The fourth quarter (January-March) is usually a weak quarter for the Indian IT companies due to the lesser number of billing days. This time, however, the good news is that the rupee has depreciated by about 1.3 per cent during the quarter. Every increase/decrease of a percentage point in the rupee lowers/adds to the operating (EBIDTA) margins by 30-50 basis points (bps).
Lenders ask RBI to ensure cheaper credit for infrastructure sector. Banks say while hardening of rates may be required to combat inflation, even a 50 basis point rise could render many projects unviable. In a meeting with RBI, bankers factored in the impact of higher interest rates on most sectors as a part of the inflation management drive but indicated that the government & the central bank should take steps to ensure cheaper credit for building roads, power plants & ports.
While banks are busy firming up business plans for 2008-09, some of them have already conveyed to the Reserve Bank of India about prospects of a moderation in the credit growth. In March, many banks held talks with RBI on resource conditions and growth prospects. In fact, Bank of India has already scaled down the estimate for the current financial year to 17-18 per cent compared with the 24 per cent rise it had targeted in the just-concluded financial year.
The move, if implemented, could change the way banks transact business. For starters, the loyal public sector bank customers could be the biggest gainers, with the Pay Commission recommending that government offices should stay closed only on the three national holidays -- Republic Day (January 26), Independence Day (August 15) and Gandhi Jayanti (October 2). All cheque clearances are expected to be faster and make money available in your accounts earlier than at present.
India Inc looks all set to grow at a slow pace in the current financial year. That is, if the financial performance of Corporate India for the first nine months of 2007-2008 is any indicator of things to come.
Rejects proposals by Bank of India, IndusInd, Kotak Mahindra and HDFC.
Report sees the index at 16,000 points in the worst-case scenario.
The rising cost of production and interest outgo have shrunk operating margins by 53 basis points to 15.16 per cent in the quarter ended December 2007, while net profit margin has slipped 39 basis points to 9.31 per cent as compared to 9.70 per cent in the corresponding quarter a year ago.
Short covering also took place in RNRL (futures up 22 per cent, OI down by 51.48 lakh shares), Reliance Energy (futures up 18.6 per cent, OI down by 57,750 shares) and NTPC (futures up 13.3 per cent, OI down by 25.11 lakh shares).
The market wide open interest declined by 15 per cent and is 25-30 per cent below the peak levels, indicating covering of long positions. The Nifty futures OI declined further by 19.5 per cent or 74.45 lakh shares. The current Nifty January OI of 30.97 million shares is the lowest for the current month series.
They have increased their holdings in Infosys Technologies, TCS and Wipro between two and four per cent, going by the shareholding data for the quarter ended December 31, 2007.
DSP Merill Lynch managing director Monish Mahurkar gives his take on the present Indian debt market and its future course in a wide-ranging interview with Business Standard.
RBI has come down heavily on banks and dealers that are holding government securities portfolio.
State Bank of India, ICICI Bank, Bank of Baroda and Bank of India are set to book mark-to-market losses on the exposures of their foreign offices to credit derivatives, with the spreads on these widening since international lenders turned risk-averse following the crisis in the US subprime (or high-risk home loan) market. Credit derivatives are instruments for which the underlying asset is a loan or a bond.
SBI tops the list of league table banks for fees earned on loan syndication in the Asia Pacific region.
The Essar group of Shashi and Ravi Ruia was the biggest overseas borrowers, mobilising $4.67 billion for Essar Global ($3.59 billion) and Essar Oil ($1.08 billion). AV Metal mobilised $3.1 billion followed by Reliance Industries ($2.7 billion), OP Jindal group ($2.40 billion), Tata Steel ($2.38 billion), Guru Gobindsingh Refineries ($1.95 billion), Suzlon Energy ($1.87 billion) and ICICI Bank ($1.8 billion).
During the probation period of six months, CAs will get a lump sum payment of Rs 50,000 a month.
The sub-prime mess has presented the foreign units of domestic banks with lucrative investment opportunities. Global banks, struck by a severe liquidity crunch and risk aversion, are selling a lot of their investments in debt of Indian companies at a discount.
The money mule scam has reached Indian shores. Banks have noticed instances of fraudsters based overseas, posing as global payment companies, luring gullible people into joining them as "money transfer agents" and using their bank accounts to route ill-gotten money.
The adverse impact of the rupee appreciation has gone beyond exports. The currency's climb is now affecting government infrastructure projects funded by multilateral lending agency such as the Asian Development Bank (ADB).
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