Cabinet Approves Simplification of Foreign Investment Norms

The government has clubbed together different categories of foreign investment in companies, Finance Minister Arun Jaitley said on Thursday, effectively giving equal treatment to foreign capital entering Asia's third largest economy.

"One of the most important decisions in relation to the investment is the introduction of composite caps for simplification of foreign direct investments," Mr Jaitley told reporters after a Cabinet meeting.

Mr Jaitley said that foreign direct investment, foreign portfolio investment and investments by non-resident Indians would be "clubbed together under a composite cap"

Axis Bank, Yes Bank Surge After Nod for Composite Foreign Investment Cap

Shares of Axis Bank surged nearly 4.5 per cent and Yes Bank 3.5 per cent after the Cabinet approved a composite cap for foreign portfolio investment (FPI) and foreign direct investment (FDI).

Finance Minister Arun Jaitley in the Budget had proposed to do away with the distinction between different types of foreign investments, especially between foreign portfolio investments and foreign direct investments, and replace them with composite caps.

Mr Jaitley on Thursday said that foreign direct investment, foreign portfolio investment and investments by non-resident Indians would be "clubbed together under a composite cap".

Experts welcomed the move, with TP Ostwal saying that it will be beneficial for the banking sector, particularly for banks where FII limit has been crossed.

Brokerage CLSA termed the move very positive for Axis Bank and Yes Bank. These two banks can make their way into the MSCI index with significant weights, it added.

CLSA said that Axis Bank shares can see buying of stocks worth $700-800 million while Yes Bank $165-185 million.

Among other banking stocks, Kotak Mahindra Bank rose 4 per cent while HDFC Bank rose 1.25 per cent. In comparison, Nifty was up 0.85 per cent.

Essar to shut 400,000 barrels-per-day Vadinar refinery for a month

Chennai Petroleum Corp Ltd will put 1.85 mn tonnes-per-year hydrocracker plant on maintenance from July 19, says report.

Essar Oil Ltd reportedly said that the company will shut its 400k barrels-per-day (bpd) Vadinar refinery from mid September for a month,  

Chennai Petroleum Corp Ltd will put 1.85 mn tonnes-per-year hydrocracker plant on maintenance from July 19, says report.

Chennai Petroleum will shut its hydrocracker plant for a month for routine maintenance at its Manali refinery that has a capacity of 10.5 million tonnes per year, technical director U. Venkata Ramana reportedly said.

Drop in inventory lifts crude oil; upside restricted

Benchmark crude oil futures for August delivery gained 0.87% to $ $51.86/ barrel from the close of 51.41/$ on July 15 in electronic trading on the New York Mercantile Exchange.

Crude oil futures were holding up on Thursday after data showed drop in US crude inventory and higher refinery demand. Data from Energy Information Administration (EIA) showed that US crude inventories fell 4.3 million barrels last week as refineries boosted throughput to a record level. However, gains were capped on prevailing fears of Iranian oil  soon hitting the global markets after securing the required sanctions s part of the historic deal reached to regulate the country’s nuclear program.

Benchmark crude oil futures for August delivery gained 0.87% to $ $51.86/ barrel from the close of 51.41/$ on July 15 in electronic trading on the New York Mercantile Exchange. In London, Brent crude for August settlement gained 0.13% at $57.47 a barrel on the ICE. Brent closed at 57.39/$ on Wednesday.

RBI constitutes a Committee on medium-term path on Financial Inclusion

The Reserve Bank of India announced the constitution of a Committee with the objective of working out a medium-term (five year) measurable action plan for financial inclusion.

The Reserve Bank of India announced the constitution of a Committee with the objective of working out a medium-term (five year) measurable action plan for financial inclusion.

It may be recalled that on the occasion of the Reserve Bank’s 80th anniversary, Prime Minister in his address urged the Bank to take the lead in encouraging financial institutions and to set a medium-to-long term target for sustainable financial inclusion

The terms of reference of the Committee are as under:

(i) To review the existing policy of financial inclusion including supportive payment system and customer protection framework taking into account the recommendations made by various committees set up earlier.

