In the EIU survey, three of the four cheapest locations globally—Karachi, Mumbai, Tehran and New Delhi—are from the Indian subcontinent. Zurich has toppled Tokyo as the world’s most expensive city, although both of them have become relatively expensive in the past one year
New Delhi: A high rate of inflation may be pinching hard on day-to-day life of the people in the country, but a global survey has named two Indian cities—the financial hub Mumbai and the national capital New Delhi—among the four least expensive places across the world, reports PTI.
As per the worldwide ‘cost of living’ survey by the Economist Intelligence Unit (EIU), Mumbai is the second least expensive city globally, while New Delhi is ranked fourth.
Karachi in Pakistan has been named as the cheapest destination globally, while Zurich in Switzerland is the most expensive place across the world, as per the survey.
Inflationary pressures have figured among the key concerns facing the government as well as the public in India for many months now, although the rate of inflation has declined a bit in the recent past.
The country’s headline inflation fell to 6.55% in January 2012. It had stood at 7.47% in December 2011.
Despite the drop in inflation in January, finance minister Pranab Mukherjee had said the rate of price rise is “still not at acceptable level” and hoped for further dip.
Headline inflation was near double digit for most of 2010 and 2011. The apex bank hiked key policy rates 13 times, totalling 350 basis points between March 2010 and October 2011 to tame inflation.
In the EIU survey, three of the four cheapest locations globally—Karachi, Mumbai, Tehran and New Delhi—are from the Indian subcontinent.
“India has been such a target of labour outsourcing, relocation and FDI over the last decade,” EIU said.
“With cheap labour and land costs making India and Pakistan incredibly attractive to those bargain hungry visitors or investors willing to brave some of the security risks that accompany such low prices, especially in Pakistan,” it added.
All the four cheapest cities have retained their positions from the previous year’s list.
However, Zurich has toppled Tokyo as the world’s most expensive city, although both of them have become relatively expensive in the past one year.
“Both Japan and Switzerland have seen strong currency movements over the last few years which have made them relatively more expensive,” EIU said.
After Karachi, Mumbai, Tehran and New Delhi, the report has named Muscat, Dhaka, Algiers, Kathmandu, Panama City and Jeddah among the least expensive cities.
In the list of ten most expensive cities, Zurich and Tokyo are followed by Geneva, Osaka Kobe, Oslo, Paris, Sydney, Melbourne, Singapore and Frankfurt.
The survey compared over 400 individual prices across 160 products and services. They include food, drink, clothing, household supplies and personal care items, home rents, transport, utility bills, private schools, domestic help and recreational costs.
The main reason behind low cost of living in the Middle Eastern cities was the use of price controls and the pegging of currencies to the US dollar, the report said.
This year’s list interestingly features cities from the Asia Pacific region (including Australasia) in the ten most expensive cities while on the other hand, three of the four cheapest locations hail from the Indian subcontinent.
“Although Asian hubs are making their presence felt at the top of the cost of living stakes, another kind of Asian hub is making its presence felt at the bottom, EIU said.
Singapore’s presence in the top ten most expensive cities highlights a shift away from Western Europe towards Asian hubs, the report said.
“Cities from the Asia Pacific region (including Australasia) now make up half the ten most expensive,” EIU said adding Western Europe still accounts for 24 of the most expensive cities in the top 50, with 14 hailing from Asia.
Interestingly, despite the Eurozone weaknesses German and French cities are still relatively expensive with Paris and Frankfurt holding firm in the ten most expensive. Besides, Oslo, which was considered the world’s most expensive city only a few years ago, also sits towards the top of the ranking.
Nifty to move in the range of 5,460 to 5,625
The market, which opened in the red on selling pressure and weak global cues, saw a good recovery in post-noon trade. But the upmove lacked strength, resulting in the benchmarks snapping their three-day rally. Yesterday’s panic buying was followed by short selling today. The Nifty moved in a narrow range with a downward pull. However, the index made a smart recovery ending with a marginal loss of 10 points. The benchmark should cross high of 5,542 made on 15th February to reach the level of 5,625 else we may see it moving sideways and down to the level of 5,460. The National Stock Exchange (NSE) saw a massive volume 120.12 crore shares.
After having notched 2% gain yesterday, profit booking resulted in the market taking a breather today. Fresh worries about Greece pushed the Asian pack lower in morning trade, which hurt investor sentiments here. The Nifty, which closed at 5,532 on Wednesday, opened 18 points down at 5514. Similarly, the Sensex saw a cut of 39 points as it resumed trade at 18,163.
Trading in a narrow range, the market extended its losses and touched its intraday low at around 11.30am. At the lows, the Nifty touched 5,484 and the Sensex fell to 18,043.
The indices witnessed a slow climb in subsequent trade on select buying in realty and power stocks. The gains saw the market touch its intraday high in late trade where the Nifty rose to 5,531 and the Sensex went up to 18,183.
However, benchmarks came off the highs and closed with marginal losses. The Nifty finished 10 points down at 5,522 and the Sensex closed at 18,154, down 48 points from its previous close.
The advance-decline ratio on the NSE was 826:623.
The broader indices underperformed the Sensex today, as the BSE Mid-cap index declined 1.04% and the BSE Small-cap index dropped 0.96%.
