Sunday, June 28, 2015

THE WEEK AHEAD

Developments in Greece to dictate near term trend


The macroeconomic data, progress of monsoon rains, outcome of Eurogroup ministers' meeting to strike a debt deal with Greece, trend in global markets, investment by foreign portfolio investors (FPIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the bourses in the coming week.

Asian stocks including Indian stocks will on Monday, 29 June 2015 react to the outcome of Eurogroup ministers meeting scheduled on Saturday, 27 June 2015 to strike a debt deal with Greece. The meeting is considered of decisive importance for a Greek solution since time was running out.

Greece needs a deal to unlock new financing ahead of a 1.54 billion euro ($1.75 billion) debt payment due to the International Monetary Fund (IMF) on 30 June 2015. On the same day, Greece's international bailout expires. A default on its international creditors-the IMF and other eurozone governments-could force Greece into a messy exit from the euro.

The results of private surveys providing indications of the strength of factory and services activity for the month of June 2015 will catch investors' attention in the coming week. Markit Economics will announce on Wednesday, 1 July 2015, a reading of India's HSBC PMI index for June 2015, indicating health of India's manufacturing activity, for that month. Markit Economics will unveil the result of a monthly survey on the performance of India's services sector for June 2015 on Friday, 3 July 2015.

The performance of monsoon rains will be closely watched. Strong showing by rains so far has eased food inflation concerns and raised bets that the Reserve Bank of India may cut interest rates. For the country as a whole, the cumulative rainfall during this year's monsoon season was 24% above the Long Period Average (LPA) until 24 June 2015. The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.

Stock specific activity could be witnessed ahead of Q1 results season, which starts from the second week of July 2015.

Auto stocks will be in focus as auto companies will start reporting sales volume data for June 2015, starting from Wednesday, 1 July 2015.

Meanwhile, a fortnightly review of fuel prices from PSU OMCs is due in the near future. PSU OMCs review fuel prices during the middle of the month and on the last day of the month based on the average imported oil price in the preceding fortnight.

On global front, Markit Economics will announce on Wednesday, 1 July 2015, a reading of HSBC PMI indices for China, Japan, US and Eurozone for June 2015, indicating health of respective region's manufacturing activity for that month. Markit Economics will announce on Friday, 3 July 2015, a reading of HSBC Services PMI indices for China, Japan, US and Eurozone for June 2015, indicating health of respective region's services activity for that month.
US jobs data for the month of June 2015 will be released on Thursday, 2 July 2015. US stock markets remain closed on Friday, 3 July 2015.

The data will be released on Monday, 29 June 2015, by the European Commission on Euro Zone Economic Confidence for June 2015, indicating the trend of the overall Euro Zone economy.

THE WEEK THAT WAS

Market surges on rate cut hopes after bountiful rains

Key benchmark indices surged in the week ended Friday, 26 June 2015, triggered by speculation that pick-up in sowing of Kharif crops, above-average monsoon rains during the initial part of the June-September southwest monsoon season, data showing higher water storage in reservoirs and a restrained increase in minimum support prices for Kharif crops announced by the government last week will improve the odds for further monetary policy easing from Reserve Bank of India (RBI). The S&P BSE Sensex rose 495.67 points or 1.81% to settle at 27,811.84. The market gained in three out of five trading sessions of the week.

The S&P BSE Sensex rose 495.67 points or 1.81% to settle at 27,811.84. The CNX Nifty gained 156.15 point or 1.89% to settle at 8,381.10.

The BSE Mid-Cap index rose 1.89%, outperforming the Sensex. The BSE Small-Cap index gained 1.66%, underperforming the Sensex.

Trading for the week was started on a strong note. Banking and IT stocks led rally for key benchmark indices on the first trading session of the week on Monday, 22 June 2015. A rally in European stocks aided sharp gains. The S&P BSE Sensex surged 414.04 points or 1.52% to settle at 27,730.21, its highest closing level since 1 June 2015.

Key benchmark indices registered modest gains on Tuesday, 23 June 2015 as Asian and European stocks edged higher. The S&P BSE Sensex rose 74.16 points or 0.27% to settle at 27,804.37, its highest closing level since 1 June 2015.

Key benchmark indices edged lower after a sudden slide in late trade on Wednesday, 24 June 2015, amid media reports that Greece's creditors have rejected the European nation's latest reform proposals. The S&P BSE Sensex shed 74.70 points or 0.27% to settle at 27,729.67, its lowest closing level since 19 June 2015.

Key benchmark indices gained on Thursday, 25 June 2015, triggered by expectations of a resolution in the long-running talks over Greece's debt crisis. The S&P BSE Sensex rose 166.30 points or 0.60% to settle at 27,895.97, its highest closing level since 22 May 2015.

Key benchmark indices dropped on the last trading session of the week on Friday, 26 June 2015 on weak global stocks. The S&P BSE Sensex declined 84.13 points or 0.3% to settle at 27,811.84.

From the 30-share Sensex pack, 22 stocks rose and 8 stocks fell.

Most IT stocks declined. Wipro (down 0.76%) and TCS (down 0.26%) dropped. Infosys rose 0.94%.

Auto stocks were mixed. Bajaj Auto (up 5.59%), Tata Motors (up 2.29%), and Maruti Suzuki India (up 3.31%) edged higher. Hero MotoCorp (down 0.18%) and Mahindra & Mahindra (down 0.68%) edged lower.

Capital goods stocks gained. Bharat Heavy Electricals (Bhel) (up 3.83%), and L&T (up 3.54%) rose.

Pharma stocks rose. Cipla (up 1.19%), Dr Reddy's Laboratories (up 4.23%), and Sun Pharmaceutical Industries (up 1.16%) gained.

Bank stocks advanced. Axis Bank (up 2.46%), State Bank of India (SBI) (up 2.45%), and HDFC Bank (up 3.19%) gained.

