This report reviews the emerging experience with the economic crisis emanating from the Euro area to draw implications of such situations for Asia and ADB. It draws on analysis within the ADB, in other international financial institutions (IFIs), and in the research community, with particular attention to the lessons from evaluations of past crises and IFI responses to them.
07 July 2012
The Implications of a Global Financial Crisis for Asia and Lessons: ADB
This report reviews the emerging experience with the economic crisis emanating from the Euro area to draw implications of such situations for Asia and ADB. It draws on analysis within the ADB, in other international financial institutions (IFIs), and in the research community, with particular attention to the lessons from evaluations of past crises and IFI responses to them.
Water: The Paramount Megatrend of our Time :Credit Suisse,
A water supply crisis might be the most likely and severe societal risk during the next 10 years. In response to this, both governments and business are increasingly engaging in dialogue to address water scarcity."
Ready reckoner: How to e-file your tax returns (ET)
With July 31 drawing closer, it's once again time to pore over your documents and ring up your tax consultant. Most individuals prefer to adopt the conventional method and let their chartered accountant handle the cumbersome procedure. However, this year, those with a taxable income of over Rs 10 lakh have no choice but to take the e-filing route. Besides, even others could consider opting for e-filing. It is not as confusing as it is made out to be. If you neither owe any tax nor have any refund to be claimed, you can follow these simple steps to ensure that your returns are filed with minimal hassles:
Zensar Technologies :FOCUS ON HIGH GROWTH IN IMS: IFCI research
IMS focused company strengthened by Akibia acquisition
Akibia is a US based IMS company, which was acquired by Zensar Tech in FY11. The IMS segment has outperformed all the other service lines and this is expected to continue, led by strong demand. It contributes 38% to the revenues for Zensar. The management has also taken active efforts to improve the PBT margin of Akibia to 14%, which will drive profitability in FY14.
Pension Plans
Pension Plans are individual insurance plans that impact your future by providing financial stability during old age. A Pension provides income to live on in retirement. To avoid a paltry income in retirement it is in everybody’s best interest to save more for it. Pension Plans are Individual Plans that gaze into your future and foresee financial stability during your old age. They are suitable not only senior citizens, but for anyone planning for a secure future.
Retirement planning is an important aspect of planning your savings. During an individual’s working life it is possible to buy a retirement insurance plan to which a small amount can be contributed on a monthly basis. These investments made early in the life can help in getting a retirement income which enables you to lead your life with the same lifestyle even after retirement. Sky high costs throw even a well-salaried person off balance. With rates rising every day, you can imagine how high they will be when you are about to retire. It is reasonable to start thinking about a good retirement plan that fits your needs.
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How do Pension plans work?
Pension plan is designed to generate a regular income for individuals once they retire. Insurance companies offer various pension plans (also called as retirement plans or annuity plans) where a person has to initially invest either a lump sum amount or regular annual installments/ premiums over a period of time in return for regular income either for life or for fixed number of years depending, upon the plan. Begin by understanding the pension amount you would require and the premiums you can afford. Accordingly choose the plan and invest accordingly.
Why the need for retirement planning?
Most people think about retirement and pension plan when they are 45. In most cases, it may be too little too late. At this stage, committing even large sums of money is of limited help.
For instance: If the target amount is Rs.1.5 crore at retirement, the amount to be committed per month (assuming 10% return throughout the period) for someone who wants to invest for 30 years is Rs 7213 per month. For someone who has only 15 years to go, it is Rs 37,348 per month.
Pension plans provide financial security to policyholders during their retirement days and so it's important to choose a pension plan carefully. Researching on the various plans available in the market and comparing their costs and benefits is very vital which is why we atIntegrated aim to provide you with all relevant facts and advice so that you can choose the perfect plan for your retirement needs.
So, starting early is important for a well-funded retirement. You will be better placed if you start your investment planning early in your financial life and keep investing regularly.
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India - Equity Markets: Adverse times => low valuations => good investments • HDFC MF
Adverse times => low valuations => good investments
• Good returns are seldom made on investments made in good times;
rather, good returns are typically made on investments made in adverse
times
• In good times when the stock markets are doing well, companies typically
trade above fair values; in adverse times when markets are not doing
well they tend to trade below fair values
• Therefore, investments made in adverse times typically yield above
average returns and vice versa
• The tables on the next page illustrate this clearly
India tends to outperform regional markets when commodity prices fall: Prabhat Awasthi, Nomura in Economic Times,
In a chat with ET Now's Nikunj Dalmia, Prabhat Awasthi , MD & Head of Equity Research, Nomura India, talks about India's macroeconomic health and its impact on the equity markets. Excerpts:
ET Now:
Indian markets are up by about 12.5% from the recent lows in local currency terms. What has done the trick for us - environment, risk-on trade, or valuations?
