BSE monitoring Amtek; seeks reply on bond payment default.

Mumbai: Troubled Amtek Auto, which reportedly defaulted on its Rs 800-crore foreign currency bonds, Tuesday informed stock exchanges that it is in advanced discussions with various banks and financial institutions to meet its debt obligations.

"We wish to clarify that the company is in advanced discussions with various banks and financial institutions for realignment of its debt obligations," Amtek informed BSE and NSE in separate letters.

"We assure that if any positive development takes place, the same will be intimated to the exchange as per the requirement of the listing agreement," it added.

Amtek also said it was not aware of any information that has not been announced to the exchanges which could explain movement of the share price.

The clarification came after NSE and BSE shot off letters to Amtek seeking clarification on media reports that the firm was in talks with banks to find a solution to its financial crisis otherwise it will not be able to service its Rs 8,000 crore loans.

The company stock plunged 20 per cent intra-day on the BSE and settled at Rs 45.95, down 11.46 per cent.

Meanwhile, BSE today said it is closely monitoring Amtek Auto and sought clarifications on reported default of Rs 800 crore foreign currency bonds.

"The exchange is monitoring the situation closely and would be seeking further details from the company whenever necessary pursuant to media reports about the FCCB default by Amtek Auto, the exchange has been periodically seeking clarifications from the company since June 18," a BSE spokesperson told PTI.

The Delhi-based auto components maker Amtek reportedly failed to pay on the Rs 800 crore worth of bonds that matured yesterday.

As per reports, the company is negotiating with banks for over Rs 1,000 crore fresh loans to repay bond holders, including JP Morgan Mutual Fund which had restricted withdrawals from two of its funds because of the Amtek bond ownership.

When contacted for enquiries, company officials informed was that its spokesperson is unavailable as he is travelling overseas. Interestingly, the company website does not offer any media contacts or email ids of its spokesperson and the media section is blank.

Amtek Group has also been facing probe by Sebi for alleged share price manipulation at its subsidiary Castex Technologies besides facing financial problems.

Over a dozen banks have more than Rs 26,000 crore exposure, mostly unsecured, to Amtek Group, which had about Rs 20,000 crore revenue last fiscal year.

Amtek required an immediate liquidity of Rs 800 crore to redeem foreign bonds but the banks have ordered a forensic audit of the books of the company before deciding on their future course of action.

Rupee stretches losses, down 24 paise to 66.22 against dollar

Mumbai: Extending weakness for the fourth straight day, the rupee fell further 24 paise to 66.22 against the US dollar in early trade on sustained month-end demand for the American currency overseas amid foreign fund outflows.
 
Forex dealers said dollar strengthening against other currencies overseas ahead of a closely watched speech later in the day by Federal Reserve chief Janet Yellen, during which markets hope she will provide more clarity on the bank's plans for an interest rate hike, also put pressure on the rupee.
 
Besides, a lower opening of the domestic equity market dragged down the Indian unit, they said.
 
The rupee had lost another 10 paise to settle at 65.98 per dollar yesterday on persistent demand for the American currency from banks and importers.
 
Meanwhile, the benchmark BSE Sensex was trading lower by 100.98 points, or 0.39 percent, at 25,722.01 in early deals.

Dish TV, Den Networks shares gain on FDI limit hike buzz

Shares of Dish TV and Den Networks rose in the morning trade on Monday after media reports said that government is mulling to raise FDI cap in Direct To Home (DTH) and TV cable operators to 100 per cent.

At 11.42 am, the Dish TV stocks were trading 5.03 per cent up at Rs 114.75. Den Networks Ltd shares were up 1.53 per cent at Rs 129.00 during the same time.

Currently, government only allows 74 per cent FDI in DTH and cable operators.

According to Angel Broking, an inter-ministerial committee is considering a proposal to raise FDI (foreign direct investment) limits to 100% from 74% currently in broadcasting carriage and content services, including direct-to-home (DTH) and cable networks, aimed at attracting overseas investment and improve infrastructure.

The brokerage firm further said that in case of broadcasting content services – uplinking of news and current affairs TV channels, the proposal under discussion is to raise the limit to 49% from the present 26%. Increase in FDI limit will help improve the pace of digitization of broadcasting services across India. Positive for cable and DTH companies such as Dish TV, Den Networks & Hathway.

Later, shares of Dish TV closed 6.59 per cent up at Rs 116.45 while Den Network closed 0.35 per cent down at Rs 126.60.

Strides Arcolab shares gain on acquiring CNS divisions of Ranbaxy.

Strides Arcolab shares gained over 4 per cent on Monday after Sun Phamaceutical Industries and Strides Arcolab announced that they have entered into a definitive agreement related to erstwhile Ranbaxy’s ‘Solus’ and ‘Solus Care’ divisions operating in the central nervous system (CNS) segment in India.

