Gold demand from India, China may hit record in 2013

India's gold demand could reach a record 1,000 tonne this year as consumers buy for the festival and wedding season in the second half, the World Gold Council said, which may scuttle the country's efforts to curb its imports and a trade deficit.

Demand from China, which is on course to challenge India's position as the top gold consumer this year, could also soar to a record 1,000 tonnes in 2013, the WGC said.

Strong physical buying from the world's biggest consumers, who account for nearly 60 percent of global demand, will help prop up prices of the metal that have shed about 20 percent this year after 12 consecutive annual gains.

Consumer demand has however not been enough so far to compensate for a sharp drop in investor appetite this year, the WGC said in its quarterly report on Thursday.

India, which wants to keep imports below 850 tonne in 2013, has raised import taxes three times in eight months. On Wednesday, it banned overseas purchases of gold bars and coins to rein in dollar spending.

But the resilience in Indian demand has offset government efforts to curb imports, which revived in July after dropping in June.

"We've seen that demand is robust," Somasundaram PR, WGC's India managing director, told Reuters. "Once the monsoon is over, rural incomes will rise and that will have its own impact on demand."

"There are also a lot more marriage and festival dates in October and November in the fourth quarter," said Somasundaram, who estimated full-year demand between 900 tonne to 1,000 tonne for both India and China.

Hitting the upper end of that range would be record annual consumption for both the countries, he said.

The rural population accounts for about 60 percent of gold demand in India, where the precious metal forms an essential part of a bride's dowry and is considered auspicious as a gift or offering at religious festivals.

India's demand reached 566 tonne in the first half of the year, a 50 percent jump but still lower than China's 600 tonne, the industry-funded WGC said in its report.

Demand this year has been particularly strong as falling prices have prompted consumers across the world to buy bullion in the form of jewellery, bars and coins.

Analysts say India's moves to curb imports have been unable to stifle demand, thus pushing local prices to around USD 50 an ounce above London spot prices.

RECORD BUYING IN CHINA

China's gold-buying spree in the first six months of the year is likely to continue into the second half amid festivals and uncertainty about the economy, which has seen a slowdown in nine out of the past 10 quarters.

"The falling gold price is key. But there are also other macroeconomic conditions that are pushing (the Chinese) to gold," said Albert Cheng, WGC's managing director for the Far East region.

Fears of an economic slowdown and lingering worries over a credit crunch are increasing gold's appeal as a safe haven in China, he said.

The demand from India and China has partly compensated for the near 600-tonne outflow from gold-backed exchange-traded funds. Global gold demand for the second quarter fell 12 percent because of the ETF outflows.

Signing of Memorandum of Understanding for implementation of Solar Power Project

NHPC has inked a Memorandum of Understanding (MoU) with Uttar Pradesh New & Renewable Energy Development Agency, Department of Additional Sources of Energy, Government of Uttar Pradesh on August 08, 2013 at Lucknow for implementation of solar power project in state of Uttar Pradesh. Initially, a 50 MW solar energy power project is proposed to be implemented at Parason, Tehsil Kalpi, Jalaun district, Uttar Pradesh.

NHPC is engaged in the planning, development and implementation of an integrated and efficient network of hydroelectric projects in India. It executes all aspects of the development of hydroelectric projects, from concept to commissioning.

UCO Bank introduces product for Indian Armed Forces

UCO Bank has introduced an exclusive product for the Indian Armed Forces including paramilitary forces on Independence Day. As per this new product, the bank will offer a zero-balance savings account with overdraft facility for in-service and retired armed personnel.

The bank has reported a rise of 41.01% in its net profit at Rs 511.11 crore for quarter ended June 30, 2012, as compared to Rs 362.46 crore for the same quarter in the previous year. Total income of the bank has increased by 5.93% to Rs 4668.81 crore for the quarter under review as compared to Rs 4407.39 crore for the quarter ended June 30, 2012.

Sensex dives 370 pts, Bank Nifty dips 3%; Titan falls 12%

The market has opened weak. The Sensex falls 115 points at 19252.11. The Nifty is down 54 points after opening above 5700. About 133 shares have advanced, 199 shares declined, and 26 shares are unchanged.

The market has opened weak. The Sensex falls 115 points at 19252.11. The Nifty is down 54 points after opening above 5700.

About 133 shares have advanced, 199 shares declined, and 26 shares are unchanged.

Titan Industries slumps 12 percent as it faces three majoe downgrades in last 24 hours on the back of gold import duty hike. The government increased import duty on gold, silver and platinum to 10 percent with a view to arrest the declining value of rupee and contain the fiscal deficit to 3.7 percent of the GDP.

The government has also raised the duty on gold ore/ concentrates/dore bars and silver dore bars ranging from 7 percent to 10 percent.

The Indian rupee opened marginally higher at 61.35 per dollar versus 61.43 yesterday.

Himanshu Arora, Religare said, "The rupee may weaken further as inflation surged to 5.79 percent. Sustained dollar demand from importers, especially oil firms may underpin the dollar against the rupee. The currency may range between 61.28-61.70/USD."

The euro rose back to 1.33 to the dollar. The dollar index slipped to 81.15 levels. The dollar yen was around 97.

RIL to explore investment opportunities in Iraqi oil fields

Reliance Industries is exploring investment opportunities in the oil and gas fields of Iraq, chairman Mukesh Ambani reportedly said.
This move came after the company divested its holding in two blocks in Kurdistan.
"Petroleum minister Veerappa Moily has asked us to consider investing in Iraq," Ambani said on the sidelines of a programme.
Mukesh Ambani reported "We have not yet decided on investing in the Nasiriya giant oil field and the accompanying refinery project but all options are being evaluated.
In March, Iraq had shortlisted Reliance Industriesand six other global energy firms for developing the Nasiriya oilfield.

Further RBI clarification on import of gold

Government of India and the Reserve Bank of India have been receiving several requests for clarifications on the  operational aspects of the scheme of imports put in place in terms of the  above circular. There have also been representations to change certain aspects of the scheme. Taking into account all these representations and in consultation with the Government of India, it has been decided to issue the following clarifications/modifications in supersession of all the earlier instructions:

Certain restrictions were imposed on the import of various forms of gold by nominated banks/nominated agencies/ premier or star trading houses/SEZ units/EoUs which have been permitted to import gold for use in the domestic sector.
Government of India and the Reserve Bank of India have been receiving several requests for clarifications on the  operational aspects of the scheme of imports put in place in terms of the  above circular. There have also been representations to change certain aspects of the scheme. Taking into account all these representations and in consultation with the Government of India, it has been decided to issue the following clarifications/modifications in supersession of all the earlier instructions:
Import of gold in the form of coins and medallions is now prohibited.
It shall be incumbent on all nominated banks/nominated agencies and other entities to ensure that at least one fifth, i.e., 20%, of every lot of import of gold imported to the country is exclusively made available for the
purpose of exports and the balance for domestic use. A working example of the operations of the 20/80 scheme envisaged in terms of the present instructions is given in the Annex. This shall be monitored by customs authorities, and will be implemented port-wise only.
Further, nominated banks/ nominated agencies and other entities shall make available gold for domestic use only to the entities engaged in jewellery business/bullion dealers and to banks authorised to administer the Gold Deposit Scheme against full upfront payment. In other words, supply of gold in any form to the domestic users other than against full payment upfront shall not be permitted.
The nominated banks/agencies/refineries and other entities shall ensure that there is no front loading of imports, particularly in the first and second lots of imports. Such imports shall be linked to normal quantities of gold supplied to the exporters by the nominated banks/agencies and shall not exceed the highest quantity supplied during any one year out  of last three years. The quantity thus arrived at, however, will not be
imported in one or two lots only. As a thumb rule, imports of more than maximum of  two months of requirements of the exporters in a lot would be considered unusual. Illustratively, if the gold supplied to exporters by a bank during the last three years is say, 30 tonnes, 40 tonnes and 60 tonnes respectively, imports in terms of this circular shall be based on highest of three i.e. 60 tonnes. Further, import of 50 tonnes( two months
export of 10 tonnes for exports and 4 times the amount for domestic use, totalling 50 tonnes) will be considered unusual. In case of nominated banks not having a previous record of having supplied gold to the exporters they would need to seek prior approval from RBI before placing orders for import of gold for the first lot under the 20/80 scheme.
The 20/80 principle would also apply for the henceforth import of gold in any form/purity including gold dore, whereby 20 per cent of the gold imported shall be provided to the exporters. This will be administered and monitored at the refinery level for each consignment at the time of such imports. This will also be monitored by the customs authorities. The refinery shall make available for domestic use only to the entities engaged in
jewellery business/bullion dealers and to the banks authorised to administer the Gold Deposit Scheme against full upfront payment and sale of gold against any other form of payment shall not be permitted. Further, the import of gold dore is permitted only against a licence issued by DGFT.
Any authorisation such as Advance Authorisation/Duty Free Import Authorization (DFIA) is to be utilised for import of  gold meant for export purposes only and no diversion for domestic use shall be permitted.
Entities/units in the SEZ and EoUs, Premier and Star trading houses are permitted to import gold exclusively for the purpose of exports only.
AD Category I banks are advised to strictly ensure that foreign exchange transactions effected by / for their constituents are compliant with the above instructions. Head Offices of nominated agencies / International
Banking Divisions of banks would be responsible for monitoring operations of the revised scheme taking into account transactions put through different centres. In respect of gold released for  the purpose of exports, AD
Category I banks will also put in place a special mechanism to monitor realization of  export proceeds  as per the extant regulations and any contraventions/ unusual developments in this regard should be reported forthwith to the concerned Regional Office of the Reserve Bank of India.
Government of India will be issuing separate instructions, if any, to the customs authorities/DGFT to operationalise and monitor the above requirements for import of gold.
The above instructions will come into force with immediate effect. Authorised dealers may please bring the contents of this circular to the notice of their constituents and customers concerned.
The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999), and are without prejudice to permissions / approvals, if any, required under any other law.

