Why rupee is unlikely to hit 60 levels against the US dollar 

Rupee

Though the rupee saw its sharpest fall in a day since July 3 of 24 paise to hit 64.08 against the US dollar(USD) on Thursday, the Indian unit is in no hurry to breach 60 levels in the near term, suggests the latest report by Tanvee Gupta Jain, an economist with UBS.

Going ahead, Jain expects the rupee (USD/INR) to remain range-bound between 62-66 levels over the next few months and average 64.3 in FY18 and 65.4 in FY19. UBS had earlier estimated it to hover around 65.4 and 67.6 levels, respectively.

The USD/INR pair has been among the better-performing currencies in emerging markets, appreciating 5.9% thus far in calendar year 2017 (CY17). On Thursday, however, the Indian unit lost ground on reports of escalating India’s geopolitical tension with China amid developments relating to North Korea and the US.

Rupee came under pressure against the US dollar and fell to the lowest level in a week after geopolitical tensions weighed on domestic as well as global equities. Asian currencies also weakened against the US dollar on weak global sentiment,” says Gaurang Somaiya, research analyst (currency) at Motilal Oswal.

“Weakness in domestic equities could continue in Friday’s session and that could further weigh on the rupee. On the domestic front, market participants will be keeping an eye on industrial production (IIP) data and slower-than-expected growth could keep the rupee under pressure.the USD/INR pair is expected to quote in the range of 64.00 and 64.45,” Somaiya adds.

Indians are stocking up on gold, jewellery demand soars 41% in Q2CY17: WGC 

Gold, Jewelry, Shop, Sales

India’s insatiable appetite for gold jewellery was evident once again in the second quarter of calendar year 2017 (Q2CY17). The total demand for gold jewellery surged to 126.7 tonnes, rising 41% as compared to the previous corresponding period, suggests the latest report by the World Gold Council titled ‘Gold Demand Trends Q2 2017’.

At a global level, the overall demand for gold jewellery in Q2’17 surged 8% year-on-year (y-o-y) to 480.8 tonnes, the report says. The strong recovery, WGC believes, had been widely expected after exceptional import figures were reported, hitting an all-time high of 104.6 tonnes in May as the market stockpiled gold ahead of the goods and services tax (GST) rate announcement.

“Expecting a punitive GST rate, jewellers and consumers alike crammed their purchases into the first two months of the quarter, slowing down once the government confirmed that a 3% rate would be applied,” WGC says.

That apart, WGC also attributes the rise in gold jewellery demand to the festival of Akshaya Tritiya – a key gold-buying festival in the Hindu calendar. The timing of the festival this year, it says, falling over a weekend and coinciding with a dip in the gold prices saw sales rise nearly 30% y-o-y .Read More

SBI cuts interest rate on savings bank deposits. Will other banks follow? 

SBI

State Bank of India (SBI) has introduced a two-tier interest rate structure on savings bank deposits. With effect from July 2017, a savings bank balance of over Rs 1 crore will earn an interest rate of 4% per annum (p.a.), while the ones with Rs 1 crore or less will earn an interest rate of Rs 3.5% p.a. The move sent the stock soaring 4% in intra-day deals to Rs 313 levels on the Bombay Stock Exchange (BSE).

“The decline in the rate of inflation and high real interest rates are primary considerations warranting a revision in the rate of interest on saving bank deposits,” SBI said in a release.

“This is a step in the right direction and I expect more banks to cut savings bank interest rates going ahead. That apart, SBI will also save on the interest costs going ahead. This is getting reflected in the stock reaction post the development,” said says Kunj Bansal, ED & CIO at Centrum Wealth Management.

Analysts have given a thumbs-up to the development as the rate of interest on savings bank deposits had not been rejigged since long. The move, they say, will benefit the bank in the long-run and aid profitability. They also expect other large banks to follow suit and slash rates on savings bank deposits

Wipro hits 52-week high; buyback attractively priced, say analysts

Abidali Neemuchwala, CEO, Wipro

Shares of Wipro, country’s third largest software services firm, hit a 52-week high of Rs 291 on Friday, up over 8% after the IT major announced a share buyback of Rs 11,000 crore entailing 34.3 crore equity shares at Rs 320 apiece.

buyback price is 24% higher than the average price of the stock for the past six months, which analysts believe is attractive and investors can consider tendering their shares. “The proposed buyback has been done at an attractive price. It will see the stock rally in the immediate term. I think investors can tender their shares,” said Sarabjit Kour Nangra, VP Research- IT at Angel Broking.