(ii) To study cross country experiences in financial inclusion to identify key learnings, particularly in the area of technology-based delivery models, that could inform our policies and practices.

(iii) To articulate the underlying policy and institutional framework, also covering consumer protection and financial literacy, as well as delivery mechanism of financial inclusion encompassing both households and small businesses, with particular emphasis on rural inclusion including group-based credit delivery mechanisms.

(iv) To suggest a monitorable medium-term action plan for financial inclusion in terms of its various components like payments, deposit, credit, social security transfers, pension and insurance.

(v) To examine any other related issues.

The composition of the Committee is as follows:

Chairman:

(i) Deepak Mohanty, Executive Director, Reserve Bank of India

Members:

(ii) Prof. Ashok Gulati, Infosys Chair Professor for Agriculture, Indian Council for Research on International Economic Relations (ICRIER)

(iii) Dr. Asli Demirgüç-Kunt, Director of Research, The World Bank, Washington DC

(iv)  A. P. Hota, MD & CEO, National Payments Corporation of India

(v)  Paresh Sukthankar, Deputy Managing Director, HDFC Bank Ltd.

(vi)  Kishor P. Kharat, Executive Director, Union Bank of India

(vii) Subrata Gupta, Chief General Manager, National Bank for Agriculture and Rural Development (NABARD)

(viii) Pawan Bakhshi, Head-Financial Services for the poor programme in India, Bill and Melinda Gates Foundation

(ix) Sudarshan Sen, Principal Chief General Manager, Department of Banking Regulation, Reserve Bank of India

(x) Arun Pasricha, Chief General Manager, Consumer Education and Protection Department, Reserve Bank of India

(xi) Nanda S. Dave, Chief General Manager, Department of Payment and Settlement Systems, Reserve Bank of India

(xii) Dr. Y. K. Gupta, Director, Department of Statistics and Information Management, Reserve Bank of India

(xiii) Dr. Saibal Ghosh, Deputy Adviser, Research, Centre for Advanced Financial Research and Learning (CAFRAL)

Member-Secretary:

(xiv) A. Udgata, Principal Chief General Manager, Financial Inclusion and Development Department, Reserve Bank of India

The Committee may consult various stakeholders/groups/institutions/experts as considered necessary.

The Committee is expected to submit its report in four months from the date of its first meeting.

Russian Order: Pipavav Defence jumps 6% in early trade

The stock is trading higher on the BSE on buzz of Russia selected company for a 'Make in India' naval frigate order.

Pipavav Defence & Offshore Eng has jumped 4.5 percent at the opening bell on the BSE on the back of positive news flow.

According to a media reports, Russia has selected Pipavav shipyard for a 'Make in India' naval frigate order that is likely to exceed $ 3 billion.

The stock is now up 6.7 percent at Rs. 64.10. The BSE counter has witnessed huge volume of around 1.1 million, as against two-week daily average volume of 117,000 shares.

Meanwhile, the Sensex has jumped 120 points at 28,319.

Greek Parliament Approves Bailout Measures as Syriza Fragments

Greek Prime Minister Alexis Tsipras delivers his speech as he attends a parliamentary session in Athens, Greece.

 The Greek parliament passed sweeping austerity measures demanded by lenders to open talks on a new multibillion-euro bailout package to keep Greece in the euro, but dozens of hardliners in the ruling Syriza party deserted Prime Minister Alexis Tsipras.

The package was approved with 229 votes in the 300-seat chamber. There were 64 votes against it and six abstentions. But Tsipras required the support of pro-European opposition parties to push the measure through, leaving a question over the future of his government.

Tsipras said there was no alternative to the package, which he acknowledged would cause hardship, but he stood by the decision. "I am the last person to shirk this responsibility," he said.

In exchange for funding worth up to 86 billion euros, Greece has accepted reforms including significant pension adjustments, increases to value added tax, an overhaul of its collective bargaining system, measures to liberalise its economy and tight limits on public spending.

It has also agreed to sequester 50 billion euros of public assets in a special privatisation fund to act as collateral on the deal.

The measures were branded "social genocide" by the firebrand speaker of parliament Zoe Constantopoulou, one of 38 Syriza lawmakers to oppose the package, and there were violent clashes between protesters and police outside parliament as the debate went on before the vote.

