BEIJING, May 7: China will let retail investors trade in a nationwide over-the-counter market for non-public companies similar to the U.S. OTC Bulletin Board, a top securities regulator said on Monday.
Apart from the Shanghai and Shenzhen stock exchanges which trade shares of listed companies, there are exchanges in many other cities such as Beijing, Tianjin and Chongqing, known as China’s ‘third boards,’ trading unlisted securities.
The China Securities Regulatory Commission (CSRC), the industry watchdog, has been working with brokerages on plans to launch a uniformly regulated OTC market, while cleaning up more than 300 local exchanges across the country trading various types of asset ownership.
Yao Gang, CSRC’s vice chairman, told a meeting in Beijing that the regulator would allow retail investors to trade unlisted shares once the OTC market goes nationwide, but with restrictions based on their investment experience.
The CSRC started a trial six years ago in Beijing’s Zhongguancun area and the exchange now trades equity stakes of about 100 unlisted companies. The annual transaction volume of less than 600 million yuan in 2011 is nothing compared with the main Shanghai and Shenzhen stock exchanges.
‘In the future, when the trial becomes nationwide, we plan to let individual investors enter the market, but they must meet certain requirements,’ Yao said.
He did not say when the OTC market would become nationwide. The CSRC’s blueprint is to first expand the trial to high-tech parks in China and then across the country. (AGENCIES)
China to let retail investors trade OTC stocks -CSRC
CEA requests Power Ministry to seek PMO help on fuel pact
NEW DELHI, May 7: Power sector planning body CEA has sought PMO intervention on fuel supply agreement as several companies have refused to sign pact with CIL amid differences over penalty to be paid by the coal firm if it fails to supply 80 per cent of the contracted fuel to them.
In a letter to the Power Ministry, CEA has requested that the matter be taken up with the Prime Minister’s Office so that the FSAs (fuel supply agreements) could be signed.
Last month, a Presidential Directive was issued to Coal India Ltd (CIL) forcing it to sign FSAs with power companies at 80 per cent commitment levels or pay penalties.
The Central Electricity Authority’s request to the ministry comes ahead of its meeting with power firms, which have not signed the FSAs, on Wednesday.
“Coal India has placed an entirely different FSA which is detrimental to the interests of the power sector,” CEA has said in the letter.
The recently released new FSA, which is being insisted on by coal companies is monopolistic in nature and pro-coal companies, the letter stated.
CEA has also requested the government to re-look some of the clauses of the FSA.
It said, “The rate of compensation for the “Failed Quantity” is 0.01 per cent, which is too little a penalty for non-fulfilment of obligations and that too is applicable after three years.”
“It is hardly a disincentive and won’t discourage low fuel supplies,” it said.
The missive also insists that the provision for sampling of coal at both loading and unloading ends and through third party agency should be done.
The power companies have said the seller should not sell low quality coal and in case it is supplied, the purchaser is not liable to make any payment including rail transportation.
The supply of imported coal should be based on mutual consultations preferably in line with supply of imported coal being made by Minerals and Metals Trading Corp or State Trading Corporation, the letter said.
Country’s largest power producer NTPC has refused to sign the FSA as the company wants the useful heat value (UHV) formula for coal instead of the new gross calorific value (GCV)
formula proposed by CIL, the country’s largest supplier.
Indian coal is classified on the basis of UHV into seven grades from A-G. UHV is based on ash and moisture contents for non-coking coals in line with the government’s directive.
These grades are wide, while under the GCV method, the bands would be narrower, closely resembling their quality. (PTI)
Chip maker AMD appoints Colette LaForce as SVP and CMO
NEW DELHI, May 7: Computer chip maker AMD today said it has appointed Colette LaForce as Senior Vice-President and Chief Marketing Officer with effect from May 14, 2012.
LaForce will join AMD from Dell, where she is now Global Vice President and Chief Marketing Officer.
She will report to AMD President and Chief Executive Officer Rory Read and will be based in Austin, Texas, AMD said in a statement.
