Nifty will continue to make attempts to cross 6,100
Last Friday, we had mentioned that as long as the NSE Nifty stays above 6,030, it may move higher. After a volatile session Monday, where the index traded on both the side of Friday’s closing, Indian stock markets closed a little lower. From here we may see the Nifty making continuing attempts to cross 6,100.
The BSE 30-share Sensex opened at 20,429 and moved between 20,312 and 20,435 before closing lower at 20,334 (down 42 points or 0.21%). The Nifty opened at 6,073 and witnessed moved down to 6,046 from 6,083 before closing at 6,053 (down 10 points or 0.16%). The NSE recorded a lower volume of 48.23 crore shares.
Among the other indices on the NSE, the top five gainers were Realty (1.30%); Pharma (0.77%); Energy (0.49%); Auto (0.46%) and PSE (0.11%) while the top five losers were Finance (0.85%); Service (0.84%); Consumption (0.67%); MNC (0.65%) and Infra (0.63%).
Of the 50 stocks on the Nifty, 23 ended in the green. The top five gainers were DLF (2.86%); Dr Reddy (1.90%); Sun Pharma (1.58%); HCL Technologies (1.42%) and LT (1.37%). The top five losers were Jaiprakash Associates (3.23%); HDFC (2.48%); Hindustan Unilever (2.42%); TCS (2.42%) and Bharti Airtel (2.39%).
Of the 1,472 companies on the NSE, 660 closed in the positive, 722 closed in the negative while 90 closed flat.
The Indian economy is expected to continue to expand at a pace of less than 5% in the year ending 31 March 2014, according to a government forecast released after trading hours on 7 February 2014. In the latest official forecast for the fiscal year ending next month, the Ministry of Statistics & Programme Implementation projected a 4.9% expansion for 2013-14. The weak growth projection underscores the severity of the slowdown in the south Asian economy which grew close to 9% as recently as in the year ended 31 March 2011. The statistics ministry's estimates show that the manufacturing output is expected to contract 0.2% during the current fiscal year while mining output is expected to fall 1.9%. However, farm output growth is expected to be much better this year on the back of higher-than-usual rainfall. The ministry estimates a 4.6% expansion in farm output, compared with the 1.4% increase in the last fiscal year. Output of services, which contribute about 60% to India's GDP, is expected to grow 6.9% this year, almost the same as the 7% expansion last fiscal year.
Business activity across emerging markets expanded in January at the slowest pace in four months, dragged down by sluggish services sectors in the BRIC quartet of big developing countries, a survey showed on Monday.
HSBC's composite emerging markets index of manufacturing and services purchasing managers' surveys slipped for the second month running to 51.4 in January. It stayed under the 2013 average of 51.7 and well below the score of 64.1 posted last January.
US indices closed in the positive on Friday.
Payrolls rose less than projected in January and the jobless rate unexpectedly dropped to the lowest level in more than five years. The 113,000 gain in hiring fell short of the estimates and followed a 75,000 increase the prior month, Labor Department data showed in Washington. Unemployment declined to 6.6%, the least since October 2008, from 6.7% in December.
Asian indices had mixed performance. Shanghai Composite was the top gainer which rose 2.03% while Jakarta Composite was the top loser which fell 0.36%.
China's central bank signaled volatility in money-market interest rates will persist and borrowing costs will rise, underscoring the risk of defaults that could weigh on confidence and drag down growth.
Japan's current-account deficit widened to a record level in December on soaring imports, adding to Prime Minister Shinzo Abe's challenges to recovery the economy. The 638.6 billion yen ($6.2 billion) shortfall surpassed November's gap of 592.8 billion yen, the finance ministry said today.
European stocks were trading marginally higher while US Futures were trading lower.
Ensuing interim railway budget may be populist, as elections are around the corner. However, there is dire need for the Railways to raise its own resources. Will Mallikarjun Kharge deliver what is most needed for the railways?
India has the fourth largest rail network in the world, but the work, its performance and developments have not been very satisfactory. Railways carry some 25 million passengers a day, and despite the fare being cheap, we still do have a large percentage of ticketless travel (there are no figures available here) and the freight carried is substantial. Indian railways have an estimated $19 billion in annual revenue.
Railway Minister Mallikarjun Kharge is scheduled to present interim rail budget (Vote-on-account, the presentation of statement of revenue and expenditure for the entire year, with a Parliament nod for expenditure in the next four months) on 12th February.
