weekly pulse 14
TRANSCRIPT
8/3/2019 Weekly Pulse 14
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Issue 14 2011 Oct17—Oct 23
Gov.t may increaseFII limit on Gov.tDebt. ………….1
Reliance to suspend itsoil operations ............ 2
Chawla appointed the
new CCI Chairman.
……..3 Weekly
Website: www.finx.
Email: [email protected].
FII LIMIT ON GOVT BONDS MAY INCREASE
The government may consider raising the limit for foreign institutional investors (FIIs) in government debtAfter the last auction the FII inflow in government securities stood at ₹42388 crore, which is just short of ₹4365crores(10 billion) available to them. This measure to boost capital inflows is high on the government’s agendkeeping in mind the slagging global financial inflows.
However any such decision will happen only in the next budget, after the finance ministry has analysed the im pact of any reduction of the securities transactions tax.
The cap on FII limit was last raised in September 2010 by $5 billion. When foreign investment limit in corporat
bonds was increased by $5 billion this year, it was mandatory to invest the enhanced limit in infrastructure bonds
Currently, FIIs can invest $20 billion in corporate bonds.
SAHARA ASKED TO RETURN ₹24000CR TO INVESTORS
The SEBI appellate tribunal ruled that Sahara Group would have to repay over ₹24,000
crore it had collected in the form of optionally convertible debentures. Sahara started col-
lecting money under optionally convertible debentures in the names of Sahara India RealEstate and Sahara Housing Investment Corporation around 2005. It was after complaints
from the investors that SEBI stepped in and directed the companies to pay back over
₹24000 crore to over two crore investors with a 15% interest.
Sahara challenged the order stating both the companies were unlisted so it was under the
Ministry of Corporate Affairs and not SEBI. However, the tribunal ruled that the company
had flouted the cap of 50 investors for a private issue and hence it was under SEBI's juris-
diction . Investor forums pointed how the company misled authorities by claiming all the investors were employ
ees or beneficiaries of the group, and hence the issue was a private issue.
Gov.t may increaseFII limit on Gov.tDebt. ………….1
Reliance to suspend itsoil operations ............ 2
Chawla appointed the
new CCI Chairman.……..3 Weekly
Website: www.finx.
Email: [email protected].
Issue 14 2011 Oct17—Oct 23
pulse“Finance, like time, devours its own children.”
— Honore de Balzac
Govt may increaseFII limit on GovtDebt.…………………….1
Reliance to suspendits oil operations .... ...…2
Rupee at 2-1/2 year
low.………………………..3 Weekly
Website: www.finx.
Email: [email protected].
Issue 14 2011 Oct17—Oct 23
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S PA I N’S C R E D
I T R A T I NG DO W N T W
O
S PA I N’S C R E D I T R A
T I NG DO W N T WO NO TC H
ES. MICROSOFT
GOVT MAY OFFER ₹26000 CRORE BAILOUT TO AIR INDIA
Currently Air India owes ₹48000 crore in loans and payments to vendorsand has accumulated losses of around ₹20000 crores. However help is onits way, with the government of India likely to offer a ₹26000 crore bailout package for the ailing national carrier. This bailout will be a mixof debt transfer and equity infusion. The group of officers (GoF) from thefinance ministry in charge of AI’s financial restructuring plan is mostlikely to recommend this bailout to the government in its next meeting.
However these recommendations would be accompanied by a series of
stringent conditions for cost control, increasing revenues, yields and soon. This bailout would be a big boost for AI and aid in its revival.
If this bailout is given clearance it would be the biggest ever help given
by the government to a public sector undertaking.
RELIANCE TO SUSPEND OIL DRILLING AND GAS EXPLORATION
Reliance industries, India’s largest private oil explorer is “re-evaluating” its
exploration and production strategy along with its new partner BP. Reliance
and BP will jointly assess reliance’s entire exploration and production port-
folio and present the government with a new plan for the same.
This development is in light of the fact that there has been a decline in the
gas output from D6, the reservoir operated by reliance, causing reliance
shares to fall nearly 27% this year. In September, reliance was producing
44 million standard cubic metres per day (mscmd) from its exploration field
which is very well below the 60 mscmd it produced in 2010.
It is a win-win situation for both the companies with Reliance gaining ac-
cess to BP’s deepwater drilling experience and BP gaining access to new hydrocarbon resources and markets.
Moody’s investors service cut Spain’s bond rating to A1 from Aa2. They are the third of the major agencies to act in recent weeks and taking it a notch below the rat-ings of Standard & Poor’s and Fitch.This cut came with Greeks beginning their biggest strike in years against the government’s austeritydrive and with France announcing that it could lose its triple A rating. Markets, however are counting down to a summit of EU leaders on 23 rd October, with hopes thatthe summit will agree to new steps to reduce Greece’s debt and strengthen the capital of banks.
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LAST WEEK’S ANSWERS:
₹ breaches 50/$, at 2-1/2 year low
The Indian rupee dipped below the 50 mark on 21st
October, a 30-month low as uncertainty about the
Eurozone continued. The rupee was dragged down
by strong dollar demand from importers and global
risk aversion.
The currency has declined 10.8% this year, makingit the worst performance among Asia’s 10 most-
traded currencies. The overall sentiment towards
rupee is expected to remain weak. Bankers expect
rupee to pierce the all time low of 52 .20 to dollar in
the next few weeks, if European crisis worsens and
RBI remains hawkish.
SENSEX 16785.64*
-297.05**
(-1.738%)
NIFTY 5049.95
-82.35
(-1.605%)
DOW JONES 11808.79
+164.3
(+1.411%)
HANG SENG 18025.72
-476.07
(-2.573%)
FTSE 5488.65
+22.29
(+0.407%)
US$ 50.03
+0.96***
(+1.956%)
EURO 69.05
+1.33***
(+1.963%)
GOLD MCX
(spot price) 26041
-509
(-1.917%)
WTI CRUDE
OIL
($/BARREL) 87.53
+0.25
(+0.286%)
WEEKLY MARKET STATUS
*CLOSING SPOT PRICES AS ON LAST FRIDAY i.e. 21/10/2011
**RISE/FALL OVER WHOLE WEEK; FROM 15 Oct to 21 Oct
***NEGATIVE SIGN INDICATE STRENGTHENING OF RUPEEAGAINST $/EURO
BRAIN SCRATCHER
FinX comes with yet another editionof crossword. First 3 correct entries
will get their name featured on theFacebook page and the next Weekly Pulse.
CROSS DOWN
Refers to stabilising the prices of stocks, currency, commodities or old through intervention by the Government or its agencies.
2. Bonds that carry low ratings but correspondingly higher yields.
A company, member of the stock exchange which cannot meet itsnancial obligations.
3. A situation when supply of credit, in relation to its demand, fallssiderably.
Assets that cannot be traded because they are mortgaged in favor of
ome class of creditors.
6. Law firms and investment bankers employed by a target compa
fend off unfriendly takeover bids.
We didn’t
receive a
correct
solution of
the last
crossword.
BUCK UP
GUYS !!