Wait until Budget: Why Raghuram Rajan wouldn’t go for a rate cut tomorrow

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It is highly unlikely that Reserve Bank of India (RBI) governor Raghuram Rajan will tinker with the key rates in the fifth bi-monthly monetary policy review slated for Tuesday.

There is no real comfort on the inflation front so far, going by the available data, which warrants a rate cut.

In fact, there has been a spike in the retail inflation in the recent months. Within that, food inflation has been the most worrying part. Within food inflation, skyrocketing prices of pulses have been hitting the common man hard.

The retail inflation continued to inch up, rising to 5 percent in October from 4.41 percent in September and 3.74 percent in the month before, mainly on account of price pressures on food items such as pulses. The central bank has a retail inflation target of 5.8 percent by January 2016.

RBI Governor Raghuram Rajan

Food inflation, an important component of overall inflation, escalated to 5.25 percent in October, compared with 3.88 percent in September and 2.20 percent in August.

Pulses (such as tur dal, moong dal etc) are important for Indian households and the only source of protein-rich food for many of them since only few rural households can afford costlier eggs, milk and meat.

But, the price of pulses has risen by 42 percent in October, despite the efforts by the government in recent months to rein in the price increase through imports and by curbing hoarding. The RBI monetary policy has, however, very little say in tackling the current price rise since it is primarily due to a supply problem. The only way out is to increase production and tackle inefficiencies in supply.

To further ease up doing business, govt sets up panel to simplify Income Tax laws

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The government on Tuesday set up a high-level committee under a former Delhi High Court judge to suggest simplification of Income Tax laws, a report that could form basis for tinkering with the controversial retrospective applicability of tax.

The 10-member panel, headed by former Delhi High Court Justice R V Easwar, has been asked to submit a preliminary report by January 31, just in time for incorporating suggestions that need legislative approval in the Budget for 2016-17.

The committee has been asked “to study and identify the provisions/phrases in the (Income Tax) Act which are leading to litigation due to different interpretations.”

Finance Minister Arun Jaitley said the main idea behind setting up the panel is to make the I-T Act more simple. “We have over the last few months been resolving a lot of past issues and now time has come to look at some provisions of the I-T Act to look at how their drafting quality can be improved in order to avoid ambiguity so that everybody is certain as to what the Act itself says,” he told reporters.

Also, the panel will study and identify the provisions which are impacting the ease of doing business as well as identify the areas and provisions of the Act for simplification in the light of existing jurisprudence.

The BJP government had previously used a similar panel headed by former Delhi High Court judge AP Shah to do away with retrospective applicability of minimum alternate tax (MAT) on profits made by FIIs and foreign portfolio investors.

Like MAT on FIIs, the other legacy issue facing the government is the Finance Bill 2012 that allowed government to impose tax on corporates on alleged gains made as early as 1962.

While it had criticised retrospective taxation of the previous UPA regime, the BJP government has so far not scrapped it even though it had decided not to use it. The continuing of such tax has been a major source of concern for
foreign investors.

Foreign investors like Vodafone has dragged government to arbitration over a Rs 20,000 crore tax dispute arising out of retrospective applicability of the tax law. British oil explorer Cairn Energy plc has also initiated a similar move over Rs 10,247 crore tax liability due to same reason.

The terms of reference of the committee also include to give suggestions on “alternatives and modifications to the existing provisions and areas so identified to bring about predictability and certainty in tax laws without substantial impact on the tax base and revenue collection.”

“We have constituted a committee to simplify the provisions of the I-T Act. The committee would be headed by Justice Eshwar who was the chairman of ITAT and judge of the High Court in Delhi,” Jaitley said.

“It has several experts both from government and private sector in it and this committee will be doing an ongoing study from time to time.

“So, as and when it keeps giving one bundle of suggestion with regard to simplification we will examine them and whichever are found acceptable we will try and simplify those provisions of the I-T Act,” he said.

Revenue Secretary Hasmukh Adhia said that the Eshwara committee can form three sub-groups. “The sections of I-T Act which are posing maximum litigations due to wrong drafting would be worked upon by the committee.”

He said public comments will be invited on recommendations of the committee. “As and when the committee submits report the I-T Act would be amended.”

The panel, which will have a term of one year, will set its own procedures for regulating its work.

“The Committee can also work in Sub-Groups and the draft prepared by the Sub-Groups can then be approved by the whole Committee. The Committee will put its draft recommendations in the public domain.

