CII snap poll suggests economic recovery visible, albeit fragile

According to CII CEOs' snap poll conducted at its National Council Meeting predicted that the GDP in the second half would grow in the range of 4.5-5.0 per cent, while ruling out the possibility of any significant improvement in GDP growth in the second half as compared to that in the first half of the current fiscal.

The poll revealed that the Economy had expanded by 4.6 per cent in the first-half.

Meanwhile, the survey showed that the percentage of respondents expecting GDP to grow higher in a range of 5.0-5.5 per cent increased sharply from 13 per cent in third quarter to 29 per cent in fourth quarter.

Commenting on the snap poll results, Chandrajit Banerjee, Director General, CII said that while the early signs of economic recovery were being noted, the same needed to be built up by way of necessary policy interventions in the next several quarters.

Substantiating the fragile economic recovery argument, most of the respondents (48 per cent) expect only moderate recovery in gross sales in the fourth quarter over the previous one. Recovery in sales, even if moderate, is underpinned mainly by revival in export demand in the backdrop of improvement in global economic prospects. Over 60 per cent of the respondents felt that their exports would increase at a moderate pace during the current quarter.

Notably, improvement in sales is being supported by an improvement in capacity utilization, as over half (53 per cent) of respondents expect their capacity utilization to improve moderately in the fourth quarter.

Even though most (38 per cent) of the CEOs saw investment staying at around the same level in the fourth quarter as in the third quarter, next highest 29 per cent respondents expected it to increase moderately over the same time period.

In view of the stagnation of investment expansion in majority cases, credit demand was also seen to stagnate in the fourth quarter by majority (52 per cent) of the respondents.

"For investment activities to pick up, a decisive revival in domestic demand for consumer goods is vital. High food inflation, growth uncertainty and rising borrowing costs have all impeded consumer demand. With inflation showing some signs of moderation, it is time that the monetary policy is now directed at stimulating growth", suggested Mr. Banerjee.

Indicating that the economy may have to manage with fragile recovery in the short-term, the survey indicated that there would be a major turnaround in investment activities not before the third quarter of the next fiscal.

This is not surprising, given the phase of political uncertainty existing till the formation of a new government at the centre. When asked to rank the risk factors to their business outlook, majority (58 per cent) of the respondents mentioned political uncertainty as the biggest concern.

Source: Hindi News

From BS News

Live drills of BrahMos supersonic fitted to Sukhoi by year-end

The BrahMos Aerospace Private Limited, the joint venture between India's Defence Research and Development Organization (DRDO) and Russia's Federal State Unitary Enterprise NPO Mashinostroyenia (NPOM), is expecting the live flight test of BrahMos supersonic missile attached on Sukhoi flights by the end of 2014, said A Sivathanupillai, founder, CEO and Managing Director of the JV company.

Speaking to reporters in the sidelines of Kurukshetra 2014, an international techno-management fest organised by College of Engineering, Guindy in Anna University, he said, "We are in a stage now to do the integrated test, which will take some time. We are planning the live flight test from the Sukhoi by the end of the year 2014."

Integrating the supersonic missile with Sukhoi requires about $50 million. Engine modifications and so many works are given to the Russians. As per the agreement, out of the $50 million investment, $25 million is funded by the Russian partner. The total investment into the JV is around $300 million while the business, which is the production based on order,is $6 billion, he said.

The company had to reduce the weight of the missile and make some changes to use it in Sukhoi. The changes had to be made since unlike launching from the land, it is launch from a moving platform.

"We needed certain modifications. All modifications have been done and missile is ready for flight test. But we need to modify the Sukhoi itself – structurally, to hold this heavy missile. That has been completed and the design has been validated through various tests," he added.

The missile, launcher and modifications are ready and a wind-tunnel test was successfully conducted at National Aerospace Laboratory (NAL) to see whether the seperation from the flight is smooth and clean. The modifications were done by Hindustan Aeronautics Ltd (HAL). It may be noted that the company has received around Rs 25,000 crore worth of orders from the Army and Indian Navy.

"Launching from the air is a big capability, because it is a moving platform. Today there is no such weapon available in the world. It becomes very important weapon for our forces," he said. "Indian Army is the only land force in the whole world, to have a supersonic cruise missile for land attack. Similarly Indian Air Force will be the only Air Force to have an air launched supersonic cruise missile which can target land and sea," he added.

He added that it is a mandate that the company have to export at the right time and the time to start exports depends upon the strategy decision of the government. Currently the country's interest is to equip the Indian armed force.

"Initially we didn’t understand the high potential of the system. Today all countries want this missile. We have become first in the world. First we should use it for our own people," he said. While it is currently producing based on orders, it can increase the production. Around 205 industrial units are working with the company and investing into manufacturing components.

Elaborating on the plans to develop hypersonic version of the missile, BrahMos II, he said that BrahMos would require a very big technology named Scramjet, and it is expecting that it would take five years to develop the technology.