ICICI Bank rose 2.18%. ICICI Bank after market hours on 25 June 2015, announced a reduction of 5 basis points (bps) in its base rate to 9.70% per annum (pa) from 9.75% with effect from 26 June 2015. With effect from 1 July 2010, interest rates on new loans and advances, including consumer loans, are determined with reference to the bank's base rate, ICICI Bank said.

Index heavyweight and housing finance major HDFC gained 4.11%.

Another index heavyweight and cigarette major ITC added 1.1%. ITC on 22 June 2015, said that its wholly owned subsidiary Russell Credit acquired the entire subscribed and paid-up equity share capital of Rs 20 crore of BFIL Finance (BFIL), another wholly owned subsidiary of the company. Consequently, BFIL has ceased to be a direct subsidiary of the company with effect from 18 June 2015, ITC said.

Index heavyweight Reliance Industries (RIL) rose 0.31%.

Bharti Airtel dropped 3.77%. The stock was the biggest loser from the Sensex pack.

Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update issued on 25 June 2015, that the southwest monsoon has been further advanced into remaining parts of north Arabian Sea, Gujarat state, Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Uttarakhand, Punjab, East Rajasthan, entire Haryana, Chandigarh & Delhi and some parts of West Rajasthan. The southwest monsoon was vigorous over East Rajasthan, Gujarat Region and Saurashtra & Kutch and active over Jharkhand, Uttarakhand, Haryana, Chandigarh & Delhi, Himachal Pradesh, West Madhya Pradesh, Madhya Maharashtra and South interior karnataka during past 24 hours until 8:30 IST, the IMD said.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 24% above the Long Period Average (LPA) until 24 June 2015. Region wise, the southwest monsoon was 52% above the LPA in Central India, 32% above the LPA in South Peninsula, 4% above the LPA in East & Northeast India and 5% below the LPA in Northwest India until 24 June 2015.

The IMD expects considerable decease in rainfall activity over Northwest India, central India and parts of Peninsular India during next 15 days. The IMD expects rainfall activity to increase and expects rains to be above normal over Odisha, Jharkhand, Gangetic West Bengal, Chhattisgarh, north Andhra Pradesh until 30 June 2015. The IMD expects near-normal rainfall over parts of east and northeast India during first ten days of July.

The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
Meanwhile, the Ministry of Water Resources on 26 June 2015, announced that the water storage available in 91 important reservoirs of the country as on 25 June 2015 was 43.26 BCM which is 27% of total storage capacity of these reservoirs. This storage is 111% of the storage of corresponding period of last year and 146% of storage of average of last ten years. The present storage position during current year is better than the storage position of last year and is also better than the storage of average of last ten years.

The RBI cut its main benchmark lending rate viz. the repo rate by 25 basis points after a monetary policy review on 2 June 2015. The central bank at that time said that the monsoon and its impact on food costs will be key to further easing. The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.

Monday, June 22, 2015

NIFTY INTRADAY VIEW ( 22 / 06 )

NIFTY INTRADAY LEVELNIFTY PROBABLE HIGHNIFTY PROBABLE LOW
R48310BULL83218006
R38275UP BREAKOUT82428085
R28262UP CAUTIONLEVEL FOR LONGLEVEL FOR SHORT
R18254SELL81928115
PIVOT8217 LAST DAYBULL WITH LV
S18196BUYOPEN8201
S28187DOWN CAUTIONHIGH8251.0
S38175DOWN BREAK OUTLOW8196.0
S48140BEARCLOSE8224.95
NIFTY MONTHLY LEVELNIFTY DAILY VOLATALITY0.67%
R26082LONGNIFTY WEEKLY VOLATALITY3.85%
R15976SHORT EXITNIFTY WEEKLY HIGH8251.0
S15765LONG EXITNIFTY WEEKLY LOW7945.0
S25659SHORTNIFTY DAY MEAN8098

THE WEEK AHEAD

Market may remain volatile ahead of F&O expiry

Trends in investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement and the progress of monsoon will dictate near term trend on the bourses. Indian stocks may remain volatile as traders roll over positions in the futures & options segment from the near month June 2015 series to July 2015 series. The near month May 2015 F&O contracts expire on Thursday, 25 June 2015.

Shares of pharmaceutical firm Lupin will replace shares of integrated power firm Tata Power Company in the benchmark S&P BSE Sensex with effect from Monday, 22 June 2015.

An initial public offering (IPO) of Gujarat-based Manpasand Beverages begins on Wednesday, 24 June 2015. The issue closes on Friday, 26 June 2015. The company will has fixed a price band of Rs 290-320 per share for the IPO.

Progress of the monsoon will be closely watched. The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.

For the country as a whole, the cumulative rainfall during this year's monsoon season was 11% above the Long Period Average (LPA) until 17 June 2015. Region wise, the southwest monsoon was 19% above the LPA in Central India, 16% above the LPA in East & Northeast India and 7% below the LPA in Northwest India until 17 June 2015. The rainfall was 100% of the Long Period Average in South Peninsula.

In Europe, developments in Greece will be closely watched. Euro-area leaders are scheduled to hold an emergency summit in Brussels on Monday, 22 June 2015 to discuss Greece's bailout program after European officials and the International Monetary Fund (IMF) failed to strike a deal on Greece's bailout program, bringing the country one step closer to a dangerous default and potential exit from the eurozone, as per reports. Greece is still struggling to reach a reform agreement with its lenders, which would unlock the next portion of bailout money needed to repay 1.6 billion euros ($1.82 billion) to IMF by the end of June.

The June flash manufacturing PMI for China, the Eurozone, and the US will be released on Tuesday, 23 June 2045.

In US, the Bureau of Economic Analysis will release the third estimate for Q1 GDP on Wednesday, 24 June 2015.

Tuesday, June 16, 2015

DO WE PERFORM OUR DUTY

I  just forward a message received by me.  I leave the subject to your prudent judgement.