The scrip closed 4.57 per cent up at Rs 1,198.20.

The agreement involves transfer of these two marketing divisions, along with employees to Strides for a consideration of Rs 165 crore. As per IMS July 2015 MAT report, all the products of these two divisions together accounted for approximately Rs 92 crore in sales.

Last one week high and low of the scrip stood at Rs 1,196 and Rs 1,100.80 respectively. The current market cap of the company is Rs 6,961 crore. The promoters holding in the company stood at 27.65 per cent, while institutions and non-institutions held 45.94 per cent and 26.41 per cent, respectively.

Oil prices edge up after sharp falls in previous session.

Singapore: Oil prices steadied early on Tuesday as traders closed short positions and took on new longs after markets tumbled in the previous session.

Crude prices fell on Monday with the onset of lower demand autumn trading and as weak economic data out of China and soft gasoline prices pressured the market.

A broker said Tuesday`s gains were mainly driven by market participants with short positions locking in profit following Monday`s falls, while other traders took the price fall as an opportunity to place new orders.

Front-month U.S. crude futures were trading at $44.30 per barrel at 0029 GMT on Tuesday, up 30 cents from their last settlement. Internationally traded Brent futures were up 32 cents at $46.69 a barrel.

"This morning`s trading is not representative of fundamentals, but instead a digestion of yesterday`s moves," said the broker.

Venezuela`s president Nicolas Maduro late on Monday repeated his call for the Organization of the Petroleum Exporting Countries (OPEC) to convene a heads of state meeting and that he would present the country`s proposals to shore up oil prices to the group.

Yet Middle East producers from OPEC - who effectively control the export club - have so far pledged to maintain high output in a fight to defend market share against rising competition.

So far, they have stuck to their decision despite calls by other OPEC members, such as Venezuela, for the Middle East to cut excessive output.

Instead, there has even been growing competition amongst the lowest cost producers in the Middle East, such as Kuwait and Saudi Arabia, to undercut each other with discounts for supplies to their core markets in Asia.

On the demand side, Japanese manufacturers` confidence slumped the most in a year in September to an eight-month low and is forecast to worsen further as fears of a China-led global economic slowdown grow, a Reuters poll showed. 

Time is ripe for up to 1% rate cut by RBI: Arvind Panagariya,

Pitching for rate cut by the Reserve Bank, NITI Aayog Vice-Chairman Arvind Panagariya on Thursday said that "time is ripe" for 0.5 percent to 1 percent reduction in benchmark lending rates.

He also expressed hope that the GDP growth can cross 8 percent in the current fiscal as investment sentiments are turning around and three quarters are still remaining.

In an interview on private business news channel, he said, "We need a rate cut of 50-100 basis point. I think time is ripe."

On the possible Fed rate hike impacting RBI decision, he said the interest rate increase by the US central bank would not be very steep so it should not make difference.

"It's not going to be major rate hike by Fed but whatever Fed does we may be ripe for 50 basis point rate cut," he said.

When asked would it be right if RBI cuts rate by just 0.25 percent, Panagariya said, "the direction would be right and would add to past 75 basis point reduction and would become one percentage point. May be this will begin the process of the pass through with the little stronger effect."

Currently, pass through is 0.3 percent out of 0.75 percent cut in rates by RBI since January this year. The policy repo rate, at which RBI lends to commercial banks for short term, is 7.25 percent, at present.

On the first quarter muted growth numbers, Panagariya said these are preliminary figure for GDP and there is possibility of it getting revised upwards.

The GDP growth slowed to 7 percent in the first quarter of the current fiscal, from 7.5 percent in the previous quarter, amid deceleration in farm, services and manufacturing sectors.

"I would not write off the prospect of getting past 8 percent growth rate. We have had quarter when we had grown 9 percent, 10 per cent. Three more quarters are left. Pick up required is not huge when we spread it to three quarters," he said.

He further said that investments are picking up and sentiment is turning positive.

"Foreign investors who were keeping out are now beginning to return to India. Investors sentiment is now turning around," he said. 

Asked if there is a possibility of rolling out Goods and Services Tax from April 1 next year, Panagariya said, "In politics you can never say that anything is over. Things can change, turnaround. I would not rule out that as a possibility."

Yesterday, Finance Minister Arun Jaitley had said that he wants the GST to be implemented from April next year, but warned that the new indirect tax regime may get delayed by sometime if the Congress continues to obstruct it.
The Constitution Amendment Bill for roll out of GST has been passed in the Lok Sabha, but is yet to be approved by the Rajya Sabha where the ruling BJP does not enjoy majority of its own.

"On the other hand if it delays .. Its okay. It is a process. It started 10 years ago. If not in April may be 6 months later it can be rolled out," Panagariya said. 

