Stocks
Nifty, Sensex in a bullish mode still – Weekly closing report
We had mentioned in last week’s closing report that whether the bulls can take Nifty, Sensex higher is questionable. The major indices of the Indian stock markets gave no clear trend. While the bulls were trying to move the indices higher, there were market corrections too. The indices have ended flat. The trends of the major indices in the course of the week’s trading are given in the table below:
 
 
The benchmark indices opened higher on Monday following firm global markets and expectations of the Goods and Services Tax (GST) bill passing in the monsoon session of parliament and expectations of better quarterly results which are to be announced later during Monday. Selling pressure was witnessed in telecom, oil and gas and metal stocks. Some movement was noticed in the state-owned banks, especially State Bank of India's subsidiary banks. Expectations of the government's announcement of the next round of capital infusion in state-run banks, for which Rs25,000 crore has been earmarked for the current fiscal boosted investors' sentiments. On the NSE, there were 603 advances, 1007 declines and 55 unchanged.
 
Glenmark Pharmaceuticals Ltd is planning to raise $200 million by issuing USD denominated non-convertible unsecured bonds to repay existing debt, the company said on Monday. "..subsequent to the rating received by the leading credit agencies in the world that is Standard & Poor's and Fitch, the company has decided to tap into the international bond market and is planning to raise around $200 million by issuing USD denominated non-convertible unsecured bonds," the company said in a filing to Bombay Stock Exchange. "The net proceeds will be used for repaying the existing debt," it said. Glenmark shares closed at Rs833.80, down 2.12%, on the BSE.
 
Profit booking, coupled with disappointing quarterly results and negative global cues, depressed the Indian equity markets on Tuesday. Consequently, the key indices traded on a flat-to-negative note during the mid-afternoon session, as heavy selling pressure was witnessed in fast moving consumer goods (FMCG), banking and consumer durables stocks. On the NSE, there were 582 advances, 788 declines and 53 unchanged at the close of trading on Tuesday.
 
On Tuesday, the benchmark indices opened on a flat note, in sync with their Asian peers. The equity markets soon rose on the back of the government's decision to infuse capital into public sector banks. In a statement, the Ministry of Finance announced a capital infusion of Rs22,915 crore towards the recapitalisation of 13 public sector banks during 2016-17. However, the key indices ceded their gains, as profit booking, disappointing quarterly results and weak global crude oil prices hampered the upward trajectory. Besides, reduced chances of further monetary policy easing by the European Central Bank (ECB) in its upcoming monetary policy review dampened investors' sentiments. Nevertheless, value buying, healthy progress of monsoon season and expectations of GST (Goods and Services Tax) getting passed supported prices at the lower levels. Most of the banking and auto sector stocks faced resistance at higher levels due to profit booking, while IT sector stocks traded with mixed sentiments.
 
FMCG major Hindustan Unilever on Monday said its net profit rose 10% to Rs1,174 crore in the quarter ended June, as compared to Rs1,069 crore in the corresponding period last year. "Net profit at Rs1,174 crore, was up 10%, aided by a one-time write back of provision for pension benefits arising from plan amendments," the company said in a statement. The company has proposed to make an investment of about Rs1,000 crore towards the setting up of a new manufacturing unit in the vicinity of its existing factory premises at Doom Dooma in Assam, it said. Net sales from operations stood at Rs7,988 crore in the quarter under review as compared to Rs7,713 crore in the same quarter last year. The new unit is expected to be commissioned in early 2017 and will augment production capacity of personal care products. HUL shares closed at Rs894.00, down 2.87% on the BSE, on Tuesday.
 
Positive European indices and US premarket futures buoyed the Indian equity markets on Wednesday, as healthy buying was witnessed in healthcare, oil and gas, and capital goods stocks. On the NSE, there were 965 advances, 448 declines and 61 unchanged at the close of Wednesday’s trading.
 
The European Union (EU) downgraded its economic outlook for Britain and the rest of the bloc on Tuesday, saying the Brexit vote ushered in uncertainty and would weigh on growth. The gross domestic product (GDP) growth in the 19-country eurozone is expected to slow to between 1.3% and 1.5% in 2016 from the previously estimated 1.7% in May. The same growth figures are expected for next year. This implies a loss of GDP of 0.25% to 0.5% by 2017, which is less than in Britain (1.0% to 2.75%), said a report published by the European Commission, the bloc's executive arm.  "The UK's 'leave' vote is expected to slow private consumption and investment and impact on foreign trade," it noted. The report warned that Britain's referendum had created an "extraordinarily uncertain situation," which is likely to prevail for some time, and would affect not only Britain but also the rest of the EU economy through several transmission channels, mainly uncertainty, investment, trade, and migration. These issues are likely to have a bearing on the investments by foreign institutional investors in emerging markets like India.
 
