While Kejriwal apologised for the violent behaviour of AAP activists, separately the Election Commission sent notice to the party
Aam Admi Party (AAP) leader Arvind Kejriwal on Thursday apologised for his party workers’ behaviour in Delhi and Lucknow while protesting his detention.
“It was going to happen...some of them retaliated after they were attacked. I apologise for their behaviour and I once again urge them to remain non-violent”, he told reporters in Gujarat in response to a query on the arrest of over a dozen AAP workers in Delhi.
The Election Commission has also written to the AAP today after receiving complaint from the Bharatiya Janata Party (BJP).
"We have received a notice asking to explain the protest outside the BJP office, however, there is no deadline to respond to the letter," said Deepak Bajpai, media coordinator of the party.
Bajpai said that the party will respond to the EC in appropriate time.
AAP workers had Wednesday clashed with activists of BJP outside the party headquarters in Delhi and Lucknow after Kejriwal’s car was damaged in Gujarat in retaliation to protests against his brief detention in the state.
Yesterday, Kejriwal, who began his four—day tour of Gujarat, was detained for alleged violation of the model code of conduct by travelling in a long carcade. Shortly later, he was allowed to go.
According to police sources, an FIR has been lodged at Parliament Street Police Station last night against the AAP protesters including leaders Ashutosh and Shazia Ilmi.
Charges of rioting, obstructing a public servant from performing his duty and damaging public property have been slapped against them.
AAP workers had stormed the BJP head office on Ashoka Road in central Delhi protesting against Kejriwal’s ‘detention’ in Radhanpur in North Gujarat where he had gone to “assess” the development claims made by CM Narendra Modi.
In Lucknow, workers of AAP, armed with brooms, had clashed with lathi—wielding activists of BJP and fought pitched street battles outside the BJP office on Vidhan Sabha Marg in protest against their chief’s detention.
Net capital inflows should be sufficient to finance the current account deficit so long as the medium-term growth outlook improves, says Nomura. However, other analysts feel the low current account deficit will not last.
As long as domestic demand remains weak, gold import curbs continue and a reasonable export recovery persists – of all which should hold in the coming months – the current account deficit should remain in check, forecasts Nomura in a research note.
Nomura expects the current account deficit to be 1.9% of GDP in FY14, before rising to 2.5%-3.0% of GDP in FY15 as gold curbs are removed and domestic growth starts to recover. Net capital inflows should be sufficient to finance the current account deficit so long as the medium-term growth outlook improves, which will crucially depend on the election outcome in May 2014, says Nomura.
The current account deficit (CAD) narrowed further to 0.8% of GDP (US$4.1bn) in Q4 2013 from 1.2% (US$5.2bn) in Q3 2013 and relative to 4.2% in H1 2013. The improvement in CAD in H2 2013 was largely owing to curbs on gold imports, stronger exports and weak domestic demand. Also, the net capital account swung into a surplus of US$23.8bn in Q4 from a deficit of US$5.4bn in Q3 on one-off accretion under the forex swap window.
Overall, the balance of payments (BoP) recorded a surplus of US$19.1bn in Q4, a sharp swing from the deficit in Q3, says the research note. The following table gives BoP data at a glance:
However, according to Anand Rathi (another brokerage house), the somewhat favourable position on the current account deficit is too good to last. In 3QFY14, gold-import restrictions helped India register the lowest current-account deficit in 19 quarters (0.9% of GDP). NRI-deposit mobilisation under the swap scheme boosted the capital account and overall BoP surplus to US$23.8 billion and US$19.8 billion, respectively. But that the capital-account surplus, however, may slip as NRI deposit flows are likely to ebb. Over the longer term, it expects India to maintain a yearly CAD of around US$60 billion.
The Anand Rathi research note has a final warning in its forecast on the rupee and the current account deficit: “We, however, feel that the structural weakness of India’s external account–large CAD financed by uncertain capital inflows–continues. Despite the strength of rupee in the recent past, we expect the currency to depreciate by around 6% to Rs65 to the US dollar in the next 12 months.”
Benefits of scale can be leveraged at Tier-1 IT to make necessary investments in newer opportunities and this may help outperform Tier-2 IT in future
Tier-2 IT stocks have outperformed Tier-1 IT stocks by a wide margin over the last year. Assuming an index with market capitalisation-based weights, Tier-2 IT stocks have nearly doubled (up 96%) as compared to the 53% gains notched by Tier-1 IT stocks. What has driven this outperformance in Tier-2 stocks and will this outperformance reverse?
Nomura believes expectations of equalisation in growth and earnings performance between Tier-1 IT and Tier-2 IT is largely captured in the valuation discounts narrowing. But questions on longer term sustainability of growth will still be an overhang at Tier-2 IT, which is likely to limit further narrowing of valuation discounts. Nomura believes that Tier 1 IT scores over Tier 2 IT on the following counts:
(a) Predictability versus volatility: There is greater predictability of revenue growth and margins at Tier-1 IT vs higher volatility at Tier-2 IT.
(b) Diversification vs concentration: Tier-1 IT has more diversified presence across all segments (geography, industry and service line) with higher exposure to faster growing and underpenetrated segments like IMS and BPO, while Tier-2 IT still remains largely ADM (application development and maintenance) centric. ADM is the most penetrated of the India IT service lines.
(c) Benefits of scale can be leveraged at Tier 1 IT to make necessary investments in newer opportunities like SMAC (social, mobile, analytics and cloud), Europe and products/platforms, without impacting margins.
Nomura includes Mindtree (MTCL IN), Hexaware (HEXW IN),
Persistent (PSYS IN), Eclerx (ECLX IN), NIIT Tech (NITEC IN) and Infotech Enterprises (INFTC IN) under Tier-2 IT stocks. For Tier-1 IT, Nomura includes Infosys (INFO IN), TCS (TCS IN), Cognizant (CTSH US), Wipro (WPRO IN) and HCL Tech. (HCLT IN).
Stock market performance of Tier-1 and Tier-2 IT companies over a period of time is summarised in the chart below: