The International Monetary Fund (IMF) has stepped up lending to low-income countries to combat the impact of the global recession.
According to an announcement on its website, IMF said it has declared a new framework for loans to the world’s poorest nations, including increased resources, a doubling of borrowing limits, zero interest rates until the end of 2011, and more flexible terms.
The IMF’s executive board approved the package of measures that will sharply increase the loan resources available to low-income countries. The resources — including from the planned sale of IMF gold — are expected to boost the IMF’s concessional lending to up to $17 billion through 2014, including up to $8 billion over the next two years.
And, the planned sale of 403 tonnes of IMF gold will take place within a new European central bank gold pact currently being negotiated.
The IMF has provisionally agreed to sell the gold to raise resources for increased lending to poor countries.
A deciding vote by the fund’s 186 member countries is expected before IMF meetings in Istanbul in October, and requires the support of 85 per cent of the membership.
The sales would probably occur all the time within the central bank agreement and could take two to three years before sales are completed.
Negotiations on the new Central Bank Gold Sales Agreement will also be finalized by October. The current 5-year agreement expires in September.
The IMF holds 103.4 million ounces (3,217 tonnes) of gold, which had a market value of about $12 billion as of March 31.
In order to meet the financing needs of the low-income countries during the global crisis, some of the proceeds of those sales will be used to help provide new subsidy resources for the concessional lending to those countries.
Resources linked to the gold sales will be used to help fund concessional lending to low-income countries in the following ways. First, windfall profits when the gold sales take place can be used for the subsidy resources.
Windfall profits would derive from gold sales at an average price in excess of $850 per ounce — that is the price assumed in the new income model as necessary to fund the model. Second, to the extent that the realized windfall profits fall short of the required contribution, the remaining amount will be generated through investment income from the endowment funded by the gold sales.
In addition, the IMF announced zero interest payments up to the end of 2011 for all concessional loans to low-income members and lower interest rates on a permanent basis thereafter. A new set of lending instruments will underpin this increased support.
Thursday, 30 July 2009
Monday, 27 July 2009
India’s IT Inc joins effort to reduce carbon footprint
India’s consumption of desktop PC and notebook PC are rising at a rapid rate, according to IDC’s World Wide Quarterly PC Tracker for 4Q08,4.1 mn more desktop PCs and 2.4 mn more notebooks will be in use in India by 2009 . This amounts to approximately 47 mn units by 2010.
IT industry is a major contributor to green house gas emissions as much of the power in desktop PC is wasted as heat.E ven servers which are typically more efficient than desktops still waste 30 to 40 percent of the power utilized. One of the prominent reasons behind wastage of power is that desktop PCs have default setting of sleep or hibernate mode when inactive for a sustained duration however, in about 90 percent of systems this functionality has been disabled. This results in higher energy consumption and an increase in electricity usage. In addition, IT users have lack of awareness about the power saving features which are already available in their computers.
Thererfore, nine major organizations in India have joined the Climate Savers Computing Initiative (CSCI), that was launched in 2007 in USA by major IT companies in USA. It was started with the aim of bringing efficiency to the computer’s power delivery thus reducing energy demand and greenhouse gas emissions. The India chapter was launched by Dell, Intel, HP,Google WWF, TERI, CII-ITC Centre Of Excellence For Sustainable Development, MAIT and NASSCOM joining hands with the aim of driving energy efficient practices in every-day computing.
CSCI global campaign, a non-profit group was started by CSC, Dell, Google, HP, Intel, Lenovo, and Microsoft. CSCI is a nonprofit group of eco-conscious consumers, businesses and conservation organizations promoting adoption of smart technologies in everyday business and personal computing which can improve the efficiency of a computer’s power delivery and reduce the energy consumed when the computer is in an inactive state.
“In next 3 years, the Climate Savers Computing Initiative will cut greenhouse gas emissions in an amount equal to planting around 4800 sq.km. of trees -- a significant step in reducing the emissions affecting our planet,” said Rahul Bedi, Director Corporate Affairs - South Asia, Intel and first Chairman of CSCI India Chapter.
The nine founding members of CSCI India pledged to reduce carbon emissions by 4 million tons and reduce 50% in energy costs through efficient computing in next 3 years. “We believe that CSCI India will play a crucial role in supplementing green ICT innovations and solutions. CSCI’s goal to achieve a 50 percent reduction in power consumption by computers and reduce 4 million tons of carbon emission over next 3 years can be a potential supplement towards India's low carbon growth,” said Ravi Singh, co-chairman of CSCI India and CEO & Sec. General of WWF India. The reduction in energy and power are the fiscal points to ensure sustainable growth for both the ICT sector and meeting country’s bigger objectives under the National Action Plan on Climate Change that involves ICT solutions.
“With the projected increase in the numbers and extent of usage of IT equipment, it is essential that this industry becomes fully conscious of the implications of these developments for increased energy consumption. It is, therefore, imperative that industry takes the lead in bringing about innovation that would ensure high levels of efficiency in the operations of IT equipment through its entire life cycle”, said Dr R K Pachauri, Chairman, Inter-governmental Panel on Climate Change (IPCC) and Director-General, TERI, in a message on the occasion of the launch. While complementing the opportune launch of CSCI chapter in India Dr Pachauri lauded the efforts and expected that “the industry, including the associations and leading think-tanks, will move along the path of designing and producing equipment which would ensure efficient use of energy."
Jairam Ramesh, India's Minister for Environment and Forests said, " India is committed to bringing about a reduction in its global carbon footprint and welcomes the CSCI initiative. The Government of India is looking to the IT industry to drive impactful and tangible change both through the use of IT across various industries as well as within the industry through the adoption of energy efficient products.
Starting January 2010, it will become mandatory for certain products to carry eco labelling. In the first lot 4 products – refrigerators, air conditioners, distribution transforms and florescent lamps will be covered. By mid next year 3 more product lines (colour TVs, LPG Stoves and electric motors) will need to carry the mandatory eco labelling. IT industry should also work with the Bureau of Energy Efficiency to device similar eco standards."
Dr Ajay Mathur, Director General, Bureau of Energy Efficiency (Ministry of Power) said, "we look forward to a close partnership with the CSCI initiative of the IT industry to work not only within the industry, but also with the channel and the user community to adopt eco-friendly products and practices. We are already working towards developing a labelling system that will enable end users of computers to make an informed choice in favour of energy efficient systems.
(IndiaPRWire)
IT industry is a major contributor to green house gas emissions as much of the power in desktop PC is wasted as heat.E ven servers which are typically more efficient than desktops still waste 30 to 40 percent of the power utilized. One of the prominent reasons behind wastage of power is that desktop PCs have default setting of sleep or hibernate mode when inactive for a sustained duration however, in about 90 percent of systems this functionality has been disabled. This results in higher energy consumption and an increase in electricity usage. In addition, IT users have lack of awareness about the power saving features which are already available in their computers.
Thererfore, nine major organizations in India have joined the Climate Savers Computing Initiative (CSCI), that was launched in 2007 in USA by major IT companies in USA. It was started with the aim of bringing efficiency to the computer’s power delivery thus reducing energy demand and greenhouse gas emissions. The India chapter was launched by Dell, Intel, HP,Google WWF, TERI, CII-ITC Centre Of Excellence For Sustainable Development, MAIT and NASSCOM joining hands with the aim of driving energy efficient practices in every-day computing.
CSCI global campaign, a non-profit group was started by CSC, Dell, Google, HP, Intel, Lenovo, and Microsoft. CSCI is a nonprofit group of eco-conscious consumers, businesses and conservation organizations promoting adoption of smart technologies in everyday business and personal computing which can improve the efficiency of a computer’s power delivery and reduce the energy consumed when the computer is in an inactive state.
“In next 3 years, the Climate Savers Computing Initiative will cut greenhouse gas emissions in an amount equal to planting around 4800 sq.km. of trees -- a significant step in reducing the emissions affecting our planet,” said Rahul Bedi, Director Corporate Affairs - South Asia, Intel and first Chairman of CSCI India Chapter.
The nine founding members of CSCI India pledged to reduce carbon emissions by 4 million tons and reduce 50% in energy costs through efficient computing in next 3 years. “We believe that CSCI India will play a crucial role in supplementing green ICT innovations and solutions. CSCI’s goal to achieve a 50 percent reduction in power consumption by computers and reduce 4 million tons of carbon emission over next 3 years can be a potential supplement towards India's low carbon growth,” said Ravi Singh, co-chairman of CSCI India and CEO & Sec. General of WWF India. The reduction in energy and power are the fiscal points to ensure sustainable growth for both the ICT sector and meeting country’s bigger objectives under the National Action Plan on Climate Change that involves ICT solutions.
“With the projected increase in the numbers and extent of usage of IT equipment, it is essential that this industry becomes fully conscious of the implications of these developments for increased energy consumption. It is, therefore, imperative that industry takes the lead in bringing about innovation that would ensure high levels of efficiency in the operations of IT equipment through its entire life cycle”, said Dr R K Pachauri, Chairman, Inter-governmental Panel on Climate Change (IPCC) and Director-General, TERI, in a message on the occasion of the launch. While complementing the opportune launch of CSCI chapter in India Dr Pachauri lauded the efforts and expected that “the industry, including the associations and leading think-tanks, will move along the path of designing and producing equipment which would ensure efficient use of energy."
Jairam Ramesh, India's Minister for Environment and Forests said, " India is committed to bringing about a reduction in its global carbon footprint and welcomes the CSCI initiative. The Government of India is looking to the IT industry to drive impactful and tangible change both through the use of IT across various industries as well as within the industry through the adoption of energy efficient products.
Starting January 2010, it will become mandatory for certain products to carry eco labelling. In the first lot 4 products – refrigerators, air conditioners, distribution transforms and florescent lamps will be covered. By mid next year 3 more product lines (colour TVs, LPG Stoves and electric motors) will need to carry the mandatory eco labelling. IT industry should also work with the Bureau of Energy Efficiency to device similar eco standards."
Dr Ajay Mathur, Director General, Bureau of Energy Efficiency (Ministry of Power) said, "we look forward to a close partnership with the CSCI initiative of the IT industry to work not only within the industry, but also with the channel and the user community to adopt eco-friendly products and practices. We are already working towards developing a labelling system that will enable end users of computers to make an informed choice in favour of energy efficient systems.
(IndiaPRWire)
Sunday, 26 July 2009
Commodity Trends:Outlook positive on equity rally
Globally stock markets are rallying raising hopes of economic recovery India’s BSE sensex has now overcome the 15,000 mark wile Do Jones industrials climbed above 9,000 for the first time since January. This trend was also now visible across several key commodities including gold, basemetals, pepper and wheat whose prices showed buoyancy and intermittent volatility.
Though the prices of select mass consumption food items such as pulses, fruits, potatoes and rice continued to rise week-on-week, the high base effect kept the wholesale price index (WPI)-based annual rate of inflation below zero for the sixth consecutive week. Weak progress of monsoon has prompted the India Government to stop all exports of non-Basmati rice and wheat, and bear half of the subsidy on diesel offered to farmers by the states.
Allaying fears of shortage of foodgrains, Pawar said, "Stock position is quite comfortable. We have sufficient stock position for 13 months in our kitty."
Precious Metals
The bullion pack traded higher during last week with Spot Gold breaching the $950 mark, on the back of weakness in the US Dollar against other major currencies. The Bullion pack continues to closely track the movements in the currencies markets. Investor interest from exchange traded commodity funds (ETFs) whose demand for gold increased 540 percent between the first quarter of 2008 and the same quarter in 2009 is also likely to be supportive of gold prices. Investment side demand is showing some signs of revival but the jewellery/fabrication demand continues to remain tepid.
The Bullion pack rally now appears to be stalled as Spot Gold is unable to trade consistently above the wall of resistance around $955 - $956 levels as we are witnessing profit booking along with reluctance of bulls to build fresh long positions around these levels. The bullion pack though continues to close consistently above their 10-Day Moving Average indicating that the short-term uptrend remains intact. The Dollar Index (DX) is currently trading around 78.60 levels, very close to its recent low of 78.33 on June 2nd, which is acting as short-term bottom. Trading below this level would lead to a sharp weakness in the USD, in turn supportive for the bullion pack.
Base Metals
The uptrend in base metals has continued on the back of a strong bullish momentum. Nickel and Aluminum have already reached their best levels this year and Copper is not far off from the nine-month highs that it set on Thursday. The rally in base metals indicates that sentiments have improved significantly and are bullish and widespread. Asian equity markets gained in today’s session as wider financial market trends provided a robust backdrop. News of supply constraints have risen this week due to shutdowns at two of Chile’s biggest mines. This factor is supportive for copper prices. Copper price are rising on the back of this news.
Base metal prices could remain upbeat but may come under selling pressure by the end of the week as 1) profit booking after higher prices could come in and 2) prices may come under pressure as we approach the weekend and funds may liquidate their positions prior to the weekend. However, the overall trend is expected to remain bullish on the back of better-than-expected corporate results. The global economy is on its road to recovery but the pace of improvement could be slow. The Federal Reserve Chairman has indicated that the pace of the economic decline in the United States has slowed down significantly and the final demand of production has shown tentative signs of stabilization. But the labour market continues to look weak and the unemployment rate could rise going forward. The currency and equity markets play a crucial role in determining price direction.
Crude Oil
Crude Oil prices rose to three week high in the last week, as surging equity markets amid better earnings reports and weaker dollar against major currencies supported oil prices. NYMEX September crude oil prices rose above $67 per barrel. Rally in oil prices came despite energy data is showing weak demand. Meanwhile OPEC has decided to trim shipments by 1.7 percent in the four weeks ending Aug. 8. OPEC will reduce its exports to 22.39 million bpd from 22.78 million bpd. It is the sixth consecutive drop reported in oil exports.
Crude Oil prices continue to take cues from trend in the equity markets. Recent strong earnings results of corporate have boosted equity market confidence and helped oil prices to gain. But inventory data has shown that gasoline and oil products stocks are at record high levels amid weak demand. Despite US driving season is underway demand for gasoline continues to remain tepid. Although OPEC is deciding to reduce oil exports, it will do little to balance the market. CFTC will have three hearings in next couple of weeks on curbing speculation activity in energy commodities and outcome of this event can impact oil prices. We believe that oil prices are having resistance near $70 mark in the near term and if prices close below $62 levels then can head towards $58 per barrel level. MCX August Crude Oil can get support around Rs3160/3050 levels, whereas resistance is seen at Rs.3325/3380 per barrel.
Though the prices of select mass consumption food items such as pulses, fruits, potatoes and rice continued to rise week-on-week, the high base effect kept the wholesale price index (WPI)-based annual rate of inflation below zero for the sixth consecutive week. Weak progress of monsoon has prompted the India Government to stop all exports of non-Basmati rice and wheat, and bear half of the subsidy on diesel offered to farmers by the states.
Allaying fears of shortage of foodgrains, Pawar said, "Stock position is quite comfortable. We have sufficient stock position for 13 months in our kitty."
Precious Metals
The bullion pack traded higher during last week with Spot Gold breaching the $950 mark, on the back of weakness in the US Dollar against other major currencies. The Bullion pack continues to closely track the movements in the currencies markets. Investor interest from exchange traded commodity funds (ETFs) whose demand for gold increased 540 percent between the first quarter of 2008 and the same quarter in 2009 is also likely to be supportive of gold prices. Investment side demand is showing some signs of revival but the jewellery/fabrication demand continues to remain tepid.
The Bullion pack rally now appears to be stalled as Spot Gold is unable to trade consistently above the wall of resistance around $955 - $956 levels as we are witnessing profit booking along with reluctance of bulls to build fresh long positions around these levels. The bullion pack though continues to close consistently above their 10-Day Moving Average indicating that the short-term uptrend remains intact. The Dollar Index (DX) is currently trading around 78.60 levels, very close to its recent low of 78.33 on June 2nd, which is acting as short-term bottom. Trading below this level would lead to a sharp weakness in the USD, in turn supportive for the bullion pack.
Base Metals
The uptrend in base metals has continued on the back of a strong bullish momentum. Nickel and Aluminum have already reached their best levels this year and Copper is not far off from the nine-month highs that it set on Thursday. The rally in base metals indicates that sentiments have improved significantly and are bullish and widespread. Asian equity markets gained in today’s session as wider financial market trends provided a robust backdrop. News of supply constraints have risen this week due to shutdowns at two of Chile’s biggest mines. This factor is supportive for copper prices. Copper price are rising on the back of this news.
Base metal prices could remain upbeat but may come under selling pressure by the end of the week as 1) profit booking after higher prices could come in and 2) prices may come under pressure as we approach the weekend and funds may liquidate their positions prior to the weekend. However, the overall trend is expected to remain bullish on the back of better-than-expected corporate results. The global economy is on its road to recovery but the pace of improvement could be slow. The Federal Reserve Chairman has indicated that the pace of the economic decline in the United States has slowed down significantly and the final demand of production has shown tentative signs of stabilization. But the labour market continues to look weak and the unemployment rate could rise going forward. The currency and equity markets play a crucial role in determining price direction.
Crude Oil
Crude Oil prices rose to three week high in the last week, as surging equity markets amid better earnings reports and weaker dollar against major currencies supported oil prices. NYMEX September crude oil prices rose above $67 per barrel. Rally in oil prices came despite energy data is showing weak demand. Meanwhile OPEC has decided to trim shipments by 1.7 percent in the four weeks ending Aug. 8. OPEC will reduce its exports to 22.39 million bpd from 22.78 million bpd. It is the sixth consecutive drop reported in oil exports.
Crude Oil prices continue to take cues from trend in the equity markets. Recent strong earnings results of corporate have boosted equity market confidence and helped oil prices to gain. But inventory data has shown that gasoline and oil products stocks are at record high levels amid weak demand. Despite US driving season is underway demand for gasoline continues to remain tepid. Although OPEC is deciding to reduce oil exports, it will do little to balance the market. CFTC will have three hearings in next couple of weeks on curbing speculation activity in energy commodities and outcome of this event can impact oil prices. We believe that oil prices are having resistance near $70 mark in the near term and if prices close below $62 levels then can head towards $58 per barrel level. MCX August Crude Oil can get support around Rs3160/3050 levels, whereas resistance is seen at Rs.3325/3380 per barrel.
Climate Changes Could Cause Worldwide Crisis, says Report
Citing their report that climate change "…will aggravate existing problems such as poverty, social tensions, environmental degradation, ineffectual leadership and weak political institutions" in some countries, members of the National Intelligence Council say that a possible worldwide crisis looms in our near future.
Thomas Fingar, chairman of the National Intelligence, testified this week before the House Select Committee on Energy Independence and Global Warming. Though the 58-page report itself is classified, Fingar released some of the report’s dire predictions, including the fact that global disease may spread as refugees from low-lying coastal countries try to flee disaster conditions.
Fingar added that potential host countries may not be equipped to handle the possibility of millions of desperate refugees, and the fragile political systems in place may give way under the pressures caused by a global humanitarian crisis.
The report, called "National Intelligence Assessment on the National Security Implications of Global Climate Change to 2030" consisted of input from retired military personnel, from the United Nations’ Intergovernmental Panel on Climate Change, and all 16 United States’ intelligence agencies.
The report emphasized that while climate change by itself will not cause a worldwide destabilization, the effects of global warming will cause a series of worsening situations that all contribute to political collapse and human crisis.
"Climate change alone is unlikely to trigger state failure," said Fingar. "But the impacts will worsen existing problems - such as poverty, social tensions, environmental degradation, ineffectual leadership and weak political institutions."
Fingar stated that the most affected countries will be in the Middle East, sub-Saharan Africa, and central and southeast Asia.
Of Africa, Fingar says, "Without food aid, the region will likely face higher levels of instability, particularly violent ethnic clashes over land ownership."
Some areas of Africa may see their agricultural output decrease as much as 50% by 2020.
In addition, the report states that as many as 50 million more people than today could suffer from hunger by the year 2020, and 1.2 billion might face "water stress."
Fingar emphasized that while the United States may not feel the initial effects of global warming as keenly as some other nations, a worldwide crisis would eventually make itself felt even in comparatively prosperous nations like America. "The United States depends on a smooth-functioning international system ensuring the flow of trade and market access to critical raw materials, such as oil and gas, and security for its allies and partners," said Fingar. "Climate change and climate change policies could affect all of these with significant geopolitical consequences."
Reaction to the report ran predictably along party lines. Republican House committee member Darrell Issa (R-Ca) called the report "a dangerous diversion of intelligence resources."
But Democrat Committee Chairman Ed Markey told reporters, "Human beings all over the planet face death or damage or injury if we do not act."
By Buzzle Staff and Agencies
Published: 6/27/2008
Thomas Fingar, chairman of the National Intelligence, testified this week before the House Select Committee on Energy Independence and Global Warming. Though the 58-page report itself is classified, Fingar released some of the report’s dire predictions, including the fact that global disease may spread as refugees from low-lying coastal countries try to flee disaster conditions.
Fingar added that potential host countries may not be equipped to handle the possibility of millions of desperate refugees, and the fragile political systems in place may give way under the pressures caused by a global humanitarian crisis.
The report, called "National Intelligence Assessment on the National Security Implications of Global Climate Change to 2030" consisted of input from retired military personnel, from the United Nations’ Intergovernmental Panel on Climate Change, and all 16 United States’ intelligence agencies.
The report emphasized that while climate change by itself will not cause a worldwide destabilization, the effects of global warming will cause a series of worsening situations that all contribute to political collapse and human crisis.
"Climate change alone is unlikely to trigger state failure," said Fingar. "But the impacts will worsen existing problems - such as poverty, social tensions, environmental degradation, ineffectual leadership and weak political institutions."
Fingar stated that the most affected countries will be in the Middle East, sub-Saharan Africa, and central and southeast Asia.
Of Africa, Fingar says, "Without food aid, the region will likely face higher levels of instability, particularly violent ethnic clashes over land ownership."
Some areas of Africa may see their agricultural output decrease as much as 50% by 2020.
In addition, the report states that as many as 50 million more people than today could suffer from hunger by the year 2020, and 1.2 billion might face "water stress."
