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BK Modi bought 51% stake in WSF in September last year and was appointed its chairman in October. His exit from the company as chairman and director has raised some questions
Financial services company Wall Street Finance (WSF) on Friday said that BK Modi has resigned as the director and chairman of the board of directors of the company, reports PTI.
His resignation would be effective from 8th February, WSF said in a filing to the Bombay Stock Exchange (BSE).
Interestingly, last October, BK Modi was appointed chairman of WSF. The BK Modi-owned Spice Investment and Financial Advisors bought 51% stake in the forex and money transfer firm from where Anil Ambani Group's Reliance Money exited by selling its entire 36.8% stake in WSF for Rs22 crore in September 2009. The exit of BK Modi from WSF has certainly raised some questions.
WSF said that BK Modi is being replaced by Dilip Modi, who has been appointed as the chairman and an additional director on the board of the company. His appointment would come with effect from 9th February, the company said.
Dilip Modi is presently the group president—global operations of Spice Group and chairman of Spice Mobiles. He is also the senior vice-president of industry body Assocham.
The financial services firm also announced the appointment of Divya Modi as vice-chairman on the board with effect from 9th February.
The US Fed’s surprise move to raise discount rates weighed heavily on Indian and Asian markets
Indian markets along with other Asian markets slumped after an increase in the US Federal Reserve discount rate spurred concerns that the economic
bounce-back will slow down as stimulus programs are being unwound. The Sensex declined 145 points to 16,183 from the previous day’s close while the Nifty closed at 4,845, down 43 points.
Next week, we expect Indian markets to move sideways as traders roll over positions from February 2010 derivatives contracts to March 2010 contracts ahead of the expiry of the near-month February 2010 contracts on Thursday, 25 February 2010.
At 12:00 hrs IST, the Sensex was trading down 179 points from the previous day’s close at 16,149. However, at 14:00 hrs IST, the Sensex was trading at 16,154, down 174 points.
At the end of the day, Maruti Suzuki India rose 1% after a senior official of the company told the media that the firm will add 3,000 employees in the next three years and the company was also investing Rs200 crore to add showrooms and stockyards.
Unichem Laboratories has been granted a certificate of suitability from the European Directorate for the Quality of Medicines and Healthcare for Meloxicam and Zolpidem Tartrate. The stock was up 1%.
Jyothy Laboratories remained flat after the company announced the launch of a multi-insect repellent at the Defence Expo in New Delhi.
Himalya International has launched real fruit blended yogurts in metro cities under the brand name ‘Himalya Fresh’. The stock was down 1%.
Jain Irrigation Systems has signed a memorandum of understanding (MoU) with the International Rice Research Institute (IRRI) for collaborative research and adaptive field trials on paddy using micro-irrigation. The stock declined 2%.
According to data released by EPFR Global, investors put their money to work more selectively in the week ended 17 February 2010, choosing mostly developed equity markets and investment-grade bonds, while avoiding Chinese stocks and high-yield bonds. China-focused equity funds had net redemptions for the sixth time in the last seven weeks as fears of more central bank policy tightening spooked investors, while Latin American equity funds posted outflows for the fourth consecutive week. Russia and Indian equity funds had relatively small inflows for the week ended 17 February 2010, while Brazil had a second straight week of outflows.
During trading hours, C Rangarajan, the prime minister’s economic adviser, said that India’s economy is likely to grow at over 7.2% in the current fiscal year ending March 2010. The wholesale price inflation is seen at around 8.5% by the end of March, Mr Rangarajan said. He also said that the government’s market borrowing in the next fiscal year ending March 2011 is likely to be around or slightly lower than the Rs4,51,000 crore ($97 billion) in the current fiscal year.
The prime minister’s economic advisory council said that inflation was a down-side risk to its projected growth rate of at least 8.2% in 2010-11, and any policy action would have to factor in the “significant” danger of high food inflation spreading into broader prices. The fiscal imbalance is a matter of concern and the process of consolidation must begin in the next financial year itself, the entity said.
As per media reports, a foreign brokerage predicts that Indian equity and equity-linked offerings may jump by as much as 33% this year as companies and the government tap a growing pool of domestic capital as the economy recovers. Indian companies may raise $25 billion to $30 billion in share sales in 2010, up from $22 billion last year.
