India to become world’s 2nd largest steel producer by 2015

Chairing a meeting of the Parliamentary Consultative Committee, steel minister Beni Prasad Verma said annual demand for steel is likely to grow at an average of over 10% in the next five years as compared to 8% growth during 1991-92 and 2010-11

New Delhi: India is expected to become the world’s second largest producer of crude steel by 2015, riding on expansion plans of domestic players like SAIL and Rashtriya Ispat Nigam (RINL), reports PTI.

Chairing a meeting of the Parliamentary Consultative Committee, steel minister Beni Prasad Verma said annual demand for steel is likely to grow at an average of over 10% in the next five years as compared to 8% growth during 1991-92 and 2010-11.

India slipped one rank to become the fourth largest steel producer in 2010, with 68.3 million tonnes (MT) of output. It produced 63.5 MT steel in 2009.

China is the number one producer of steel, followed by Japan and the US at second and third places, respectively.

“India also maintained its lead position as the world’s largest producer of direct reduced iron (DRI) or sponge iron,” the official statement said, adding the per capita steel consumption during the last six years has risen from 38 kg in 2005-06 to 55 kg in 2010-11.

The steel sector contributes nearly 2% of the gross domestic product (GDP) and employs over 5 lakh people.

Expressing concerns over exports of iron ore, a fast depleting resource, Mr Verma said iron ore is a non-renewable natural resource and his ministry is of the view that it should be conserved for long-term utilisation of domestic steel industry.

“Our policy should, accordingly, aim at value addition of iron ore within the country instead of exporting iron ore,” he said. The National Steel Vision and strategy paper are being finalised for promoting steel sector, he said.

The minister also elaborated on expansion plans of PSUs like SAIL, RINL, etc.

“The major thrust of the modernisation and expansion plans is to adopt the best modern technology, which in addition to being cost effective should also be energy efficient and environment-friendly,” he said.

State-run SAIL has undertaken a massive expansion drive to increase its steel production capacity from current 14 MT to about 24 MT, with an investment of about Rs70,000 crore.

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Rupee to rise to Rs45-46 per dollar by March 2012: Crisil

The key assumption behind the expected recovery of the rupee is that developed economies will witness slowdown, but they will avoid another recession. This will lead to a pick-up in FII inflows towards early 2012 as the risk appetite for investment in emerging markets returns, rating agency Crisil said in a report

New Delhi: Rating agency Crisil on Monday said it expects the rupee to strengthen to Rs45-Rs46 level against dollar in the next five months on the back of pick-up in foreign institutional investment (FII) inflows towards early 2012, reports PTI.

The rupee is expected to strengthen to Rs45-Rs46 per dollar by March 2012, from the current lows of around 50, Crisil said in a report.

The rupee in the past one month has dived from 45 level to near 50 levels against the US currency on continued FII outflows and strong dollar overseas.

The Rupee closed at 49.45/46 against the dollar yesterday.

The key assumption behind the expected recovery of the rupee is that developed economies will witness slowdown, but they will avoid another recession. In our opinion, this will lead to a pick-up in FII inflows towards early 2012 as the risk appetite for investment in emerging markets returns, it said.

However, in a worst-case scenario, it said, a potential double dip in growth in advanced economies could have a sharper-than-expected impact on the Indian currency, causing it to slide further and prolonging its recovery.

The rupee fell to almost 50 against the dollar on 23rd September from 44.4 in July 2011. The fall is almost as steep as that during the peak of Lehman crisis in 2008, it said.

The rupee depreciation during the Lehman episode was characterised by a global recession and the consequent credit freeze. The current slide of the rupee is due to two factors—first, rising demand for dollars by Indian companies, in conjunction with reducing supply of dollars due to weak FII inflows, it said.

Repayment pressures on corporate India, rather than capital outflows, seem responsible for the sharp weakening of the rupee, it said.

While rising risk aversion has led to portfolio outflows from India in the past few weeks, the quantum of outflows has not been too large, it said, adding, in fact, the withdrawal of portfolio investments from India during August-September 2011 has been much lower as compared to October 2008 and January-March.

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SEBI proposes norms for regulating role of investment advisors

The entities, which include banks and fund managers, would have to be registered with a Self Regulatory Organisation (SRO) as investment advisors, said the concept paper on Regulation of Investment Advisor issued by SEBI

Mumbai: In the backdrop of the alleged multi-crore fraud by a Citibank employee, market regulator Securities and Exchange of Board of India (SEBI) on Monday proposed to bar investment advisors from acting as agents for promoting financial products, reports PTI.

The entities, which include banks and fund managers, would have to be registered with a Self Regulatory Organisation (SRO) as investment advisors, said the concept paper on Regulation of Investment Advisor issued by SEBI.

“No financial incentives/consideration would be received from any person other than investors seeking advice. In case of advice regarding investment in entities related to the investment advisor, adequate disclosures shall be made to investor regarding the relationship,” said the paper on which SEBI has invited comments from stakeholders by 31st October.”

It further said, “The person who interfaces with the customer should declare upfront whether he is a financial advisor or an agent of the manufacturer.”

The paper further said that “conflict of interest in the financial product distribution space” due to the dual role played by the distributors raises doubt on their credibility to protect interest of investors.

“This (conflict of interest) is due to the fact that with respect to many financial products, agents receive their payments from two sources: commissions from the manufacturers, and advisory fees or other charges received from the investors,” it added.

The paper has proposed that investment advisors, or banks providing such services, should be regulated by an SRO, registered with SEBI.

It also said the advisors should be strictly identified as ‘investment advisors’ and not by names like wealth managers or private bankers. Besides, they should be highly qualified.

“This causes much confusion as to their role and responsibility. Hence the (proposed) regulations will provide that no person can carry on the activity of offering investment advice unless he is registered as an investment advisor under the regulations,” SEBI said.

Last year, a Rs461-crore fraud was unearthed at Citibank’s Gurgaon branch allegedly engineered by its global wealth manager Shivraj Puri.

SEBI’s proposed regulatory framework intends to regulate the activity of providing investment advisory services in various forms by a wide range of entities, like independent financial advisors, banks and distributors.

Duties of an SRO would include registering and setting professional standards for investment advisors.

“While the activity of giving investment advice will be regulated under the proposed framework through an SRO, issues relating to financial products other than securities shall come under the jurisdiction of the respective sectoral regulators...,” the paper added.

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