Luckily or unluckily,  I will not become a child again whereas today’s children may become parents in future. So for me the first part of the mail is irrelevant but I assure to follow the last part of the mail to the extent possible.


I know that after receiving this mail some of my beloved youngsters will put counter questions like whether all the parents are following what they preach and  why so many advices to us but less to parents? 

 
Before my loved ones ask such questions, let me clarify my stand.  I am a strong believer of ‘ give and take’ policy.  But, the problem is that in the present day world, since inter-personal relationships even within the family, are, willy-nilly, made complex, nobody knows when to give and when to take. There are many behavioral changes in both parents and children.  The set of rules which were ok in yesteryears are not ok today. Today our set of rules and that of our children differ much.  So quoting rules will not solve the problems. If we analysis more and more, instead of getting answers we get more questions only.

 
To get an answer I read the mail again and again and at last I got the answer ie.  Love begets love.   That means problems can be solved only by mutual love and affection and not by questions and counter questions.

 
In the mail it is also stated that it is not an account settlement matter.  This statement is partly true. Because in Accountancy there is one aspect called ‘Bank Reconciliation’ where omissions and commissions of both sides are reconciled to tally the accounts. I don’t think that there will be any second opinion on this.

 
Regards
R.Lakshminarayanan

 
(By youngsters I mean persons above teen ages)
 
----------------------------------------------------------------------------------------------------------------------------------
Mail Received by me:

 
Do we perform our duty to parents?

 
The parents nowadays are quite worried about the behavioural changes in their children due to several socio-economic reasons. The gap between parents and the younger generations is increasing day by day due to which the family bonding is getting weaker and weaker. They have forgotten the countless efforts and sacrifices made by their parents throughout their lives.
 
 
DO WE PERFORM OUR DUTY TO OUR PARENT?
 
Since birth we ate the food provided by them - many lakhs of times!!! Our household expenses, maintenance, educational needs, daily coaching etc., was attended by them free of cost. All our requirements under the sky, from childhood till we started earning our own income, was provided by them at their cost, despite their financial conditions and ability, until we became independent to enjoy and survive in this world. The services of our parents cannot be listed as it will run to volumes. All that we can do in return is our moral and spiritual responsibility to take care of them now when they are helpless.

 
Give them enough money understanding their requirements without their indicating same.
Share time with them to laugh and smile. Be polite and do not try to control their actions, but politely give your views slowly and softly. While walking keep pace with them as due to age, they may be slow and stay behind them. Give them respect.

 
Look after their needs, just asking "shall I bring water, some biscuits, a fruit etc.,? Should I bring tea for you? Are you hungry, baba" etc.

 
Observe their health condition closely and take them for periodical check ups. Sensitive parents will not ask you to do this and that.

 
Check whether they take their medicines timely and remind, do not talk about the cost of the medicine and value!! Take them out where they would like to go, and organise it to their satisfaction

 
Go from time to time to public places, parks, restaurants of their choice etc., Respect their preferences and likes. Do not force your views and preferences. They do not demand respect, they deserve it.

 
When elders arrive or depart, open the door with respect. Go shopping and watch they select and do not comment on their choices. Your choices certainly will differ with theirs and you cannot thrust it on theirs.

 
Celebrate their birthdays and wedding days with some surprise gifts observing their needs and preferences. Daily wish them before you go out and return home visiting them in their rooms.

 
Explain your children the importance of the grand parents and cultivate the habit so that you will be respected when they become grown up!!! When you come back to home, visit them first in their room.

 
Do not criticise their friends and their manners, dresses etc., and talk ill of them. They have not come to see you or care for your views, which please remember.
 
 
In any matter of discussions where the views of yours and the parents differ try to follow their views as much as possible finding a compromising solution without hurting feelings. Remember their sacrifices and time, and you owe them immeasurably which they never asked for. Going their way with your supporting ideas would be ideal patiently and politely.

 Disposal of old parents to old age homes, and separate care homes is a crime unpardonable. Remember their hardship and difficulties in bringing you up and putting up with your tantrums and obstinacies unmindfully. Do not be ignorant..
 
At the dinner table, first serve food to them and then to others

 
A word to parents also -- Please for heaven's sake do not mention how much troubles and sufferings you had in bringing up your children in front of them or talk about the money you spent on their studies and maintenance etc. This is not settlement of account matter. Please remember Love begets love and do not degrade yourself. You should not demand respect but command it.

Sunday, May 31, 2015

THE WEEK AHEAD

RBI's monetary policy review in focus
The Reserve Bank of India's monetary policy review and macro-economic data will dictate near term trend on the bourses. Trend in investment by foreign and domestic institutional investors will be keenly watched.
The Reserve Bank of India (RBI) is scheduled to announce the outcome of its second bi-monthly monetary policy review for the year 2015-16 early next week. The announcement is due at 11:00 IST on Tuesday, 2 June 2015. Economists expects the RBI to cut its benchmark lending rate viz. the repo rate by 25 basis points to 7.25%.
Markit Economics will unveil HSBC India Manufacturing PMI for May 2015 on 1 June 2015. The headline HSBC India Purchasing Managers' Index (PMI) had declined to 51.3 in April 2015 from 52.1 in March 2015.
Markit Economics will unveil HSBC India Services PMI for May 2015 on 3 June 2015. The seasonally adjusted HSBC India Services Business Activity Index had declined to 52.4 in April 2015 from 53 in March 2015.
Shares of auto companies will be watched as auto firms will start unveiling monthly sales volume data for May 2015 from Monday, 1 June 2015.
Shares of public sector oil marketing companies (PSU OMCs) will be in focus as they undertake a review of fuel prices during the end the month. The review takes place during the middle of the month and on the last day of the month based on the average imported oil price in the preceding fortnight.
Progress of the monsoon will also be closely watched. Private weather forecaster Skymet on Wednesday, 27 May 2015, said that conditions are favorable for the onset of Southwest Monsoon in India. It expects monsoon to hit Kerala around 30 May 2015. The progress of monsoon over Peninsular India is expected to be delayed by a week, according to Skymet.
Meanwhile in Europe, Greece is scheduled to repay euro 1.6 billion ($1.76 billion) to the International Monetary Fund (IMF) between June 5-19.
US treasury chief Jacob Lew on Wednesday, 27 May 2015, urged Greece and its creditors to “double down” in their efforts to reach a deal to solve the nation's debt crisis, saying no one should be complacent about the risks to the world economy from a Greek default and its possible exit from the eurozone.
China HSBC Manufacturing PMI for May 2015 will be disclosed on Monday, 1 June 2015.
China HSBC Services PMI for May 2015 will be disclosed on Wednesday, 3 June 2015.
Eurozone unemployment rate for May 2015 will be disclosed on Wednesday, 3 June 2015.
ECB Monetary Policy statement will be disclosed on Wednesday, 3 June 2015.
US unemployment data for May 2015 will be disclosed on Friday, 5 June 2015.