During the day, Asia’s key benchmark indices in Hong Kong, Indonesia, Japan, Singapore and South Korea were down by between 0.99%-2.59%. On Thursday, 18 February 2010, the Dow Jones Industrial Average was up 84 points while the S&P 500 and the Nasdaq Composite were up 7 points and 15 points respectively.
As per US media reports, after trading hours, the US Federal Reserve raised the discount rate from 0.5% to 0.75% effective 19 February 2010 and said that the move will encourage financial institutions to rely more on money markets, rather than the central bank, for short-term loans.
Meanwhile, Singapore’s government said that the economy will increase 4.5% to 6.5% in 2010 after shrinking 2% last year.
In premarket trading, the Dow was trading 50 points lower.
Expressing concern over the rising fiscal deficit—which is estimated at 6.8% this fiscal—the PM's Economic Advisory Committee has said that it is crucial to cut down on spending to bring in fiscal discipline
Projecting an economic growth of over 8% next fiscal, the Prime Minister's Economic Advisory Committee (PMEAC) on Friday pitched for raising duties in the Union Budget 2010-11 as part of the rollback of stimulus measures, reports PTI.
"Partially, we need to roll back (stimulus) and if you partially roll back, there is one possibility that you unify both the rates (excise and service tax) at 10% (and also raise both rates) to 12%," PMEAC member Govinda Rao said, but clarified that his comment was not a suggestion to the finance minister.
He was speaking after the release of the Economic Review by PMEAC chairman C Rangarajan.
Expressing concern over the rising fiscal deficit, which is estimated at 6.8% this fiscal, the panel said that it was crucial to cut down on spending to bring in fiscal discipline.
"There is a case for adjustment of duties. Adjustments are possible both on the revenue and expenditure side in order to bring down fiscal deficit," Mr Rangarajan told reporters.
As part of the stimulus given to the industry to combat the global financial crisis in late 2008, the government had reduced excise duty to 8% from 14% and service tax to 10% from 12%. This pushed fiscal deficit up to 6.2% in FY09 and it is expected to touch 6.8% of GDP in FY10.
The PMEAC said that growth in FY10 would beat 7.2% and exceed 8% next fiscal, and 9% in the year after that. On inflation, the PMEAC suggested import of 3-4 million tonnes of sugar to meet domestic shortfall next fiscal.
Mr Rangarajan said that the proposed goods and service tax (GST) provides an opportunity for unifying excise and service tax rates. However, Mr Rao said that excise duties can't be raised to the pre-crisis level of 14%, as the rate would be too high for GST.
The Review suggested expansion of tax coverage and unification of the rate structure of central value added tax (CENVAT), pegging it between the current and the previous level. He further suggested that the government should initiate fiscal consolidation measures in the forthcoming budget, as the current level of deficit was unsustainable.
Fiscal deficit rose to 6.2% of GDP in 2008-09 against the budget estimates of 2.5% due to the government's stimulus packages for the industry.
Mr Rangarajan said that it is possible to cut down fiscal deficit during 2011-12 by outlay rationalisation. He, however, said that the government should refrain from reducing outlay for the infrastructure sector to contain fiscal deficit "which is now a matter of concern".
To a query, Mr Rangarajan said that he expects overall inflation to more or less come down to 8.5% by this fiscal end, as also projected by the Reserve Bank of India (RBI).
The Council also expects the effect of food inflation, which is hovering around 18%, to spill over to other sectors by next fiscal.
To avert such a situation, the Council wants the government to ensure timely release of sufficient amount of foodgrains below prevailing market prices, plan for imports at the first hint of a production shortfall and develop better distribution channels.
PMEAC advised the government to take urgent steps to import white sugar to the tune of 3-5 million tonnes to meet the shortfall next fiscal. Sugar prices rose over 58% during the week ended 6th February.
"Given the high international prices that are principally a result of the aggravated state of short supply in India, there is hesitation to make such imports due to fear that when the material reaches Indian shores the price may be lower than the landed cost. It is therefore important that the government takes the initiative to start the process," it said.
The PMEAC also pointed to the danger of rise in commodity prices. "India and China, as well as several other developing countries, are showing strong signs of growth and their elevated domestic demand in combination with unsettled financial conditions have the potential of causing commodity prices to rise."
The advisory body marked agriculture and power generation as major constraints of economic growth in the medium to long run. It wanted to scale up nuclear-power generation following the Indo-US nuclear accord on civil supplies.
It expects more neutral policy from RBI as the economy improves, but said that the central bank's action will depend on many factors like inflation.