Among the Syriza rebels was former Finance Minister Yanis Varoufakis, who was sacked by Tsipras last week and who denounced the bailout deal as "a new Versailles Treaty" - the agreement that demanded unaffordable reparations from Germany after its defeat in World War One.

Energy Minister Panagiotis Lafazanis and Deputy Labour Minister Dimitris Stratoulis also voted against the package.

Amid speculation that both ministers could lose their jobs in a reshuffle, possibly as early as Thursday, Lafazanis said he remained loyal to the government but was ready to offer his resignation, joining Deputy Finance Minister Nadia Valavani, who stepped down earlier on Wednesday.

"We support Syriza in government and we support the Prime Minister. We don't support the bailout," he said after the vote.

Elected in January on an anti-austerity platform, Tsipras made an about-turn following gruelling all-night negotiations in Brussels on Monday, giving in to lenders' demands for immediate reforms to prevent a chaotic exit from the single currency.

Speaking in parliament before the vote, Tsipras made clear he was supporting the package against his will but there was no alternative if Greece was to avoid financial collapse.

"I acknowledge the fiscal measures are harsh, that they won't benefit the Greek economy, but I'm forced to accept them," he said as he made a final appeal for support.

"A NEW VERSAILLES TREATY"

With Greek parliamentary approval secured, the way has been cleared for other national parliaments to approve the start of bailout talks and for the release of funding to allow Greek banks to re-open, more than two weeks after capital controls were imposed to prevent them from collapsing.

Eurozone finance ministers are due to hold a conference call on Thursday at 10 a.m. (0800 GMT) to discuss the vote.

With Greece facing an urgent deadline on July 20, when a 3.5 billion euro payment to the European Central Bank is due, EU officials raced to agree a bridge financing accord that would enable Athens to avoid defaulting on the loan.

Despite strong objections from Britain and the Czech Republic - EU countries that do not use the euro - a 7 billion euro loan is expected to be extended to Greece from the European Financial Stability Mechanism (EFSM), an EU-wide fund not intended for euro zone funding needs.

Given the hurdles facing the agreement, doubts have surfaced about how long it could hold together, with one senior European Union official saying it had a "20-, maybe 30-percent chance of success".

After its deepest crisis since World War Two, the Greek economy has lost more than a quarter of its output and more than one in four of its workforce is unemployed. It is unclear how it can sustain the burden of one of the most far-reaching austerity programmes ever imposed on a euro zone country.

A study by the International Monetary Fund issued on Tuesday called for much more debt relief than Greece's euro zone creditors, particularly Germany, have been prepared to accept so far.

Berlin, which along with the other creditors knew about the IMF study before agreeing to new bailout talks, may wince at providing huge debt relief to a country it scarcely trusts to honour its promises.

But Germany insists on having the IMF in the negotiations to help keep Greece in line. It may countenance extending repayment periods for Greek debt but has said it will not accept a writedown, with the finance ministry insisting it could not accept "a debt haircut via the backdoor".

"EUROPE'S BANKRUPT CHILD"

The European Commission published its own assessment of Greece's debt burden on Wednesday that also offered the prospect of debt relief. While ruling out any write-offs, the Commission said debt reprofiling was possible, as long as Greece implemented the reforms to which it has agreed.

Washington has stepped up pressure for a deal between the euro zone and NATO member Greece. U.S. Treasury Secretary Jack Lew is making a short-notice trip to Frankfurt, Berlin and Paris this week to press for a quick agreement.

Although the bailout package is much tougher than the Greek people could have imagined when they resoundingly rejected a previous offer from the creditors in a referendum on July 5, most want to keep the euro.

With banks shut and the threat of a calamitous exit from the currency bloc hovering over the country if it cannot conclude a deal, many Greeks see the package as the lesser of two evils.

"We are Europe's bankrupt child and as a child, Europe has been supporting us for five years and told us what we needed to do to get out of this situation," said Yannis Theodosis, a 35-year-old civil engineer. "We did nothing and now we are paying the consequences."