Fingar emphasized that while the United States may not feel the initial effects of global warming as keenly as some other nations, a worldwide crisis would eventually make itself felt even in comparatively prosperous nations like America. "The United States depends on a smooth-functioning international system ensuring the flow of trade and market access to critical raw materials, such as oil and gas, and security for its allies and partners," said Fingar. "Climate change and climate change policies could affect all of these with significant geopolitical consequences."
Reaction to the report ran predictably along party lines. Republican House committee member Darrell Issa (R-Ca) called the report "a dangerous diversion of intelligence resources."
But Democrat Committee Chairman Ed Markey told reporters, "Human beings all over the planet face death or damage or injury if we do not act."
By Buzzle Staff and Agencies
Published: 6/27/2008
Fragile monsoon hits major corn, sugarcane region
India’s Agriculture minister Shard Pawar on Friday said country’s monsoon rains remain weak in major corn and sugarcane producing areas.
Speaking in Parliament, Pawar said Bihar, the country's leading corn producer, and Uttar Pradesh, which normally produces more than half of India's sugarcane, received less rains than average so far.
India’s Meteorological department has forecast only scanty rain in these regions in the next three days, and from July 26 it has predicted widespread rains only in northeastern India and the west coast.
India's cotton, corn and oilseeds sowing was almost normal despite deficient monsoon rains this year, but sugarcane planting had dropped by 122,000 hectares from a year ago.
The June-September monsoon rains began with an exceptionally dry phase in the first five weeks, but rainfall has improved in the past two weeks in most parts of the country.
Total rainfall in India was 15 percent above normal in the week to July 22, but was still 19 percent below normal for the June -July
Speaking in Parliament, Pawar said Bihar, the country's leading corn producer, and Uttar Pradesh, which normally produces more than half of India's sugarcane, received less rains than average so far.
India’s Meteorological department has forecast only scanty rain in these regions in the next three days, and from July 26 it has predicted widespread rains only in northeastern India and the west coast.
India's cotton, corn and oilseeds sowing was almost normal despite deficient monsoon rains this year, but sugarcane planting had dropped by 122,000 hectares from a year ago.
The June-September monsoon rains began with an exceptionally dry phase in the first five weeks, but rainfall has improved in the past two weeks in most parts of the country.
Total rainfall in India was 15 percent above normal in the week to July 22, but was still 19 percent below normal for the June -July
Thursday, 23 July 2009
U.S. Stocks Rally, Dow Tops 9,000 for First Time Since January
U.S. stocks rose, sending the Dow Jones Industrial Average above 9,000 for the first time since January, as EBay Inc., Ford Motor Co. and AT&T Inc. posted better-than-estimated results and home resales increased more than forecast.
EBay rallied 9.7 percent as its earnings signaled consumers’ appetite for online commerce is starting to recover. Ford jumped 9.9 percent after topping analyst estimates by paring expenses and adding market share. AT&T added 3.2 percent as new customers of Apple Inc.’s iPhone bolstered profit. D.R. Horton Inc. led homebuilders higher after sales of existing homes increased for a third straight month.
The S&P 500 advanced 2.3 percent to 975.64 at 11:41 a.m. in New York, the highest intraday level since Nov. 5. The Dow Jones Industrial Average gained 181.98 points, or 2.1 percent, to 9,063.24. The Nasdaq Composite Index surged 2.3 percent for a 12th straight gain, its longest streak since 1992. Benchmark indexes for Asia and Europe also rose.
“It’s been a good earnings season, given the backdrop that was there,” said Sarah Hunt, a money manager who helps oversee about $6 billion for Purchase New York-based Alpine Mutual Funds. “When you look at some of the estimates, they are expecting a better second half.”
The S&P 500 has rallied 10 percent since July 10 as earnings topped analysts’ estimates at 75 percent of the 158 companies in the index that reported results, including Caterpillar Inc., Intel Corp. and JPMorgan Chase & Co. Profits have fallen 25 percent on average from a year ago, according to data compiled by Bloomberg, less than the 33 percent drop forecast by analysts as of July 17.
‘Doing Well’
“Relative to the estimates, it looks like they are doing well,” said Stephen Wood, who helps manage $136 billion as chief market strategist for North America at Russell Investments in New York. “Part of that is an expectations game. Analyst estimates tend to lag, so some of that is a catch-up.”
EBay climbed 9.7 percent to $21.34 as the company forecast revenue in the next three months will be $2.05 billion to $2.15 billion. Analysts had estimated $2 billion.
Ford increased 9.9 percent to $7.01. The only major automaker to shun a U.S. rescue reported a second-quarter loss, excluding some items, of 21 cents a share. The average estimate of analysts surveyed by Bloomberg was for a loss of 50 cents.
“Ford looks like it’s improving its balance sheet, and its cash position looks pretty good,” said Hayes Miller, who helps manage $38 billion at Baring Asset Management Inc. in Boston. “Not only do we not have a potential for bankruptcy, but it looks like it’s improving itself at a quicker pace than Chrysler and GM.”
AT&T Climbs
AT&T added 3.2 percent to $25.64 after reporting second- quarter earnings, excluding some items of 54 cents a share, beating the average analyst estimate by 5.3 percent.
All 13 companies in a gauge of homebuilders advanced after sales of existing U.S. homes rose 3.6 percent in June to an annual rate of 4.89 million, the National Association of Realtors said in Washington. Economists in a survey had forecast an increase of 1.5 percent.
3M Co. gained 6.1 percent to $68.62, the biggest advance in the Dow, after the maker of Post-it Notes and Scotch Tape reported second-quarter profit excluding some items of $1.20 a share, beating the average analyst estimate by 28 percent. The company also raised its 2009 earnings forecast.
Fifth Third Bancorp, Ohio’s largest lender, gained 15 percent to $8.07 after reporting second-quarter earnings of $1.15 a share, compared with a loss of 37 cents a share a year earlier.
McDonald’s, Qualcomm Slump
McDonald’s Corp., the world’s largest restaurant company, sank 4.3 percent to $56.33, the biggest drop in four months. Second-quarter revenue declined more than analysts projected on slowing consumer demand and a stronger U.S. dollar.
Qualcomm Inc. declined 4.2 percent to $46.41 after the company forecast fourth-quarter sales that fell short of some analysts’ estimates, raising concern that handset demand is still slowing. Separately, South Korea’s antitrust regulator said it plans to fine the world’s biggest maker of mobile-phone chips a record 260 billion won ($208 million) for anti- competitive practices.
CIT Group Inc. slid 17 percent to 72 cents. Advisers to bondholders that rescued CIT with a $3 billion loan said creditors should push the company into Chapter 11 bankruptcy after a debt swap next month, according to a person familiar with the matter.
World' first double-page weather spread launched
Weather Underground, the Internet's first weather service, has helped to create history with the launch of The San Francisco Chronicle's new double page weather spread in its Sunday edition.
The Hearst Corporation-owned newspaper recently announced that it was to become the nation's first high-definition newspaper thanks to new state-of-the-art presses. Weather Underground was chosen to develop a new weather service that takes advantage of the presses' reproduction quality and color capabilities, displaying the Bay Area's diverse microclimates using detailed maps, graphs and diagrams.
The double page spread in Sunday's edition features a detailed map of the entire Bay Area including a forecast of the infamous fog layer that greets Bay Area residents most mornings. Other new features include a weekly summary of earthquake activity and a more detailed map of the city of San Francisco itself. The Chronicle also exploits the extra space on the large maps to highlight local events that are taking place that day enabling readers to plan their Sunday activities alongside the weather forecast.
"This new spread represents the biggest commitment that any newspaper has ever made to weather reporting," commented Alan Steremberg, President and co-founder of Weather Underground. "The move reflects the high value of weather content within the newspaper industry and all media. Weather Underground is honored that a newspaper with the stature of The San Francisco Chronicle is utilizing our weather technology."
Weather Underground's chief meteorologist Shaun Tanner adds: "Pioneering new weather services for our media clients is a core business goal of Weather Underground. The Bay Area is home to some of the most diverse microclimates in the United States and this groundbreaking service allows us to provide readers with the most localized forecasts available.
(Marketwire)
The Hearst Corporation-owned newspaper recently announced that it was to become the nation's first high-definition newspaper thanks to new state-of-the-art presses. Weather Underground was chosen to develop a new weather service that takes advantage of the presses' reproduction quality and color capabilities, displaying the Bay Area's diverse microclimates using detailed maps, graphs and diagrams.
The double page spread in Sunday's edition features a detailed map of the entire Bay Area including a forecast of the infamous fog layer that greets Bay Area residents most mornings. Other new features include a weekly summary of earthquake activity and a more detailed map of the city of San Francisco itself. The Chronicle also exploits the extra space on the large maps to highlight local events that are taking place that day enabling readers to plan their Sunday activities alongside the weather forecast.
"This new spread represents the biggest commitment that any newspaper has ever made to weather reporting," commented Alan Steremberg, President and co-founder of Weather Underground. "The move reflects the high value of weather content within the newspaper industry and all media. Weather Underground is honored that a newspaper with the stature of The San Francisco Chronicle is utilizing our weather technology."
Weather Underground's chief meteorologist Shaun Tanner adds: "Pioneering new weather services for our media clients is a core business goal of Weather Underground. The Bay Area is home to some of the most diverse microclimates in the United States and this groundbreaking service allows us to provide readers with the most localized forecasts available.
(Marketwire)
Tuesday, 14 July 2009
IndiaMART.com unhurt, records 40% growth
IndiaMART.com, India's largest online B2B marketplace, reports an impressive growth of 40 percent in revenues for 2008-2009 despite an economic downturn. The growth in revenues has also been backed by a robust 52 percent growth in supplier registrations.
"Our numbers speak for themselves, While the whole world is busy hiding behind words like recession and economic downturn to conceal their poor performance, our teams have strived hard to keep the winning streak going,'' said a beaming Dinesh Agarwal, CEO and Founder of IndiaMART.com.
Agarwal feels the steep rise in registrations is clearly indicative of recessionary pressure on entrepreneurs to make do with show string marketing budgets, which naturally pushes them to seek online marketing as the most credible and effective option. As the market leader, IndiaMART is always keen to take on path breaking initiatives to sensitize SMEs about online marketing and adoption of technology through events, trade shows and conferences.
IndiaMART.com has been ranked India's No. 1 online B2B marketplace by the Internet and Mobile Association of India (IAMAI) in its recent study done on Information, Communication & Technology (ICT) usage among Micro, Small and Medium Enterprises (MSMEs). The independent market research, with special focus on online B2B marketplaces, accords over 85 percent preference for IndiaMART among B2B suppliers who go online, and who were interviewed by IAMAI. The study also states a 60 per cent market share for IndiaMART.com in India.
IndiaMART.com received its first round of private equity investment from Intel Capital earlier this year. Bennet Coleman and Co Ltd, publishers of The Times of India and The Economic Times, also have a stake in IndiaMART as a private treaty partner.
IndiaMART.com is India's largest online B2B marketplace connecting global buyers with suppliers through business directories, online product catalogs, buy-sell offers, industry specific marketplaces, printed media and trade shows participation.
(Courtesy: PRLog)
"Our numbers speak for themselves, While the whole world is busy hiding behind words like recession and economic downturn to conceal their poor performance, our teams have strived hard to keep the winning streak going,'' said a beaming Dinesh Agarwal, CEO and Founder of IndiaMART.com.