In her new role, LaForce will lead global integrated marketing for AMD, including marketing strategy, branding, internal and external communications, corporate events, sponsorships and entertainment marketing, it added.
“Colette brings strong technology marketing and brand-building experience, a fresh perspective and a results-oriented approach that will strengthen AMD’s global marketing organisation,” Read said in the statement. (PTI)
Farm items comprised 12 pc of total trade in futures in FY’12
NEW DELHI, May 7: Trade in agri commodities was around Rs 22 lakh crore last fiscal and was 12.12 per cent of the total trade in all the commodity exchanges in the country, Parliament was informed today.
In a written reply to the Rajya Sabha, Food Minister K V Thomas said the total volume of farm items traded in the 2011- 12 fiscal was 4,942.09 lakh tonnes, which was 35.23 per cent of the volume of all commodities traded at the exchanges.
“The percentage share of agricultural commodities traded in futures market in all the national and regional exchanges was 35.23 per cent of the total volume and 12.12 per cent of the total value of trade in the year 2011-12,” Thomas said.
Presently, 27 agri commodities are actively traded in futures commodity markets, he added.
On the issue of rising prices of some commodities, the minister attributed it to demand-supply mismatch.
“It is observed that some of the agricultural commodities have exhibited considerable prise rise during the past 2 years, April 2010 to March 2012, such as chana, guar gum, guar seed, potato, rapeseed, mustard seed and mentha oil basically due to demand supply mismatch,” Thomas said.
To another query on relation between price rise and futures trading, the minister said that futures trading gives only advance and aggregated information of the likely price scenario of a particular commodity at future date.
Thomas, quoting from the Reserve Bank of India’s annual report (2009-10), said “…Commodity prices in India seem to be influenced more by other drivers of price changes, particularly demand-supply gap in specific commodities, the degree of dependence on imports and international price movements in these commodities.”
To a separate query, the minister said that government is not considering to ban futures trading in any agricultural commodity, as futures trading is a mechanism for price discovery and price risk management.
In another query, Thomas said the commodity market regulator Forward Markets Commission (FMC) has found instances of financial irregularities in a national commodity exchange.
Without naming the exchange, he said “FMC, the regulator of futures market under the provisions of the Forward Contracts (Regulation) Act, 1952 has conducted investigations into complaints received in a national exchange and has found financial irregularities.”
Thomas added that an inquiry into a complaint on tax evasion is also underway.
On the issue of the action taken by the government, he said that they have received a report on the malpractices and the subsequent investigation.
“…However the matter is sub-judice as the alleged individual has moved the court,” Thomas added. (PTI)
Regional offices to clear IPO proposals of up to Rs 500cr:Sebi
CHENNAI, May 7: Market regulator Sebi today said its regional offices would be delegated powers to clear public offer proposals of companies planning to raise up to Rs 500 crore.
“Regional offices can clear proposals of IPO up to Rs 500 crore. Regional offices will be delegated powers with respect to mutual funds, inspection..”, Securities and Exchange Board of India Chairman U K Sinha told reporters here after inaugurating the southern regional office.
In a statement issued recently, Sebi said it was decided that the draft offer documents in respect of issues of size up to Rs 500 crore shall be filed with the concerned regional office of the Board under the jurisdiction of which the registered office of the issuer company falls.
Noting that Sebi has planned to open 10 new regional offices, Sinha said, “one should look at markets on a long term basis”.
“There will be periods when markets will do well, sometimes, they may not. People should not get carried away by short term developments”, he said.
Former Sebi Chairman G V Ramakrishna, Sebi whole-time member Rajeev Agarwal were also present. (PTI)
Shares of MNC units spurt on hopes they may delist
MUMBAI, May 7: Shares of the Indian units of MNCs are on the front-foot this year on investor hopes that many of their promoters may delist them in view of a government directive to increase public-holding in listed firms to a minimum of 25 per cent in about a year’s time.
Shares of multinational companies (MNCs) have jumped 11-104 per cent as compared to the BSE index, Sensex, which has gained nine per cent so far this year, according to the information available with the stock exchanges.
Market experts believe that share prices of the Indian units of MNCs have seen a substantial gain on the expectation that their parent organisations may opt for delisting them following the government ruling.
However, they added that there is a potential risk of share prices correcting sharply, especially if industry demand for extending the deadline for complying with the minimum public holding norm beyond June 3, 2013 is agreed to.
Fairfield Atlas has gained 104.15 per cent, Thomas Cook (85 pc) BOC India (61.26 pc), Fresenius Kabi Oncology (62.1 pc), AstraZeneca Pharma (55.72 pc), Singer India (53 pc) and Honeywell Automation India (49.12 pc).
In addition, Oracle Financial Services Software surged 35.38 per cent, Wendt India (31.54 pc), Elantas Beck India (35.52 pc) and Timken India (30.06 pc).
Other gainers were Gillette India, Ineos ABS (India), Blue Dart Express, Novartis, 3M India, Cambridge Solutions, APW President Systems.
The BSE barometer Sensex has gained 8.9 per cent so far in this year to close at 16,831.08 points on Friday.
“With Sebi mandating that all listed companies have to increase public shareholding to a minimum 25 per cent by June 2013, these companies have to take a call sooner or later whether to reduce promoter holding or go for delisting mechanism,” Destimoney Securities MD and CEO Sudip Bandyopadhyay said.
“Good management and corporate governance are other factors driving these stocks,” he added.
Another Analyst Kishor Ostwal of CNI Research said, “Counters of the Indian units of MNCs have witnessed surge on account of being potential delisting candidates.”
He said, “June deadline may be extended as government itself has not complied with the regulation. There are several listed companies where government holding is 70 per cent. If it would happen, we would see some corrections in these stocks.”
Ostwal said investors can also lose in the short-term if MNCs opt for equity dilution to stay listed.
In recent months, the stock market has witnessed a slew of delisting offers and the promoters have been MNCs for most of these entities.
Some of the entities having announced or got delisted so far in 2012 include Alfa Laval, IT firm Patni Computer, media and entertainment firm UTV Software Communications, Carol Info Service and Exedy India. (PTI)
RBI to go for more regulatory changes to stabilise rupee: HSBC
NEW DELHI, May 7: The Reserve Bank is likely to go in for more forceful regulatory changes and aggressive direct intervention to stabilise the declining value of rupee, says a research note by HSBC.
Last Friday, RBI announced amendments aimed at easing foreign currency flows but investors need to be on “high alert” for more forceful regulatory changes, global banking giant HSBC said.
“We need to be on high alert for more forceful regulatory changes, and more aggressive direct intervention activity, but it is going to be a difficult fight to reverse the negativity surrounding the currency,” the research note said.
On May 4, RBI raised the interest rate ceiling on NRI deposits in foreign currencies by up to 3 per cent, following which Indian banks will be able to offer higher interest rates on NRI deposits in foreign currency.
RBI also deregulated interest rates on export finance, a development that would help exporters to freely raise money in foreign currency without any limit on interest ceilings.
Saying that RBI’s move could alleviate some short-term pressure on the currency, HSBC said clearer steps are needed to make the rupee look more attractive on a longer-term basis.
RBI’s decisions are aimed at arresting the declining value of rupee which is hovering around Rs 53 level against the US dollar. Last week, it came very close to the 54 level, setting off alarm bells.
“The measures themselves are insufficient to stabilise USD-INR,” HSBC said, adding that clear and credible policies are required to alleviate Balance of Payments and fiscal burdens.
The last time the country had a major Balance of Payment crisis was in 1991, which triggered economic reforms.
HSBC said one of the key focus areas would be whether the authorities would open a special dollar purchasing window for state oil companies—one of the notable USD buyers in the Indian market.
Foreign fund flows as well as the rupee will be sensitive to General Anti Avoidance Rule (GAAR) developments, the research note said.