Civil servants held a strike on Wednesday, as did pharmacists, whose industry would be opened up under the reform package, in demonstrations that passed peacefully until a small group threw petrol bombs at police, who responded with tear gas and flash bombs.

Calm later returned but nearby streets were empty and garbage bins were still burning. About 30 people were detained, according to a police source.

25 Stocks in focus today

Check out the companies which will be in focus during trade today based on recent and latest news developments.

Biocon: The stock gained around 3% on Wednesday and will continue to be in action as the company will hold a press conference today to announce the IPO of its unit Syngene.  The price band is expected to be in the range of Rs. 240-Rs.250 per share

SRF Ltd: The company will seek shareholders' approval to raise up to Rs. 2,000 crore through issuance of redeemable non-convertible debentures in one or more series/tranches on a private placement basis.

Adani Ports & SEZ: The company has entered into exclusive talks to acquire Gangavaram Port near Vishakhapatnam in Andhra Pradesh for $2.1bn.

Zee Entertainment Ltd: The company set to acquire 100% equity stake in Sarthak Entertainment Pvt Ltd which operates ‘Sarthak TV’, the number 1 GEC in Odia language.

Essar Oil Ltd: The company will shut its 400k barrels-per-day (bpd) Vadinar refinery from mid September for a month, while Chennai Petroleum Corp Ltd will put a 1.85 mn tonnes-per-year hydrocracker plant on maintenance from July 19.

Pfizer: The pharma company is planning to close its Navi Mumbai plant from September 16, 2015. The decision to close the plant is based on an assessment of its long term viability and its ability to achieve the needed production, it added.

NHPC Ltd: The company has raised Rs. 14.75bn by issuing long-term bonds through private placement.

Aditya Birla Nuvo: The company has tied-up with Flipkart to retail its exclusive brands through the e-commerce channel.

SBI, Axis Bank, Yes Bank: The bank's are set to launch mobile wallets to take on pre-paid issuers like Paytm and MobiKwik who lure customers with easy payment option and attractive retail offerings.

Reliance Industries:  The stock is above Rs.1000 now and the company is planning to start petrol and diesel export to the Persian Gulf nation following the landmark nuclear deal.

Adani Power: The company emerged as the lowest bidder for three power transmission projects -- Chhattisgarh A, Chhattisgarh B and Sipat -- while Sterlite Grid has bagged Maheshwaram project.

Thermax: The company has entered a pact to acquire 33% stake in First Energy Private Limited with an arrangement to increase the stake to 76% in the next four years. 

IOC, BPCL, HPCL: The OMCs will be in focus after petrol and diesel prices were cut with effect from Wednesday mid-night. 

Eicher Ltd: Royal Enfield, the two-wheeler division of Eicher Motors said it has sold its entire inventory of 200 units of limited edition motorcycles within 26 minutes of opening of online booking.

Cholamandalam Investment and Finance Company Ltd: The company said that it will raise up to Rs. 10,000 crore through issue of NCDs and its shareholders would meet on July 31 to approve the fund raising plan.

Raymond: The company has said like-to-like store sales grew by a quarter in 18 months after the company rolled out a new retail design in 40 'The Raymond Shop' stores last year, as per media reports.

Zensar Technologies Ltd: The company posted revenue growth of 16.5% from Rs. 604.78 crore to Rs. 704.64 crore in quarter ended June 30, 2015. 

Pipavav Defence: The Russian Govt has chosen Pipavav shipyard for a 'Make in India' naval frigate order that is likely to exceed $3 billion, making it the private sector's biggestever warship-building project.

Everest Industries: The company has reported a 16.9% increase in net profit for the quarter ended June 30 at Rs 22.9 crore mainly on the back of double digit growth in its steel buildings business.

Bharti Infratel: A leading telecom tower infrastructures provider is in talks with British telecom major Vodafone and the Aditya Birla Group's Idea Cellular to buy out telecom tower.

Hero Motocorp: The company reported a 6% increase in the revenue when it sold 6.6 million units in 2014-15 and planning to launch two new versions of bikes.

Gold Holds Near Four-Month Low as US Rate Hike Looms

 Gold hovered near its lowest level since March early on Thursday after Federal Reserve Chair Janet Yellen reiterated that a U.S. interest rate increase is likely this year.

Fundamentals

* Spot gold was off 0.1 percent at $1,147.85 an ounce by 0035 GMT, close to Wednesday's trough of $1,143.43, its weakest since March 17.

* U.S. gold for August delivery was flat at $1,147.10 an ounce.

* Yellen said the U.S. central bank remains on track to raise interest rates this year, with labour markets expected to steadily improve and turmoil abroad unlikely to throw the U.S. economy off track.

* Yellen's comments were in line with her recent remarks along with the most recent policy statement by the Federal Open Market Committee which will meet next on July 28-29. Yellen is expected to repeat those comments when she testifies before the Senate Banking Committee on Thursday.

* A potential U.S. rate hike boosts the dollar, putting dollar-priced assets such as gold out of favour as they become more expensive for buyers holding other currencies.

* There was more evidence of U.S. economic growth improving, with industrial production rebounding last month and factory activity in New York state picking up in July.

* In Greece, the parliament passed a sweeping package of austerity measures demanded by European partners to open talks on a multi-billion euro bailout package needed to keep the near-bankrupt country in the euro zone

Asia Shares Mostly Higher after Greek Vote, Dollar up After Yellen

 Asian stocks were mostly higher on Thursday after the Greek parliament approved a bailout plan while the dollar stood tall after Federal Reserve Chair Janet Yellen reinforced expectations for a U.S. rate hike.

Japan's Nikkei rose 0.5 per cent, as did Australian shares. South Korea's Kospi was up 0.2 per cent.

MSCI's broadest index of Asia-Pacific shares outside Japan was flat, with the focus on how Chinese shares will fare when they begin trading.

The Greek parliament passed a sweeping bundle of austerity measures demanded by European partners, a price to pay for opening talks on a multi-billion euro bailout package near-bankrupt Athens needs to stay in the euro zone.

The euro, already beaten down overnight against the dollar by Yellen's rate views, showed limited reaction to the Greek vote outcome which did not surprise many in the market.

The European common currency stood flat at $1.0954 after shedding 0.5 per cent overnight. The dollar traded at 123.91 yen and in reach of a near three-week high of 123.97.

In her semiannual testimony to Congress on Wednesday, Yellen repeated her view that the Fed will likely hike interest rates this year if the U.S. economy expands as expected, and cited improvement in the labour market.

"Not only did Yellen confirm that rates will rise this year but it is her view that waiting too long would mean rates would have to rise at a faster pace later," Kathy Lien, managing director of FX Strategy for BK Asset Management, wrote.

"She prefers to start earlier to allow for a more gradual rate path. As a result every FOMC meeting this year including September is a live meeting at which the central bank could raise rates."

It was a different story for Canada, which saw its central bank on Wednesday cut key interest rates for a second time this year amid a flagging economy.

The Canadian dollar was at C$1.2922 to the greenback after touching C$1.2958, its lowest since March 2009.

The New Zealand dollar slumped under a similar predicament after weaker-than-expected inflation data cemented expectations for a rate cut there as early as next week.

The kiwi skidded to $0.6560, a low not seen since late 2009.

In commodities, crude oil rebounded modestly after sliding overnight on expectations increased exports from Iran will add to a global supply glut and on rising inventories at the delivery hub at Cushing, Oklahoma.

U.S. crude rose 0.4 per cent to $51.59 a barrel after dropping 3 per cent on Wednesday.

Tuesday's agreement on Tehran's nuclear programme between six world powers and Iran is expected to result in the lifting of sanctions, which have limited sales of Iranian oil for several years, in early 2016.

Biocon Sets Syngene's IPO Price Band at Rs 240-250

Mumbai: Drugmaker Biocon has set the price band for an initial public offering (IPO) of its clinical research services arm, Syngene International Ltd, at Rs 240 to Rs 250 a share, it said on Thursday.

Syngene's IPO shall open for subscription on July 27 and close on July 29, Biocon said in a filing to exchanges.

Biocon said in April that it planned to sell 22 million shares and provide an over-allotment option. 

Sensex Jumps Over 100 Points, Nifty Above 8,550

9:20 a.m.: The markets opened on a positive note tracking broad-based buying. The Sensex jumped over 100 points to move above 28,300 and the Nifty was trading above its crucial psychological level of 8,550, up 30 points.

Buying was visible across most of the sectors. Metal, oil & gas, banking, auto and IT indices were up 0.5-0.6 per cent each.

9:13 a.m.: Gaurav Bissa says large caps are not participating as the midcaps are and this is a worrying sign.

9:08 a.m.: The Sensex jumps 61 points to 28,260 and Nifty up 22 points at 8,546 in the pre-market session.

9:04 a.m.: Avinnash Gorakssakar of Precision Investment says markets will consolidate around current levels and there will be stock-specific action.

9:00 a.m.: Rupee opens lower at 63.51 per dollar against Wednesday's close of 63.41.

8:55 a.m.: Gaurav Bissa, derivatives analyst with LKP Securities says that markets likely to maintain uptrend as long as Nifty holds 8,500.

8:38 a.m.: CLSA has maintained its buy call on HCL Technologies for target price of Rs 1,150 per share. CLSA says that engineering is emerging as a new structural growth driver and company will evolve into a higher-quality business. CLSA expects 16 per cent CAGR over FY15-18 and is the best pick in IT sector.

8:25 a.m.: Shares of Mindtree, DB Corp, Cyient, Delta Corp and Mastek will be in limelight today as these companies will come out with results later in the day.

8:15 a.m.: Below are the stocks which will be in focus today:

Adani Ports: Adani Ports will be in focus today as the company received letter of award from the Kerala government. Letter of award is for developing Vizhinjam International Deepwater Project. Cost of project is Rs 4,100 crore and construction period is four years.

Thermax: Thermax has acquired 33 per cent stake in First Energy for Rs 20 crore. Thermax will acquire remaining stake in a phased manner. First Energy is into commercial and home cooking segments.

Take Solutions: Take Solutions has divested interest in US-based joint venture 'Applied Clinical Intelligence'.

Adani Power: Adani Power has bagged three power transmission projects worth Rs 3,666 crore. Projects will strengthen power evacuation in Chhattisgarh.

VA Tech Wabag: VA Tech Wabag bagged orders worth Rs 1,000 crore in April-June period.

8:00 a.m.: The foreign institutional investors (FIIs) purchased Indian shares worth Rs 407.6 crore while the domestic institutional investors (DII) sold shares worth Rs 50.38 crore.

Since June 2015, the FIIs have been net sellers of Indian equities as they have sold shares worth 1,826 crore and the DIIs purchased shares worth Rs 11,104 crore.

7:55 a.m.: The other Asian markets were trading mostly higher after the Greek parliament approved a bailout plan while the dollar stood tall after Federal Reserve Chair Janet Yellen reinforced expectations for a U.S. rate hike.

Hang Seng was down 0.2 per cent, Shanghai Composite was up 0.3 per cent, Japan's Nikkei rose 0.5 per cent and Taiwan Weighted was down 0.15 per cent.

Overnight, U.S. stocks edged lower on Wednesday following comments from Federal Reserve Chair Janet Yellen, as a decline in energy shares outweighed gains in the financial sector in the latter stages of trading.

The Dow Jones industrial average fell 3.41 points, or 0.02 per cent, to 18,050.17, the S&P 500 lost 1.55 points, or 0.07 per cent, to 2,107.4 and the Nasdaq Composite dropped 5.95 points, or 0.12 per cent, to 5,098.94.

7:50 a.m.: The Sensex and Nifty are likely to open on a flat note in trades today as indicated by the Nifty which is traded on the Singapore Stock Exchange. The SGX Nifty was up 0.07 per cent or 5 points at 8,552.

Meanwhile, Federal Reserve Chair Janet Yellen on Wednesday said the US central bank remains on track to raise interest rates this year, with labour markets expected to steadily improve and turmoil abroad unlikely to throw the US economy off track.

A rate hike in US would mean that money may move out of emerging market equities into the US bonds hence triggering a fear of selloff in emerging markets like India.