Agarwal feels the steep rise in registrations is clearly indicative of recessionary pressure on entrepreneurs to make do with show string marketing budgets, which naturally pushes them to seek online marketing as the most credible and effective option. As the market leader, IndiaMART is always keen to take on path breaking initiatives to sensitize SMEs about online marketing and adoption of technology through events, trade shows and conferences.
IndiaMART.com has been ranked India's No. 1 online B2B marketplace by the Internet and Mobile Association of India (IAMAI) in its recent study done on Information, Communication & Technology (ICT) usage among Micro, Small and Medium Enterprises (MSMEs). The independent market research, with special focus on online B2B marketplaces, accords over 85 percent preference for IndiaMART among B2B suppliers who go online, and who were interviewed by IAMAI. The study also states a 60 per cent market share for IndiaMART.com in India.
IndiaMART.com received its first round of private equity investment from Intel Capital earlier this year. Bennet Coleman and Co Ltd, publishers of The Times of India and The Economic Times, also have a stake in IndiaMART as a private treaty partner.
IndiaMART.com is India's largest online B2B marketplace connecting global buyers with suppliers through business directories, online product catalogs, buy-sell offers, industry specific marketplaces, printed media and trade shows participation.
(Courtesy: PRLog)
Sunday, 12 July 2009
Gold demand surges as production hits 84-year low
The United States is immersed in exploding debt. The U.S. Federal Debt is now more than $10.2 trillion… and the number is growing by over $1 million every minute. This debt is a significant part of the inflationary tsunami that is sending the dollar into a steady downward spiral.
When the dollar is weak, which it has been in recent years, gold goes up.
And as the government pours over $8.5 trillion dollars of liquidity into the market and it filters down, there could be inflation of the type we have not seen since the early 80’s – and once that happens… gold could rally past $1,000… past $2,000… even soaring past $6,000 an ounce.
Remember… in the 80’s when inflation was 18%? Well if that happens again, some experts believe gold could soar as high as $6,000 an ounce.
And just when inflation was starting to surge – from 1975 to 1980 – precious metal stocks soared – Bankeno Mines from $1.25 to $430, handing early-in investors a 34,300% gain, Azure Resources from $.93 to $440 – a 47,211% gain and Wharf Resources from $.40 to $560 – an incredible 139,900% gain.
That five-year period was one of the biggest financial opportunities for investors in history.
And now we’re at the same crossroads... with inflation rising... the dollar falling... and the world in turmoil... and you’ve been handed another once-in-a-lifetime opportunity to invest in gold stocks which are poised to make double-, triple-, even quadruple- digit gains.
Just listen to what two of the brightest and most knowledgeable moneymen think about the weakening dollar:
Warren Buffett advises you to “build an ark” to protect against the fallout from the falling U.S. dollar.
Professor Kenneth Rogoff, a former head researcher at the International Monetary Fund, warns of a potential 40%+ drop in the greenback’s value.
With the threat of global inflation fueled by soaring energy and food prices, it isn’t just the U.S. Federal Reserve that is likely to take action in an effort to stabilize rates. The entire world is now aware of the financial crisis, since the U.S. credit problem has spread to the broader global markets.
Central banks all over the world will have to coordinate efforts to mitigate the problem… continuing to inject liquidity into the global system.
Because of this, many economic experts believe we’re headed for inflationary times. And gold has always been a safe asset to protect your wealth against inflation.
Thing is, right now is the perfect opportunity for you to put your “toe in the water” ahead of the enormous gains that gold and gold resource stocks will bring in the next year…
Upward pressure on the price of gold will be driven by the current economic uncertainty surrounding the U.S. economy, increasing inflation and the strong demand for gold overseas.
Fact of the matter is, holding dollars has not been a “good idea” for several years now.
Foreign investors are slowly making that realization and are actively looking for investments that are appreciating, not depreciating.
Gold fits the bill.
With the steady decline of the stock market, not to mention the U.S. dollar, now is the best time to own something of real substantial value – GOLD.
Fact is, with the weak dollar, other countries are in the process of diversifying their dollar holdings – buying gold to get out of the dollar… And as gold’s popularity increases during this volatile time, you’ll see prices of gold and gold related stocks continue to soar upwards.
According to Mining Weekly… Dr. David Davis, a Senior Gold Analyst at Credit Suisse Standard Securities states…
“Between 2007 and 2010, supply-and-demand dynamics will undergo irreversible change, caused by a decline in global mine and official sector supply and increased demand from China and the investment community.”Gold Demand Surges Worldwide… While Gold Production Hits 84-Year Low
The economic fundamentals for gold are favorable. Production of gold from South Africa, United States, Australia and Canada, has dwindled every year over this past decade.
These countries, which combined, produce two thirds of the global gold through the 1980’s, now produce less than half of the gold mined today.
Meanwhile, physical demand for gold has been going through the roof. Much of the recent explosion in demand can be attributed to retail investors in India, China and other parts of Asia where the appetite for gold investments are soaring.
India, for example, is experiencing an 80% growth in gold investment following a loosening of trade and market restrictions.
And let’s not forget China… home to 1.3 billion people.
China, which has the fastest-growing economy in modern history, is undergoing major changes in the way it handles gold.
Private gold ownership has been outlawed for generations. But in 2002, the Shanghai Gold Exchange opened and started free trade in gold for the first time in the nation’s history.
Even more recently, China legalized gold investment by private citizens.
Considering the high savings rate in China, gold is a logical investment. It’s estimated that the equivalent of US $36 billion in Chinese private investment could move into gold in coming years.
Plus, the Chinese government is moving to increase its low gold reserves. Given these recent developments, China alone could consume 40% of the world’s entire gold production for years to come.
The worldwide monetary policy and global supply-and-demand for gold have already ignited a powerful rally that’s virtually certain to carry gold to much higher price points.
So now is the perfect time for you to jump on board the gold market rally…
Courtesy: Smart Profits Research
When the dollar is weak, which it has been in recent years, gold goes up.
And as the government pours over $8.5 trillion dollars of liquidity into the market and it filters down, there could be inflation of the type we have not seen since the early 80’s – and once that happens… gold could rally past $1,000… past $2,000… even soaring past $6,000 an ounce.
Remember… in the 80’s when inflation was 18%? Well if that happens again, some experts believe gold could soar as high as $6,000 an ounce.
And just when inflation was starting to surge – from 1975 to 1980 – precious metal stocks soared – Bankeno Mines from $1.25 to $430, handing early-in investors a 34,300% gain, Azure Resources from $.93 to $440 – a 47,211% gain and Wharf Resources from $.40 to $560 – an incredible 139,900% gain.
That five-year period was one of the biggest financial opportunities for investors in history.
And now we’re at the same crossroads... with inflation rising... the dollar falling... and the world in turmoil... and you’ve been handed another once-in-a-lifetime opportunity to invest in gold stocks which are poised to make double-, triple-, even quadruple- digit gains.
Just listen to what two of the brightest and most knowledgeable moneymen think about the weakening dollar:
Warren Buffett advises you to “build an ark” to protect against the fallout from the falling U.S. dollar.
Professor Kenneth Rogoff, a former head researcher at the International Monetary Fund, warns of a potential 40%+ drop in the greenback’s value.
With the threat of global inflation fueled by soaring energy and food prices, it isn’t just the U.S. Federal Reserve that is likely to take action in an effort to stabilize rates. The entire world is now aware of the financial crisis, since the U.S. credit problem has spread to the broader global markets.
Central banks all over the world will have to coordinate efforts to mitigate the problem… continuing to inject liquidity into the global system.
Because of this, many economic experts believe we’re headed for inflationary times. And gold has always been a safe asset to protect your wealth against inflation.
Thing is, right now is the perfect opportunity for you to put your “toe in the water” ahead of the enormous gains that gold and gold resource stocks will bring in the next year…
Upward pressure on the price of gold will be driven by the current economic uncertainty surrounding the U.S. economy, increasing inflation and the strong demand for gold overseas.
Fact of the matter is, holding dollars has not been a “good idea” for several years now.
Foreign investors are slowly making that realization and are actively looking for investments that are appreciating, not depreciating.
Gold fits the bill.
With the steady decline of the stock market, not to mention the U.S. dollar, now is the best time to own something of real substantial value – GOLD.
Fact is, with the weak dollar, other countries are in the process of diversifying their dollar holdings – buying gold to get out of the dollar… And as gold’s popularity increases during this volatile time, you’ll see prices of gold and gold related stocks continue to soar upwards.
According to Mining Weekly… Dr. David Davis, a Senior Gold Analyst at Credit Suisse Standard Securities states…
“Between 2007 and 2010, supply-and-demand dynamics will undergo irreversible change, caused by a decline in global mine and official sector supply and increased demand from China and the investment community.”Gold Demand Surges Worldwide… While Gold Production Hits 84-Year Low
The economic fundamentals for gold are favorable. Production of gold from South Africa, United States, Australia and Canada, has dwindled every year over this past decade.
These countries, which combined, produce two thirds of the global gold through the 1980’s, now produce less than half of the gold mined today.
Meanwhile, physical demand for gold has been going through the roof. Much of the recent explosion in demand can be attributed to retail investors in India, China and other parts of Asia where the appetite for gold investments are soaring.
India, for example, is experiencing an 80% growth in gold investment following a loosening of trade and market restrictions.
And let’s not forget China… home to 1.3 billion people.
China, which has the fastest-growing economy in modern history, is undergoing major changes in the way it handles gold.
Private gold ownership has been outlawed for generations. But in 2002, the Shanghai Gold Exchange opened and started free trade in gold for the first time in the nation’s history.
Even more recently, China legalized gold investment by private citizens.
Considering the high savings rate in China, gold is a logical investment. It’s estimated that the equivalent of US $36 billion in Chinese private investment could move into gold in coming years.
Plus, the Chinese government is moving to increase its low gold reserves. Given these recent developments, China alone could consume 40% of the world’s entire gold production for years to come.
The worldwide monetary policy and global supply-and-demand for gold have already ignited a powerful rally that’s virtually certain to carry gold to much higher price points.
So now is the perfect time for you to jump on board the gold market rally…
Courtesy: Smart Profits Research
Monday, 6 July 2009
How India Budget affects commodities
Union Finance Minister Pranab Mukherjee has announced several commodity-friendly measures in the budget including withdrawal of Commodity Transaction Tax. (CTT) apart from the stated objective of raising agricultural growth to 4% by substantial increase in plan allocation and capital formation and increase in infrastructure investment to more than 9% of GDP.
These measures are expected to boost the agri-commodities, metals, cements and chemicals industries in the medium to long term and also add further impetus to stimulus packages already announced to boost growth.
”A very positive sign for Indian commodities market. Being in the nascent stage of development, abolition of CTT will reduce transaction costs in commodities trading, thereby the burden will come down and participation in these markets shall increase.CTT was to be introduced in the last budget and was causing concern in the growth of the Indian commodities market. This news of abolition of CTT has brought in great relief,” according to Dinesh Thakkar, CMD of Angel Broking.
