Economy
India’s manufacturing growth improves in October: HSBC PMI

Inflation as measured by all indices has remained elevated and Wholesale Price Index-based inflation has remained above the RBI’s comfort zone of 5% to 5.5% for past 34 months now

 
New Delhi: India’s manufacturing sector inched up in October 2012, driven by new orders, but persistent power shortages weighed on production, reports PTI quoting an HSBC survey.
 
The HSBC India Manufacturing Purchasing Managers’ Index (PMI)—a measure of factory production—stood at 52.9 in October 2012, slightly up from September 2012, when it was 52.8.
 
The index has remained above the 50-mark, below which it indicates contraction, for more than three years now.
 
The October reading of HSBC PMI points to a further improvement in the health of the manufacturing sector, which witnessed the weakest growth rate in nine months in August.
 
However, going forward, the recovery in manufacturing growth is likely to be ‘slow’, HSBC said, adding that backlogs of work in the Indian manufacturing sector were accumulated at a sharp rate during October 2012, mainly due to persistent power shortages.
 
“Economic activity in the manufacturing sector picked up slightly, thanks to firm new orders. However, insufficient power dampened output growth and led to an increase in outstanding work,” HSBC chief economist for India and ASEAN (Association of Southeast Asian Nations) Leif Eskesen said.
 
On inflation, HSBC said it eased notably with both output and input prices rising at a slower pace in October but it is still likely to stay “elevated for a while”.
 
Input price inflation in the Indian goods-producing sector persisted in October and part of the burden of input cost inflation was passed on to clients as output prices were increased again. However, the rate of inflation was the slowest since November 2010, HSBC said.
 
Inflation as measured by all indices has remained elevated and Wholesale Price Index-based inflation has remained above the Reserve Bank of India’s (RBI) comfort zone of 5% to 5.5% for past 34 months now.
 
In the mid-year monetary policy review on 30 October 2012, the RBI left the key interest rate unchanged but reduced cash reserve ratio by 0.25% to infuse additional liquidity of up to Rs17,500 crore into the system.
 
The RBI kept the repo rate and reverse repo rate unchanged at 8% and 7% respectively.
 
Meanwhile, staffing levels at the manufacturing firms increased, marking an eight-month sequence of job creation.
 
The payroll numbers were raised largely to support new orders growth, the HSBC survey said.
 
This is the second successive monthly expansion in new export orders and new orders increased for the forty-third consecutive month.
 

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Maruti Suzuki sales increase 85% this October

The country’s largest car maker reported a total sales at 1,03,108 units in October compared to 55,595 units in the same month last year

 
New Delhi: The country’s largest car maker Maruti Suzuki India (MSI) today reported 85.46% increase in total sales at 1,03,108 units in October, reports PTI.
 
The company had sold 55,595 units in the same month last year, the company said in a statement.
 
In October, MSI recorded domestic sales of 96,002 units compared to 51,458 units in the same period a year ago, registering a rise of 86.56%, it added.
 
MSI’s exports went up by 71.77% to 7,106 units last month from 4,137 units in the same period last year, it said.
 
Total passenger car sales in the domestic market rose by 93.75% to 79,811 units from 41,192 units in October 2011.
 
Sales of the company’s mini-segment cars, including M800, A-Star, Alto and WagonR, increased by 68.87% to 42,233 units during the month from 25,009 units in October last year.
In the compact segment (comprising the Estilo, Swift and Ritz models), MSI witnessed an over two-fold rise in sales to 22,459 units from 10,859 units in the same month last year.
 
Sales of MSI’s DZiRE model increased by nearly three-fold to 14,389 units in October from 5,001 units in October last year, it said.
 
MSI’s mid-sized Sedan SX4 sales were up by over two-fold to 695 units last month from 320 units in October 2011.
 
Luxury Sedan Kizashi witnessed over 11-fold increase in sales at 35 units as against 3 units in the same month last year.
 

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Corporate Governance-An important aspect to check before picking stocks

One of the reasons why shares of some companies trade cheap is poor governance...

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