Bond yields edge higher in subdued session of trade

Bond yields were trading higher in subdued session of trade after central bank's announcement of term repo auctions for next month was seen reducing the prospects of bond purchases via open market operations. The Reserve Bank will conduct a 14 day term repo variable rate auction for a notified amount of Rs 39,000 crore on February 21, 2014 (Friday). The auction will be conducted as per the revised guidelines issued on February 13, 2014. On the global front, U.S. Treasury prices slipped on Wednesday as minutes of the Federal Reserve's January meeting showed members supported continued tapering of the central bank's bond-buying program in the absence of a significant change in the economy. Meanwhile, Brent crude slid towards $110 a barrel on Thursday, dragged down by a survey that pointed to slower growth in China, the world's second largest oil consumer. The yields on new 10 year Government Stock 2023 were trading 2 basis points higher at 8.79% against its previous close of 8.77% on Tuesday. The benchmark five-year interest rate swaps were trading 1 basis point higher at 8.44% from its previous close of 8.45% on Tuesday.

Thomas Cook net down 27% at Rs. 2.24 cr

Thomas Cook (India) reported a 27 per cent drop in its net profits for the quarter ended December 31, 2013. The company recorded a net profit of Rs. 2.24 crore on a total income of Rs. 84 crore against Rs. a net profit of Rs. 3.08 crore on a total income of Rs. 81.69 crore.

For the full year, Thomas Cook (India) Ltd declared a 36 per cent growth in net profit at Rs. 68.7 crore (Rs 50.4 crore) boosted by a 200 per cent increase in income from operations, which rose from Rs. 430 crore to Rs. 1,296 crore for the year ended Dec 31, 2013.

The board has recommended a dividend of 37.5 per cent.

Improving efficiency of capital is the key to growth

Whether FDI in retail or balancing needs of small scale and large-scale in manufacturing, the focus should be on improving efficiencies for economic growth, said C Rangarajan, Chairman, Economic Advisory Council to the Prime Minister.Addressing a function to mark the release of “India Uninc” a book by R Vaidyanathan, Professor of Finance, IIM-Bangalore, which focussed on the contribution of the informal sector to the economy, Rangarajan said productivity and efficiency of capital has to improve for economic growth.

In 2007-08 when the economy grew at 9.5 per cent the investment rate was 38 per cent. But now while the investment rate is at 34 per cent growth is low. This is because efficiency of investment has been hit due to delays and inadequate critical inputs like power and coal, he said addressing the event organised by the Madras Management Association.

Allowing FDI in retail is about bringing in efficiencies in the supply chain and improving market access to the farmers. The wholesale trade needs to be revamped by allowing large-scale retail direct access to farmers to improve farmers’ income and increase efficiency of retail, he said.

Arun Duggal, Chairman, Shriram Capital, said more institutions are needed to focus on credit delivery to the unorganised and small scale businesses. S. Gurumurthy, corporate advisor and columnist, said the small scale and unorganised sector contribute to the major portion of the economy and jobs. But formal financial support is less than five per cent.

Syntel revenues up 19% at $223 mn in December quarter

Nasdaq-listed Syntel has reported a 19 per cent increase in revenues for the December quarter at $223.3 million, compared to $187.8 million in the previous corresponding period.

The increase in revenues was 6 per cent on a sequential basis, the company said. Net income for the fourth quarter was $66.3 million compared to $49.9 million in the prior-year period, the company said.

Further, during the fourth quarter, growth was primarily led by Applications Outsourcing that accounted for 78 per cent of total revenue, while Knowledge Process Outsourcing (KPO) contributed 15 per cent.

For 2014, based on current visibility and an exchange rate assumption of 62 rupees to the dollar, the company expects to clock revenues in the range of $910 to $940 million.

Opening bell: Weak global cues likely to drag Nifty today

The Indian equity market is likely to break its winning streak today after four straight days of gains with SGX Nifty ((down 46 points at 6121)) indicating a negative opening for the 50-share index. 
Meanwhile, global cues are unlikely to add some support as the US markets sunk to session lows on Wednesday after Federal Reserve officials weighed whether it might be time to drop the notion that a 6.5 percent unemployment rate would be enough to consider raising rates, indicating that officials discussed the possibility of raising interest rates sooner than expected. Higher interest rates would bolster the dollar and pressure demand for precious metals. 
European markets ended mixed while Asian markets have opened weak with trade deficit data weighing on the Nikkei. 
In other asset classes, the dollar holds firm against a basket of major currencies, drawing support from minutes of the US Federal Reserve which showed policymakers remained committed to reducing its massive stimulus at the current pace. The euro was at USD 1.3731 pulling back from seven-week highs of USD 1.3773 against the greenback. 
Meanwhile, crude prices trend mixed with Nymex trading near a four-month high at above USD 103 a barrel ahead of data from the United States and china that may give cues for fuel demand in the world's two largest oil consumers. 
And the precious metal gold bounced back after falling nearly 1 percent in the previous session.