The key sectoral gainers were BSE Realty (up 1.53%); BSE Power (up 1.37%); BSE Capital Goods (up 0.65%); BSE IT (up 0.49%) and BSE Auto (up 0.34%). The losers were led by BSE Metal (down 1.63%); BSE Oil & Gas (down 1.53%); BSE Consumer Durables (down 0.92%) and BSE Fast Moving Consumer Goods (down 0.02%).
Jindal Steel (up 4.94%); Hero MotoCorp (up 4.57%) State Bank of India (up 4.38%); Maruti Suzuki (up 4.10%) and Bajaj Auto (up 3.81%) were the main advancers on the Sensex. Coal India (down 5.44%); Hindalco Industries (down 4.71%); Sterlite Industries (down 4.16%); Tata Motors (down 3.67%) and Tata Steel (down 3.23%) were the main trailing stocks.
Hero MotoCorp (up 4.34%); Jindal Steel (up 4.27%); SBI (up 4.10%); Maruti Suzuki (up 4.10%) and Cairn India (up 3.17%) topped the Nifty chart today. The laggards were led by Coal India (down 5.84%); Hindalco Ind (down 5.14%); Tata Motors (down 4.12%); Sterlite Ind (down 3.86%) and Tata Steel (down 3.77%).
Markets in Asia settled in the negative as European policymakers deferred an announcement of a fresh bailout for Greece, as the leaders still doubt the beleaguered nation’s commitment towards spending cuts. Prospects of more ratings downgrades for 17 global and 114 European banks also weighed on the sentiments.
The Shanghai Composite declined 0.42%; the Hang Seng dropped 0.41%; the Jakarta Composite fell by .64%; the KLSE Composite slipped by 0.69%; the Nikkei 225 fell by 0.24%; the Straits Times tanked 1.14%, the Seoul Composite lost 1.38% and the Taiwan Weighted settled 1.69% down. At the time of writing, the key European indices were trading with losses of 0.75% to 1.15% and the US stock futures were lower.
Back home, foreign institutional investors were net buyers of shares totalling Rs1,838.85 crore on Wednesday. On the other hand, domestic institutional investors were net sellers of equities amounting to Rs313.47 crore.
Telecom services major Reliance Communications (RCom) today said it has received RBI approval for the refinancing for redemption of its outstanding FCCBs (Foreign Currency Convertible Bonds) worth Rs5,825 crore. The outstanding FCCBs of $1,182 million (approximately Rs5,825 crore at the prevailing dollar exchange rate of Rs 49.30) will be redeemed on the due date of 1 March 2012. The stock fell by 2.39% to close at rs102.05 on the NSE.
Wyeth has claimed $960 million from Sun Pharmaceutical Industries for alleged patent violation in launching a generic version of acid reflux drug Protonix in the US. The original patent relating to Protonix, known chemically as pantoprazole sodium, is held by Swiss drugmaker Nycomed and was licensed to Wyeth, which is now owned by Pfizer. Wyeth lost 0.16% and closed at Rs870 on the NSE today.
Union Bank of India is likely to raise up to Rs955 crore through the preferential route. The bank has received the board’s approval to issue up to 2.6 lakh crore shares to LIC on a preferential allotment basis. This works to 5% of the bank’s equity share capital and is expected to mop-up to Rs600 crore. It will also raise nearly Rs355 crore by issuing shares to the government. The banking stock fell 1.28% to close at Rs255.05 on the NSE.
In a letter to heads of public sector banks, the finance ministry said “instances of over-reporting of profit have been continuing year after year and no corrective action seems to have been taken to stop the recurrence”
New Delhi: The finance ministry has written to all public sector banks asking them to ensure profits are not overstated and to make appropriate provisions for bad loans, reports PTI.
In a letter to heads of public sector banks, the finance ministry said “instances of over-reporting of profit have been continuing year after year and no corrective action seems to have been taken to stop the recurrence”.
The letter assumes significance in the light of rising bad debts in the banking sector.
According to a senior official of a public sector bank, the letter has been issued recently by the finance ministry.
Sometimes there could be a difference of opinion about the classification of NPA (non-performing assets) which gets sorted out at the time of external audit or Annual Financial Inspection (AFI) by the Reserve Bank of India (RBI), the official said.
If the bank is unable to convince the RBI for not classifying some loans as NPA and subsequently not making provisions, then the bank has to make provision after AFI, the official said.
To that extent the profit is depressed later, the official said.
Banks have been trying to follow prudential guidelines of RBI on NPA in letter and spirit but there could be differences of opinion which gets resolved after AFI and reconciliation of accounts takes place, the official added.
During the third quarter of the current fiscal, banks profitability was hit due to jump in bad loans and restructured loans. There has been about 19% rise in restructured loan against the previous quarter as textiles, steel and infrastructure companies have suffered due to lower output and higher cost of funds.
Besides, there is NPA pressure for banks from the aviation and power sectors. They are struggling to recover Rs19,000 crore from the ailing national carrier Air India.
Worried over rising bad loans in certain sectors, the RBI is expected to meet banks to take stock of the NPA situation soon.
“Stress sectors are well known, the issues which are there. But we don’t think there is a great concern as of now,” RBI deputy governor KC Chakrabarty had said earlier this week.
“But any how we are going to discuss it (NPA issue) with the banks in the coming days. We are going to meet banks during this month or first week of March,” he had said.