The propulsion system Scramjet is a Supersonic Combustion Ramjet, in which the oxygen for the engine to combust would be taken from the air passing through the vehicle, instead of from a tank onboard.

According to US space research agency NASA, researchers predict scramjet speeds could reach 15 times the speed of sound, which makes an 18-hour trip to Tokyo from New York City reduced to a 2-hour flight. BrahMos has to bring in new materials for the hypersonic version, because the temperature is very high.

 

Source: Latest News in Hindi

From BS News

Rupee up 9 paise against dollar in early trade

The rupee strengthened by 9 paise to 62.59 against the US dollar in early trade today at the Interbank Foreign Exchange market today on increased selling of the American currency by exporters.

Forex dealers said increased selling of the dollar by exporters supported the rupee but a lower opening in the domestic equity market and weakness in other currencies against the American currency overseas capped the gains.

The rupee had lost 12 paise to close at 62.68 on Friday weighed down by demand for the American currency from importers.

Source: Today Business News

From TOI News

Sembcorp to acquire 45% stake in NCC-Gayatri power project

 Sembcorp Industries, a Singapore-based energy, water and marine group, has signed a conditional agreement to acquire 45 per cent stake in NCC Power Projects, which is currently building a 1,320-megawatt coal-fired power plant in Andhra Pradesh for Rs 848 crores.

NCCPP is jointly owned by Gayatri Energy Ventures (GEVPL) and NCC Infrastructure Holdings (NCCIHL), a subsidiary of Indian conglomerate, NCC Limited (NCCL). Gayatri is Sembcorp’s project partner for another power plant in Nellore district of AP, according to a press release issued by the Singaporean company.

Once the deal is through, Sembcorp will hold 45 per cent of NCCPP, while the remaining 55 per cent will be held by NCCIHL.

NCCPP’s upcoming plant is located on a site adjacent to Thermal Powertech Corporation India (TPCIL), Sembcorp’s first power plant investment in India.

“The proximity of the two plants will enable Sembcorp to benefit from substantial synergies. The two plants will utilise the same infrastructure, such as that for coal importation and logistics. They will also be run by the same Sembcorp management team in Nellore,” the release said.

At present, the NCCPP project is about 30 per cent completed and it is expected to come on-stream in early 2016.

Financing for the project has also been secured, with 75 per cent of the project cost funded through long-term limited recourse rupee-denominated project finance loans and the remainder funded by shareholders’ equity.

The project will be fuelled by both domestic and imported coal. It has already received a Letter of Allocation for its domestic coal supply from Coal India.

Sembcorp Group president and CEO Tang Kin Fei said, “With our first power project in India progressing well and on track for completion this year, we are now pleased to embark on our second power plant investment there. This acquisition will provide the opportunity for Sembcorp to increase our foothold in India’s power market, where we see opportunities for our business to grow significantly in the years to come.”

The transaction is subject to the fulfilment of conditions, including approvals from the relevant authorities and the lenders.

Additional conditional agreements would also be entered into giving Sembcorp the right and obligation to take an incremental 20 per cent stake in NCCPP and an incremental 16 per cent stake in TPCIL respectively, subject to and upon the respective projects having obtained requisite formal approvals by relevant authorities in India.

Source: Business News India

From TH News

Index outlook: Market in search of a foothold

Investors disappointed by Act I of the Fed taper drama in December — when the financial markets reacted insipidly to the announcement — would have been pleased this time around. Funds are fleeing emerging markets; currency markets are in a state of pandemonium and even investors in developed equity markets such as the US and Europe are wondering if the party is over.

There was no dearth of drama in Indian markets either. Stock prices caved in on Monday morning, pulling both the Sensex and the Nifty below critical support levels. The RBI provided no relief by choosing to hike the repo rate. The Federal Reserve’s callous indifference to the plight of emerging markets in its policy statement exacerbated the decline that started on Monday.

The week ahead is going to be, as the Chinese put it, just as interesting. Inflation in the Euro Zone at 0.7 per cent in January has brought back fears of deflation in that region and expectations are high that the European Central Bank could cut its policy rate in the meeting scheduled this week. That can strengthen the dollar further, leading to rupee weakness. That does not bode well for our stock market.

FII outflow has accelerated from both equity and debt ever since the emerging market contagion began. There has been net outflow of $1.5 billion from equity and debt so far this year.

According to EPFR, a global fund-tracker, emerging market equity funds have lost $6.3 billion in the week ending on January 29, the biggest weekly outflow since August 2011. Oscillators in the daily chart of both the Sensex and the Nifty have plunged deep into the negative zone following the sell-off witnessed last week. The point of worry, however, is the sell signals in the medium-term charts. This is negative for the medium-term view.
Sensex (20,513.8)

We had expected short-term weakness, but the ferocity of the sell-off was quite unexpected. The Sensex has breached our farthermost short-term target last week. It has also closed below the recent low at 20,625, emphasising that the short-term trend has reversed lower.

The week ahead: We had a hammer and a star pattern in the daily candlestick chart. This implies indecision. A rally in the early part of next week will face resistance at 20,744, 20,911 and 21,000.