THE WEEK THAT WAS

Key indices decline in volatile trading week
Key benchmark indices edged lower in what was a volatile trading week. Benchmark indices witnessed volatility as traders rolled over positions in the futures & options (F&O) segment from May 2015 series to June 2015 series. The May 2015 F&O contracts expired on Thursday, 28 May 2015.
The S&P BSE Sensex fell 129.06 points or 0.46% to settle at 27,828.44. The Nifty fell 25.30 points or 0.30% to settle at 8,433.65.
The BSE Mid-Cap index rose 96.28 points or 0.91% to settle at 10,716.09. The BSE Small-Cap index rose 72.91 points or 0.65% to settle at 11,280.57. Both these indices outperformed the Sensex.
Trading for the week began on a negative note. Cement stocks and index heavyweights ITC, HDFC and Infosys led decline for key benchmark indices on the first trading session of the week on Monday, 25 May 2015. The S&P BSE Sensex fell 313.62 points or 1.12% at 27,643.88. The CNX Nifty fell 88.70 points or 1.05% at 8,370.25.
Cement and oil stocks led modest losses for key benchmark indices on Tuesday, 26 May 2015. The S&P BSE Sensex fell 112.47 points or 0.41% to settle at 27,531.41. The Nifty fell 30.90 points or 0.37% to settle at 8,339.35.
Gains in bank stocks helped the barometer index, the S&P BSE Sensex, register small gains. On the other hand, the 50-unit CNX Nifty registered miniscule losses on Wednesday, 27 May 2015. The S&P BSE Sensex rose 33.25 points or 0.12% to settle at 27,564.66. The Nifty fell 4.75 points or 0.06% to settle at 8,334.60.
Weakness in pharma stocks pulled key benchmark indices lower in what was a choppy trading session on Thursday, 28 May 2015. The S&P BSE Sensex fell 57.95 points or 0.21% to settle at 27,506.71. The Nifty fell 15.60 points or 0.19% to settle at 8,319.
Telecom, cement and pharma stocks led rally as key benchmark indices surged on the last trading session of the week on Friday, 29 May 2015. The S&P BSE Sensex rose 321.73 points or 1.17% to 27,828.44. The 50-unit CNX Nifty rose 114.65 points or 1.38% to 8,433.65.
Among the 30 Sensex shares, 16 declined and the remaining shares rose.
Tata Motors was the top Sensex loser last week. The stock fell 6.40% to Rs 481.60 after the company reported weak Q4 March 2015 results after trading hours on Tuesday, 26 May 2015. Tata Motors' consolidated net profit fell 56.19% to Rs 1716.50 crore on 3.43% increase in total income to Rs 67821.21 crore in Q4 March 2015 over Q4 March 2014.
Tata Motors said its profit before tax (PBT) declined sharply to Rs 2771 crore in Q4 March 2015 from Rs 5053 crore in Q4 March 2014. The sharp decline in PBT was due to higher depreciation and amortization and adverse mark to market of un-matured hedges not eligible for hedge accounting. The company attributed the small increase in revenue in Q4 March 2015 to increase in wholesale volumes and richer product mix both in the standalone business and Jaguar Land Rover (JLR).
JLR's profit after tax declined to GBP 302 million in Q4 March 2015 from GBP 449 million in Q4 March 2014. JLR's profit before tax (PBT) fell 31.3% to GBP 396 million in Q4 March 2015 over Q4 March 2014. The sharp decline in PBT was due to higher depreciation and amortization and unfavourable revaluation of foreign currency debt and unrealised hedges that are not eligible for hedge accounting treatment. JLR's revenue rose 8.9% to GBP 5,826 million in Q4 March 2015 over Q4 March 2014. JLR's earnings before interest, taxation, depreciation and amortization (EBITDA) rose 10.4% to GBP 1,016 million in Q4 March 2015 over Q4 March 2014.
On standalone basis, Tata Motors reported net loss of Rs 1164.25 crore for Q4 March 2015, which was sharply higher than net loss of Rs 816.61 crore in Q4 March 2014. Revenue (net of excise) jumped 26.2% to Rs 10784 crore in Q4 March 2015 over Q4 March 2014. EBITDA stood at Rs 299 crore in Q4 March 2015 as against negative EBITDA of Rs 528 crore in Q4 March 2014.
Tata Motors said that considering the continued weak operating environment in the standalone business and in view of the losses for the year, no dividend is permitted to be paid to the shareholders of the company for the year ended 31 March 2015 (FY 2015) as per the Companies (Declaration and Payment of Dividend) Rules, 2014.
Hindalco Industries fell 5.83% to Rs 129.15 after the company reported weak Q4 results during market hours on Thursday, 28 May 2015. Hindalco Industries' net profit fell 35.71% to Rs 159.53 crore on 11.03% growth in total income to Rs 9601.63 crore in Q4 March 2015 over Q4 March 2014. The company's PBITDA (profit before interest, taxation, depreciation and amortization) rose 1.98% to Rs 1078 crore in Q4 March 2015 over Q4 March 2014.
Hindalco said there was an exceptional expenditure of Rs 146 crore in Q4 March 2015 consisting of liability provided towards Renewable Power Obligations (RPO). There was an exceptional expense of Rs 396 crore in Q4 March 2014.
GAIL (India) fell 1.58% to Rs 389.90 after the company reported weak Q4 results during market hours on Wednesday, 27 May 2015. GAIL (India)'s net profit fell 47.45% to Rs 510.75 crore on 2.99% decline in total income to Rs 14529.95 crore in Q4 March 2015 over Q4 March 2014. There was no subsidy sharing burden for GAIL (India) in Q4 March 2015. The company had shared Rs 500 crore towards LPG subsidy in Q4 March 2014.