Meanwhile, implementation of GAAR provisions has been deferred by one year. It will be now applicable from 2013-14, Finance Minister Pranab Mukherjee informed Parliament today. (PTI)
Top 5 Indian IT services cos grow 23.8 pc: Gartner
NEW DELHI, May 7: Top five India-based IT services providers grew 23.8 per cent last year compared to 7.7 per cent growth logged by the overall global IT services market, research firm Gartner said today.
Nasdaq-listed Cognizant, which displaced Wipro to become the third-largest Indian IT services provider recently, experienced the highest growth rate of 33.3 per cent amongst the top five IT service providers in 2011, Gartner said in a statement.
Though Cognizant is not listed in India, 75 per cent of its over 1.3 lakh employees are based in India.
“2011 signalled a change in the mind-set of European buyers, particularly Continental Europe for offshore services,” Gartner Principal Research Analyst Arup Roy said.
Indian providers have historically found it more difficult to gain market share in the Western Europe IT services market than in the US market but, as a group, the top five increased market share in the region from 2.3 per cent in 2010 to 2.8 per cent in 2011, he added.
Top player Tata Consultancy Services (TCS) saw 29.4 per cent growth in revenues in 2011, over 2010, while Infosys registered 17.8 per cent increase in revenues, Gartner said.
Wipro and HCL Technologies registered growth of 12.3 per cent and 26.2 per cent, respectively, it added.
On average, Tier 1 providers dramatically outperformed the growth rates of Tier II and Tier III providers, despite the consolidation and acquisitions among some of the smaller firms, Gartner said.
There were some standouts, however, with Genpact up 27 per cent and Syntel up 21 per cent. Smaller providers were charged with creating a more compelling marketing message that went beyond labour arbitrage, the research firm added.
“The top five Indian service providers have continuously chipped away market share from the large multinational corporation providers. In the past five years, they have been increasingly winning large outsourcing deals with a total contract value of more than USD 100 million,” Roy said.
However, in recent years, these top five providers have greatly expanded their service portfolios and have been cross- selling and up-selling their application services client base with offerings like infrastructure services, BPO services, cloud and analytics services, he added. (PTI)
Angels of hope and relief
Red Cross
O.P. Sharma
The Indian Red Cross Society has lived up to its reputation of rendering selfless service to the people in distress due to natural or man-made calamities anywhere across the globe. It has also helped those suffering social discrimination, financial deprivation and physical or mental disabilities. This organisation has, in fact, a long history of service with smile. Whenever, the Red Cross team goes they are looked up as angels of hope and relief.
The task before this welfare organisation is challenging indeed. The Indian Red Cross Society mobilised itself and size itself up to the situation extending much needed relief to the victims and rehabilitation work.
Every year, Red Cross Day is observed on May 8, being the birth anniversary to Jean Henri Dunant, founder of this great humanitarian movement in the world. After a traumatic personal experience of battle in Solferine, Mr. Dunant, a Swiss businessman wrote a book: “A Memory of Solferino” and he pleaded for formation in all countries voluntary relief societies to work in the battle-fields. And in 1864 the first Red Cross Society came into being. Firstly, it was confined to medical care and welfare of wounded soldiers but by later conventions it undertook other welfare works as well. Red Cross on a white ground (derived from the Swiss flag) has been adopted as the symbol of this body. It saves people without consideration of caste, creed, colour or faith.
This organisation with a mission of mitigation human sufferings, takes up humanitarian work observing strict neutrality for the benefit of all without any distinction. The only criterion is need and urgency. The magnitude of the welfare work is increasing and so is the strength of the Red Cross to do the stupendous task.
Indian Red Cross Society is a national federation of over 600 branches in the country. It has spread its network in all the important and vulnerable corners in India with its headquarters in New Delhi and branches across all parts of the country to inspire, encourage and initiate all forms of humanitarian activities to minimize, alleviate and even prevent human sufferings.
In our country it came into being after the Indian Red Cross Society Act which was passed in 1920 and the then Viceroy and Governor General became its first President. Prior to this the British Red Cross Society did the relief work in India.