PM's I-Day Speech: No freebies announced, but some promises made

Prime Minister Manmohan Singh's Independence-Day address to the nation from Red Fort on Thursday - the final one before the 2014 general elections - was no shower of freebies or announcement of populist schemes. Instead, it was a recollection and review of nine years of the United Progressive Alliance (UPA) government.

While the PM said work would start on two new ports, eight airports, new industrial corridors and rail projects over the next few months, he expressed satisfaction that some schemes for the poor had worked well and more were in the offing. The speech sought to reinforce the belief that UPA would continue with what it believes is its unique selling point - "new rights to the common man, leading to his social and economic empowerment".

Emphasising agricultural growth over the nine years of UPA, Singh said record production had enabled the food security law, which would soon be passed. He highlighted that rural wages, too, had increased much faster during this period and said the National Rural Employment Guarantee Scheme had provided employment to tens of millions in rural areas.

He conceded measuring poverty was a difficult task but added, no matter what the definition, "it cannot be denied that the pace of reduction in poverty has increased after 2004".

Singh enumerated the strides in education - through the mid-day meal scheme, the right to education and the fact that the number of young men and women going to college had more than doubled over the past nine years.

Eight new IITs, seven New IIMs, 16 new Central universities and 10 new NITs had been opened, he said. All of these were poised to give the country the benefit of the demographic dividend.

Though unexpected, Singh accepted the government's skill-development programme had not had the desired result: "In the area of skill development, we could not initially achieve as much progress as we wanted. But now the pace has picked up. We have established the National Skill Development Authority a few months back. We will shortly launch a new scheme, under which those who have successfully acquired new skills will be given a grant of about Rs 10,000, he said.

BRPL struggles to pay dues as blackouts loom

BRPL officials say they have helped improve electricity supplies in Delhi since the distribution business was privatised

Gopal Saxena, the chief executive of power distribution company BSES Rajdhani Power Ltd (BRPL), run by Anil Ambani-controlled Reliance Infrastructure Ltd, faces a tough choice.

He could break a mandate to supply around-the-clock electricity to 1.8 million customers in south and west Delhi, or he could wait for two power utilities to make good on threats to cut off supplies to his company unless they are paid $590 million owed in late payments.