GAIL (India) said that effective 1 April 2014, the company has revised the useful life of fixed assets based on Schedule II to the Companies Act, 2013 for the purposes of providing depreciation on fixed assets. This resulted in increase in profit before tax (PBT) to the extent of Rs 55.89 crore in Q4 March 2015.
Vedanta (down 5.18%), HDFC (down 4.04%), Tata Steel (down 3.82%), Sun Pharmaceuticals Industries (down 3.74%), Cipla (down 3.5%), Dr Reddy's Laboratories (down 2.92%) and Reliance Industries (down 2.83%), edged lower from the Sensex pack.
Bharti Airtel rose 7.66% to Rs 425.30. It was the top Sensex gainer last week. British telecom giant Vodafone Group Plc reportedly sold its 4.2% stake in Bharti Airtel for $200 million. The British telecom giant reportedly said the stake was sold to Bharti Enterprises -- the parent company of Bharti Airtel. The sale follows a change in regulation from the Department of Telecommunications that prohibit companies from owning stake in competing operators in a service area. Previously, telecom operators were allowed to own up to 10% of a competing company.
Bharat Heavy Electricals (Bhel) rose 7.54% to Rs 251.60 after the company reported strong results on sequential basis in Q4 March 2015 at the fag end of trading session on Tuesday, 26 May 2015. Bhel's net profit jumped 317.85% to Rs 888.35 crore on 104.68% growth in total income from operations to Rs 12686.03 crore in Q4 March 2015 over Q3 December 2014. Net profit plunged 51.84% to Rs 888.35 crore on 15.6% decline in total income from operations to Rs 12686.03 crore in Q4 March 2015 over Q4 March 2014.
Coal India rose 4.43% to Rs 391.30. On a consolidated basis, Coal India's net profit fell 4.41% to Rs 4238.55 crore on 3.05% increase in total income to Rs 23065.65 crore in Q4 March 2015 over Q4 March 2014. The result was announced after market hours on Thursday, 28 May 2015. On a consolidated basis, the company's net profit fell 9.16% to Rs 13726.70 crore on 3.74% increase in total income to Rs 80690.71 crore in the year ended March 2015 over the year ended March 2014.
ONGC rose 2.33% to Rs 329.95. ONGC's net profit fell 19.51% to Rs 3935.07 crore on 3.07% increase in total income to Rs 23381.07 crore in Q4 March 2015 over Q4 March 2014. The result was announced after trading hours on Thursday, 28 May 2015.
The company's net profit fell 19.74% to Rs 17732.95 crore on 2.61% decline in total income to Rs 88238.18 crore in the year ended March 2015 over the year ended March 2014.
As per the decision of the Government of India no discount has been extended by ONGC to public sector oil marketing companies (PSU OMCs) during Q4 March 2015. During the corresponding previous year period i.e. in Q4 March 2014, ONGC gave a subsidy discount of a whopping Rs 16202 crore to PSU OMCs on sale of crude oil, PSD kerosene and domestic LPG.
There was an increase in oil and gas production by 6.19% (oil 0.86% and gas 16.37%) in the year ended March 2015 compared with the year ended March 2014. The incremental production was primarily due to better management and addition in the portfolio.
In a statement, ONGC said that a continuous decline in the company's production of crude oil over last seven years was reversed during the year ended 31 March 2015 (FY 2015). Offshore oil production rose 4.3% to 16.18 MMT in FY 2015 from 15.51 MMT in the year ended 31 March 2014 (FY 2014). ONGC's total crude oil production has gone up from 22.25 MMT in FY 2014 to 22.26 MMT in FY 2015.
The estimated accretion to in-place hydrocarbons from ONGC operated areas in India in FY 2015 stands at 215.65 MMTOE. Accretion to ultimate 2P Reserves of ONGC (domestic stand-alone operated areas) in FY 2015 was 61.05 MMTOE.
Reserve Replacement Ratio (RRR), the ratio of reserve accretion to total oil and gas production in one year, stands at 1.38. ONGC, thus, maintains RRR at more than one for last 9 years (2P). Considering the global trend, this is a significant achievement, ONGC said.
Meanwhile, ONGC's board of directors at its meeting held on Thursday, 28 May 2015, approved investment of Rs 1881.22 crore for the redevelopment of Gamij field under Stage Gate Process at Ahmedabad Asset. Gamij field, located in East of Ahmedabad city, is the first onshore field being developed under Stage Gate Process. The project cost includes drilling of 280 wells and creation of surface facilities like Group Gathering Stations.
ONGC also announced that Cairn Energy India Private Limited has handed over the operatorship of NELP block Nagayalanka KG-ONN-2003/1 to ONGC. As the operator of the block, ONGC has made plans to drill 20 horizontal wells with multistage Hydro-fracturing in High Pressure - High Temperature domain. The project cost is around Rs 5000 crore. It is envisaged to produce 2.54 MMT of oil and 1.31 BCM of gas by 2030-31.
On the macro front, the government on Tuesday, 26 May 2015, named former finance secretary and economist Vijay Kelkar to head a panel that will recast the public-private-partnership (PPP) model of infrastructure development in which the government partners with private firms. The Kelkar committee will review the PPP policy and suggest a better risk-sharing mechanism between private developers and the government after analysing such projects in different sectors and the existing framework of risk-sharing. It will also propose design changes to contractual arrangements of the PPP in line with the review and international best practices and suggest measures to improve capacity-building in government for implementation of the PPP projects. The committee will submit a report in three months

