Nifty has to stay above 8217 for the rally to continue
Positive closing of the US indices on Wednesday and the optimism on the Asian bourses played well on market sentiments back home. The benchmarks opened higher and was followed by a range bound session. They closed at almost the same level as at which it had opened. We had mentioned yesterday that market may bounce back today, however we foresee that the gains may not sustain beyond one or two sessions.
S&P BSE Sensex opened at 27,179 and moved in the range of 27,102 and 27,316 and closed at 27,275 (up 366 points or 1.36%). CNX Nifty opened at 8,191 and moved between 8,167 and 8,244 and closed at 8,235 (up 133 points or 1.64%). NSE recorded a volume of 82.89 crore shares. India VIX fell 9.19% to close at 16.4725.
Minister of Chemicals and Fertilizers, Ananth Kumar, on Wednesday said that the government has removed the cap/restrictions to production of Neem coated urea. Neem coated urea will not only increase crop yields but also lower input cost to farmers. He said it will also reduce imports of precious fertilizers as well as reduce ground and soil pollution.
Foreign Tourist Arrivals (FTAs) to India increased 6.8% to 8.77 lakh in December 2014 over the year ago period. FTAs during the period January- December 2014 recorded a growth of 7.1% to 74.62 lakh over the relevant period in 2013.
The increase in foreign direct investment (FDI) limit in insurance from 23% to 49% is expected to alleviate the capital pressure on Indian private non-life insurers, global credit rating agency Moody's Investor Service (MIS) said on Thursday. According to MIS, Indian private non-life insurers stand to benefit by the government's decision to increase the FDI limit as they are relatively pressured for capital and by poor underwriting performance.
The Indian economy is moving on the right track with efforts to fast track reforms, raising prospects of pickup in growth from 5.4% in FY15 to 7% by fiscal year 2017, says a Macquarie report.
According to CRISIL Research, India Inc’s revenue growth in the third quarter ended December 2014 will fall to 7% (year-on-year). Among other things this may be attributed to slow pace of investment, subdued growth in export-oriented sectors and soft commodity prices.
Berger Paints (10.30%) was among the top two gainers in ‘A’ group on the BSE. It hit its 52-week high today. Today the stock traded post-split. Its face value reduced from Rs 2 to Re 1. The companies share holding pattern as on 31 December 2014 showed that FIIs have reduced their holding to 11.46% from 12.02% as at the end of 30 September 2014.
DIIs shareholding reduced to 2.13% from 2.23% while retail holding increased from 10.78% to 11.44% for the relevant period.
Hathway Cable & Datacom (2.77%) was among the top two losers in ‘A’ group on the BSE. Its board today approved and passed the resolutions that subject to receipt of approval of the FIPB and / or RBI and all other applicable authorities, increasing the foreign investment limit only by foreign institutional investors, foreign portfolio investor from 49% to 74% of the issued arid fully paid-up share capital of the company.
Except for Reliance Industries (1.47%) all the other Sensex 30 pack companies closed in the green. Tata Motors (3.68%) was the top gainer in the pack. The company recently filed its monthly report of sales. Except for the domestic sales for Nano, Indica, Indica Vista, Indigo CS, Zest and few other categories, all the other categories recorded a fall in the domestic sales for December 2014 over December 2013.
On Wednesday US indices closed in the green.
According to minutes of their meeting on 17 and 18 December 2014 the Federal Reserve policymakers said they could begin raising interest rates before inflation starts to pick up. However, the Fed officials added that "they would want to be reasonably confident that inflation will move back" toward the Fed's annual 2% target "over time".
Except for Shanghai Composite (2.39%) all the other Asian indices closed in the green. Taiwan Weighted (1.74%) was the top gainer.
European indices were trading in the green. US Futures were also trading in the green.
There are reports that pessimistic Euro zone data could prompt the European Central Bank (ECB) to implement more aggressive stimulus measures.
German manufacturing orders fell sharply in monthly terms in November, data from the country's economy ministry showed today, 8 January 2015 reversing a strong growth pace in the previous month. New orders in November were down 2.4% in adjusted terms. The October growth figure was revised upwards to 2.9% versus the 2.5% growth originally reported.