Either way, the capital of Asia's third-largest economy is facing the prospect of blackouts.

His dilemma underscores the rot in India's power sector after years of rising debts, fuel supply shortages, corruption, red tape and tariffs kept artificially low by populist politics. In the sweltering summer heat last year, the country suffered a mass blackout, affecting an area where 670 million people live.

Such problems have hobbled Prime Minister Manmohan Singh's efforts to fix India's chronic power shortages, which are a drain on economic growth - now at its lowest rate in a decade - and sap the competitiveness of its businesses.

"Unfortunately we have not had a cost-reflective tariff from the regulatory commission, which has imposed severe burdens on us," Saxena told Reuters in an interview in his Delhi office. "We are faced with Hobson's choice: I have to supply power 24/7. I don't have the money to pay. Now if I do not pay, somebody is going to cut off the power, or somebody has to pay the cost."

Reliance took over BRPL in 2002 in partnership with the Delhi state government. It was a rare foray by a private company into the power distribution business, which is mostly controlled by India's 28 states.

BRPL officials say they have helped improve electricity supplies in Delhi since the distribution business was privatised there, but at a big cost to their company.

The tariffs they are permitted to charge by a state electricity regulator have risen nearly 70% since 2002, but the cost of buying electricity from generation companies and supplying it has shot up by more than 300%, Saxena said.

As a result, BRPL now owes $770 million in late payments to more than a dozen power utilities. Two of these, Pragati Power Corporation Limited (PPCL) and Indraprastha Power Generation Company Limited (IPGCL), have threatened BRPL with an ultimatum to either pay up or lose the power, Saxena said. Ironically, both the generators are run by the Delhi state government.

The threat means BRPL might be forced to cut power supplies by 25-30% for a period of four hours at peak times.

A spokesman for IPGCL could not be reached for comment. The general manager for finance at both companies declined to comment, as did a company secretary for PPCL.

Govt will consider proposal to raise diesel prices by more than 50 paise per month: Moily

Giving some respite for the oil marketing companies, the country's oil minister, M Veerappa Moily said, “Government will consider a request from oil marketing companies to be allowed to raise diesel prices by more than the approved 50 paise a month, to bridge the losses”. The decision is yet to be taken. However, he ruled out any hike in LPG and Kerosene prices.

In January, fuel retailers were given the freedom to raise the price of subsidized diesel every month, while bulk buyers were asked to pay market rates. Since, then firms for seven times have raised diesel rates, cumulatively taking up the price of the fuel by Rs. 3.75 per litre. Meanwhile, petrol prices have been raised by five times since June. While, petrol price was last hiked by 70 paisa per litre, diesel price was upped by 50 paisa per litre on 31st July this year.

Further while, an increase in diesel prices may see prices of essential commodities go up, there is little the government can do about it, as it tries to rein in the widening current account deficit which is one of the major reasons for the rupee's slide.

LIC Housing Finance spurts on reporting 36% rise in Q1net profit

LIC Housing Finance is currently trading at Rs. 182.10, up by 4.30 points or 2.42% from its previous closing of Rs. 177.80 on the BSE.

The scrip opened at Rs. 180.75 and has touched a high and low of Rs. 184.70 and Rs. 175.55 respectively. So far 679707 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 300.00 on 02-Jan-2013 and a 52 week low of Rs. 154.40 on 07-Aug-2013.

Last one week high and low of the scrip stood at Rs. 179.20 and Rs. 154.40 respectively. The current market cap of the company is Rs. 9273.18 crore.

The promoters holding in the company stood at 40.31% while Institutions and Non-Institutions held 45.29% and 14.23% respectively.

LIC Housing Finance’s net profit for the first quarter ended June 30, 2013 grew by 36.34% at Rs 310.51 crore as compared to Rs 227.75 crore for the corresponding quarter ended June 30, 2012. Company’s total Income has increased by 23.23% at Rs 2177.94 crore for the quarter under review against Rs 1767.30 crore for June quarter of the previous year.

LIC holds 40.31% stake in LIC Housing Finance while, institutional investors, both foreign and domestic together, are holding 41.47% shares, others hold 18.22% shares.