By very nature of its size and the volume of traffic, though a few developments have taken place in the related industries, such as production of rails, locomotives, coaches and wagons, and a number of allied products, India cannot boast of top class signalling equipments, engines and coaches being produced in the country itself. Imports continue and there is tremendous scope for industrial development and infrastructural needs that can be additionally met by inducing foreign investors to come into the country.
In fact, the DIPP (Department of Industrial Policy and Promotion) have come out with a plan that proposes a 100% FDI in Railways. After preparation and circulation of a note for the Cabinet, and taking into account certain conditions laid by Railways, there are reasonable prospects for this to become a reality soon.
It appears, when the proposal is finally approved, it may permit foreign investors to fully own new services in suburban areas, lay high speed tracks and connections to ports, mines and power installations. However, the existing passenger and freight network operations may not be open to foreign investors. Also, Railways would gladly accept such investments in areas of construction and maintenance of projects, but not in running operations, as they would like to control these themselves.
DIPP plan would eventually attract an estimated $5 billion of investments in Railways and giants like General Electric Co and Bombardier are keen to take advantage, when this opportunity is given. It appears that this proposal has been vetted by Railways, Ministry of Industry as well as Finance Ministry.
In just making a passing reference, we may note that, in 66 years India has added 13,000 Kms of new railway lines, while, according to Ernst & Young, China added 14,000 Kms just between 2006 and 2011! On the top of that, the China Railway Construction Corporation has plans to invest a staggering $104.2 billion in fixed assets during 2014. Set against this, as mentioned earlier, our revenue in the Railways chugged along to reach a measly $19 billion.
But Railways can no longer act as a cheap public transport system for aam aadmi alone. They need to improve the quality of service by making facilities for the passengers, ensure well maintained passenger coaches and railway stations, and provide security and safety besides eliminating accidents, which, in the recent past, have become a regular occurrence. They need to make Railways a profitable proposition by increasing the passenger fare, ensure no ticketless travel and decrease the freight rates, so that heavy cargo movement that clogs the roads can be taken over by them. This will also save foreign exchange on imported fuel.
FDIs in railways may also be encouraged to build dedicated corridors for movement of freight, such as coal and iron ore from mining centres to areas of consumption and to points of export exit. So far, the Railways did not have any competition and so the aam aadmi had to take what was given to him. By encouraging direct FDIs in railways, it is hoped the spirit of competition would create better, safer and reliable service.
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
Oregon, Minnesota, Maryland and Massachusetts are still struggling to get back on track after a disastrous launch that makes HealthCare.gov look successful by comparison
Much has been written (and will continue to be written) about the spectacular failure of health insurance exchanges in Minnesota, Massachusetts, Oregon and Maryland—all blue states that support the Affordable Care Act.
All were woefully unprepared for their Oct. 1 launch, and unlike HealthCare.gov, the federal marketplace, they are still having trouble getting back on their feet. As a result, enrollment in those four states has lagged behind other states, including many that actively oppose the health law.
The New York Times recently reported on how problems in these states could give Republican candidates an opening. “Last month, the Republican National Committee filed public-records requests in Hawaii, Maryland, Massachusetts, Minnesota and Oregon seeking information about compensation and vacation time for the exchange directors, four of whom have resigned. All five states have Democratic governors whose terms end this year. Three of them — Gov. Neil Abercrombie of Hawaii, Gov. Mark Dayton of Minnesota and Gov. John Kitzhaber of Oregon — are seeking re-election,” The Times reported.
One common element emerging in the coverage of these exchanges is that at least some state employees knew they were heading for disaster but didn’t take action early enough to remedy it. All the states have blamed some, if not all, of their problems on outside tech contractors. Here’s a sampling of what has been reported in each state.
The Oregonian newspaper has done a great job chronicling the unfolding disaster with Cover Oregon. The state is the only one in which no one has been able to enroll using the website. In an article last month, the newspaper reported that a technology analyst at Oregon's Department of Administrative Services warned last May that managers at the exchange were being "intellectually dishonest" in claiming it would be ready Oct. 1.
As the Oregonian set forth in its findings:
Blame is being spread around in Minnesota, where the MNsure exchange is sputtering and its call center is unable to keep up with demand. As news site MinnPost reported last month: “The vendors are blaming the state. Gov. Mark Dayton and state officials are blaming the private companies who built the faulty technology, and MNsure leaders are quick to point out that they weren’t around when controversial decisions were made. Republican lawmakers, meanwhile, are saying that the governor needs to take responsibility for the project.”
MinnPostreported that despite their efforts to blame vendors, state officials were responsible for key decisions:
Newly released contract documents suggest the state and MNsure leaders had a more direct role in the health exchange’s many missteps than they have publicly acknowledged.