“After stakeholder consultations, the Committee will formalise its recommendations. The Committee can give its recommendations in batches. The first batch containing as many recommendations as possible shall be submitted by January 31,” an official statement said.

The committee comprises of V K Bhasin, former Law Secretary; Vinod Jain, Chartered Accountant; Rajiv Memani, Consultant; Ravi Gupta, Senior Advocate; Mukesh Patel, Tax Advocate; Ajay Bahl, Consultant; Pradip P Shah, Investment Adviser; Arvind Modi, IRS; Vinay Kumar Singh, IRS.

Our clients made huge money by going short in HDFC

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Hope you guys enjoyed our clear cut sell on HDFC

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Trade Deal To Reduce Cost, Boost Global Exports Between US$1.8-US$3.6 Trlllion, Says WTO

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KUALA LUMPUR — The Trade Facilitation Agreement (TFA) concluded in 2013 will help reduce trade cost for its member countries, spur global export between US$1.8 trillion and US$3.6 trillion, providing a badly needed boost to the global economy.

The TFA has the potential to reduce trade costs by a significant amount and thereby increase both global trade and output, the World trade Organisation (WTO) said in its World Trade Report released in Geneva on Monday.

“This agreement (FTA) aims to standardise, streamline and speed-up customs processes around the world, helping to expedite the movement, release and clearance of goods. In doing so, it will significantly cut the costs of trade,” WTO Director-General Roberto Azevedo said.

All too often, outdated and uncoordinated customs processes slow down the movement of merchandise and raise trade costs to prohibitive levels – especially in developing and least-developed countries, he said.

“By tackling these problems, the TFA will have a big impact on global economy,” he said when launching the report.

This year’s report focused on the benefits and challenges of implementing the WTO’s TFA.

In the report, WTO said the full implementation of the TFA would have the ability to reduce members’ trade costs by an average 14.3 per cent.

The range of trade cost reduction will be between 3.6 per cent and 23.1 per cent with African countries and less developed countries are expected to see the biggest average reduction in trade costs in excess of 16 per cent from the full implementation of the TFA, it said in the World Trade Report.

The TFA also has the ability to reduce time to import by over a day-and-a half (a 47 per cent reduction over the current average) and time to export by almost two days (a 91 per cent reduction over the current average), it said.

WTO said by reducing both the variable and fixed costs of exporting, trade facilitation increased the export of those firms already involved in international trade, while enabling new firms to export for the first time.

Furthermore, the trade and output gains are bigger with full and accelerated implementation of the TFA.

The trade body said the results obtained from computable general equilibrium (CGE) model simulations predicted export gains from the TFA of between US$750 billion and over US$1 trillion per annum.

“Full implementation of the TFA has the potential to increase global exports between US$1.8 trillion and US$3.6 trillion. In both cases, the magnitude of the gains is larger with full and accelerated implementation of the TFA,” said WTO in the report.

Since trade costs are among the shaping factors of global trade, implementation of the TFA not only gave a badly needed boost to the global economy at the present, but had the ability to give a significant lift to its trajectory and to carry it forward in the future, it said.

Over the 2015-30 horizon, implementation of the TFA can add up to 2.7 per cent a year to world export growth and more than half a per cent a year to world GDP growth, it said.

However, the key to reaping all these benefits is full and speedy implementation of the TFA, Azevedo opined.

To recap, members have agreed on a road map for the TFA’s entry into force.

First milestones were reached when delegations concluded the legal review of the Bali text and adopted the amendment protocol in 2013, which cleared the way for the domestic ratification process to commence.

Some members have already deposited their acceptance instruments, bringing the TFA closer to the ratification threshold of two-thirds of the WTO membership required for it to take legal effect.

“We need to see far speedier ratification of the agreement than we have seen thus far, so that we can quickly turn to the task of implementation,” he added.

China September Industrial Profits Fall Slightly but Recover from August Plunge

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Beijing: Profits earned by Chinese industrial companies fell 0.1 per cent in September from a year earlier, data from the statistics bureau showed on Tuesday, levelling after a record 8.8 per cent collapse in August.

Industrial profits – which cover large enterprises with annual revenue of more than 20 million yuan ($3.15 million) from their main operations – fell 1.7 per cent in the first nine months of the year compared with the same period a year earlier, the National Bureau of Statistics said on its website.

“Even though the rate of industrial losses narrowed in September, given that downward pressure on the industrial economy continues, the industrial profit outlook is still not optimistic,” the NBS said in the statement.

The NBS added that core business revenues had declined 0.5 per cent at industrial firms, the first time in “many years” it had done so.

