Nik's Diary
The Indian market open flat mirroring
flat opening trades in the SGX Nifty and negative trades in the major Asian
Indices. Major Asian bourses are trading lower, as the recent economic data
releases have shown that the confidence among big Japanese manufacturers missed
estimates and factory output in China has expanded at a slower-than-expected
pace. The US and the European markets were closed on Friday due to the Easter
holiday. On Thursday, the US markets, after initially showing a lack of
direction, moved mostly higher over the course of the trading day. The strength
on the Wall Street was partly due to the recent upward momentum for the
markets, with traders showing continued buying interest despite recent concerns
about the sequester and the situation in Cyprus. Most of the European bourses
finished in the green on Thursday. Cypriot banks reopened for business on
Thursday, after being closed since March 16, with limits imposed by the Cypriot
Govt. on withdrawals and credit card transactions in a bid to prevent the
nation's financial sector from collapsing. Investors were encouraged by the
lack of panic in Cyprus and the relative calm of those waiting in line at the
nation's banks. Meanwhile, Indian markets were also closed on Friday on account
of the Easter holiday. On Thursday, Indian markets rallied, primarily on short
covering due to F&O contract expiry, even as India’s Current account
deficit widened to a recordhigh of 6.7% of GDP in 3QFY2013 and 5.4% in
9MFY2013.
Current Account Deficit (CAD)
hits a record-high at 6.7% of GDP in 3QFY2013
Having hit a record
6.7 per cent of gross domestic product (GDP) in December quarter, India’s
current account deficit (CAD) was expected to show some improvement in the last
quarter of this financial year on account of a likely uptick in exports, the
Prime Minister’s Economic Advisory Council Chairman C Rangarajan said
today. The current financial year, he hoped, would end with a CAD of a
little more than five per cent. "The CAD (in December quarter) was
higher than expected...But I believe CAD will come down during the fourth
quarter (January-March). For the year as a whole, I expect CAD to be a little
higher than five per cent,” Rangarajan said. CAD widened to a historic
high of 6.7 per cent of the GDP in December quarter, to $32 billion, on account
of surge in oil and gold imports, besides weak exports. It was at $20 billion
(4.4 per cent of GDP) in the corresponding quarter last financial year. CAD is
the difference between inflow and outflow of foreign funds. Even at around five
per cent, the CAD would be nearly double the mark of three per cent during 1991
— the year when India faced the foreign exchange crisis. Crisil Principal
Economist D K Joshi said the higher CAD could weaken the rupee. However, it is
expected to come down as a whole, he said. “The higher CAD increases
vulnerability and dependence on foreign inflows. It causes lots of currency
volatility which can weaken the rupee. Going ahead, we believe it will come
down," Joshi said. On whether the current balance of payment (BoP) problem
could be equated with the situation faced during 1991, he added,”that was a
different problem.” CRISIL in a note said government’s effort to revive
the economy should be able to cover the widening CAD in the next financial
year. “We believe that if the domestic reform momentum continues, India should
be able to attract sufficient inflows to cover its CAD in the next financial
year,” CRISIL said. Source:
Business Standard
TN pollution
board orders closure of Sterlite's smelter
Sterlite
Industries (India) said on Monday a copper smelter run by the
company in Tamil Nadu has been closed after a preliminary inspection by state
pollution regulator. The company will engage with Tamil Nadu
Pollution Control Board to explain the factual position regarding emissions
from the unit in Tuticorin, the company said in a statement to the National
Stock Exchange. Source: Business Standard
Removal of import alert by USFDA for
Unit-VI of Aurobindo Pharmaceuticals
Aurobindo Pharma, the leading pharmaceutical
research company in India, announced on 28 March 2013 that the US Food and Drug
Administration (USFDA) lifted import alert on the Hyderabad-based antibiotics
facility. This would enable Aurobindo Pharma to export nine products in all from
its Hyderabad-based facility to US market. The USFDA lifted import alert
from the non-sterile products that are manufactured at the Unit-VI
cephalosporin facility in Hyderabad. It is worth noticing that before this
import alert, the Hyderabad-based antibiotics unit had annual sales of 33
million US dollar in America. USFDA had issued import alerts on the products of
Aurobindo Pharma’s Hyderabad-based cephalosporin facility in 2011 because of
which its exports had suffered. In December 2010, the USFDA audited
the cephalosporin facility, Unit VI of Aurobindo Pharma Ltd at Chitkul Village,
Hyderabad. After the audit, USFDA had imposed import alert on Aurobindo Pharma.
Cephalosporins are actually the class of antibiotics which are used for
treatment of those infections that are caused by bacteria.
What is import alert? Import Alert is the information to the FDA district offices concerning unusual or new problems affecting imports which give background and compliance guidance information for each product and problem. Source: jagranjosh
What is import alert? Import Alert is the information to the FDA district offices concerning unusual or new problems affecting imports which give background and compliance guidance information for each product and problem. Source: jagranjosh
HDFC Bank reduces base rate by 10 bps to 9.6%
HDFC Bank, the country’s
second largest private sector bank, has decided to cut its benchmark lending
rates by 0.1 per cent. The new rates have come into effect from March 30
(Saturday). The base rate, or the minimum lending rate, of the bank will become
9.6 per cent from the existing 9.7 per cent. At the same time, the benchmark
prime lending rate (BPLR) of the bank, which was promoted by the housing lender
HDFC, is expected to be slashed by similar margin to 18.10 per cent. HDFC
Bank has become the first bank to cut lending rate after the Reserve Bank of
India (RBI) cut the short-term lending rate by 0.25 per cent on March 19. Other
banks are also expected to follow suit in cutting rates. Source: DeccanChronicle
L&T
completes acquisition of Audco India Ltd
Economic Times
reported that infrastructure major Larsen and Toubro said that it has completed
the acquisition of its group firm, Audco India Ltd. = Audco, a leading
domestic valve manufacturing company, was established by L&T through a JV
with UK's Audco Ltd. The Indian unit commenced manufacturing operations in
1962. The Company said in a statement that "Today announced the
completion of ownership transactions related to its group company Audco India
Ltd. As a result of these transactions, L&T obtains full ownership of AIL
and acquires the key product lines, viz, Gate, Globe and Check valves, Forged
Steel GGC valve." It added that L&T will retain the manufacturing
plants of AIL at Manapakkam, Chennai and Kanchipuram. The company however
did not disclose the deal value. The shareholding structure of AIL prior to the
deal was not immediately available. It added that "The acquisition is
in line with L&T's over all portfolio rationalization. The deal will help
grow L&T's valve business globally with a comprehensive range of valve
offerings.” According to the website of Audco India, the company is 1 of
the largest integrated valve manufacturers in the world and has 2 independent
manufacturing plants at Manapakkam, Chennai and Kanchipuram which are capable
of producing thousands of valves. Source - Economic Times
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