Inability to move beyond 20,911 will imply that the index can head lower in the upcoming sessions. Downward targets are 20,272, 20,087 and 19,973.

Investors can now look out for the support around the 200-day moving average positioned at 20,000. This is also a key medium term support for the index.

The short-term view will remain negative as long as the index trades below 21,000,

Medium term view: As explained in our last column, the Sensex is moving in a sideways range since November 2013. The decline last week is pulling the index towards the lower end of this sideways trend. But the range has not been breached and investors need not worry about the medium-term trend yet.

The alarm bells for medium-term investors need to be set off if the index records a strong close below 20,000. This is where the 200-DMA and a key Fibonacci support are placed. Subsequent targets are 19,500 and 19,000. If the Sensex continues vacillating in the zone between 20,000 and 21,500, it will retain the possibility of a new high this year.
Nifty (6,089.5)

The short-term trend in the Nifty too is down. The floor of the gap formed last Monday, at 6188, will be an important resistance for the Nifty in the week ahead. The 50-day moving average at 6,220, can also thwart rallies in the short term.

The week ahead: There can be a short-term bounce to 6,154 or 6,200 in the coming sessions. Inability to get past 6,200 will be the cue for short-term traders to initiate fresh short positions. Downward targets are 6,008 and 5,954. Short-term trend will turn positive only on a strong close above 6,234.

Medium-term trend: The medium-term trend in the Nifty is sideways since the November-peak of 6,342.9. Last week’s decline can make the index head towards the lower end of this medium-term trading range that is held aloft by a cluster of important supports at 5,973 (November 2013-trough), 5,971 (200-DMA) and 5,920 (38.2 per cent retracement of the previous medium-term up-move).

Investors, therefore, need not fret as long as the Nifty holds above 5,920. Continued movement in the band between 5,900 and 6,400 for few more months will be construed as positive from a long-term perspective. That said, decline below 5,900 can drag the index to 5,770 or even 5,618.
Global cues

Most global indices ended the week on a negative note. The CBOE VIX spiked to 19 before closing the week at 18.4. The medium-term view for this index will however be hurt only on a strong close above 23. The Dow Jones Industrial Average moved further lower last week. It has lost 5 per cent since the beginning of this year. The index is however still above the 15,703-support indicated last week. Next support is at 15,445. The short-term view will turn negative only if the Dow goes on to close below this level. Key medium-term support is at 14,700.

Source: Hindi News

From BL News

Global automakers look for dream market in rural India

 

For global automakers, the dusty backroads of rural India could be the new El Dorado.

As economic torpor suffocates demand for new cars in India's megacities, incomes are growing faster in small towns and country areas. That's pushing the likes of General Motors and Honda Motor Co to fan out in search of buyers in places where fewer than 20 people in every thousand own a car - for now.

Standing firmly in the way are strong home-grown brands. With local services plentiful and repairs cheap, Maruti Suzuki India Ltd, Mahindra and Mahindra Ltd, and Tata Motors Ltd dominate the rural vehicle market where foreign automakers are seen as expensive and distant.

Source: Latest News in Hindi

From TOI News

Bajaj Auto Jan sales down 8%, exports growth silver lining

Bajaj Auto 's total sales for January declined around 8 percent year-on-year to 3.18 lakh units. However, sales were up 7 percent compared to December 2013. Motorcycle sales were down around 7 percent year-on-year to 2.81 lakh units, but up 10 percent month-on-month. 

 

Exports rose 7 percent year-on-year but were down close to 10 percent sequential. Analysts said the sequential improvement in sales could have to do with the fact that December sales across the industry are usually lower, as many buyers postpone their purchases to the new year. This is because the year of purchase influences the resale value of the vehicle. January sales too are usually lower as many buyers wait for the Union Budget in February hoping for an excise duty cut that could make vehicles cheaper. 

 

This time, there will be no Budget in February, but a vote-on-accounts. The decline in three-wheeler sales narrowed, with the company selling 36,781 units in January, down around 20 percent year-on-year, but a decline of less than 1 percent over December. 

 

In an interview to CNBC-TV18 in January while announcing the third quarter numbers, Bajaj Auto Managing Director Rajiv Bajaj had said that the company was looking to recoup its market share in the motorcycle segment through strong sales of its Discover model variants . "This quarter will see the benefit of the new Discover 100 throughout the quarter. 

 

It was launched only towards the end of October in the last quarter and that will be supplemented by the new product from the Discover's table. It is a new Discover 125, which will provide us with the same impetus in the 125 cc segment that the 100 cc has provided us in its segment," 

 

Bajaj had said in the interview. "This will be launched in the month of March. So, riding on the back of these two very big launches which are aimed at the middle of the market, the heart of the market, I am pretty confident that we will recover 3 percent market share that we had lost so far in the first nine months of this year. Hopefully we can gain a little more than what we have lost," he had said. Read more..

Source: Hindi News

From MC News