Brokerage HDFC Securities also suggests investors tender their shares. Going ahead, the brokerage feels organic growth for the company will remain a challenge and investors will be better off utilising the current opportunity to exit the stock .

“Organic growth engine for Wipro remains a challenge. Some pockets have shown improvement in the last couple of quarters. Digital revenue is growing strongly, but these are not enough to backfill the loss from legacy.  We currently have a neutral rating on the stock, and we recommend shareholders to tender shares,” point out Amit Chandra and Apurva Prasad of HDFC Securities in a result analysis Read More

India-focused funds, ETFs mop up $5 bn in Jan-June

India-focused funds, ETFs mop up $5 bn in Jan-June

India-focused offshore funds and exchange tradedfunds (ETFs) have received net inflow of $4.8 billion in the first six months of the year, the second highest in five years. The category had seen net inflow of $7.3 billion during the same period in 2015; however, it saw net outflows in 2013, 2014 and 2016 for the period.

The flow this year largely came into India-focused offshore funds, which signify long-term money, against India-focused offshore ETFs, where the money is largely short-term. India-focused offshore funds received net inflows of $3.8 billion, compared with inflow of $1 billion for that of ETFs.

“While FPIs (foreign portfolio investors) are looking at India from a long-term perspective, this could reverse if expectations of the managers on economic growth are not met,” said Himanshu Srivastava, senior research analyst – manager research, Morningstar Investment Adviser India.

The portfolio of India-focused offshore funds and ETFs showed an affinity sectors that stand to benefit from the fall in interest rates, a turnaround in the economic cycle and a rise in urban consumption demand.There has been interest in financial services and consumer cyclicals, particularly automobiles and auto ancillaries, followed by basic material sectors such as…Read More

Amazon’s Prime Day sales sizzle 

Image result for amazon prime day

Mobile phones to electronics to entertainment to even sugar — Amazon India managed to sell everything in its first-ever Prime Day sale. Although India emerged as one of Amazon’s biggest Prime Day markets during the 30-hour global sale, the e-commerce company refrained from any ranking.

According to Amazon India senior vice-president and country manager Amit Agarwal, there has been more than 200 per cent increase in the number of Prime members in India during January to June this year.

“In fact, in the run-up to the sales, we saw a phenomenal increase in member sign-up and it has increased beyond our wildest expectations. Not only in metros, we are also seeing the number of members rise in Tier-II and Tier-III cities,” Agarwal said. While the company has so far not disclosed the number of Prime members, estimates put the figure at 70 million for the globe and 10 million for India.

“All categories are seeing significant double-digit growth. Top-ups increased 17 times over normal days. We saw five times more members paying for their purchases using AmazonPay Balance. The percentage of orders paid using digital payment methods was the highest in the past 12 months, exceeding de-monetisation,” he said. Groceries is another area where Amazon pushes for growth in the hope that it will bump up the number of repeat customers on its portal. According to the company, more than 50 per cent of Read More

Is India Inc prepared for GST rollout?

GST, Tax

The GST Council, on its part, has relaxed return filing rules for businesses in the first two months. In the run up to July 1 when the GST comes into force, Business Standard spoke to leading market experts on their views about the GST, its implementation and the likely impact on the economy, corporate profits

I don’t think anybody or any company can truly prepare properly for GST, beyond implementing the relevant systems and processes. Nobody that I have met can fully comprehend the impact of GST on working capital cycles and pricing

the compliance burden will be felt far more keenly by small and medium enterprises (SMEs) which don’t have large finance and IT teams to deal with a scale of this magnitude

The GST rates are more or less in line with expectations. The government has ensured minimum deviation from the existing rates. In every country where GST has been implemented, there were challenges for one–two quarters READ MORE