Healing Touch
As the premier and largest voluntary agency in the country, the Red Cross has entered a number of welfare fields in a big way. A commendable job was done during 1947 in relief, repatriation and rehabilitation work for mass exodus of refugees. Then again it repeated its good work in 1962, 1965 and 1971 conflicts. Its performance during the peace time is also praise worthy indeed. The Red Cross swung into action and rushed relief material in the form of food, medicaments and other things.
The Red Cross has much to speak about the soothing balm of love and relief applied on the victims of terrorism.
Besides, other human sufferings engaged its active attention. We know children continue to die due to avoidable deaths in India. Of the 21 million born every year, one in seven die before attaining age of five and three million die each year from conditions preventable by oral dehydration and immunization. There is actually high incidence of diseases due to mal-mutrition, lack of safe drinking water and proper healthful habits.
A praiseworthy work is also being done in the sphere of maternity and child welfare. through its countrywide network.
The State and Union territory branches of the Red Cross Society execute number of welfare schemes for the mentally, physically and socially handicapped and other distressed persons. Vocational training, home for the aged or infirm, working womens hostels, crèches and balwadies for children are in the sphere of its activities. Mobile dispensaries and blood banks are also arranged.
The Red Cross has a pivotal role of welfare both in war and peace time. The humanitarian work is gigantic indeed and need to be strengthened by men, money and material for the sufferings due to natural or man-made causes. The spirit of Red Cross must be preserved and further promoted.
In Jammu and Kashmir, the Red Cross Society has done monumental work of selfless service. During the armed conflicts of 1947, 1962, 1965 and 1971, a praiseworthy work was done in this border State. Presently, the Red Cross is rendering useful service to the people affected by calamities: natural or man-made. It must take step further and make sustained efforts for reaching out welfare activities in all the districts in Jammu and Kashmir. Jammu has a decent Red Cross building in the heart of the city It manages a Red Cross Sarai near the Government Medical College for the stay of attendants of the in-door patients. Plans are afoot to further strengthen Red Cross net-work to rush necessary relief material and workers even in remotest corner and the last victim of any calamity. All of us must join hands with Red Cross Society for doing our part of welfare service.
Can we optimise situation ?
India-Afghan Partnership
Monish Tourangbam
‘Strategic Partnership’ is one of the most fashionable and over-used phrases in international relations, with every promising bilateral relationship becoming a strategic one.
Pertinently, India just implemented its strategic partnership with Afghanistan: Holding the first session of the India-Afghanistan Partnership Council and convened the first Joint Working Group on Political and Security Consultations. Besides, three Joint Working Groups under the Partnership Council on Trade and Economic Cooperation; Capacity Development and Education; and Social, Cultural, Civil Society and People-to-People Contacts will meet soon.
Arguably, what does this strategic partnership entail in terms of India’s interest? Does New Delhi have a long-term plan to ensure its security after western forces withdraw from the Afghan battlefield? Despite it becoming second nature for everyone to assert the Afghan peace process should be Afghan-led, questionably: Who will eventually lead Afghanistan in the near future.
Will Karzai continue to hold the reins of power, howsoever rickety? Or will the Taliban rise to power with full force once western forces withdraw? Is India talking to the right people in Afghanistan? What game is Pakistan planning to play in the near future? How should India respond?
Importantly, the situation in Afghanistan has reached a critical juncture whereby New Delhi needs to make some quick and hard decisions. Keeping the Afghan Government engaged is one of them which has been done efficiently till now. Prime Minister Manmohan Singh visited Afghanistan in May 2011, soon after Osama Bin Laden was hunted down in Pakistan.
A few months later in October, President Karzai visited India officially inking the strategic agreement that envisioned a number of working groups dealing with different issues. Foreign Minister of Afghanistan Zalmai Rassoul’s recent visit and the first session of the Partnership Council have set in motion a dynamics that cannot be slackened.
