Free fall: Volatile week erodes one-year gains for large-cap schemes

Large-cap schemes that were holding fort among the actively-managed plans have started giving in amid the rise in market volatility.

These schemes have seen most of their one-year returns getting wiped off in the last seven trading sessions. As of September 27, the average returns for these schemes stood at 10.3 per cent. Following last week’s sell-off, the one-year returns have fallen to just about 1.5 per cent, shows the data from Value Research. Experts say selling by foreign institutional investors (FIIs) is hurting large-caps as FIIs investments are largely parked in them.

“Investor sentiment in non-banking financial companies (NBFCs) — several of which are large-cap companies — has got hit as a result of the IL&FS crisis. Even big names like HDFC have not managed to escape the selling pressure seen in the NBFC space. The global headwinds have also hit investor sentiment,” said a fund manager, who wished not to be identified.

SBI in international bond market to raise nearly $500 mn in green bonds

The nation's largest lender State Bank of India Wednesday raised the first tranche of USD 650 million through a maiden green bond offering, which is part of its planned USD 3 billion in such funds for onward lending to green projects.

The five-year dollar money is priced at the US treasury plus 165 basis points, while from for an British investor the coupon will be 3 Libor plus 151 bps.

"SBI has successfully priced our maiden green bonds, a five-year money for USD 650 million at T+ 165 bps, corresponding to 3L + 151 bps approximately," a merchant banking source official said.

The money is raised through the bank's London branch, the source added.

With this issue SBI will become compliant with the global standards as prescribed by the Climate Bonds Initiative, a global not-for-profit investor-focused organisation.

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Sensex falls as rupee slides, oil jumps; SBI, ICICI Bank stocks down

Stock prices tumbled on Tuesday as investors took money off amid rising macro-economic headwinds. The benchmark Sensex fell for a fifth day, while the broader markets clocked their worst single-day performance in nearly two months. Investors were spooked by the sliding rupee, surging bond yields, and oil prices. The rupee dropped to a record low of 71.56 against the dollar, the 10-year government bond yield ended at 8.06 per cent, and Brent crude prices neared $80 a barrel, a level last seen in May.

The Sensex fell 0.4 per cent to close at 38,157.92 points, while the Nifty declined 0.54 per cent to 11,520.3. Sharp gains in technology stocks helped the benchmark mitigate losses. The magnitude of the correction was witnessed in the broader market, with the Nifty Midcap 100 dropping 2.72 per cent — most since February 2 and the Nifty Smallcap 100 index declining 2.6 per cent — most since July 16. On the BSE, there were nearly three declining stocks for every one advancing.

The spike in bond yields and weakness in the rupee took a toll on banking stocks, as investors speculated that the Reserve Bank of India (RBI) maybe once again forced to raise interest rates. The Bank Nifty index fell 1.4 per cent, while the Nifty PSU Bank index declined 3.55 per cent, the most since August 10. Shares of State Bank of India fell 3.2 per cent, while ICICI Bank declined 1.72 per cent. Asian Paints fell 3.5 per cent amid rising oil prices, a key raw material.

No pure GST on petrol, diesel; 28% tax plus VAT a possibility: Official

A peak tax rate of 28 per cent plus states levying some amount of local sales tax or VAT on petrol and diesel is likely to be the tax structure when the two auto fuels are covered under the GST regime, a top government official said.

The peak GST rate plus VAT will be equal to the present tax incidence, which is made up of excise duty, levied by the central government, and VAT charged by the states.

But before the two fuels are put under GST, the Centre has to decide if it is willing to let go of the about Rs 200 billion (Rs 20,000 crore) of input tax credit it currently pockets by keeping petrol, diesel, natural gas, jet fuel and crude oil out of the Goods and Services Tax (GST) regime that came into force from July 1, 2017, the official said.

"There is no pure GST on petrol and diesel anywhere in the world and so in India too it will have to be a combination of GST and VAT," said the official, who is closely involved with the GST implementation.

Good show by Modi govt in four years; private sector now needs to pitch in

Evaluating the performance of any government on economic grounds is challenging. This is so because direct linkages are at best by chance as phenomena like oil prices, monsoons, global forces etc. affect inflation and exchange rates which are beyond the purview of any government. Further, it would also be disingenuous to say that the NPAs are high during a particular regime due to the ruling government as these things build up over time and mere recognition cannot be attributed to a government.

