India's services PMI inches up to 47.1 in October

HSBC/Markit PMI for India’s services industry inched up to 47.1 in October from 44.6 in September, the fourth successive monthly contraction of services sector output across the country

India’s services sector activity witnessed a moderate improvement in October from a four-and-a-half year low of 44.6 in September, even while indicating a fourth successive monthly contraction amid economic uncertainty, an HSBC survey said today.


The HSBC/Markit Purchasing Managers Index (PMI) for the services industry inched up to 47.1 in October from 44.6 in September, the fourth successive monthly contraction of services sector output across India.


An index value of below 50 indicates contraction.


HSBC said, business activity fell in five of the six categories monitored by the survey, with the sharpest decline noted in hotels and restaurants.


“The continued contraction in services sector activity is testament to the dampening effects of the heightened macroeconomic uncertainty, which is making businesses and consumers more cautious about spending,” HSBC Chief Economist for India and ASEAN, Leif Eskesen, said.


The country’s economic growth slowed to 5% during fiscal ended March 2013 from an average of 8% over the past decade.


Earlier this week, the HSBC/Markit manufacturing PMI showed that India’s manufacturing sector activity contracted for the third straight month in October and stood at 49.6, unchanged since September, indicating a third, albeit marginal, successive deterioration of business conditions across the country.


Accordingly, the HSBC India Composite Output Index, which maps both services and manufacturing activity, rose from 46.1 in September to 47.5 in October, signalling a moderate and slower drop in private sector business activity.


“While activity readings may be stabilising, a notable recovery is not in the cards for a while still,” Eskesen said, adding that “despite the weak growth backdrop, RBI has to keep its inflation guards up to address the lingering inflation pressures.”


The Reserve Bank of India (RBI) in its second quarter policy review last week hiked key lending rate by 25 basis points to contain inflation in continuation of its hard-line stance.


India launches first-ever mission to Mars

The Orbiter is expected to arrive on Mars on 14 September 2014 and the spacecraft will enter a highly elliptical orbit of 372km x80,000 km around Mars

India on Tuesday embarked on its maiden Mars odyssey, with its polar rocket carrying Mars Orbiter Mission, successfully lifting off from the Satish Dhawan Space Centre at Sriharikota. This is India's first-ever inter-planetary expedition to join a select band of nations.


The textbook lift-off of ISRO’s workhorse launch vehicle PSLV C25 at 2.38pm from the spaceport was witnessed among others by Minister of State in PMO, V Narayanasamy, US Ambassador to India Nancy Powell, Indian Space Research Organisation Chairman, K Radhakrishnan, and a host of other officials.


The XL version of PSLV C 25 had carried Chandrayaan 1, the country’s maiden moon mission, in 2008.


After going around Earth for 20-25 days in an elliptical orbit (perigee of 250 km and apogee of 23,500 km), the Rs450-crore Orbiter would begin a nine-month long voyage to Mars around 12.42am on 1st December.


It is expected to reach the red planet’s orbit by 24 September 2014 and go around in an elliptical orbit (periapsis of 366 km and apo-apsis of 80,000 km).


The Mars mission of the ISRO is aimed at establishing the country’s capability to reach the red planet and focus on looking for the presence of methane, an indicator of life in Mars.


The Mars Orbiter has five scientific instruments — Lyman Alpha Photometer (LAP), Methane Sensor for Mars (MSM), Mars Exospheric Neutral Composition Analyser (MENCA), Mars Colour Camera (MCC) and Thermal Infrared Imaging Spectrometer (TIS).


European Space Agency (ESA) of the European consortium, National Aeronautics and Space Administration (NASA) of the US and Roscosmos of Russia are the three agencies which have successfully sent their missions to the red planet.


Biggest ever insider-trading settlement: SAC Capital to pay $1.8 billon

Unlike the case involving Rajat Gupta and Rajarathinam, has SAC, one of the world’s most successful hedge fund companies, got away with a settlement even though it was running a vast insider-trading racket?