Prabhat Awasthi : The large part of it I would ascribe to risk-on trade. So we have got three or four things which did the trick. First, commodities and oil prices fell and that is typically a positive for Indian markets especially in a relative context. There is enough evidence to show India tends to outperform regional markets when commodity prices are falling and vice versa because we are more sensitive regarding current account and inflation when it comes to commodity prices. Second, there was a risk-off and India is high beta to risk-off, so those selloffs were pretty strong. Third, the optimism on the policy front. And last, technically people have been underweight on India. As a result, when markets go down very quickly, they tend to bounce back a bit, especially because domestic investors were sitting on cash and global investors have been largely underweight. That was one of the reasons why you saw institutional buying come back into the market, which had relatively lower volumes. Still, the bounceback in the market has not happened with a massive degree of conviction. Otherwise, you would have seen far more participation in the market; participation has been reasonably weak given the volumes.
Indian markets are up by about 12.5% from the recent lows in local currency terms. What has done the trick for us - environment, risk-on trade, or valuations?
Prabhat Awasthi : The large part of it I would ascribe to risk-on trade. So we have got three or four things which did the trick. First, commodities and oil prices fell and that is typically a positive for Indian markets especially in a relative context. There is enough evidence to show India tends to outperform regional markets when commodity prices are falling and vice versa because we are more sensitive regarding current account and inflation when it comes to commodity prices. Second, there was a risk-off and India is high beta to risk-off, so those selloffs were pretty strong. Third, the optimism on the policy front. And last, technically people have been underweight on India. As a result, when markets go down very quickly, they tend to bounce back a bit, especially because domestic investors were sitting on cash and global investors have been largely underweight. That was one of the reasons why you saw institutional buying come back into the market, which had relatively lower volumes. Still, the bounceback in the market has not happened with a massive degree of conviction. Otherwise, you would have seen far more participation in the market; participation has been reasonably weak given the volumes.
Geometric :STRONG TRACTION IN ENGINEERING SERVICES: IFCI research
Organisation restructuring structure will help enhance growth
The management has restructured organisation in order to get more growth from engineering services. The organisation has been divided it into two teams, each handling sales and delivery separately. This structure is expected to provide higher efficiency, improve response time to customer and increase sales.
JSW Energy- Upgrade to Buy.- Favorable times ahead; 79% EPS CAGR over FY12-14E ::Motilal oswal
Favorable times ahead; 79% EPS CAGR over FY12-14E
Softening coal prices, Raj West CoD key triggers; Buy for 27% upside
JSW Energy's (JSWEL) performance was hit due to its "converter" business model with
open exposure on coal. Correction in global coal prices has improved the situation.
CoD of Raj West project (Sep-12) would pave way for final tariff , removing uncertainty
on under-recovery for an otherwise regulated return project. This along with group
captive will mean offtake mix in favor of regulated projects, reducing earnings volatility.
Expect FY12-14 EPS CAGR of 79%. Reasonable valuation (FY14E P/E of 8x, P/BV of 1.2x)
and lowest DER among peers (1.5x) provide further comfort. Upgrade to Buy.
Persistent Systems :NEW SERVICE LINES WILL DRIVE GROWTH: IFCI research
Focus on key service lines to drive next wave of growth
Persistent Systems has bet big on new service lines like cloud, enterprise mobility, enterprise collaboration and business analytics to drive growth. Contribution from these service lines is expected to grow from 45% in FY12 to 60% in FY14. All these service lines have witnessed double-digit growth on a sequential basis over the last four quarters.
NIIT Technologies- FOCUS ON NICHE BUSINESS VERTICALS :: IFCI research
FOCUS ON NICHE BUSINESS VERTICALS
Successful execution of large deals; strong deal visbility ahead
NIIT Tech has successfully implemented the large BSF contract worth Rs 2,280mn in FY11. This provides it impetus to win more new deals in the Indian government vertical. NIIT Tech has won various large deals from clients like Eurostar and Morris, which provide strong revenue visibility.Fresh order intake in Europe and APAC was at USD 151mn and USD 136mn respectively in FY12
S Mobility-INCH DEEP - MILE WIDE :: SPA Sec
We recently met with the management of S Mobility to understand the reasons behind the recent slide in performance
of the group. S Mobility (previously Spice Mobility) is a mid tier mobile handset manufacturer with 887 retail stores
across India spread over 145 cities. The company also has strong online presence. It also provides VAS to different
telecom service provider's customers through Voice, IVR, SMS and applications etc. In FY12 the company's revenue
grew by 10.6% to INR 22.3bn as against 92% CAGR over FY08-11. Here are a few excerpts:
IT services – Mid-cap :: Advantage: Niche Services :IFIN Research
Mid tier Indian IT vendors are expected to grow at a faster pace than large Indian IT vendors in USD revenue for FY13 and FY14.