Anjani Sinha, Director, MCX, said, “The Budget is visionary and good for the commodity markets, for which the government should be applauded with highest intensity. It will stimulate huge investment in the warehousing sector since the uncertainty of commodity market viability with respect to the cost of transaction (CTT) has been removed and now it will be at par with top 25 global commodities exchanges which constitute 99.99% of the world’s exchange traded commodity derivative volume. This announcement will put Indian commodity market ecosystem at par with international exchanges with respect to cost of hedging, thereby fulfilling the government’s vision of making Indian commodity derivative market competitive on a global canvass”.
National Rural Employment Guarantee Act that provided employment to 4.47 crore households in 2008-09 has got a further fillip with allocation for the scheme raised to Rs 39,100 cr, a whopping increase of 144%. To increase the productivity of assets and resources under NREGA, convergence with other schemes relating to agriculture, forests, water resources, land resources and rural roads is being initiated, Finance Minister said.
The Budget has restored an eight percent Centre Excise duty on manmade fibre and yarn making ito on par with cotton sector. The Minister has also reduced the customs duty on wool waste and cotton waste used in cheaper varieties of textile articles such as blankets and rugs to 10% from 15%.
Gold Bars, Silver
Customs duty on gold bars have been hiked to Rs 200 per 10 gm from Rs 100 while other forms of gold excluding jewellery will be levied at the rate of Rs 500 per 10 grams against existing rate of Rs 250. Silver will charged at Rs 1000 per kg as against existing Rs 500.
One mega handloom cluster each in West Bengal and Tamil Nadu and one powerloom mega cluster in Rajasthan have been announced..The minister said that the earlier tow the two mega handloom clusters at Varanasi and Sibsagar and two mega powerloom clusters at Erode and Bhiwandi are under successful implementation..These will generate job opportunities and income. The government also intends to add new mega clusters for Carpets in Srinagar (J&K) and Mirzapur (UP).
Financial inclusion
As a result of financial inclusion initiatives by scheduled commercial banks -3.3 crore no-frill accounts were opened. To develop banking network in unbanked or underbanked areas, a Sub-committee of State Level Bankers Committee will identify such areas and formulate an action plan to bring them under banking network within 3 years, the Minister said. A budget allocation of Rs.100 crore during the current year as one-time grant-in-aid has been made to ensure provision of at least one centre/Point of Sales (POS) for banking services in each of the unbanked blocks in the country.
The RBI has announced a further relaxation in its Branch Authorisation Policy. Scheduled Commercial Banks are now allowed to set up off-site ATMs without prior approval, subject to reporting.
Exports
The adjustment assistance scheme to provide enhanced Export Credit and Guarantee Corporation (ECGC) cover at 95 percent of badly hit sectors have been extended to March 2010.
The allocation for Market Development Assistance Scheme provides support to exporters in developing new markets has been raised by 148% to Rs 124 cr. The interest subvention scheme of 2 percent on pre-shipment credit for seven sectors—textiles including handlooms, handicrafts, carpets, leather, gems and jewellery, marine products and small and medium exporters has been extend till March 31, 2010.
Micro, Small and Medium Enterprises (MSMEs) have been affected by the slowdown in exports and the indirect effect of the global crisis on domestic demand. To support this them credit flow will be ensured by providing a special fund out of Rural Infrastructure Development Fund (RIDF) to Small Industries Development Bank (SIDBI), Pranab Mukherjee said. This fund of Rs.4,000 crore will incentivise Banks and State Finance Corporations (SFCs) to lend to Micro and Small Enterprises (MSEs) by refinancing 50 per cent of incremental lending to MSEs during the current financial year.
Nutrient-Based Subsidy .
To ensure balanced application of fertilizers, the Government intends to move towards a nutrient based subsidy regime instead of the current product pricing regime, Pranab Mukherjee said. It will lead to availability of innovative fertilizer products in the market at reasonable prices. This unshackling of the fertilizer manufacturing sector is expected to attract fresh investments in this sector. In due course it is also intended to move to a system of direct transfer of subsidy to the farmers.
Agriculture
The one-time bank loan waiver of nearly Rs.71,000 crore to cover an estimated 40 million farmers was one of the major highlights of the last Budget. This scheme has been extended to 31 December 2009. A task force will be set up to study the problem of indebtedness among Maharasthra farmers due to credit availed from money lenders and therefore not coming under the loan waiver scheme.
Finance Minister had made an additional Rs.1,000 crore allocation over Interim BE for the Accelerated Irrigation Benefit Programme (AIBP), marking an increase of 75 per cent over the allocation in 2008-09(BE). The allocation for the Rashtriya Krishi Vikas Yojna (RKVY) is also being stepped up by 30 per cent over Budget Estimates of 2008-09.
Agriculture has been the mainstay of our economy with 60 per cent of our population Agriculture credit flow was Rs.2,87,000 crore in 2008-09. The target for agriculture credit flow for the year 2009-10 is being set at Rs.3,25,000 crore. To achieve this, the Minister has proposed to continue the interest subvention scheme for short term crop loans to farmers for loans upto Rs.3 lakh per farmer at the interest rate of 7 per cent per annum. Thereby effective interest rate for farmers will come down to 6%. An additional budget allocation of Rs 411 crore over interim budget is being made.
Power
Allocation for Accelerated Power Development and Reform Programme (APDRP) has been increased to Rs 2,080 crore, an increase of 160% over interim budget. Minister also announced reduction of the basic customs duty on permanent magnets - a critical component for Wind Operated Electricity Generators - from 7.5 per cent to 5 per cent
Government will evolve a blue print for long distance gas highways leading to National Gas Grid facilitating transportation of gas across the country.
India Infrastructure Finance Company Limited (IIFCL) set up as a special purpose vehicle for providing long term financial assistance to infrastructure projects will be strengthened to fulfill its mandate, the Minister said.
Bio-Fuel
In order to encourage the use of this environment friendly fuel and augment its availability in the country, Government will reduce basic customs duty on bio-diesel from 7.5 per cent to 2.5 per cent - at par with petro-diesel. Biodiesel obtained from vegetable oils and used for blending with petro-diesel, is currently exempt from excise duty. From now on petro-diesel blended with bio-diesel will also be exempted from excise duty.
These measures are expected to boost the agri-commodities, metals, cements and chemicals industries in the medium to long term and also add further impetus to stimulus packages already announced to boost growth.
”A very positive sign for Indian commodities market. Being in the nascent stage of development, abolition of CTT will reduce transaction costs in commodities trading, thereby the burden will come down and participation in these markets shall increase.CTT was to be introduced in the last budget and was causing concern in the growth of the Indian commodities market. This news of abolition of CTT has brought in great relief,” according to Dinesh Thakkar, CMD of Angel Broking.
Anjani Sinha, Director, MCX, said, “The Budget is visionary and good for the commodity markets, for which the government should be applauded with highest intensity. It will stimulate huge investment in the warehousing sector since the uncertainty of commodity market viability with respect to the cost of transaction (CTT) has been removed and now it will be at par with top 25 global commodities exchanges which constitute 99.99% of the world’s exchange traded commodity derivative volume. This announcement will put Indian commodity market ecosystem at par with international exchanges with respect to cost of hedging, thereby fulfilling the government’s vision of making Indian commodity derivative market competitive on a global canvass”.
National Rural Employment Guarantee Act that provided employment to 4.47 crore households in 2008-09 has got a further fillip with allocation for the scheme raised to Rs 39,100 cr, a whopping increase of 144%. To increase the productivity of assets and resources under NREGA, convergence with other schemes relating to agriculture, forests, water resources, land resources and rural roads is being initiated, Finance Minister said.
The Budget has restored an eight percent Centre Excise duty on manmade fibre and yarn making ito on par with cotton sector. The Minister has also reduced the customs duty on wool waste and cotton waste used in cheaper varieties of textile articles such as blankets and rugs to 10% from 15%.
Gold Bars, Silver
Customs duty on gold bars have been hiked to Rs 200 per 10 gm from Rs 100 while other forms of gold excluding jewellery will be levied at the rate of Rs 500 per 10 grams against existing rate of Rs 250. Silver will charged at Rs 1000 per kg as against existing Rs 500.
One mega handloom cluster each in West Bengal and Tamil Nadu and one powerloom mega cluster in Rajasthan have been announced..The minister said that the earlier tow the two mega handloom clusters at Varanasi and Sibsagar and two mega powerloom clusters at Erode and Bhiwandi are under successful implementation..These will generate job opportunities and income. The government also intends to add new mega clusters for Carpets in Srinagar (J&K) and Mirzapur (UP).
Financial inclusion
As a result of financial inclusion initiatives by scheduled commercial banks -3.3 crore no-frill accounts were opened. To develop banking network in unbanked or underbanked areas, a Sub-committee of State Level Bankers Committee will identify such areas and formulate an action plan to bring them under banking network within 3 years, the Minister said. A budget allocation of Rs.100 crore during the current year as one-time grant-in-aid has been made to ensure provision of at least one centre/Point of Sales (POS) for banking services in each of the unbanked blocks in the country.
The RBI has announced a further relaxation in its Branch Authorisation Policy. Scheduled Commercial Banks are now allowed to set up off-site ATMs without prior approval, subject to reporting.
Exports
The adjustment assistance scheme to provide enhanced Export Credit and Guarantee Corporation (ECGC) cover at 95 percent of badly hit sectors have been extended to March 2010.
The allocation for Market Development Assistance Scheme provides support to exporters in developing new markets has been raised by 148% to Rs 124 cr. The interest subvention scheme of 2 percent on pre-shipment credit for seven sectors—textiles including handlooms, handicrafts, carpets, leather, gems and jewellery, marine products and small and medium exporters has been extend till March 31, 2010.
Micro, Small and Medium Enterprises (MSMEs) have been affected by the slowdown in exports and the indirect effect of the global crisis on domestic demand. To support this them credit flow will be ensured by providing a special fund out of Rural Infrastructure Development Fund (RIDF) to Small Industries Development Bank (SIDBI), Pranab Mukherjee said. This fund of Rs.4,000 crore will incentivise Banks and State Finance Corporations (SFCs) to lend to Micro and Small Enterprises (MSEs) by refinancing 50 per cent of incremental lending to MSEs during the current financial year.
Nutrient-Based Subsidy .
To ensure balanced application of fertilizers, the Government intends to move towards a nutrient based subsidy regime instead of the current product pricing regime, Pranab Mukherjee said. It will lead to availability of innovative fertilizer products in the market at reasonable prices. This unshackling of the fertilizer manufacturing sector is expected to attract fresh investments in this sector. In due course it is also intended to move to a system of direct transfer of subsidy to the farmers.
Agriculture
The one-time bank loan waiver of nearly Rs.71,000 crore to cover an estimated 40 million farmers was one of the major highlights of the last Budget. This scheme has been extended to 31 December 2009. A task force will be set up to study the problem of indebtedness among Maharasthra farmers due to credit availed from money lenders and therefore not coming under the loan waiver scheme.
Finance Minister had made an additional Rs.1,000 crore allocation over Interim BE for the Accelerated Irrigation Benefit Programme (AIBP), marking an increase of 75 per cent over the allocation in 2008-09(BE). The allocation for the Rashtriya Krishi Vikas Yojna (RKVY) is also being stepped up by 30 per cent over Budget Estimates of 2008-09.