Wednesday, May 27, 2015

SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014

1. How the research analysts are regulated in India?

The SEBI (Research Analysts) Regulations, 2014 (“RA Regulations”) were notified on September 01, 2014. The RA Regulations have come into effect from December 01, 2014. The regulations specify conditions for registration, certification, limitations on trading by research analysts, limitations on compensations of research analyst, various disclosures to be made during public appearance and during making recommendations through public media, code of conduct, records to be maintained, manner of conducting inspection, etc. The RA Regulations are available on the SEBI website www.sebi.gov.in.

2. What is the transition period provided for the existing persons acting as research analyst or research entity for obtaining registration under RA Regulations?

Transition period of six months from the date of commencement of RA Regulations has been provided to the existing persons acting as research analyst or research entity before commencement of the RA Regulations to comply with certification, qualification, segregation of research activity from other activities, etc. However, they are required to file an application for grant registration within the said period of six months from the commencement of the regulations i.e. December 01, 2014, to continue to do so thereafter. Such persons who have made applications for grant of registration can continue to do so till the disposal of the application. The person who fails to file an application for grant Page 2 of 12 of registration within the aforesaid time period of six months from the commencement of the regulations, shall stop acting as research analyst. If any person found to be acting as research analyst without making an application for grant of registration under RA regulations after expiry of such period i.e. May 31, 2015, appropriate action as deemed fit, under SEBI Act, 1992 may be initiated.[Ref. Regulation 3(1)].

3. Whether the individuals employed as research analyst with an entity are required to obtain registration certificate under RA Regulations?

No. Individuals employed as research analyst with an entity are not required obtain registration certificate from SEBI. The research entity which employs individuals as research analysts is required to obtain registration certificate under RA Regulations. The individuals employed as research analyst by research entity are required to comply with qualification and certification requirements as specified in the regulations. The trading limitations prescribed under the regulations are applicable to them.[Ref Regulation 7 and 16]

4. Whether the personnel involved in publication activities like marketing and editing are covered under the definition of Research Analyst under RA Regulations.

The RA Regulations do not cover personnel engaged in clerical activities/marketing activities, back office assistance, support services, etc, in relation to publication and/or distribution of research report. As per the regulations, “research analyst” means a person who is primarily responsible for,- i. preparation or publication of the content of the research report; or ii. providing research report; or iii. making 'buy/sell/hold' recommendation; or iv. giving price target; or v. offering an opinion concerning public offer, with respect to securities that are listed or to be listed in a stock exchange, whether or not any such person has the job title of 'research analyst' and includes any other entities engaged in issuance of research report or research analysis. Explanation.-The term also includes any associated person who reports. Page 3 of 12

5. What are all the communications excluded from the definition of research report?

"Research report” does not include the following communications:- i. comments on general trends in the securities market ii. discussions on the broad-based indices; iii. commentaries on economic, political or market conditions; iv. periodic reports or other communications prepared for unit holders of Mutual Fund or Alternative Investment Fund or clients of Portfolio Managers and Investment Advisers; v. internal communications that are not given to current or prospective clients; vi. communications that constitute offer documents or prospectus that are circulated as per regulations made by SEBI vii. statistical summaries of financial data of the companies viii. technical analyses relating to the demand and supply in a sector or index ix. any other communication which SEBI may specify from time to time [Ref. Regulation 2(1)(w)]

6. Whether technical analysis is exempted under the purview of the RA Regulations?

Making buy/sell/hold recommendation on individual stocks based on the technical analysis is not exempted under the purview of the RA Regulations. However, technical analyses relating to the demand and supply for a particular sector or index is exempted from the purview of the RA Regulations. [Ref. Regulation 2(1)(w)]

7. What are all communications excluded under periodic reports as per definition of research report?

Periodic reports such as sending financial account statements, annual reports and any other communication as required under the specific regulations prepared for unit holders of Mutual Fund or Alternative Investment Fund or clients of Portfolio Managers and Investment Advisers are excluded from the definition of research report under RA Regulations.

8. Does RA Regulations cover only equity and equity linked securities?

No. RA Regulations covers all the securities as defined under clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956. Page 4 of 12

9. Who are all covered under the definition of Research Entity?

Intermediaries registered with SEBI who is engaged in merchant banking or investment banking or brokerage services or underwriting services and issue research report or research analysis and other intermediaries to whom there is no specific exemption under RA Regulations are covered under the definition of research entity. Accordingly, SEBI registered Stock Brokers, Merchant Bankers and Underwriters and other intermediaries except those who are exempted from making application under RA Regulations are required to make application for grant of registration under RA Regulations, if they are engaged in issuance of research reports or research analyses. [refer to Regulation 2(v) for the definition of research entity]

10.Who is an independent research analyst?

"Independent research analyst" means a person whose only business activity is research analysis or preparation and/or publication of research report and includes individuals engaged in providing research services without being employed with any research entity(intermediary) and entities other than SEBI registered intermediaries who are engaged in research activities. [refer to Regulation 2(h)]

11.Who is a proxy adviser?

"Proxy adviser” means any person who provide advice, through any means, to institutional investor or shareholder of a company, in relation to exercise of their rights in the company including recommendations on public offer or voting recommendation on agenda items.[ Ref Regulation 2(1) (p)].

