Economy
India's November manufacturing PMI rises sharply to 21-month high

Given the recent slide of commodity prices, Nomura said it expect input costs to fall next month, while output prices may remain largely unchanged as demand improves, leading to better corporate profit margins

 

Led by sharp rise in the output and new orders sub-indexes, the HSBC India's manufacturing Purchasing Managers Index (PMI) rose to a 21-month high of 53.3 in November from 51.6 in October. While the sharp rise in manufacturing activity is partly seasonal on a revival of economic activity after the October festive season, Nomura, in a research note said, it believes the rise in PMI nonetheless does indicate stronger underlying momentum.

 

 

"Today's PMI data indicate that demand – and thus manufacturing activity – has recovered in Q4, following the consolidation seen towards the end of Q3. Despite the increase in production during the month, the new orders-to-inventory ratio rose to 1.10 in November from 1.06 in October, suggesting strong momentum in manufacturing activity should continue into December as well. This in turn suggests manufacturing sector growth in Q4 following a dismal 0.1 % y-o-y in Q3," the report said.

 

Nomura said, "The rise in the price indexes does indicate that there could be some uptick in WPI inflation in November. However, given the recent slide of commodity prices, we expect to input costs to fall next month, while output prices may remain largely unchanged as demand improves, leading to better corporate profit margins. Overall, we remain confident that the economy is on a gradual recovery path and real GDP growth is likely to climb in coming quarters. Overall we expect real GDP growth of 5.5% in FY15 from 4.7% in FY14."

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United Spirits: Minority shareholders reject 9 special resolutions related with Mallya

Out of the 12 special resolutions, shareholders rejected nine resolutions connected with entities related with USL chairman Vijay Mallya

 

Minority shareholders of United Spirits Ltd (USL) defeated a majority of the special resolutions during the company's extraordinary general meeting on 28th November at Bengaluru. This is seen as a major setback to the integration between the company and its new owner Diageo Plc. Out of the 12 special resolutions, shareholders rejected nine resolutions connected with entities related with USL chairman Vijay Mallya.

 

In a regulatory filing, USL said, a key resolution regarding approval of a loan agreement between USL and UB Holdings Ltd has not been approved by the shareholders. Another resolution regarding sale of immovable properties to USL by UB Holdings also did not find favour with the shareholders. These resolutions required approval from at least 75% of shareholders. During the voting, only 127 public shareholders participated, suggesting that institutions had a major role to play in the defeat of the majority of the resolutions.

 

The company said, due to Securities and Exchange Board of India (SEBI), regulation for prohibiting related entities to participate in the voting, USL promoters did not participate in the process. This includes Relay BV, which owns 54.78% stake, United Breweries Holdings, Kingfisher Finvest India, and others who together hold 4.09% in USL.

 

UB Holdings, Kingfisher Finvest India, Devi Investments, Rossi and Associates and Vittal Investments, however, exercised their votes in favour of the resolutions at item no 2 related to approval of sales promotion agreement between USL and Diageo and item no 11 related to approval of properties call agreement between USL and PE Data Centre Resources Ltd. The filing said the scrutiniser has invalidated the votes by these entities. It also said the company will investigate the validity of the votes exercised by these entities.

 

Resolutions passed by USL shareholders include erosion of net worth of the company, sales promotion agreement and trademark licence agreement.

 

Resolutions that were rejected by the shareholders are:

 

3. Loan agreement between the company and UBHL (voted against: 44.12%).

 

5. Agreement between the company and UBHL to sell to the company certain immovable properties (27.12%).

 

6. Agreement with Kingfisher Fiinvest India. (77.17%).

 

7. Advertising agreement with Watson Ltd. (58.78%).

 

8. Sponsorship agreement between the company and United Racing & Bloodstock Breeders. (58.25%).

 

9. Sponsorship between the company and United Mohan Bagan Football team (32.69%)

 

10. Aircraft services between the company and UB Air Pvt Ltd. (77.53%)

 

11. Properties call agreement between the company and PE Data Centre Resources (75.52%).

 

12. Contribution agreement between the company and Vittal Mallya Scientific Research Foundation. (47.48%).

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SEBI allows 123 alternative funds-AIFs to operate

SEBI have 123 funds registered as AIFs. Of these, around 34 entities got the market regulator's approval to operate so far this year, 67 in 2013 and the remaining 22 in 2011

 

Market regulator Securities and Exchange Board of India (SEBI) has allowed as many as 123 entities to set up alternative investment funds (AIFs), the newly created class of pooled-in investment vehicles for real estate, private equity and hedge funds, in less than two and half-years.

 

Since July 2012, SEBI have 123 AIFs have been registered with it.

 

Of these, around 34 entities got the market regulator's approval to operate so far this year (January-November), 67 in 2013 and the remaining 22 in 2011.

 

The AIFs that have registered with SEBI in November are Religare Dynamic Trust, Indus Way Emerging Market Fund and Carpediem Capital Partners Fund.

 

Singular India Opportunities Trust was registered in October.

 

The regulator had notified in May 2012, the guidelines for this new class of market intermediaries. AIFs are basically funds established or incorporated in India for the purpose of pooling in capital from Indian and foreign investors for investing as per a pre-decided policy.

 

Under SEBI guidelines, AIFs can operate broadly in three categories. The SEBI rules apply to all AIFs, including those operating as private equity funds, real estate funds and hedge funds, among others.

 

The Category-I AIFs are those funds that get incentives from the government, SEBI or other regulators and include Social Venture Funds, Infrastructure Funds, Venture Capital Funds and SME Funds.

 

The Category-III, AIFs are those trading with a view to making short-term returns and it includes hedge funds, among others.

 

The Category-II AIFs can invest anywhere in any combination but are prohibited from raising debt, except for meeting their day-to-day operational requirements. These AIFs include private equity funds, debt funds or fund of funds, as also all others falling outside the ambit of above two other categories.

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