A highlight of his visit was India’s decision to hold an investors’ conference on Afghanistan, hoping to enlarge the field of private investments in the war-torn country. On a Government-to-Government basis, New Delhi is one the largest donors in Afghanistan’s reconstruction having pledged $2 billion since the 2001 US invasion.
The investor’s meet hopes to open up the country for more competitive and transparent investments. In this field, India will face stiff competition from China which has an eye on Afghanistan’s vast mineral deposits having already won some coveted contracts including the lucrative Aenak copper mine. India has the Hajigak iron ore mine and is looking at securing petroleum blocks in northern Afghanistan and copper mines in four other parts of the country.
Interestingly, Kabul is ready to cash in on this opportunity and make the most out of the competitive search for resources among the regions big economies. In a welcome development, Pakistan too is expected to join the investors’ meet. Given that of late India and Pakistan have not only taken significant strides towards economic engagement but also Islamabad has shown a cooperative attitude which could boost economic integration in the sub-Continent.
Indeed, with stakes being high a lot depends on Afghanistan’s stability and security and the socio-political makeup that emerges in the near future. Presently, the Karzai Government does not seem to be control of the situation. With President Obama busy with his re-election the Afghan war in a foreign policy weakling in his Presidential campaign.
Notwithstanding, Obama’s unannounced Afghanistan visit where he signed a strategic pact which envisions tackling the post-withdrawal phase in the country, many criticized it as a political gimmick to shore up his foreign policy credentials on the poll eve. A Taliban attack in Kabul just hours Obama left the country underscores a resurgent Taliban is clearly not in a mood to compromise and seems confident of winning the war, forcing foreign forces to withdraw.
Moreover, Pakistan’s double game: Providing safe haven to terrorist groups like the Haqqani network in North Waziristan responsible for many NATO casualties has proved a major blow to the war effort.
Further, since Osama’s killing in Abottabad, US-Pakistan ties have been under severe strain with various rounds of talks coming a cropper. Washington-directed drone attacks continue to ignite the war of words between the two countries.
Worse, Pakistan is in dire straits. The cold war between the military and the civilian Government continues. With the Government’s fate hanging in balance, not only is the Pakistani Taliban giving sleepless nights to the State’s security apparatus but Islamabad is slowly losing the safe American hand.
However, at the same time, all sides involved in Afghanistan know that safeguarding the country’s future needs Islamabad’s active support. Pakistan, specifically its powerful military has always played a pivotal game in the socio-political churning that Afghanistan has gone through since the Cold War days to the Taliban’s creation in the 90s and continues to take sides in the ethno-political clashes within Afghanistan.
Clearly, Pakistan’s military is supporting some groups and providing safe havens while simultaneously aligning with US in its terror war. But, this double game stands exposed now, with Americans clearly annoyed with Pakistan’s reluctance to fight terrorism sincerely. The question is: Is New Delhi making optimum use of this new situation?
Recently, India and Pakistan have made some major strides towards greater economic engagement. But, efforts should be made to open communication links with the military establishment and that is where New Delhi should pressure Washington in back-channels communication.
Despite complications in their relationship, Washington still wields a lot of influence in Islamabad. No other country, not even China would stick its neck out to assist Pakistan in its military ambitions if Washington threatens to wash its hands off completely.
The weakening position of the Pakistani military vis-à-vis anti-State elements should be exposed. A combined Indo-US effort towards softening the might of the Pakistani military would go a long way in preserving security in the region and also in making lives easier for the Americans in the post-withdrawal phase.
In sum, India-Afghanistan strategic partnership should aspire to move out of the usual rhetoric and chart territories instrumental for the security of Afghanistan and the region as a whole. New Delhi has taken a step towards training Afghan forces, and the Karzai Government should expose Indian policy-makers to the reconciliation process.
Moreover, New Delhi should keep track of the figures on the other side of the fence. Namely, Taliban with whom the Americans and the Afghan Government are engaging. India should keep its ears and eyes open and monitor all elements that are bound to take instrumental roles post the 2014 withdrawal, lest we are caught yet again with a hostile power in Kabul. INFA