EBIT margin of mid tier Indian IT vendors will remain weaker than that for the large IT companies.
PAT margin of most of the mid tier Indian IT vendors would be in single digit.
PAT growth of large and mid tier Indian IT vendors is expected to be almost at par in FY13 and FY14.
Mid tier Indian IT vendors are concentrating on few business verticals for driving growth.
Mid tier Indian IT vendors provide niche service offerings and have higher focus on non-linear services.
Jyothy Laboratories: Better Earning Visibility; Boosts Confidence: Karvy
Better Earning Visibility; Boosts Confidence
Jyothy Laboratories (Jyothy) has come out well from the phase marked
with tremendous pressure in terms of acquisition of Henkel India
(Henkel), slower growth of core business due to distribution restructuring
and liability of interest payment. Jyothy’s H2FY12 performance was way
ahead of H1FY12 performance with improved visibility in business, which
it lost previously. Hence, the stock has run up by 45% in past 3 months.
With a view to getting Jyothy’s outlook, we recently met the Management
of the Company. We observed that still there is enough scope for the stock,
as better performance in ensuing quarters would drive the stock further
Mcleod Russel (India) Ltd: Accumulate: way2wealth
World’s largest tea plantation company with 39,318 ha. dedicated tea plantations spread across
47 tea estates in Assam, 5 in West Bengal, 4 in Vietnam, 5 in Uganda and 1 in Rwanda. Aggregate
production capacity stands at ~100 mn kgs - 82.6mn kgs in India, 4.5mn kg in Vietnam, 15mn kg in
Uganda and 1.7 mn kgs in Rwanda.
Forayed globally with its first acquisition of 100% stake in Phu Ben Co. in Vietnam in 2008, having
a capacity of 4.5 mn kgs . In 2010, Mcleod acquired Rhwenzori Tea Investments Ltd. in Uganda
having a capacity of 15 mn kgs. And the latest acquisition was of 1.7mn kg Gisovu Tea Garden, in
Rwanda in 2011.
Accounts for ~7.8% of India’s total tea production and ~2% of the global tea production.
Industry outperformer
V-Guard Industries Ltd. Management re-iterates growth momentum: IDBI cap
We hosted a two day road show with the management of V-guard Industries. Key take away from the meetings were:
Management re-iterates 25% growth in revenues during FY13
V-Guard management has re-iterated guidance of 25% growth in revenues in FY13. Growth will come from across product categories. Management has indicated Non-South markets will grow at a higher pace as compared to the South markets in FY13. During Apr-May, 2012 it has witnessed descent growth which has further given it confidence to achieve its yearly guidance.
Petronet LNG -Concerns priced in; offers decent upside, Prabhudas Lilladher,
PLNG has witnessed ~20% correction from its highs on account of regulatory
concerns over LNG terminals and cap on marketing margins. This, coupled with
limited near-term earnings trigger, led to the subdued stock performance. However,
we believe potential regulatory concerns are exaggerated and near-term flattish
earnings profile overlooks the strong earnings potential, starting FY15. We maintain
a ‘BUY’ on the stock with revised target of Rs176/share (~19% upside).
Fortis Healthcare - Stretched balance sheet remains a concern, maintain a Sell :: Anand Rathi
Following a management meet with Fortis Healthcare (FH) we believe
that near- to mid-term pain persists due to a stretched balance sheet
and lower margins in SRL (Super Religare Laboratories). FH has been
affected by uncertainty following its acquisition of Fortis Healthcare
International (FHI) and its resulting stretched balance sheet. The
India hospitals business should continue strong growth led by huge
demand. We maintain a Sell with a target price of `102.
Investing with Style: A Primer by Credit Suisse
Successful equity style timing can considerably add to investment performance. So what is style investing? In this article, learn how it can be a source of added value, as well as which styles work best in various economic phases.
Oberoi Realty-Risk reward ratio turns favorable; We Upgrade To Buy : Nirmal Bang,
Risk reward ratio turns favorable; We Upgrade To Buy We had a meeting with the management of Oberoi Realty (ORL) to get the latest business update. We upgrade the stock to Buy from Hold after recent underperformance of 16% vis-a-vis Sensex over last one month. We believe the stock price factors delay in new launches and slowdown in office leasing. The management is confident of launching its Oasis (Worli) project and Exotica (Mulund) in FY13 which should drive pre-sales. Further recent clarity on Development Control Regulations (DCR) will fasten up execution in Esquire project. We have factored Worli launch in FY13, conservatively factored Mulund launch in FY14 and revenue booking from Esquire project from 3QFY12. There was no meaningful land acquisition activity in FY12, but the management stated that due to macro-economic uncertainty the sellers’ price expectations have come down, which would lead to more land deals going forward.