12.Whether proxy advisers are required to obtain registration under RA Regulations?

Yes. Proxy Advisers are required to obtain registration from SEBI under RA Regulations.

13.What are the additional requirements to be fulfilled by proxy adviser?

All the provisions of Chapter II, III, IV, V and VI of RA Regulations shall apply mutatis mutandis to the proxy adviser. The proxy adviser shall additionally disclose the following: Page 5 of 12 (i) the extent of research involved in a particular recommendation and the extent and/or effectiveness of its controls and procedures in ensuring the accuracy of issuer data; (ii) (ii) policies and procedures for interacting with issuers, informing issuers about the recommendation and review of recommendations. Proxy adviser is required to maintain the record of his voting recommendations and furnish the same to SEBI on request. [Ref. Regulation 23]

14.Who is required to make an application to get registration under RA Regulations?

In terms of the RA Regulations, no person shall act as a research analyst or research entity or hold itself out as a research analyst unless he has obtained a certificate of registration from SEBI on and from the commencement of RA Regulations unless an exemption specifically applies. [Ref. Regulation 3(1)]. Independent research analyst or research entity (intermediary) who is engaged in issuance of research report or research analysis is required to make an application for registration under RA Regulations.

15.What is the procedure of obtaining registration as a research analyst from SEBI?

Application shall be made in Form A as specified in RA Regulations with necessary supporting documents. A section by the name "Research Analyst" has been created on the SEBI website where in the details/circulars/press releases pertains to RA regulations will be uploaded on a periodic basis. A document by the name "How to get registered as research analyst" has also been uploaded under the relevant section.

16.Where to make an application to get registered as a research analyst?

The application for grant of registration as a research analyst under RA Regulations shall be filed with either the Head Office (HO) or the concerned Regional Office(RO) / Local Office(LO) of the SEBI under the jurisdiction of which the registered address of the applicant is located. The addresses of offices of SEBI are available on the website at www.sebi.gov.in and also on the link 
http://www.sebi.gov.in/sebiweb/stpages/contact_us.jsp. Page 6 of 12

17.Who are exempted from making application for grant of registration under RA Regulations?

Investment Advisers, Credit Rating Agencies, Asset Management Companies and Fund Managers (i.e. fund managers of a mutual fund or alternative investment fund or venture capital fund or portfolio manager) shall not be required to be registered under these regulations. However, they are required to comply with Chapter III of these Regulations, if they issue research reports or their research report is circulated or distributed to public or general investors and/or if they or their directors or employees make public appearance. [Ref. Regulation 3(1)].

18.Who are all covered under public media?

Any persons who makes recommendation or offers an opinion concerning securities or public offers to the general public through any media source available such as radio, television, internet, web or print media are covered under the definition of "public media".

19.Whether journalists who are on the payrolls of media organizations such as newspaper or television are covered under definition of public media ?

Yes. SEBI (Research analyst) Regulations, 2014 covers any person including journalists who: i. make public appearance or ii. make comments through the public media for giving opinion or recommendations concerning securities or on public offers. Journalists employed by various news organizations and who comment on specific stock with proper research, which get published in news paper, etc have to comply with provisions specified under regulation 21(2) of SEBI (Research Analysts) Regulations, 2014. However, RA regulations do not cover the following communications while making recommendations through public media: (i) general trends in the securities market; (ii) discussions on the broad-based indices; (iii) commentaries on economic, political or market conditions; (iv) statistical summaries of financial data of the companies (v) technical analyses relating to the demand and supply in a sector or index based on trading volume and price Page 7 of 12

20.Whether journalists who are on the payrolls of media organizations such as newspaper or television are required to get registered with SEBI ?

No. The journalists who are on the payrolls of media agency such as newspaper or television are not required to get registered with SEBI. However, if they make public appearance or makes a recommendation or offers an opinion concerning securities or public offers through public media, all the provisions of regulations 16 on limitations on trading and 17 on limitations on compensation shall apply mutatis mutandis and they shall disclose their name, registration status and details of financial interest in the subject company.

21.Whether the persons making recommendations through public media are required to obtain registration under RA Regulations?

No. Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations. However, whenever they make public appearance or makes a recommendation or offers an opinion concerning securities or public offers through public media, all the provisions of regulations 16 on limitations on trading and 17 on limitations on compensation shall apply mutatis mutandis to him and he shall disclose his name, registration status and details of financial interest in the subject company. Further, if such person is also engaged in preparation and/or publication of research report or research analysis, he or the entity on whose behalf the he is acting as a research analyst, needs to get registered with SEBI.

22.What are the disclosures required for making recommendations in public media?

Any person including a director or employee of an investment adviser or credit rating agency or asset management company or fund manager, makes public appearance or makes a recommendation or offers an opinion concerning securities or public offers through public media, all the provisions of regulations 16 on limitations on trading and 17 on limitations on compensation shall apply mutatis mutandis to him and he shall disclose his name, registration status and details of financial interest in the subject company at the time of: (i) making such recommendation or offering such opinion in personal capacity; (ii) responding to queries from audiences or journalists in personal capacity; Page 8 of 12 (iii) communicating the research report or substance of the research report through the public media.

23.Whether any application fee is required to be paid at the time of making application for grant of registration under RA Regulations and What is the amount to be paid for grant of registration/renewal registration as research analyst?