Rupee recovers 9 paise at 66.34 against USD

The rupee recovered 9 paise at 66.34 against the dollar in early trade Friday on fresh selling of the US currency by exporters.

Forex dealers said dollar's weakness against major currencies overseas and early gains in domestic equity markets supported the rupee.

The rupee had slipped marginally by two paise at 66.43 against the US dollar yesterday on good demand for the greenback from banks and importers.

The benchmark BSE Sensex rose 204.65 points, or 0.80 percent, to 25,826.82 in early trade. 

Rupee strengthens 24 paise at 66.31 against US dollar

 The rupee advanced by 24 paise to 66.31 against the dollar at the Interbank Foreign Exchange in early trade on Wednesday on sustained selling of the US currency by banks and exporters.

Dealers said apart from increased selling of the US currency by exporters and banks, weakening of dollar overseas also supported the domestic currency.

Gains in stock markets also helped rupee strengthen against the dollar, they added.

The rupee had recovered by 27 paise to close at 66.55 against the US dollar in yesterday's trade on fresh selling of the American currency by banks and exporters amid a weak greenback in overseas markets.

Meanwhile, the benchmark BSE Sensex climbed 427.28 points or 1.69 per cent to trade at 25,745.15 in deals. 

Sensex rebounds 424 points on global leads; Nifty above 7,600.

 The China factor, for a change, gave markets some cheer Tuesday as a late surge in Chinese equities propelled the benchmark BSE Sensex by 424 points, which signed off above the psychological 25,000-level.

The rub-off effect was visible on the NSE Nifty, which too picked up.

The meeting of the Prime Minister Narendra Modi with industry captains, bankers and economists to discuss ways and means to support the economy amid a global slowdown gave investors a lot to chew on, which in turn boosted sentiment.

SBI, ICICI Bank hail D-SIBs tag, say have higher capital base.

Mumbai: Welcoming Reserve Bank decision to declare them as systemically important banks, state-owned SBI and private sector ICICI Bank Monday said their capital adequacy is much higher than required.

"SBI currently has a much higher level of Tier I at 9.62 percent as opposed to 7 percent required under the current guidelines," SBI Chairperson Arundhati Bhattacharya said in a statement.

ICICI Bank Managing Director and Chief Executive Chanda Kochhar said, "The bank's capital adequacy is well in excess of regulatory requirements and the bank is not expected to require fresh equity capital for the next couple of years."

Both the banks said they were expecting to be declared as D-SIBs (Domestic Systemically Important Banks) due to their size and significant presence across the financial sector.

RBI said D-SIBs will be subjected to differentiated supervisory requirements and higher intensity of supervision based on the risks they pose to the financial system.

As per the framework for dealing with D-SIBs, the regulator will determine a cut-off score beyond which banks will be put under this category.

These banks will be plotted into four different buckets and will be required to have additional common equity tier 1 (CET1) capital requirement ranging from 0.2 percent to 0.8 percent of risk weighted assets, depending upon the bucket they are plotted into.

Additional CET1 requirement as a percentage of risk weighted assets (RWAs) for SBI, India's biggest lender, is 0.6 percent and that of ICICI Bank, the country's No. 1 private bank, is 0.2 percent, RBI said.

The additional CET1 requirements will be applicable from April 1, 2016, in a phased manner and would become fully effective from April 1, 2019.

In the D-SIB framework, in case a foreign bank having branch presence in India is a global systemically important bank (G-SIB), it has to maintain additional CET1 capital surcharge here as applicable to it as a G-SIB, proportionate to its risk weighted assets in the country.

The concept of SIBs came into play after the 2008 global credit crisis which triggered the collapse of many Wall Street banks, including Lehman Brothers. A slew of these global banks were bailed out by their respective governments.
 

Sensex plummets 586 points to 1-year low; Nifty tanks 185 points to close at 7,785

New Delhi: The benchmark BSE Sensex on Tuesday tanked 586.65 points to one-year low of 25,696.44 while the Nifty fell 185.45 points to close at 7,785,85 due to lower- than-expected GDP data and sell-off in global equities.

In pre-close session, sensex extended its rout to crash by 700 points, while NSE Nifty cracked the 7,800-mark.
Also Read: Foreign investors sell record amount of Indian shares in August

Sentiment was also hit after a gauge of Chinese manufacturing fell to a three-year low.

The GDP growth slowed to 7 per cent in the June quarter, from 7.5 per cent in the previous quarter amid deceleration in farm, services and manufacturing sectors.

Also read -- NSE launches nationwide awareness campaign Nivesh India

The 30-share index which slumped below the crucial 26,000-mark in early trade, continued to slide and dived by 703.21 points or 2.67 per cent to trade at 25,579.88 during the mid-session.

The gauge had lost 109.29 points in the previous session.