The announcement comes after China’s central bank cut key interest rates and eased bank reserve requirements on Friday, following a GDP reading of 6.9 per cent in the third quarter, beating expectations but still the lowest growth rate in decades.

The NBS said that the milder reading was thanks to a recovery from sharp losses due to currency fluctuations, which it blamed for the August plunge.

The People’s Bank of China (PBOC) conducted a surprise devaluation of the yuan in August that saw the currency lose over 3 per cent against the dollar in just a few short trading days.

Chinese firms continue to struggle with high debt levels – in particular in heavy industry and in inefficient state-owned enterprises – and this has meant that producer price deflation has effectively raised their real interest rate burden.

Major Chinese construction machinery maker Zoomlion Heavy Industry Co said earlier this month that it expected to report a loss in the third quarter due to the weakness in the yuan and a supply glut at home as the economy slows. Zoomlion expects to report a net loss of between 190 million yuan and 290 million yuan ($30 million to $45 million) for the June to September period, compared with a net profit of 100.2 million yuan for the same year-ago period, the company said in a stock exchange filing.

Technically hot buy BAJAJ AUTO, Buy at opening bell/valuerupee/SunilBehki

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bajaj new

 Last close 2460.40

Most of the traders are indulge in predicting stock/market direction which is a waste of time, market are un-predictable entity hence any effort trying to predict will go in vain. Just concentrate on stock specific picks…!!!


Technically the stock is ready for a long jump … after a decent period of consolidation a major upside is now on the anvil … Just catch at the opening bell and see the stock zooming past Rs.2489 and Rs.2514 in hours. Another Lottery & Jackpot for you all…!!! Protect plus position with stop loss of Rs.2433..!!!

Rapid spurt in CANARA BANK in coming days/valuerupee/SunilBehki

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Last close 302.90

Grab it and watch intraday spurt in this stock.

The stock has not only started a fresh uptrend but it has got into an acceleration mode.

 Generally, these breakouts are followed by 2 or 3 days of rapid advances…!!!

We would see today, the stock price will head towards targets of Rs.308, Rs.312 mark…!!!

 It is possible that it even exceeds them given the breakout we have had on charts.

Protect your position keeping stop loss of Rs.298…!!!

Grab JUST DIAL at opening bell/valuerupee/SunilBehki

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Last close 1024.20

Just Grab it at the opening bell..!!!


Today every Tom, Dick & Harry will recommend this stock to buy..!!!

We are highly bullish in this stock, best stock for Day/Swing traders..!!!

The technical setup and the breakout are very significant.

 It has a very strong price breakout followed with and coupled with strong breakout on the volume charts.

Grab it keeping stop loss of Rs.1006 for an upper target of  Rs.1038, Cross over will take this to Rs.1055 mark..!!!

Tata Housing plans to develop 20-mn sq/ft land in 8 cities

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Realty firm Tata Housing is planning to develop 20 million sq/ft land in eight cities including Bengaluru, Delhi-NCR and Mumbai over the next few years. The company, which was revived in 2006, presently has got 29 projects and 70 million sq/ft land under various stages of planning and execution across 13 cities. Tata Sons holds 99.86 percent equity shares in the company and is eyeing to sell one-third of its properties through online mode by 2020. “We have got an additional 20 million sq/ft land for development in the pipeline and we will be developing the same during the next few years. “We are in talks with the land owners in this connection, currently,” Tata Housing managing director and chief executive Brotin Banerjee told reporters here. He was speaking on the sidelines of launch of social sell initiative by Tata Housing, as per which the company will be selling homes through Facebook in Goa.

A total of 250 units will be made available for sale through Facebook by the company from October 26-28, and will be priced between Rs 29 lakh and Rs 50 lakh. “The additional land measuring 20 million sq/ft will be developed by the company in eight cities including Bangalore, New Delhi, NCR and Mumbai over next few years,” he added. The company has already delivered 5,000 homes during the last 3-4 years and it plans to deliver another 4,000 homes in the remaining part of the current fiscal, he said. “We will be launching four residential projects during October-December,” he added. However, Banerjee rued over the fact that the online sales of property has not picked up as of now. “At Tata Housing, we have been able to sell only 2,000 units through online platform, so far, which comprises even less than 10 percent of the company’s total sales. “Still I do hope that the online sale will go up to 50,000 units, comprising around one-third of its total sales, by 2020,” he said. Recently, the company has reached an agreement with the Rajasthan Government for development of affordable homes in the state under PPP model, he added.