Yes. Application fees must be paid along with the application Form for grant of registration. Applicants who are individuals and firms including proxy advisers are required to pay a sum of Rs. Five Thousand (Rs.5,000/-) as application fee at the time of filing of application for grant of registration. Applicants who are body corporates and Limited Liability Partnership Firms (LLPs) are required to pay a sum of Rs. Fifty Thousand (Rs. 50,000/-) as application fee at the time of filing of application for grant of registration. [Ref. Second schedule of RA Regulations]. Applicants who are individuals and firms are required to pay a sum of Rs. Ten Thousand (Rs.10,000/-) as registration fee at the time of grant of registration or renewal of certificate by SEBI. Applicants who are proxy advisers are required to pay a sum of Rs. Ten Thousand (Rs.10,000) as registration fee at the time of grant of registration or renewal of certificate by SEBI. Applicants who are body corporates and Limited Liability Partnership Firms (LLPs) are required to pay a sum of Rs. Five Lakh (Rs. 5,00,000) as registration fee at the time of grant or renewal of certificate by SEBI. [Ref. Second schedule of RA Regulations] S. No. Category Application Fee* Registration /Renewal Fee 1 Individual and Partnership Firms Rs. 5,000 Rs. 10,000 2 Proxy Advisers Rs. 5,000 Rs. 10,000 3 Body Corporate including Limited Liability Partnership Rs. 50,000 Rs.5,00,000 *Application fees must be paid along with the application Form for grant of registration. Page 9 of 12

24.What is the capital adequacy requirement for a Research Analyst?

A research analyst who is individual or partnership firm is required to have a minimum net worth of Rs. One Lakh. A research analyst who is body corporate or limited liability partnership firm (LLPs) required to have a minimum net worth of Rs. Twenty Five Lakh. [Ref. Regulation 8] Proxy Advisers shall have to comply with the capital adequacy requirements within three years from the date of commencement of the RA Regulations.

25.Can a sole proprietor make an application to get registered as a research analyst?

A sole proprietor can make an application to get registered as an independent research analyst. The proprietor of the sole proprietorship firm is required to fulfill eligibility conditions applicable to individual under RA Regulations.

26.Whether a person located outside India can issue research reports under RA Regulations?

Yes. Any person located outside India engaged in issuance of research report or research analysis in respect of securities listed or proposed to be listed on a stock exchange in India shall enter into an agreement with a research analyst or research entity registered under RA regulations.

27.What is the qualification and certification requirement under regulation 7(2) of RA Regulations?

An individual registered as a research analyst, individuals employed as research analyst and partners of a research analyst, as the case may be engaged in preparation and/or publication of research report or research analysis are required to obtain NISM certification for research analysts as specified by SEBI or other certification recognized by SEBI from time to time.

28.Is it mandatory for research analysts to include the words ‘research analyst’ in its name?

Research analyst registered under these regulations shall use the term "research analyst‟ in all correspondences. [Ref. Regulation 13(iii)] Page 10 of 12

29.What is the time period for obtaining certification as specified under regulation 7(2) of RA Regulations for an existing research analyst?

The existing persons acting as research analysts before commencement of the RA Regulations and seeking registration are required to comply with the regulation 7(2) of RA Regulations within two years from the date of commencement of RA Regulations i.e. December 01, 2014. [Ref. proviso to Regulation 7(2)]

30.In case of a partnership firm, who is required to fulfill qualification and certification requirement under regulation 7 of RA Regulations?

All the partners engaged in preparation and/or publication of research report or research analysis are required to fulfill qualification and certification requirement under regulation 7 of RA Regulations.

31.What is the criteria for Net worth certificate?

The Networth certificate should not be more than 6 months old at the time of filing of application.

32.How long does the certificate of registration remain valid under RA Regulations?
The certificate of registration under RA Regulations remains valid for five years or till suspended. [Ref. Regulation 10]

33.When can a research analyst/research entity can apply for grant of renewal of its registration?

A research analyst/research entity is required to apply for grant of renewal registration certificate to SEBI, three months before the expiry of the validity of the certificate. [Ref. Regulation 11]

34.Who are all required to monitor the personal trading activities of the individuals employed as research analysts ?

Research entities and independent research analysts who employ individuals as research analysts are required to monitor and record the personal trading activities of the individuals employed as research analyst with them {Ref Regulation 16(1)} Page 11 of 12

35.What are trading restrictions imposed under RA Regulations?

Research analyst or his associate shall not deal or trade any securities that the research analyst recommends or follows within 30 days before and 5 days after the publication of a research report on the subject company. Research analyst or his associate shall not deal or trade directly or indirectly any securities that he reviews in a manner contrary to his outstanding recommendation, etc. [ Ref Regulation 16]

36.Whether the limitations on trading prescribed under regulation 16 of RA Regulations are applicable to research entity?

The trading limitations prescribed in the RA regulations are applicable to the individuals employed as research analyst, individuals registered as research analyst, independent research analysts, research entities and their associates. [Ref Regulation 16(2)]

37.Whether the limitations on trading applicable to research entity or its associates, if it has segregated its research activities from other activities?

The limitations on trading prescribed under regulation 16(2) to 16(4) are not applicable to a research entity or its associates, if such research entity has segregated its research activities from all other activities and maintained arms-length relationship between such activities. A time period of six months from the commencement of RA Regulations i.e. December 01, 2014,has been provided to the existing research entities to segregate its research activities from all other activities.

38.Who are required to comply with chapter III of RA Regulations?

All the SEBI registered research analysts are required to comply with chapter III of RA Regulations. Further, the exempted persons from obtaining registration under RA Regulations such as investment adviser, credit rating agency, asset management company or fund manager, who issues research report or circulates/distributes research report to public or its director or employee who makes public appearance are required to comply with Chapter III of RA regulations. [Ref. proviso to Regulation 3(1)]

39.Who are required to appoint a compliance officer under RA Regulations?

Research analyst or research entity which is a body corporate or limited liability partnership firm is required to appoint a compliance officer who shall be responsible for monitoring the compliance in respect of the requirements of the Act, regulations, notifications, guidelines, instructions issued by SEBI. [Ref. Regulation 26] Page 12 of 12

40.Whether the existing compliance officer of a Brokerage Firm/Merchant Banking Firm, etc can act as a compliance officer of research entity under RA regulations.

Yes. The existing compliance officer of intermediary can be appointed as a compliance officer of a research entity under RA Regulations.