Agri Digest Sector Update; July'12; All eyes on monsoon :Emkay PDF link
Agri Digest
All eyes on monsoon
· Monsoons continue to play hide & seek. While rains have been deficient by 31% so far, current live storage is lower than last year by 40%, though it is in line with last 10 yr average
· Delay in monsoons has impacted kharif sowing. Rice sowing is down by 26% while oilseeds witnessed 17% decline till date; coarse cereal planting is down 53%
· Foodgrain buffer at 82mn mt reaches all-time high. Though MSPs have been hiked however excess foodgrain supply in the system will act as a hindrance
· Fertiliser/agrochemical prices increased in response to rupee depreciation will impact consumption further. Though MSPs have been increased, however market prices remain weak
FII DERIVATIVES STATISTICS FOR 06-Jul-2012
| FII DERIVATIVES STATISTICS FOR 06-Jul-2012 | |||||||
| BUY | SELL | OPEN INTEREST AT THE END OF THE DAY | |||||
| No. of contracts | Amt in Crores | No. of contracts | Amt in Crores | No. of contracts | Amt in Crores | ||
| INDEX FUTURES | 35431 | 908.85 | 47287 | 1238.53 | 539552 | 13928.02 | -329.69 |
| INDEX OPTIONS | 343247 | 9072.49 | 303082 | 8002.02 | 1470993 | 39106.76 | 1070.47 |
| STOCK FUTURES | 37330 | 1074.93 | 44656 | 1261.57 | 927544 | 25243.30 | -186.64 |
| STOCK OPTIONS | 25621 | 724.24 | 24938 | 706.98 | 34990 | 1018.86 | 17.26 |
| Total | 571.41 | ||||||
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Trade 2022: How India's trade scenario will shape up ten years from now :Economic Times
Yesterday, the Commerce Minister unveiled the Long-Term Export-Import Policy for 2022-27, to coincide with the 14th Five-Year Plan (2022-27). As was indicated in the Annual Report for 2020-21, several organisations, Directorate General of Foreign Trade, Directorate General of Supplies & Disposals, Directorate General of Anti-Dumping and Allied Duties, Directorate General of Commercial Intelligence and Statistics, Development Commissioner for SEZs and the Boards (of coffee, rubber, tea, tobacco, spices) and Export Development Authorities (marine, agriculture) have now been wound up.
This follows the recommendations of the high-powered C Rangarajan panel, which submitted its report in 2017. Because of coalition dharma, some amendments and repeal of relevant legislation are still stuck in Parliament. DGCIS was unable to reconcile its export/import data with the Reserve Bank's and the data task has been outsourced to CMIE. With GST implemented in 2018 and complete registration of exporters, export incentives are only via the advance licensing route.
DGAD has moved to the Finance Ministry and SEZs have been declared illegal by the Supreme Court under Article 14 of the Constitution. Therefore, the Department of Commerce only has a trade policy division now, divided separately into multilateral agreements, regional agreements, subregional agreements and bilateral agreements.
Negotiations on the Doha Development Agenda were completed in 2019 and agreements will come into effect in 2029. SAFTA is stuck, because Pakistan has not yet been able to resolve the most-favoured nation issue. Meanwhile, Comprehensive Economic Cooperation Agreements have separately been signed with ASEAN, Japan, South Korea and China.
The agreement with South Korea will have to be revisited once Korean re-unification happens. Separate sub-regional economic integration agreements have been signed with Sri Lanka and Maldives, and Bhutan, Nepal, Myanmar and Bangladesh.
Following the agreement with China, trade figures are being reported in three currencies - US dollar, Indian rupee and Chinese yuan. Merchandise exports were $1.2 trillion in 2021-22 and are projected to grow by 20% during the long-term export policy period. In the last couple of years, export growth has been constrained by the rupee appreciating to Rs 45 against the dollar.
Hindustan Zinc: Mining and exploration to drive growth ahead: Centrum
Mining and exploration to drive growth ahead
We went on a plant visit to HZL sites on 3rd and 4th July 2012 and interacted with the top
management including key personnel at mines (Sindesar Khurd and Rampura Agucha) and
smelters (Rajpura Dariba and Chanderiya). We were impressed with the company’s
strategic focus on increasing mining and exploration for achieving long term integrated
volume growth. We were also satisfied with the progress on expansions in silver and lead
divisions and expect the company to meet its guidance on silver and lead volumes in
FY13E/14E. We maintain our positive stance on the stock with a buy rating.
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