In recent weeks, Gov. Mark Dayton and MNsure officials have increased their criticism of vendors, blaming the private technology companies for some of the underlying problems and glitches with the health exchange’s operation.
However, in early May, the state of Minnesota in effect took over responsibility from its lead contractor, Maximus Inc., for constructing MNsure’s technical infrastructure, according to contract amendments released to MinnPost by MNsure.
The new documents show that the exchange staff quietly made a significant change to its key contract for building MNsure — just months after making major revisions to the timeframe and size of the project.
Dayton later said he was unsure if senior MNsure staff were keeping him apprised of the serious issues with the exchange as soon as they came up.
As in Oregon, the head of Minnesota’s exchange also resigned.
In many ways, Massachusetts should have been a leader in setting up its own exchange. After all, its 2006 health reform law signed by then-Gov. Mitt Romney has been cited as the model for Obamacare. But the state’s exchange, the Massachusetts Health Connector, has fumbled.
The Boston Herald reported last month that, “State officials overseeing the Health Connector website knew as early as February 2013 — some nine months before launch — that parts of the $69 million Obamacare gateway would probably be delayed, public records obtained by the Herald last night revealed.”
The Boston Globe followed up with another report:
Massachusetts officials knew in July, three months before the launch of the state’s ill-fated health insurance website, that the technology company in charge was far behind on building the site and that there was “a substantial and likely risk” it would not be ready, according to a state official’s memo.
The website launched on Oct. 1 was incomplete and riddled with errors that frustrated consumers, blocked some from getting coverage, and required the state to move tens of thousands of people whose applications could not be processed into temporary insurance programs.
The head of the Massachusetts Health Connector Authority, which runs the insurance marketplace, was copied on the July memo. But the executive director, Jean Yang, and her staff never told the Connector board during its monthly public meetings that the project was off track, according to meeting minutes.
The Globe reported in a separate story how an untold number of people who “applied for Connector plans without financial assistance have not gotten coverage, because their payments were lost or somehow never linked to their accounts.”
John J. Monahan, a columnist for the Worcester Telegram & Gazette, put it like this last weekend:
Massachusetts' universal health care program was the model for Obamacare. And now, it seems, the Obamacare website fiasco has been modeled by Massachusetts.
The state contracted with the same software company that messed up the launch of the Obamacare website to redesign its Health Connector website for people to buy insurance. It was scheduled to be working Oct. 1 to renew insurance for Jan. 1. It still isn't working.
The Maryland Health Connection, like the exchanges in other states, knew well in advance that it wasn’t ready to launch, but the problems weren’t fixed in time.
The Washington Post reported last month how “senior state officials failed to heed warnings that no one was ultimately accountable for the $170 million project and that the state lacked a plausible plan for how it would be ready by Oct. 1.”
Over the following months, as political leaders continued to proclaim that the state’s exchange would be a national model, the system went through three different project managers, the feuding between contractors hired to build the online exchange devolved into lawsuits, and key people quit, including a top information technology official because, as he would later say, the project “was a disaster waiting to happen.”
The repeated warnings culminated days before the launch, with one from contractors testing the Web site that said it was “extremely unstable” and another from an outside consultant that urged state officials not to let residents enroll in health plans because there was “no clear picture” of what would happen when the exchange would turn on.
Within moments of its launch at noon Oct. 1, the Web site crashed in a calamitous debut that was supposed to be a crowning moment for Maryland officials who had embraced President Obama’s Affordable Care Act and pledged to build a state-run exchange that would be unparalleled.
Weeks later, the Baltimore Sun’s Meredith Cohn wrote a piece about just how much trouble she personally had trying to enroll:
For a chunk of two recent days, I tried to buy insurance on the Maryland health exchange.
My editors asked me to do this because Gov. Martin O'Malley recently told a national television audience that the "website is now functional for most citizens."
They wanted to know what "functional" meant, especially after hearing stories from consumers about a glitch-prone website created under the Affordable Care Act for the uninsured and underinsured. Marylanders have described frozen screens, lost information, error messages and even mistaken identity.
My own enrollment took 5 hours and 22 minutes over two days, two calls to the exchange's call center, seven times entering my personal information, two computers and two web browsers.
Maryland’s exchange director resigned in December. Last week, Maryland Gov. Martin O’Malley signed a law that would provide a backup method for hundreds of residents to get coverage effective Jan. 1 if they can show that they tried unsuccessfully to get coverage from the exchange.
Have you tried signing up for health care coverage through the new exchanges? Help us cover the Affordable Care Act by sharing your insurance story.