Agriculture has been the mainstay of our economy with 60 per cent of our population Agriculture credit flow was Rs.2,87,000 crore in 2008-09. The target for agriculture credit flow for the year 2009-10 is being set at Rs.3,25,000 crore. To achieve this, the Minister has proposed to continue the interest subvention scheme for short term crop loans to farmers for loans upto Rs.3 lakh per farmer at the interest rate of 7 per cent per annum. Thereby effective interest rate for farmers will come down to 6%. An additional budget allocation of Rs 411 crore over interim budget is being made.
Power
Allocation for Accelerated Power Development and Reform Programme (APDRP) has been increased to Rs 2,080 crore, an increase of 160% over interim budget. Minister also announced reduction of the basic customs duty on permanent magnets - a critical component for Wind Operated Electricity Generators - from 7.5 per cent to 5 per cent
Government will evolve a blue print for long distance gas highways leading to National Gas Grid facilitating transportation of gas across the country.
India Infrastructure Finance Company Limited (IIFCL) set up as a special purpose vehicle for providing long term financial assistance to infrastructure projects will be strengthened to fulfill its mandate, the Minister said.
Bio-Fuel
In order to encourage the use of this environment friendly fuel and augment its availability in the country, Government will reduce basic customs duty on bio-diesel from 7.5 per cent to 2.5 per cent - at par with petro-diesel. Biodiesel obtained from vegetable oils and used for blending with petro-diesel, is currently exempt from excise duty. From now on petro-diesel blended with bio-diesel will also be exempted from excise duty.
Key Features of India Budget 2009-10
Key Features of India Budget 2009-10:
• The government to abolish to the controversial Commodity Transaction Tax (CTT) in line with recommendation of Economic Advisory Council of Prime Minister.
• Branded jewellery exempt from excise duty. Duty on gold re-imposed. Customs duty hike on gold and silver. Tax exemption holiday for gems, jewellery and textiles.
• Target for agriculture credit raised to Rs 3,25,000 crore (Rs 3250 billion) in 2009-10 from Rs 2,87,000 crore. Incentives in interest rates to farmers to pay back agriculture loans in time. Additional allocation of Rs 1,000 crore for accelerated irrigation project.
• Allocations for highways being stepped up by 23 per cent. Indian Infrastructure Financial Corporation Limited to evolve financing mechanism for giving increased support to infrastructure projects.
• Indian Infrastructure Finance Company Limited will re-finance commercial bank loans upto 60 per cent in critical projects through public private partnership to the tune of Rs 1,00,000 crore (Rs 1,000 billion) to raise investment in the sector.
• Allocation for urban poor for provision for housing and basic amenities to be raised to Rs 3,973 crore (Rs 39.73 billion) in the current year. Allocation for Jawaharlal Nehru Urban Renewal Mission increased by 87 per cent to Rs 12,887 crore (128.87 billion).
• Central assistance for storm-water drainage project increased to Rs 500 crore (Rs 5 billion) from Rs 200 crore (Rs 2 billion) in the Interim Budget.
• Income Tax returns to be made simpler.
• Banks and insurance firms to remain in public sector. Rs 100 crore (Rs 1 billion) to be given as one time grant in aid to expand banks in unbanking areas.
• Export Credit Guarantee scheme extended till March 2010.
• Growth rate in 2008-09 dipped to 6.7 per cent from average 9 per cent growth in previous three fiscal years. Pranab said he intends to make pre-budget consultations with state finance ministers an annual affair.
• Fiscal deficit grew from 2.7 per cent to 6.8 per cent of GDP. Total fiscal stimulus during 2008-09 amounts to Rs 1,86,000 crore (Rs 1,860 billion).
• India infrastructure finance company IIFCL is given greater flexibility; used to take care of asset liability mismatch and free up capital for financing new projects; can facilitate incremental lending to infra sector
• IIFCL will finance 50% of projects; involving total investment of Rs1 trillion, public investment in infra to get a big boost. Asked my colleagues in the state governments to remove policy bottlenecks
• Budgetary allocation to highways and railways being stepped up by 23%; railways Rs15,000 crore. JNUURM allocation up by 87%.
• Scheme for urban poor housing to Rs3,973 crore; Rajiv Gandhi Awas Yojana; slum free India. Mumbai drainage allocation up
• Accelerated power development and reform progamme: Rs2,080 crore / 160% increase in allocation
• Natural gas: long distance highway to facilitate a national gas grid
• Agriculture: Rs2.87 trilliion to Rs3.25 trillion; interest subvention scheme for farmer; govt shall pay an additional 1% subvention to those who paid their loans on time — Rs411 crore over the interim budget
• Farm loan waiver covered 40 million farmers; six months extension on account of delayed monsoon. Maharashtra loan waiver coverage review; a task force. Accelerated irrigation development programme:75% increase in allocation
• Kautilya advice: return to frbm targets at the earliest after the negative effects of the global economy are overcome. Medium term perspective await the 13th FC.
• To bring fiscal deficit under control need institutional controls; will cover subsidy, expenditure and disinvestments
• Fertilizer subsidy: a nutrient based subsidy scheme as opposed to product based scheme; unshackling of fertilizer manufacturers will ; direct transfer of subsidy to the farmer
• Oil and petroleum subsidy: Three-fourths of our oil consumption is met through imports. Task force
• Direct tax reforms: asked the department to work on saral-2 form. We need a tax system that generates revenue on a sustained basis. More reforms spread over 5 years.
• Disinvestment: people participation; banks/insurance to remain in public sector; recall of nationalization/socialist credentials; 40 years ago on this day.
• The government to abolish to the controversial Commodity Transaction Tax (CTT) in line with recommendation of Economic Advisory Council of Prime Minister.
• Branded jewellery exempt from excise duty. Duty on gold re-imposed. Customs duty hike on gold and silver. Tax exemption holiday for gems, jewellery and textiles.
• Target for agriculture credit raised to Rs 3,25,000 crore (Rs 3250 billion) in 2009-10 from Rs 2,87,000 crore. Incentives in interest rates to farmers to pay back agriculture loans in time. Additional allocation of Rs 1,000 crore for accelerated irrigation project.
• Allocations for highways being stepped up by 23 per cent. Indian Infrastructure Financial Corporation Limited to evolve financing mechanism for giving increased support to infrastructure projects.
• Indian Infrastructure Finance Company Limited will re-finance commercial bank loans upto 60 per cent in critical projects through public private partnership to the tune of Rs 1,00,000 crore (Rs 1,000 billion) to raise investment in the sector.
• Allocation for urban poor for provision for housing and basic amenities to be raised to Rs 3,973 crore (Rs 39.73 billion) in the current year. Allocation for Jawaharlal Nehru Urban Renewal Mission increased by 87 per cent to Rs 12,887 crore (128.87 billion).
• Central assistance for storm-water drainage project increased to Rs 500 crore (Rs 5 billion) from Rs 200 crore (Rs 2 billion) in the Interim Budget.
• Income Tax returns to be made simpler.
• Banks and insurance firms to remain in public sector. Rs 100 crore (Rs 1 billion) to be given as one time grant in aid to expand banks in unbanking areas.
• Export Credit Guarantee scheme extended till March 2010.
• Growth rate in 2008-09 dipped to 6.7 per cent from average 9 per cent growth in previous three fiscal years. Pranab said he intends to make pre-budget consultations with state finance ministers an annual affair.
• Fiscal deficit grew from 2.7 per cent to 6.8 per cent of GDP. Total fiscal stimulus during 2008-09 amounts to Rs 1,86,000 crore (Rs 1,860 billion).
• India infrastructure finance company IIFCL is given greater flexibility; used to take care of asset liability mismatch and free up capital for financing new projects; can facilitate incremental lending to infra sector
• IIFCL will finance 50% of projects; involving total investment of Rs1 trillion, public investment in infra to get a big boost. Asked my colleagues in the state governments to remove policy bottlenecks
• Budgetary allocation to highways and railways being stepped up by 23%; railways Rs15,000 crore. JNUURM allocation up by 87%.
• Scheme for urban poor housing to Rs3,973 crore; Rajiv Gandhi Awas Yojana; slum free India. Mumbai drainage allocation up
• Accelerated power development and reform progamme: Rs2,080 crore / 160% increase in allocation
• Natural gas: long distance highway to facilitate a national gas grid
• Agriculture: Rs2.87 trilliion to Rs3.25 trillion; interest subvention scheme for farmer; govt shall pay an additional 1% subvention to those who paid their loans on time — Rs411 crore over the interim budget
• Farm loan waiver covered 40 million farmers; six months extension on account of delayed monsoon. Maharashtra loan waiver coverage review; a task force. Accelerated irrigation development programme:75% increase in allocation
• Kautilya advice: return to frbm targets at the earliest after the negative effects of the global economy are overcome. Medium term perspective await the 13th FC.
• To bring fiscal deficit under control need institutional controls; will cover subsidy, expenditure and disinvestments
• Fertilizer subsidy: a nutrient based subsidy scheme as opposed to product based scheme; unshackling of fertilizer manufacturers will ; direct transfer of subsidy to the farmer
• Oil and petroleum subsidy: Three-fourths of our oil consumption is met through imports. Task force
• Direct tax reforms: asked the department to work on saral-2 form. We need a tax system that generates revenue on a sustained basis. More reforms spread over 5 years.
• Disinvestment: people participation; banks/insurance to remain in public sector; recall of nationalization/socialist credentials; 40 years ago on this day.
Sunday, 5 July 2009
Railway budget 2009-2010: Imp Points
Here are the highlights of the railway budget 200-2010 presented in parliament Friday by Railways minister Mamta Banerjee.
No increase in passenger fare and freight tariff
budget to have inclusive growth and expansion of railway network to every corner of the country
Plan outlay of rs.40,745 cr. proposed for 2009-2010, passenger amenities get high priority, to get 119% increase
Traffic receipts during 2008-09 increase by 11.4 % while freight loading grew @ 5% Special trains for perishable farm produce, facilities for transportation of rural craft.
Works for 7 new lines, gauge conversion of 17 lines and doubling of 13 lines to be taken up.
Faster parcel services proposed on three routes
Tatkal scheme to be made passenger friendly
Railway tickets to be made available through post offices and ‘mushkil aasaan’ mobile vans
Concession for press persons increased to 50%
Monthly ticket of rs. 25/- for unorganized sector/poor under ‘izzat’ scheme “only ladies’ emu trains at Delhi, Kolkata and Chennai
‘Yuva trains’ from rural hinterland to metros at concessional fare
12 new point-to-point ‘duranto’ trains
57 new trains, extension of 27 trains and increase in frequency of 13 trains and air-conditioned double-decker trains proposed
50 stations to be upgraded to world class stations
Long distance trains to have on-board doctors and infotainment services
Handicapped and aged persons to have more amenities
Special trains to ferry perishable agro products and rural handicrafts
Special fund for the development of north east railway
Quazigund-Anantnag line to be completed by next month
6560 railway staff quarters to be constructed and group‘d’ employees to get scholarships for their girl child
Railways to come out with while paper on financial status and vision-2020 document
No increase in passenger fare and freight tariff
budget to have inclusive growth and expansion of railway network to every corner of the country
Plan outlay of rs.40,745 cr. proposed for 2009-2010, passenger amenities get high priority, to get 119% increase
Traffic receipts during 2008-09 increase by 11.4 % while freight loading grew @ 5% Special trains for perishable farm produce, facilities for transportation of rural craft.