On Thursday, the benchmark indices opened on a positive note, in sync with their Asian peers, especially the Japanese markets. Besides, the equity markets were pushed up by higher global crude oil prices, firm rupee, healthy progress of monsoon season and recovery in the European indices. However, the equity markets soon ceded their gains on the back of sector-specific profit booking. In addition, reduced chances of further monetary policy easing by the European Central Bank (ECB) in its upcoming monetary policy review dampened investors' sentiments. Further, the ongoing logjam in parliament hampered the upward trajectory in the stock markets. Selling pressure was witnessed in banking, healthcare and capital goods stocks. On the NSE, at the close of trading, there were 489 advances, 936 declines and 49 unchanged. The BSE market breadth was also tilted in favour of the bears -- with 1,596 declines and 1,088 advances and 184 unchanged.
 
Positive domestic cues such as value buying, short covering and a firm rupee lifted the Indian equity markets on Friday. Consequently, the key indices traded in the green during the late-afternoon session, as healthy buying was witnessed in capital goods, metals and automobile stocks. Initially on Friday, the benchmark indices opened on a flat-to-negative note, in sync with their Asian peers, especially the Japanese markets. Besides, the equity markets were pulled down by lower global crude oil prices, a logjam in parliament and negative European indices. Furthermore, sector-specific profit booking on the back of quarterly results hampered the upward trajectory. In addition, the European Central Bank (ECB) decision to halt the easing of its monetary policy dampened investors' sentiments. Overall, on Friday, the major indices closed with gains of upto 0.37% over Thursday’s close. 

User

Fiscal frauds are sore point for foreign investors: Study
 A rise in financial frauds has become one of the sore points for foreign investors and needs to checked by a global standard regulatory framework coupled with the companies' in-house mechanisms, a study has said.
 
"With the increased prevalence of fraud and the negative consequences associated with it, there is a strong argument that companies should invest resources and time to tackle it," a paper authored jointly by Associated Chambers of Commerce and Industry of India (Assocham) and global consultancy firm Grant Thornton said.
 
"Cases of financial fraud have risen in India over the last few years and have become one of the main factors deterring foreign companies from investing in India," it said.
 
As the Indian economy is growing, increasing corporate frauds will prove to be disastrous for India, the paper said. 
 
Noting companies' inability to perform an effective fraud risk assessment, the paper said, "As technology is advancing, fraudsters are able to find ways to use it and perpetrate a fraud. Tech-savvy fraudsters are using technology in a variety of ways to commit fraud."
 
"Devious ingenuity of the human brain is now leveraging technology to indulge in more sophisticated methods of crimes which are very much capable of creating systemic instability," Assocham President Sunil Kanoria was quoted as saying.
 
"Putting restrictions on what your employees have access to will limit the potential of misappropriation of assets but if an employee has access to all aspects of an organisation, the potential for fraud is significantly increased," the paper said.
 
Vidya Rajarao, Partner, Grant Thornton India, said the initiative to stop frauds must come from the senior management. 
 
"The responsibility of preventing, detecting and investigating corporate and financial frauds rests squarely on board of directors. The top management should define their anti-fraud strategy, establish appropriate fraud mitigation steps and train their employees to combat financial and corporate frauds," Rajarao said.
 
It is not to suggest as if there are no financial frauds taking place in rest of the world, said the paper that enumerated several big-time scandals that have hit the international headlines. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  

 

User

Who are terrorists and who finances them?
Nearly, every day in one country or the other terrorists strike and innocent people are killed. Terrorism is global menace. It has become a major problem of this century. Attempts made to counter it have not produced any tangible results. This is evident from series of attacks taking place one after the other. The recent ones are in Bangladesh followed by Nice in France, which butchered 84 people and wounded many. This has been done in the name of Islam—if this is Islam, then I hang my head in shame, being the follower of Islam. George Bernard Shaw said, “Islam is the BEST religion, with the WORST followers” and his comment has proved prophetic.
 
Terrorism is a barbaric act. It raises its ugly head with its varied faces and manifestations to bite into the goodness of humanity and spread barbarism, hatred, extremism, radical thoughts, and bigotry. Terrorists are monsters who do not hesitate in using the cruellest methods of violence and do not spare even women and children. These terrorists have no heart. They are blinded by extreme ideology that only misguides them to commit the heinous crime of inflicting fatalities—most of the time it is revenge motivated or like Karma Boomerang (phrase used by Timothy Bancroft-Hinchey -Hinchey Director and Chief Editor of the Portuguese version of Pravda.Ru)
 
It is reported that among the 84 people killed there were 10 children — the youngest six months, the eldest 18 years... In his article in Pravda.Ru dated 16 July 2016, Timothy Bancroft-Hinchey raises a poignant question “How can a child, who has no notion of the issues involved and who has done nothing actively or passively against the murderer, deserve to be maimed, scarred or killed in the name of some cause?”
In 2011, Timothy Bancroft-Hinchey wrote, “Let us hope France, the UK and US do not start complaining when what they are doing in Libya happens on their doorstep”. 
 
