floating one of interest plus 0.50 per cent (i.e, 9.8 per cent). For car loan, customers will be charged MCLR of one year plus 0.25 per cent (9.55 per cent) on a floating basis. As for fixed interest rate with a reset clause of 3 years, it will be MCLR of one year plus 0.25 per cent, or 9.55 per cent. Permanent employees of central and state governments, defence personnel and paramilitary forces will be able to avail of the benefits of lower rates under the PNB Pride scheme. All other terms and conditions of the existing housing and car loan scheme will be applicable to the borrowers, PNB said.

Govt issues demand notes to 7 telcos for spectrum purchase-:- Equity Research

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Government today issued demand notes to seven telecom operators to make payment in 10 days for the spectrum they bought in the just-concluded auction. In the five-day spectrum auction that concluded last week, seven telecom companies made commitments of Rs 65,789 crore for buying 964.80 MHz of spectrum in various frequency bands. "The demand note for payment has been issued to all successful bidders via email today evening," sources told PTI. As per the NIA or the bid document, the operators will have 10 days from the date of issue of demand note to make the payment for successful bid amount. Accordingly, they would have to make the payment by October 20. Bids were received for 964.80 MHz of spectrum out of 2,354.55 MHz across seven bands put on offer. Even at the end of the auction, nearly 60 per cent of the spectrum remained unsold, including the expensive 700MHz band, which found no takers. UK-based Vodafone's India unit was the most aggressive, taking home Rs 20,279 crore worth of spectrum. Bharti Airtel, the nation's biggest telecom company, bought Rs 14,244 crore worth of spectrum, while Idea Cellular put in Rs 12,798 crore of bids. Newcomer Reliance Jio spent Rs 13,672 crore on spectrum buying. Other operators who bought spectrum included Tata Teleservices (about Rs 4619 crore), RCom (about Rs 65 crore) and Aircel (Rs 111 crore).