Works for 7 new lines, gauge conversion of 17 lines and doubling of 13 lines to be taken up.
Faster parcel services proposed on three routes
Tatkal scheme to be made passenger friendly
Railway tickets to be made available through post offices and ‘mushkil aasaan’ mobile vans
Concession for press persons increased to 50%
Monthly ticket of rs. 25/- for unorganized sector/poor under ‘izzat’ scheme “only ladies’ emu trains at Delhi, Kolkata and Chennai
‘Yuva trains’ from rural hinterland to metros at concessional fare
12 new point-to-point ‘duranto’ trains
57 new trains, extension of 27 trains and increase in frequency of 13 trains and air-conditioned double-decker trains proposed
50 stations to be upgraded to world class stations
Long distance trains to have on-board doctors and infotainment services
Handicapped and aged persons to have more amenities
Special trains to ferry perishable agro products and rural handicrafts
Special fund for the development of north east railway
Quazigund-Anantnag line to be completed by next month
6560 railway staff quarters to be constructed and group‘d’ employees to get scholarships for their girl child
Railways to come out with while paper on financial status and vision-2020 document
Commodity Trends:Hopes high on CTT removal
The Railway Budget and Economic Survey 2008-09 have raised hopes of a reformist budget from Finance Minister Pranab Mukherjee on Monday. The Survey has favoured regulation of the commodity futures market by the Securities and Exchange Board of India (Sebi), lifting of ban on futures trading of rice, tur and urad, extension of spot commodity trading in electronic form to agricultural markets by involving APMCs and complete removal of the commodity transaction tax (CTT).
Since Commodity Futures also are part of the financial market, it should be regulated by SEBI, according to the Survey. The Survey hints at removal of commodity transaction tax (CTT) which was vehemently opposed by the industry when the concept was introduced in 2008 budget but not yet notified.
Last week, among the major exchange-related news include MCX launching futures in gasoline. There were also reports that Universal Commodity Exchange has approached the Forward Markets Commission (FMC) to set up India's sixth national level commodity exchange which is promoted by IT entrepreneurs.
Meanwhile, state-run MMTC Ltd, the country’s biggest importer of gold, said it will import 150 tonnes of the yellow metal during the 2009-10 fiscal, the same quantity it imported last fiscal.
Precious Metals
The overall Bullion pack was under pressure last week with Gold continuing to trade sideways whereas Silver witnessed a sharper fall. Weak US economic data and sharp fall in US stock markets made investors rush towards the safe refuge of the US Dollar. Earlier in the week, reports that China has asked to debate proposals for a new global reserve currency at next week’s Group of Eight summit in Italy had supported the Bullion pack. Further, holdings in the world's largest gold-backed exchange-traded fund (SDPR) have been falling in the past few weeks as growing optimism about the global economy saps investors' appetite for the safe-haven asset. Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, was unchanged at 1,120.55 metric tons.
Spot Gold continues to trade in the range of $912 - $948 zone. Overall, gold has benefitted from persisting worries that heavy government borrowing could boost inflation. Physical demand from India has been weak with imports down 50% year-on-year in the first half of this year compared with the first six months of 2008, as per the Bombay Bullion Association. For the week, we expect Spot Gold prices to have immediate support at $920/$908 whereas resistance is seen at $944/$958. Spot Silver prices shall find support at $13.00/$12.70 whereas resistance is seen at $13.65/$13.95. MCX August Gold has support at 14350/14260 whereas resistance is seen at 14580/14710. MCX Sep Silver shall find support at 21220/20750 whereas resistance is seen at 21950/22410 levels.
Crude Oil
Crude Oil prices pared early gains and tumbled in the last week, reaching to their lowest level in one month and marking its third successive weekly loss, as bearish weekly inventory data and relatively strong dollar against major currencies exerted pressure on oil prices. Oil prices are also taking cues from equity markets and weak global equity markets dented risk sentiments in the market and weighed on oil prices. NYMEX May Crude Oil futures ended the week 5.10% lower than the previous week to close at $65.63 per barrel, the lowest closing level since 3rd June.
Crude Oil prices are facing downward pressure once prices reach above $70 mark, as recent economic data is still mixed and raising concerns in the mind of investors with regard to early economic recovery. With unemployment rates are at multi year high, consumers are unlikely to expedite consumption in the near term, which can certainly curb the energy demand. Global risk sentiment is on the edge and if equity markets peak off, then we can see fall in risk appetite, which can potentially reduce demand for higher yielding assets like commodities.
Weekly inventory data in US is showing that energy demand in world’s largest oil consuming nation is still more than 5% less than last year. Despite US summer driving season is underway, gasoline demand is not picking up, which is certainly not a positive sign. Traders will also have to look out for trend in dollar, as rising dollar can also weigh on oil prices. Rising geopolitical tension in the Nigeria is the only possible factor which can lend support to oil prices. Due to above mentioned factors; we expect that oil prices can face resistance near $70 levels and it can eventually head downwards towards $60-61 levels.
Soybean
Soybean (NCDEX Aug contract) prices opened the week at Rs 2550/quintal, initially fell sharply on account of lower export demand of soy meal from global livestock industry. However, it could not sustain at lower levels and prices moved slightly higher after making a low of 2462 levels and finally managed to close at 2490 levels on account of short covering, value buying, lower stock of soybean and delayed monsoon in major growing areas also provided support to bulls in the market.
Oil meal exports declined to 1,97,593 metric tonnes in June 2009, down 33% as compared to 2,95,204 metric tonnes in June 2008. While, during the first three months of financial year (April-June, 2009) total oil meal export was 6,14,528 metric tonnes, down 57% on corresponding period last year. India exported 1,09,923 metric tonnes of soy meal, 58, 805 tonnes of rape/mustard seed meal, 12580 tonnes of rice bran meal and 16046 tonnes of castor meal in June 2009.
Plantation of soybean has started during the first week of July in major producing state (Madhya Pradesh). Area covered under kharif oilseeds is 6.63 lakh hectares, down by 65% as compared to 19.23 lakh hectares in corresponding period a year ago, due to delayed monsoon this year. Domestic area under soybean is reported lower at 1.63 lakh hectare compared to 8.11 lakh hectare in the corresponding period a year ago.
USDA’s planted Acreage Report released on Tuesday, which shows soybean acreage number was only 77.43 million acres, about 500,000 acres below trade expectations. However, this was still up from 76.024 million acres on the USDA’s March 31st report, it is largest soybean acreage number on record. In the coming week (NCDEX Aug Soybean), prices are expected to move range bound with a support at 2450/2350 and resistance is seen at 2550/2620 levels.
Black Pepper
Black Pepper prices in the spot markets quoted in the range of Rs.12,500 – Rs.12,900/qtl in the past 15 days. Prices witnessed strength in the beginning due to poor monsoon rains and supportive sentiments that production could reduce in the year 2010 but declined at the end of the previous week. Indonesia fresh crop arrivals have started and they are offering it at lower levels at $2,325 a tonne (f.o.b).
Pepper prices in the international market of Indian origin are being quoted at higher levels of $2,750/tonne. Pepper imports in May showed a substantial increase into the nation. Imports of black pepper were 2,265 tonnes (May) through the Kochi port alone against export of 1,750 tonnes. Demand from the overseas and domestic continues to be lackluster. Prices at the futures after making a high of Rs.13,150/qtl dipped to lows of Rs.12,188/qtl. Prices may dip further if the support level of Rs.12,130 is breached and may touch Rs.12,050/qtl and thereafter Rs.11,600/qtl. Prices may find resistance initially at Rs.12,540/qtl and thereafter at 12,890/qtl.
Rubber
Rubber is witnessing steady to mixed trend in domestic and overseas markets. Buyer resistance is visible which is not allowing prices to go beyond Rs 98-102 range. July Futures in NMCE concluded the weekend session at Rs 96.69 while the August contract traded at Rs 93.47.
In the early part of the week, Rubber exhibited weakness and quantity buyers stayed away from spot markets. Major consumers seemed comfortable with imports rather than buying from domestic markets. The Automotive Tyre Manufacturer’s Association has urged the government bring down the customs duty on natural rubber from 20 to 10% on par with finished rubber products which is levied at 10 %.
Weakness was visible in Asian rubber futures despite the fact that International Tripartite Rubber Council members Thailand, Indonesia and Malaysia announced a decision to remove 9,15,000 tons from the market in 2009 to bolster prices. At TOCOM a steady to high trend was visible in rubber futures while Shanghai technical selling led to decline in prices.
Rubber is likely to witness steady or range-bound trading as there is no bullish factors alive with China buying the only saving grace while US and European markets appear quiet.
Base Metals
It was a rather dull weak for base metals although some recovery was visible during weekend on Chinese data.Copper exhibited weakness on concerns of a weakening US labour market. Payrolls in the U.S., the second-biggest consumer of copper after China, declined by 467,000 in June. The jobless rate climbed to 9.5 percent, the highest since August 1983. This has raised concerns about demand for industrial metals falling.
Copper for three-month delivery slid $65, or 1.3 percent, to $4,970 a metric ton. Analysts expect weaker demand and rising inventories to pull down prices to $4000 in July-September period.
Towards weekend there was a gain from economic data from China which indicated that official purchasing manager’s index for June rose to 53.2 from 53.1 in May, the fourth straight month in which the manufacturing sector has showed signs fo expansion. Nickel prices gained more than 8% to $16,600. The week ahead, expect choppy trade with some profit booking as most of the commodities are trading higher compared to fundamentals.
Last week, MCX August copper prices opened the week at 246.50 initially moved higher and as expected found good resistance at 250.45 levels. Later prices fell sharply lower breaking the initial support marginally made a low of 239.25 and finally ended the week with a loss of Rs.3.8 to close at 241.85. This week market is expected to find good resistance in the range of 243.50-245.50 levels and then strongresistance is seen at 249.50-250.50.
(With analytical inputs from Angel Commodities, Mumbai)
Since Commodity Futures also are part of the financial market, it should be regulated by SEBI, according to the Survey. The Survey hints at removal of commodity transaction tax (CTT) which was vehemently opposed by the industry when the concept was introduced in 2008 budget but not yet notified.
Last week, among the major exchange-related news include MCX launching futures in gasoline. There were also reports that Universal Commodity Exchange has approached the Forward Markets Commission (FMC) to set up India's sixth national level commodity exchange which is promoted by IT entrepreneurs.
Meanwhile, state-run MMTC Ltd, the country’s biggest importer of gold, said it will import 150 tonnes of the yellow metal during the 2009-10 fiscal, the same quantity it imported last fiscal.
Precious Metals
The overall Bullion pack was under pressure last week with Gold continuing to trade sideways whereas Silver witnessed a sharper fall. Weak US economic data and sharp fall in US stock markets made investors rush towards the safe refuge of the US Dollar. Earlier in the week, reports that China has asked to debate proposals for a new global reserve currency at next week’s Group of Eight summit in Italy had supported the Bullion pack. Further, holdings in the world's largest gold-backed exchange-traded fund (SDPR) have been falling in the past few weeks as growing optimism about the global economy saps investors' appetite for the safe-haven asset. Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, was unchanged at 1,120.55 metric tons.