Stephen Cohen-promoted hedge fund giant SAC Capital Advisors on Monday pleaded guilty to criminal charges of engaging in insider trading. The agreement imposes a $1.8 billion financial penalty on the SAC companies—the largest insider trading penalty in history—split between a $900 million fine in the criminal case and a $900 million forfeiture judgment in a civil money laundering and forfeiture action filed by the US government simultaneously with the criminal charges.


However, according to John Cassidy of New Yorker, even the fine of $1.8 billion could be a sweet deal for Cohen, who set shop 20 years ago with just $25 million under management. "Far from being treated like a mobster, Cohen was hit solely in the pocketbook. He wasn’t even mentioned in the US Attorney’s press release about today’s settlement, or in a letter and legal stipulation about the settlement that Bharara’s office filed in US District Court. Rather than naming names, the documents contain repeated references to dozens of corporate entities and investment funds connected to SAC—the 'SAC Entity Defendants'. From Cohen’s perspective, that’s got to be encouraging. He’s not quite in the clear yet. But with about seven billion dollars in his back pocket even after he’s paid off all his fines, he’ll be feeling better about things," wrote John Cassidy in his blog post.


Under the agreement, announced by Preet Bharara, the US attorney for the Southern District of New York (who pursued Rajat Gupta and Raj Rajarathinam), and George Venizelos, assistant director in charge of the New York Office of the Federal Bureau of Investigation (FBI), four companies—SAC Capital Advisors LP, SAC Capital Advisors LLC, CR Intrinsic Investors LLC, and Sigma Capital Management LLC together SAC companies, will plead guilty to each count in which they are charged of an indictment unsealed in July of this year with securities fraud and wire fraud in connection with a large-scale insider trading scheme.


Bharara said, “Individual guilt is not the whole of our mission. Sometimes, blameworthy institutions need to be held accountable too. No institution should rest easy in the belief that it is too big to jail. That is a moral hazard that a just society can ill afford. Today, SAC Capital, one of the world’s largest and most powerful hedge funds, agreed to plead guilty, shut down its outside investment business, and pay the largest fine in history for insider trading offences. That is the just and appropriate price for the pervasive and unprecedented institutional misconduct that occurred here.”


As alleged in the indictment, from 1999 through at least 2010, numerous employees of the SAC companies obtained and traded on material, non-public information that they were not permitted to have inside information, or recommended trades based on such information to SAC portfolio managers (SAC PMs) or the SAC owner. Specifically, the indictment charges the SAC companies with insider trading offences committed by numerous employees, occurring over the span of more than a decade and involving the securities of more than 20 publicly traded companies across multiple sectors of the economy.


As charged in the indictment, the systematic insider trading engaged in by SAC PMs and research analysts were the predictable and foreseeable result of multiple institutional failures. The failures alleged included hiring practices heavily focused on recruiting employees with networks of public company insiders, the failure of SAC management to question employees about trades that appeared to be based on Inside Information, and ineffective compliance measures that failed to prevent or detect such trading, particularly prior to late 2009.


“What SAC Capital’s plea demonstrates is that cheating and breaking the law were not only permitted but allowed to persist," said Venizelos adding, "The result is $1.8 billion in fines and forfeiture, the largest penalty in an insider trading case ever, and termination of their investment advisory business. The problem of insider trading is real. For companies that wilfully turn a blind eye, be on notice: how your employees make money is just as important as how much they make. The FBI’s investigation into insider trading on Wall Street, on Main Street, in hedge funds, at expert networking firms, and anywhere else, continues.”


"The agreement would resolve the criminal charges against the SAC companies but does not provide any individual with immunity from prosecution. Under the terms of the agreement, the government is not prevented from charging any individual with insider trading offences and seeking the maximum prison term authorized by law for such offences," the release from FBI says.


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