Sensex, Nifty uptrend to lose strength – Monday closing report

Watch out for a close below today’s low, for the up move to weaken and a short downtrend


On Monday Indian market made a small gain as it did on Friday. For the fifth consecutive day, the market closed in the positive, with sentiments boosted by the improved monsoon.
The S&P BSE Sensex opened at 25,777 while NSE's CNX Nifty opened at 7,702. After hitting the day’s high at the beginning of the session at 25,861 and7,722 the indices started trending lower. After hitting the day’s low at the end of the session at 25,678 and 7,674, both Sensex and Nifty closed at 25,715 (up 74 points or 0.29%) and 7,684 (up 20 points or0.26%), respectively. NSE recorded a much lower volume of 72.18 crore shares. India VIX fell 1.31% to close at 14.8975.
Among the other indices on the NSE, the top five gainers were Media (1.40%), FMCG (1.12%), Consumption (0.60%), Finance (0.44%) and Smallcap (0.41%), while the top five losers were PSU Bank (1.13%), Realty (0.61%), Infra (0.59%), PSE (0.52%) and CPSE (0.43%).
Of the 50 stocks on the Nifty, 25 ended in the green. The top five gainers were IndusInd Bank (3.44%), Asian Paints (2.51%), HDFC (2.21%), Reliance Industries (1.97%) and ACC (1.78%). The top five losers were DLF (2.94%), Tata Power (2.03%), Gail (1.99%), IDFC (1.98%) and Bhel (1.86%).
Of the 1,613 companies on the NSE, 936 companies closed in the green, 607 companies closed in the red, while 70 companies closed flat.
The government announced today that that there has been significant increase in the monsoon during the last one week, beginning from 13th July, recording dramatic increase in the monsoon country-wide. In June and first two weeks of July, the monsoon was deficient by 43%. In the week beginning 13 July 2014, the deficiency was only 32%.
On Sunday, 20 July 2014, the Ministry of Shipping has decided that lifetime licences will be issued to Indian ships and any other ship charted by an Indian citizen or an Indian company instead of such licences being renewed every year as the system works now. Ship operators now need not undertake the exercise of getting the licence every year.
Revenue and operating profit of HDFC for June 2014 quarter recorded a growth of 16% and 19% respectively over June 2013 quarter. HDFC (3.06%) was the top gainer in the Sensex 30 pack.
Tata Power, which filed its shareholding pattern on Friday, showed a growth in the FII holding to 28.61% for June 2014 quarter from 25.76% for March 2014 quarter. Tata Power, which was the top loser among the Sensex 30 stocks on Friday, continued to lose even today, being the top loser again (fell 1.75%).
Century Textiles, top gainer in the ‘A’ group on the BSE, hit its 52-week high today at Rs642.80 and closed at Rs633.50 (up 9.48%).
Crisil (3.85%) was the top loser in the ‘A’ group on the BSE. Crisil which came out with its result on Friday after market hours. It recorded a 13% growth in revenue for the June 2014 quarter over the June 2013 quarter, while the operating profit recorded a growth of just 7% for the relevant period.
US indices closed Friday in the positive. Asian indices showed a mixed performance. Among the indices which were trading today, Jakarta Composite (0.79%) was the top gainer while Hang Seng (0.29%) was the top loser.
European indices were trading in the red. US Futures were also trading lower.


Cyber frauds cost India $870 million in 2013

Online scams and frauds have targeted and defrauded many Indians into losing upto $870 million to the scamsters in the last year alone


Two separate surveys with different objectives released almost simultaneously, reveal how susceptible Indians are to cyber fraud and email scams. The first report, by Ultrascan Advanced Global Investigations, shows that India is increasingly being targeted by such frauds, and $870 million has gone out of India because of, what they call the "advance fee frauds (AFF)" scams (better known as the Nigerian Fraud or Lottery Scam ). The second report, titled “Cybercrime Survey 2014” by KPMG, polled senior corporate officials. The KPMG report says, “Of the 170 participants from across India, an overwhelming 89% of the respondents said cybercrime has emerged as a major threat.”