Hence, to evaluate the performance of the NDA government in the last 4 years a twofold approach is required. The first is to judge what is within the purview of the government and the progress made therein and the second is a comparison of economic indicators in the pre- and post-periods as part of the routine.

The performance of the NDA government in terms of conceptualisation and implementation of policies has been most remarkable with very little left to be done. The major reforms that were noteworthy are bringing in the eNAM (electronic national agricultural market), opening up of FDI (defence and railways equipment included), GST, power sector reforms, addressing NPA issue through the IBC and recap measures, improving the doing business environment, channeling funds for the SMEs etc.

Facebook launches digital, start-up training hubs to aid small biz in India

Facebook on Wednesday introduced its digital training and start-up training hubs in India aimed at helping small businesses and people grow by giving them the digital skills they need to compete in today's digital economy.

Facebook said it plans to train more than half a million people in the country by 2020 through these online training hubs, which are being rolled out first in India.

The learning curriculum which is personalised to the individual's needs and available in English and Hindi on mobile, the social network, which is used by 217 million people in India, announced.

"We believe the best way to prepare India for a digital economy is by equipping people with the tools, knowledge, and skills they need to succeed," said Ritesh Mehta, Head of Programmes, Facebook, India and South Asia.

To develop the learning curriculum, the social network worked with several organisations, including Digital Vidya, Entrepreneurship Development Institute of India (EDII), DharmaLife and the government's StartupIndia initiative.

The curriculum includes vital skills for digital skill seekers and tech entrepreneurs, including how to protect their ideas, how to hire, how to go about getting funding, what regulations and legal hurdles they need to consider, how to build an online reputation, and a host of other critical skills.
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Tax breaks, infra push top markets' Budget 2017 expectations

Budget 2017 india - As the Narendra Modi-led government prepares to present the Budget on February 01 after the big bang demonetisation move in November, the markets have clawed back from their recent December lows with the S&P BSE Sensex rallying nearly six per cent to over 27,200 levels.

The rally in the mid-and small-cap indices has been sharper with the S&P BSE Mid-cap and the S&P BSE Small-cap indices surging around 11 per cent each during this period.

So what does this Budget hold in store, and what are the markets expecting from the Finance Minister this time around?

The markets, analysts say, are primed with the expectation that the Budget will be focussed primarily on reinforcing the 'black money crackdown' theme with a secondary focus on delivering token payments to the poor as well as income tax cuts. The government now will have the opportunity to signal its unbridled economic priorities within the broader ambit of prudent fiscal consolidation.

"We expect the Government to announce an 'anti-rich' budget which focusses on installing penalties on cash transactions, tax on the withdrawal of cash from the banking system, income tax relief for the middle class and potentially an adverse capital gains tax-related decision for equity investments," says Saurabh Mukherjea, chief executive officer, Ambit Capital.

"Additionally, we expect a moderate increase in revenue expenditure allocation whilst capex is deprioritised. As regards the fiscal deficit, the government is likely to postpone the fiscal goalpost of hitting three per cent of GDP (gross domestic product) in FY18," he adds.(Read More)

GDP growth to slow to 7.1% in FY17 from 7.6% a year ago: CSO estimates

Latest Business News - The government on Friday estimated the country's economic growth rate to slow down to 7.1 per cent in the current financial year,  compared with 7.6 per cent in 2015-16, as economic activity has been affected after the demonetisation of high-value notes effected in November. 

If it acutally turns out to be true, the growth rate would be only slightly lower than the 7.2 per cent witnessed in the first half of the current financial year. As such, demonetisation has impacted economic growth slightly, according to the advance estimates of gross domestic product (GDP) released in New Delhi. 

Growth is basically expected to come from agriculture and government expenditure. Everything else seems to have recorded a smaller expansion rate in 2016-17 when compared with 2015-16.

GDP growth for 2016-17 is also closer to the 7.2 per cent rate that the economy had clocked in 2014-15. This means, the economy could have gone back two years, though 7.1 per cent growth might also appear to be an overestimation by ome economists. (Read More)