Nifty may rally a bit more before a correction
The move on the indices, in the morning session, showed that the upward bias would continue for the third consecutive session, it could cross Thursday’s high and it would remain above previous day’s low. However, the moves on the indices on Friday were directionless. Positive data from the US helped the initial move today but soon the gains started to wither.
The S&P BSE Sensex opened at 27,139 and moved in the range of 27,048 and 27,247 before closing at 27,090 (down 22 points or 0.08%) while NSE's CNX Nifty opened at 8,129 and moved between 8,105 and 8,161 and closed at 8,121 (up 7 points or 0.08%).
The NSE recorded a volume of 120.39 crore shares. India VIX fell 3.55% to close at 11.8875.
On Thursday, the second day of Chinese President Xi Jinping's three-day visit to India, it was announced that China will invest $20 billion in India over the next 5 years. Under a five year Trade and Economic Development Plan, China has also agreed to improve the trade balance between the two countries. The two Asian countries agreed that specific measures to enhance market access for Indian companies in China will be expedited in agricultural and pharmaceutical products and for export of services. China will set up two industrial parks in India -- one in Gujarat and one in Maharashtra. India and China also agreed on specific steps to enhance co-operation in upgrading India's railways sector.
CRISIL (7.63%) was the top gainer in the ‘A’ group on the BSE. The stock hit its all-time high again today. Crisil Research, a unit of the credit rating agency recently launched the first inflation-linked securities index. It believes the index will provide market participants an appropriate and easily accessible benchmark to measure and analyse the performance of such securities. CRISIL IIGS Index seeks to track the performance of a portfolio of inflation-linked securities issued by the Government of India.
Suzlon Energy (9.93%) was the top loser in ‘A’ group on the BSE. Suzlon Group recently announced that it has successfully completed the production of its first blade for its best in class S1112.1 MW turbine. This product has been specifically designed for Suzlons next generation 2.1 MW turbine and is engineered to deliver a 20% increase in AEP (Annual Energy Production) at the same hub height compared to Suzlons 597 wind turbine model.
Tata Consultancy (2.71%) hit its all-time high today and was also the top gainer in Sensex 30 pack. Maruti Suzuki (1.29%) which hit its 52-week high on Thursday was among the top two gainers in the pack. It was in the news when it announced that its second plant at Manesar in Haryana has crossed the 25 lakh cumulative production milestone this month.
Larsen & Toubro (2.51%) was the top loser in the Sensex 30 stock. Its Oman subsidiary bagged an order from the Ministry of Defense, Sultanate of Oman for building Adam airbase.
US indices closed Thursday in the positive.
American jobless claims fell by 36,000 to 280,000 in the period ended 13 September 2014, the Labour Department said yesterday. Those already collecting unemployment benefits fell to a more than seven-year low.
US housing starts and permits fell in August, but upward revisions to the prior month's data indicated gradual improvement in the housing market.
All the Asian indices closed in the positive. Nikkei 225 (1.58%) was the top gainer.
European indices were trading in the green. US Futures too were trading higher.
The RBI should constitute a committee of experts with majority representation from users of banks’ services to ensure that a fair, just and equitable charter is evolved
The draft Charter of Customer Rights proposed by the Reserve Bank of India (RBI) is only a half-baked product, serving no useful purpose. What is required is a foolproof comprehensive charter of rights in the interest of consumers, who are at the receiving end of never ending problems faced in their day to day dealings with banks in our country. The RBI has proposed to give the freedom to banks to decide on various issues concerning service quality suggesting only broad contours of the charter. The charter, in the words of Sucheta Dalal, Founder-Trustee of Moneylife Foundation is “a set of pious motherhood statements and the entire charter is meaningless unless there are specific and steep penalties” for non-compliance. The draft charter does not meet the expectations of harassed bank customers, who deserve a much better deal, more so when a large majority of people in our country are financially not literate and nearly 25% of our population is totally illiterate. Under these circumstances, giving total freedom to each bank to devise its own standards of service and provide for compensation for its own failures is asking for total chaos in the banking system in our country. The draft charter does not serve the ends of justice for the following reasons:
1. The drat Charter requires much more clarity both in its contents and in its implementation. In the present form, the charter will go the way of “Code of Bank’s commitment to Customers” introduced a few years ago under the aegis of Banking Codes and Standards Board of India (BCSBI). This code was more in the nature of showing lip sympathy to bank customers as it was only long on promise but very short on performance. It has virtually disappeared from the banking scene, causing considerable loss of face to the RBI. Therefore, the proposed Charter should not be a repetition of past mistakes, but should serve as ground rules for uplifting the quality of customer service in banks for ensuring complete customer satisfaction with no cause for complaints.