The merger was cleared at different Extraordinary General Meetings of both banks' stakeholders
Extraordinary General Meetings of Kotak Mahindra Bank and ING Vysya Bank have passed the proposal to merge the two banks on Wednesday.
The exchange ratio of shares for the deal has been set at 725 shares of Kotak Mahindra Bank for 1000 shares of ING Vysya.
The Mumbai based Kotak Mahindra Bank and Bengaluru based ING Vysya had been in talks for a possible merger of around Rs15000 crore.
The combined banking entity will have a branch network of 1,214 branches.
The deal will go through after approvals from the Reserve Bank of India and the Competition Commission of India. Once the deal goes through, the combined bank will be the fourth largest private bank in India.
ING Vysya's employee union had called for a strike to protest the proposed merger. The unions were demanding job security for the current employees of ING Vysya.
However, now that the merger proposal has been passed, there seems to be little the strike can achieve.
Despite directions from RBI, banks refuse to share details of the entity sending money through NEFT
The National Electronic Fund Transfer (NEFT), used by almost everyone to transfer money quickly, can also put the receiver in a difficult position. The main reason is, there are no details available about the remitter or sender and if the amount is large, then the recipient may end up facing Income Tax (I-T) Department queries. Remember what happened with Aishwarya Rai, when in 2006 she received a parcel containing 23,000 euros (around Rs14 lakh at that time) sent by an unknown person from the Netherlands?
Well, with banks hesitating in sharing details of the person or entity who is transferring money via NEFT, it may be you next time. Although the Reserve Bank of India (RBI) has directed banks to furnish appropriate details in passbook or account statement for credits sent and received by the customer through NEFT, all the recipient gets is just a name and amount. “A very generic mention as 'NEFT' or 'NECS' does not help customers in identifying the source of credits, particularly where multiple credits are afforded to their accounts through these products. The Core Banking Solutions (CBS) of banks should be enabled to capture complete information from the relevant fields in the messages, data files which can be displayed to customers when they access their accounts online or provided to them additionally when they approach the branch counters, help desks, call centres,” the RBI had said.
However, all the recipient gets to know is just a name. There are no details like sender’s PAN number, address and the cause/remark for the money transfer.
Often money launderers are found using bank accounts of low-income individuals for transferring money. In addition, due to the forceful implementation of the Jan Dhan Yojana, we have about 10 crore new bank accounts, out of which 73% do not have a single penny. But consider that tomorrow, if somebody uses these accounts to launder money, then without detailed information about the remitter, how is a poor Kalawati supposed to answer queries from the authorities, including but not limited to I-T department. In the absence of detailed information about the remitter, how will she explain the unaccounted money remitted into her account through NEFT?
Receiving funds from unknown remitters becomes an even bigger issue for non-governmental organisations (NGO), who need to give a receipt as well as I-T exemption certificate. If there is just a name of the remitter, how and where is an NGO, like Moneylife Foundation, supposed to send the receipt?
Another issue with NEFT fund transfer is the delay. According to RBI policy, banks need to afford credits to beneficiary accounts or return transactions (uncredited for whatever reason) to the originating / sponsor bank within the prescribed timeline. It also directed banks to move towards hourly settlement starting from 9am to 7pm on all week days and between 9am to 1pm on Saturdays. Yet, it appears that banks are still using the last part of the work-day or first hour of the next day for NEFT transactions.
Coming back to the Aishwarya Rai episode, the actor was grilled by the Customs official for two-and-a-half hours at the international airport as soon as she landed in Mumbai from Jodhpur. The parcel was allegedly sent by one Avineshwar from the Netherlands marked to the actress. It arrived at the Foreign Post Office in Mumbai during September 2006. Besides the currency, it also contained a top-brand shirt, a pair of binoculars, a DVD player and other electronic items. Following a notice, Aishwarya's father Krishnaraj Rai, on 15th November met Custom officials to clarify her position. However, the officials insisted to know details from Aishwarya, due to which the actor had to come to Mumbai to clarify her position. She was shooting for the movie 'Jodha Akbar' in Jodhpur at that time. After the enquiry, she was give a temporary clean chit by the Customs.
Therefore, it is high time the central bank issues another order mandating banks to share all details of the remitter who is sending money through NEFT or any other payment method to the recipient and actually penalises banks if there are persistent complaints about flouting the RBI’s order.