The KPMG report polled corporates and as such, the results are focussed on the issues faced by corporates vis-a-vis cyber crime. It states that, about 51% perceive themselves to be an easy target for cyber attacks due to the nature of their business. Out of these 51%, about 68% respondents claim that they monitor their cybercrime threats on a daily basis. 49% of the respondents said they experienced cybercrime in the last one year. This number was at 11% 2 years ago, which indicates that the number of cybercrime incidents in India has been on rise.


About 45% of the 170 senior executives polled by KPMG said that cyber crime had caused financial loss and a slightly higher 48% said they had suffered a disruption in their business process. These are considerably high numbers and serve to highlight the urgent need for businesses to build defences against cyber crime. Another important number the report highlighted was that 58% of the respondents saw the Financial Services sector as most prone to cyber attacks, this would agree with the kind of effects that these attacks seem to be having as described above. A final worrisome number that the report brings out is that 47% of the attacks involved both internal and external employees.


The Ultrascan report on the other hand focuses on individuals who have fallen prey to cyber crime. It says says, “Where hundreds of thousands of Indians are falling mainly for low-end job and (student) visa scams. Chinese are falling for simple lottery scams perpetrated from Europe and C.O.D. (cash on delivery) scams perpetrated from Africa.” The report said the in India, poverty stricken citizens were being used to create fronts by opening bank accounts, registering companies with the chambers of commerce.


At $870 million, India was fourth in the list of countries which were monetarily most afffected by AFF scams. First was the US at $2.3 Billion, followed by China ($1.7 Billion) and third place was the UK ($1.2 Billion). India was the fourth worst affected, inspite of the fact that internet penetration in the country is still quite low compared with other nations on the list. If this trend continues, with rising internet users, the number of Indian victims of such scams will rise with as much speed.


In the recent BRICS summit in Brazil, Prime Minister Narendra Modi, has also raised the issue of cyber crime in the context of overall security. While it is encouraging to see the government take cognizance of this menace at such a high level summit, ground level steps, financial education, technical literacy etc are yet to begin. Among the possible defences against cyber crime, KPMG suggests that technology and such tools are one thing, but, the first line of defense is increasing awareness about such crimes that may affect breach in companies. For both corporate and those like the AFF, mere technological defenses won't do. The AFF type of scam (also known as the Nigerian Prince scam) goes back to the 19th Century. The only thing that has changed is the medium, while the method remains the same. The only credible defence against this and other such scams could be better awareness and wider literacy of financial matters.



SEBI bars Sunplant Forgings, directors from mobilising funds

Pulling the plug on illegal mobilisation of funds by Sunplant Forgings, the market regulator said the company and its directors raised more than Rs17 crore from 6,662 investors, a clear violation of its CIS rules 


Market regulator Securities and Exchange Board of India (SEBI) has barred Sunplant Forgings Ltd (SFL) and its directors from raising money by issuing securities.


Citing the Sahara case and the Supreme Court's order in this regard, SEBI said that Sunplant Forgings raised more than Rs17 crore from 6,662 investors amounted to a public offer and not a private placement.


"...SFL is prima facie engaged in fund mobilising activity from the public, through the issue of redeemable preference shares (RPS), which is a public issue made to 50 persons or more," SEBI said in its order.


The regulator has directed the company and its directors not to mobilise funds from investors through the issue of RPS or any other securities to the public.


SEBI also directed SFL to provide a full inventory of all assets and properties of the company. The company has been barred from disposing of any of its properties without prior permission from SEBI. Besides, it cannot divert any funds raised from the public which are kept in bank account(s) and/or in the custody of SFL.


The directions would take effect immediately and would be in force until further orders.


The regulator received a communication from Ministry of Corporate Affairs (MCA) saying that certain companies including SFL were collecting monies from the public through issue of debentures and redeemable preference shares allegedly allegedly in violation of the Companies Act.


SEBI noted that although the issue of redeemable preference shares is stated to have been made on a private placement basis, "yet, through the same offer, SFL circulated 11,904 application forms inviting subscription towards the issue of redeemable preference shares".


"Out of which it admittedly allotted redeemable preference shares to 6,662 investors and mobilised funds amounting to approximately Rs17.51 crore," SEBI noted. Since the offer was made beyond the limit of 49 persons as prescribed under Companies Act, the offer qualified as a public issue.


The directors of the company against whom the order has been issued are Abhinandan Kumar Singh, Sumanta Sinha and Neeraj Pathak.


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