He continues, “But let us not forget what France did in Libya, alongside its UK; US bed masters. France perpetrated a massive act of state terrorism, strafing civilian structures with military equipment, strafing civilians with weaponry, destroying the electricity grid, destroying the water supply network, bombing the water pipe factory so that the pipeline could not be repaired, siding with marauding demonic hordes of terrorists, who sliced the breasts off women in the streets, impaled boys on stakes, gang-raped little girls before and after beheading them and after forcing them to watch their parents being tortured to death.”
 
Now a few questions to Dr Zakir Naik, and other hard line Islamic preachers…
  • Does any divine injunction enjoin on Islam followers to slice the breasts of women, indulge in gang rape, destroy the electricity grid and the water supply network and force children watch their parents being tortured?
  • Is it not gruesome, shocking, unacceptable, and a blot on humanity?
  • Are these terrorists not barbaric bloodthirsty organization?
  • Don’t they lack compassion even for those they control or capture, whether Muslim, Christian or Jew?
  • Are they not well-organised mindless entities actively selling a fairly-tale not only to the marginalised Muslim youth but to the educated ones also and those weak-minded enough to believe their seductive message?
I wish I get the answers.
 
Dr Zakir Naik in my assessment could be described as an extremist Islamic Scholar of Wahabi doctrine believing in the medieval interpretation of the Quran. He has demonstrated the ability to embrace modern methods of spreading his message. His oratorical skills are sharp. Intelligent use of social media has been at the forefront of his preaching tactics. His speeches do seem to brainwash, who listen to him, into believing that they will achieve martyrdom if they murder others they perceive as the enemy of Islam. Or take to suicide bombing to achieve that purpose.
 
However, there is nothing in the Quran, which justifies an act of suicide in any way, shape or form. In fact, any act of individual or collective suicide, is strictly condemned. Therefore, these young men, who sacrifice themselves by doing what is prohibited and condemned by the Quran edicts will, suffer eternally in Jahannam (Hell/Narak) that includes suicide bombers as well but as I understand, according to Dr Naik their permanent abode will be Jannat- (Heaven/Swarg).  I wish to know from which Ayat of the Quran this inference has been drawn.
 
Who Funds Terrorist?
 
“Money is the fuel that feeds the fire of international terrorism,” said New York Governor Cuomo in a statement. “Global terrorist networks simply cannot thrive without moving significant amounts of money throughout the world. At a time of heightened global security concerns, it is especially vital that banks and regulators do everything they can to stop that flow of illicit funds.”
 
My article, “How terrorists finance their operations,” published in Moneylife on 2 September 2014 very briefly highlights the various methods used to raise funds to finance terror operations. Loretta Napoleoni, the Italian bestselling author, economist and journalist studied and interviewed a wide range of terrorist groups globally. This includes the Italian “Red Brigades”, a Marxist organisation to members of Al Arqawi in the Middle East, and the Islamic State of Iraq and Syria (ISIS), a rapidly growing Sunni militant group that is consolidating power throughout Iraq and Syria, and is currently thought to be the richest insurgent group in the world. Her findings have shed light on how the business model of terrorist organisations has evolved over a period, and how the legitimate global financial system becomes unwittingly complicit as a channel for terrorist financing. 
 
Organised crime rackets of drug trafficking, people trafficking; extortion and other like offences are typical crimes for funding terrorism. However, much lower grade ---and more difficult to detect-- crime such as simple fraud, burglary and robbery are used by terrorists who are "sleeping” that is already in place in a country waiting for instructions and do not want to come to the attention of the authorities by becoming employed or by claiming benefits. The perpetrator of the deadly attack in Nice (France) falls in this category. He was a lone wolf, I guess.
 
However much of the money intended for terrorism does not arise out of crime - it is paid into the accounts by people who earn it legally in ordinary jobs and who pay money to a cause in which they believe. For this reason, money does not come into the financial system as dirty money, which is a point at which dirty money is often most visible.
 
“Funding remains the life blood of terrorist organizations,”, “It is also one of their most significant vulnerabilities,” says Dennis Lormel, CAMS, a counterterrorism expert.
 
Discovering and intercepting these sources of funding is the most effective way to choke these organisations and deprive them of their most powerful weapon – cash.
 
(SSA Zaidi is a retired banker and consultant for training and development. He is also author of Anti Money Laundering /Anti-Terrorism Financing & Know Your Customer)
 
 

 

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