Market rally to fizzle out, says Nomura

The government should take bold steps in addressing problems related to fiscal deficit, current account deficit, inflation and slowdown in corporate investment. This is the only route to improve market sentiment, says Nomura Equity Research

On the balance, Nomura expects the market rally to fizzle out in due course of time, primarily because the global liquidity glut would likely push up global commodity prices as well, which would worsen India’s twin-deficit problem and raise inflation expectations across the board.


The government policy in India and abroad is fuelling the current rally. The government is defensive because of Coalgate. It has been bolder with respect to the diesel price hike and the opening up of FDI in multi-brand retail, civil aviation and power. The Federal Reserve’s QE3 (third round of quantitative easing) policy is also brave. The ECB’s OMT (outright monetary transactions) lowers financial risk. The rally in markets could also be followed by a rally in the rupee if the capital flows come in strong on improved market sentiment.


Nomura predicts that the market may rally in the short-term, given the facts that dedicated investors are mostly defensively positioned; and Nomura’s feedback from ‘long-only’ investors suggests an across-the-board underweight position on India.


Nomura’s market predictions for the medium term include: (a) It suggests buying banks, real estate and metals as insurance against a beta rally; (b) It thinks that problems besieging the infrastructure sector have not been sorted out in the least, as yet; (c) Nomura feels that inaction of the past few years means that a quick turnaround in the investment cycle would be close to impossible; (d) Nomura thinks that the window of reforms would close in about a couple of months with key impending elections in the states of Gujarat and Himachal Pradesh.


Nomura’s predictions are in the light of the three key overhangs on the economy in India which include:

(a) Fiscal deficit – diesel price hike of Rs5 per litre is insufficient to rein in fiscal deficit. This problem is far from over until the next Union Budget;

(b) Current account deficit – with greater liquidity and a weaker dollar fuelling the rise in global commodity prices, the trade deficit would likely come under further pressure in the coming months. Improved domestic market sentiment may boost FII inflows in both debt and equity, leading to a short-term fix in balance of payments;

(c) Inflation – the potential strength in global commodity prices also means that inflation is likely to surprise negatively in the coming months.


Government leadership is required in policy-making with respect to:

(a) investment slowdown to be addressed, which is due to issues hampering infrastructure and corporate capex; and

(b) commitment to fiscal rectitude—important in the context of general elections in 2014. The government should be cautious on its policy towards subsidies.


Now, you can buy gold, silver on mobiles

Muthoot Group Apps for Apple and Andriod phones and tablets allows consumers to buy gold and silver coins 

New Delhi: After enabling purchase of books and clothes among items, as well as internet banking and share market dealings, new mobile applications have been developed to allow consumers buy precious metals like gold and silver, reports PTI.
With nearly 15 million mobile subscribers being added every month in the country, the mobile application market has emerged as a major growth area for developers and there are estimated to be about 2.5 lakh app developers in India alone.
Mobile apps are applications that allow the users to carry out various activities ranging from games to mobile commerce transactions on their phones.
The latest addition to the mobile app space is the one by the 125-year-old non-banking financial giant Muthoot group, which has launched 'Muthoot Group Apps' for Apple and Andriod phones and tablets.
The app will allow consumers to purchase gold and silver coins, besides giving investment reports among other things.
"In the present scenario 'convenience' is the most important criteria wherein the customer can book/buy from the comforts of his/her home and get over the delivery hassles/ billing counter.
"We believe that in the coming years, the sale of gold and silver coins via internet will become as popular as internet banking and online travel and tour booking," George Alexander Muthoot, Managing Director of Muthoot group told PTI.
"Brick and mortar branches will always remain our main channel for extending our products and services to the customers. However, with the advent of new technologies, the number of consumers using mobile devices to browse and purchase have increased over a period of time and we, as a progressive organisation are always looking out for innovative means to provide greater customer convenience," he added.
According to a recent study released at Mobile Apps Summit 2012 in Bangalore, as many as 100 million applications are being downloaded in India every month. The global app market is set to grow to $17.5 billion by the end of 2012, from $4.1 billion in 2009.
"India's internet access capable mobile population has already touched 47 million users. A recent research said that smartphone users in India spend on an average 157 minutes on their smartphones in a single day," digital agency Magnon Solutions's Founder and Group CEO Vineet Bajpai said.
"While there are some usability restrictions on mobile devices due to smaller screen sizes, we expect internet/ mobile banking in India to boom to unprecedented levels sooner than later," Bajpai added.
India is expected to have 237 million internet-activated mobile connections by 2015, as a result of which entrepreneurs are focusing more on mobile apps which are internet-dependent, rather than SMS-based.


GMG Airlines asked to pay Rs40,000 for not accommodating flier

The forum also directed Barclays Bank, whose card the passenger had used to book the tickets, to pay him Rs5,000 for not paying/refunding him Rs2,500 as per its cash back offer

New Delhi: Bangladesh-based GMG Airlines has been directed by a consumer forum to pay Rs40,000 to a passenger for not accommodating him on another plane after one of its scheduled flights was cancelled, reports PTI.
The New Delhi District Consumer Disputes Redressal Forum awarded the compensation saying not only was the flier inconvenienced by the flight cancellation, but he also had to bear additional expense of buying another ticket for returning to India from Malaysia as well as hotel charges.
"Complainant (Sukhija) was forced to purchase another ticket for return journey...He suffered lot of inconvenience due to cancellation of the flight and (had to) bear expenses towards hotel charges, etc.
"There is deficiency on the part of opposite party 1 (GMG Airline) for not accommodating passengers (who had) already booked (tickets). It also failed to refund amount of return journey. Holding opposite party guilty of deficiency in service, we direct it to pay Rs40,000 lump sum," the bench, presided by CK Chaturvedi, said.
The forum also directed Barclays Bank, whose card Sukhija had used to book the tickets, to pay him Rs5,000 for not paying/refunding him Rs2,500 as per its cash back offer.
The Delhi-resident in his complaint had said he had booked tickets on GMG Airlines for his trip, from Delhi to Kuala Lumpur and back, in May 2008 for Rs16,377.
On enquiring about his return flight, he was informed by the airline that there was no flight to Delhi for the month of June and the travel portal had issued him a wrong ticket for June 11, Sukhija had alleged.
He had also alleged that Barclays had offered cash back of Rs2,500 if tickets were booked using the bank's card, but he was not paid/refunded the amount.
Despite the summons issued, the airline and the bank had not appeared before the forum and were proceeded against ex-parte.


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