2. The Charter of Customer Rights, therefore, should list out standards of service in crystal clear terms and appropriate time norms for their compliance applicable for all banks in their day to day dealing with all customers. These rules should spell out what services are available to bank customers as a matter of right and free of all charges, and what services are available for a fee. And this fee should be capped at a reasonable level to ensure that there is no exploitation of customers who are weak, helpless and ignorant of banking terms and legal norms to follow. This will streamline the service levels at all banks and eliminate most of the complaints that are caused by the indifference of banks to meet the needs of bank customers.
3. In order to make the charter workable and effective, it should prescribe appropriate penalties for mal-implementation or non-implementation of the basic guidelines laid down in the charter. Besides it should provide for reasonable compensation to customers who suffer because of the laxity or negligence on the part of the banks, who blatantly violate the spirit of the charter, thereby giving a sense of justice and fair-play to aggrieved customers.
4. The charter should also provide for a prescribed time frame for resolving issues and there must be conditions. Under this, individual complaints should get converted into class-action suits providing for rectification without requiring every individual to file a complaint. This would not only help those who do not understand the nuances of making a complaint, but also considerably reduce the burden of redressing individual complaints. This will elevate the entire process of complaints redressal mechanism to a new level of customer convenience and fair-play.
It is appropriate to quote here what Dr Deepali Pant Joshi, Executive Director of RBI stated at the MR Pai Memorial Award function while handing over this year’s award to Moneylife Foundation earlier this week in Mumbai.
Dr Pant Joshi spoke about the need for an “ingrained suitability clause in financial products,” that would put the onus of suitability of the product on the banker or financial institution, instead of the customer. This would naturally mean that it was high time that the financial services and banking institutions move from the maxim of Caveat Emptor (Buyer Beware) to Caveat Venditor (Seller Beware), she added.
In the context of rampant mis-selling by banks prevailing today, the earlier you put into practice this doctrine of consumer rights, the better it is for the people of our country.
“The only watchword is the present customer experience should be better than the experience of the previous generation of customers,” said Dr Pant Joshi.
The present draft charter of customer rights appears to be an in-house exercise of RBI without any concrete consultation with the stake holders. Unless and until the charter is widened to cover the views of the vital stakeholders like depositors, borrowers and all other customers of banks, it would be futile to expect that this charter will be of any consequence to the consumers.
The RBI should, therefore, immediately constitute a committee of experts with majority representation from the users of banks’ services and other stake holders to ensure that a fair, just and equitable charter is evolved in the best interest of consumers.
If what is said by Dr Pant Joshi, is to be implemented, it requires a larger canvas of consultations and a stricter enforcement of rights of customers to make it an epoch making document that can change the face of Indian banking for the greater good of bank customers, in particular, and our economy in general.
(The author is a banking analyst and he writes for Moneylife under a pen-name ‘Gurpur’ )
New norms will enable listing and trading of Real Estate Investment Trusts -REITs as any other security on the stock exchange
Market regulator Securities and Exchange Board of India (SEBI) said it will soon notify norms for creation and listing of business trusts to help attract greater foreign and domestic investments into real estate.
Addressing a conference organised by Assocham in New Delhi, SEBI's Executive Director Ananta Barua said, "We will soon notify the new norms on Real Estate Investment Trusts or REITs."
Last month, SEBI board had approved regulations on REITs after receiving public comments.
According to experts, the new instrument has the potential of attracting $8-10 billion into the cash-starved real estate sector.
This trust would help in the progress of the real estate sector, Barua said.
Like mutual funds, REITs would pool in money from investors and issue units in exchange. Most of the money collected would be invested in commercial properties which are completed and generate income.
The new norms will enable listing and trading of REITs as any other security on the stock exchange and also help create new platform for raising of funds by real estate companies.
The guidelines, approved by SEBI board, have fixed the minimum requirement for asset sizes permitted to be listed in India at Rs500 crore. Earlier there was a minimum requirement of Rs1,000 crore in this regard.
REITs may invest directly in properties or through a special purpose vehicle (SPV). As per the norms, 80% of the value of a REIT shall be invested in completed and revenue-generating assets, and the remaining 20% may be invested in developmental properties and other assets.
In the Union budget, Finance Minister Arun Jaitley had announced significant tax incentives for this product.
The government feels the new investment avenue would reduce pressure on the banking system while also making available fresh equity in form of long-term finance from foreign and domestic sources including the NRIs for the real estate sector.