Spot Gold continues to trade in the range of $912 - $948 zone. Overall, gold has benefitted from persisting worries that heavy government borrowing could boost inflation. Physical demand from India has been weak with imports down 50% year-on-year in the first half of this year compared with the first six months of 2008, as per the Bombay Bullion Association. For the week, we expect Spot Gold prices to have immediate support at $920/$908 whereas resistance is seen at $944/$958. Spot Silver prices shall find support at $13.00/$12.70 whereas resistance is seen at $13.65/$13.95. MCX August Gold has support at 14350/14260 whereas resistance is seen at 14580/14710. MCX Sep Silver shall find support at 21220/20750 whereas resistance is seen at 21950/22410 levels.
Crude Oil
Crude Oil prices pared early gains and tumbled in the last week, reaching to their lowest level in one month and marking its third successive weekly loss, as bearish weekly inventory data and relatively strong dollar against major currencies exerted pressure on oil prices. Oil prices are also taking cues from equity markets and weak global equity markets dented risk sentiments in the market and weighed on oil prices. NYMEX May Crude Oil futures ended the week 5.10% lower than the previous week to close at $65.63 per barrel, the lowest closing level since 3rd June.
Crude Oil prices are facing downward pressure once prices reach above $70 mark, as recent economic data is still mixed and raising concerns in the mind of investors with regard to early economic recovery. With unemployment rates are at multi year high, consumers are unlikely to expedite consumption in the near term, which can certainly curb the energy demand. Global risk sentiment is on the edge and if equity markets peak off, then we can see fall in risk appetite, which can potentially reduce demand for higher yielding assets like commodities.
Weekly inventory data in US is showing that energy demand in world’s largest oil consuming nation is still more than 5% less than last year. Despite US summer driving season is underway, gasoline demand is not picking up, which is certainly not a positive sign. Traders will also have to look out for trend in dollar, as rising dollar can also weigh on oil prices. Rising geopolitical tension in the Nigeria is the only possible factor which can lend support to oil prices. Due to above mentioned factors; we expect that oil prices can face resistance near $70 levels and it can eventually head downwards towards $60-61 levels.
Soybean
Soybean (NCDEX Aug contract) prices opened the week at Rs 2550/quintal, initially fell sharply on account of lower export demand of soy meal from global livestock industry. However, it could not sustain at lower levels and prices moved slightly higher after making a low of 2462 levels and finally managed to close at 2490 levels on account of short covering, value buying, lower stock of soybean and delayed monsoon in major growing areas also provided support to bulls in the market.
Oil meal exports declined to 1,97,593 metric tonnes in June 2009, down 33% as compared to 2,95,204 metric tonnes in June 2008. While, during the first three months of financial year (April-June, 2009) total oil meal export was 6,14,528 metric tonnes, down 57% on corresponding period last year. India exported 1,09,923 metric tonnes of soy meal, 58, 805 tonnes of rape/mustard seed meal, 12580 tonnes of rice bran meal and 16046 tonnes of castor meal in June 2009.
Plantation of soybean has started during the first week of July in major producing state (Madhya Pradesh). Area covered under kharif oilseeds is 6.63 lakh hectares, down by 65% as compared to 19.23 lakh hectares in corresponding period a year ago, due to delayed monsoon this year. Domestic area under soybean is reported lower at 1.63 lakh hectare compared to 8.11 lakh hectare in the corresponding period a year ago.
USDA’s planted Acreage Report released on Tuesday, which shows soybean acreage number was only 77.43 million acres, about 500,000 acres below trade expectations. However, this was still up from 76.024 million acres on the USDA’s March 31st report, it is largest soybean acreage number on record. In the coming week (NCDEX Aug Soybean), prices are expected to move range bound with a support at 2450/2350 and resistance is seen at 2550/2620 levels.
Black Pepper
Black Pepper prices in the spot markets quoted in the range of Rs.12,500 – Rs.12,900/qtl in the past 15 days. Prices witnessed strength in the beginning due to poor monsoon rains and supportive sentiments that production could reduce in the year 2010 but declined at the end of the previous week. Indonesia fresh crop arrivals have started and they are offering it at lower levels at $2,325 a tonne (f.o.b).
Pepper prices in the international market of Indian origin are being quoted at higher levels of $2,750/tonne. Pepper imports in May showed a substantial increase into the nation. Imports of black pepper were 2,265 tonnes (May) through the Kochi port alone against export of 1,750 tonnes. Demand from the overseas and domestic continues to be lackluster. Prices at the futures after making a high of Rs.13,150/qtl dipped to lows of Rs.12,188/qtl. Prices may dip further if the support level of Rs.12,130 is breached and may touch Rs.12,050/qtl and thereafter Rs.11,600/qtl. Prices may find resistance initially at Rs.12,540/qtl and thereafter at 12,890/qtl.
Rubber
Rubber is witnessing steady to mixed trend in domestic and overseas markets. Buyer resistance is visible which is not allowing prices to go beyond Rs 98-102 range. July Futures in NMCE concluded the weekend session at Rs 96.69 while the August contract traded at Rs 93.47.
In the early part of the week, Rubber exhibited weakness and quantity buyers stayed away from spot markets. Major consumers seemed comfortable with imports rather than buying from domestic markets. The Automotive Tyre Manufacturer’s Association has urged the government bring down the customs duty on natural rubber from 20 to 10% on par with finished rubber products which is levied at 10 %.
Weakness was visible in Asian rubber futures despite the fact that International Tripartite Rubber Council members Thailand, Indonesia and Malaysia announced a decision to remove 9,15,000 tons from the market in 2009 to bolster prices. At TOCOM a steady to high trend was visible in rubber futures while Shanghai technical selling led to decline in prices.
Rubber is likely to witness steady or range-bound trading as there is no bullish factors alive with China buying the only saving grace while US and European markets appear quiet.
Base Metals
It was a rather dull weak for base metals although some recovery was visible during weekend on Chinese data.Copper exhibited weakness on concerns of a weakening US labour market. Payrolls in the U.S., the second-biggest consumer of copper after China, declined by 467,000 in June. The jobless rate climbed to 9.5 percent, the highest since August 1983. This has raised concerns about demand for industrial metals falling.
Copper for three-month delivery slid $65, or 1.3 percent, to $4,970 a metric ton. Analysts expect weaker demand and rising inventories to pull down prices to $4000 in July-September period.
Towards weekend there was a gain from economic data from China which indicated that official purchasing manager’s index for June rose to 53.2 from 53.1 in May, the fourth straight month in which the manufacturing sector has showed signs fo expansion. Nickel prices gained more than 8% to $16,600. The week ahead, expect choppy trade with some profit booking as most of the commodities are trading higher compared to fundamentals.
Last week, MCX August copper prices opened the week at 246.50 initially moved higher and as expected found good resistance at 250.45 levels. Later prices fell sharply lower breaking the initial support marginally made a low of 239.25 and finally ended the week with a loss of Rs.3.8 to close at 241.85. This week market is expected to find good resistance in the range of 243.50-245.50 levels and then strongresistance is seen at 249.50-250.50.
(With analytical inputs from Angel Commodities, Mumbai)
Thursday, 2 July 2009
Fortunoff diamond auction:73% recovery achieved
SimplexDiam Inc. announced a 73% recovery on Fortunoff's loose diamonds. Said CEO Yogesh Madhvani, "We knew we'd attain a tangibly better recovery than the competition, that's why we took the project. One has to remember that this isn't a going-out-of-business sale, it's an auction to the trade. These aren't certified stones, they're 70 pointers down. Both the bidders and the estate seem quite happy with the result."
Madhvani and his team are in fact no strangers to record breaking auctions. In May of 2008 he and his team were a hair's breadth away from winning $17,000,000 of diamonds, at auction, of the LID diamond inventory, only to lose it in the combined bidding. Consensus Advisor's Chris Ellis has credited them with being integral to the auction's process and success
Returning to Fortunoff, let's put the achievement in perspective: Recent wholesale auctions have recovered between 35% and 55% of wholesale cost. Retailers usually pay 20% markup on loose diamonds under 70 points. In other words, retailers own the loose diamonds at 120 cents on the wholesale dollar. Doing the math, this means that Simplex recovered 87.6% (73% of 120 cents) on wholesale cost as opposed to the 35%-55% one normally sees. We can't find a trade auction in recent recorded history that's even within 25 points of this number.
Says VP of Finance, Shail Madhvani: "This is a high watermark. Still, I must say we have faith in our math. We've been meticulous about keeping data over the years and using it to improve results. It's this data that has made it possible to build lots that will be most attractive to potential bidders. Intelligent selection, based on multiple variables, allows us to maximize value for the bidder and the estate. It has taken us decades to understand the secondary market this well. We still work hard each time to improve our models."
SimplexDiam Inc. values and purchases diamonds and fine jewelry. They have functioned as a stalking horse (reserve bidder) in the LID Deal, guaranteeing, in partnership, over $20,000,000. They served as a bidder and winner of the Friedman's, Whitehall, Colibri, and Christian Bernard residual jewelry inventories. Most recently they performed as an auctioneer of loose diamonds for the Fortunoff Estate in bankruptcy. They are also winners at many major retailers' quarterly jewelry auctions and provide services to small jewelry retailers and pawn shops by valuing and purchasing closeout diamonds and jewelry they acquire from individuals and diamond traders. Additionally, their going-out-of-business division. (PRWeb)
Madhvani and his team are in fact no strangers to record breaking auctions. In May of 2008 he and his team were a hair's breadth away from winning $17,000,000 of diamonds, at auction, of the LID diamond inventory, only to lose it in the combined bidding. Consensus Advisor's Chris Ellis has credited them with being integral to the auction's process and success
Returning to Fortunoff, let's put the achievement in perspective: Recent wholesale auctions have recovered between 35% and 55% of wholesale cost. Retailers usually pay 20% markup on loose diamonds under 70 points. In other words, retailers own the loose diamonds at 120 cents on the wholesale dollar. Doing the math, this means that Simplex recovered 87.6% (73% of 120 cents) on wholesale cost as opposed to the 35%-55% one normally sees. We can't find a trade auction in recent recorded history that's even within 25 points of this number.
Says VP of Finance, Shail Madhvani: "This is a high watermark. Still, I must say we have faith in our math. We've been meticulous about keeping data over the years and using it to improve results. It's this data that has made it possible to build lots that will be most attractive to potential bidders. Intelligent selection, based on multiple variables, allows us to maximize value for the bidder and the estate. It has taken us decades to understand the secondary market this well. We still work hard each time to improve our models."
SimplexDiam Inc. values and purchases diamonds and fine jewelry. They have functioned as a stalking horse (reserve bidder) in the LID Deal, guaranteeing, in partnership, over $20,000,000. They served as a bidder and winner of the Friedman's, Whitehall, Colibri, and Christian Bernard residual jewelry inventories. Most recently they performed as an auctioneer of loose diamonds for the Fortunoff Estate in bankruptcy. They are also winners at many major retailers' quarterly jewelry auctions and provide services to small jewelry retailers and pawn shops by valuing and purchasing closeout diamonds and jewelry they acquire from individuals and diamond traders. Additionally, their going-out-of-business division. (PRWeb)
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