CARE reaffirms ratings of Dena Bank’s Long Term Debt Instruments

Credit rating agency, CARE has reaffirmed ‘AA+’ rating to Dena Bank’s Lower Tier II Bonds worth Rs 1610.00 crore  and ‘AA’ rating to company’s Perpetual Bonds worth Rs 125.00 crore.

CARE has rated the aforesaid Perpetual Bonds one notch lower than the Lower Tier II Bonds in view of their increased sensitiveness to the Dena Bank’s Capital Adequacy Ratio (CAR), capital raising ability and profitability during the long tenure of the instruments.

Dena Bank was established in 1938 and was nationalized in July 1969. As on March 31, 2012, the bank has 1,342 branches and 543 ATMs with 57% branches in rural and semi-urban areas. More than half of the bank’s branches are in the states of Gujarat and Maharashtra.

Rupee recovers from historic low, still ends weaker for the day

Indian rupee slumped to its historic low in Tuesday’s trade. It was some speculated RBI intervention that helped the domestic currency make some recovery otherwise the government and RBI looked helpless despite all their efforts to protect it. Rupee continued to bear the brunt of a large current account deficit and concern of stimulus tapering by the US Federal Reserve. Bond yields too surged with the 10-year yield nearing the 9.50 mark. However, there was some report of dollar selling by banks that helped the rupee to recover from its record low. There was weakness in most of the regional currencies before the announcement of US FOMC Minutes. In the global markets euro firmed up against dollar.

Finally the rupee ended at 63.25, weaker by 13 paise from its previous close of 63.13 on Monday. The currency has touched a high and low of 64.11 and 63.12 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 63.73 and for Euro it stood at 85.06 on August 20, 2013. While, the RBI’s reference rate for the Yen stood at 65.51, the reference rate for the Great Britain Pound (GBP) stood at 99.7875. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

Tata Steel gains as its JV firm - TSML secures permission for land use in Canada project

Tata Steel’s joint venture firm - Tata Steel Minerals Canada (TSML) has secured key permission in the last week for land use related to its proposed iron ore project in north-eastern Canada. For the direct shipping ore (DSO) project, TSML has signed agreement with the appropriate aboriginal council of the south Labrador, which has powers to authorize use of land in the vast Millennium Iron Range area containing undeveloped magnetic iron deposits.

Tata Steel, the flagship company of the Tata group is the first integrated steel plant in Asia and is now the world’s second most geographically diversified steel producer and a Fortune 500 Company.

MRPL resumes crude oil imports from Iran

Mangalore Refinery and Petrochemicals (MRPL), has resumed crude oil imports from Iran after a gap of four months. The company, on August 17, received a ship carrying 75,000 tonnes of crude oil from Iran and has also booked at least three other similar sized cargoes for delivery this month and the next.

MRPL, which imported 3.9 million tonnes of crude oil from Iran in 2012-13, had not imported any oil from the Persian Gulf nation, as insurance companies declined to extend full coverage to refiners processing Iranian crude due to US sanctions.

MRPL is a joint venture oil refinery promoted by Hindustan Petroleum Corporation (HPCL), a public sector company and IRIL & Associates (AV Birla Group). It has a design capacity to process 9.69 million metric tonnes per annum and is the only refinery in India to have two hydrocrackers producing Premium Diesel (High Cetane).

NMDC plans to set up 500-MW power plant at Gonda

NMDC is planning to set up a 500-MW power plant at Gonda, Uttar Pradesh. With this, the company will make its maiden venture into thermal power generation. In this regard, the company will invest around Rs 3,016 crore on the project. The power plant will comprise two units of 250 MW and about 300-350 MW electricity will be used at NMDC’s upcoming 3 million tonnes steel mill in Chhattisgarh's Nagarnar, which is more than 1,100 km away from Gonda.

Meanwhile, the company has roped in IL&FS Energy Development Company (IEDCL) as a partner for the project with a 74% stake and the remaining 26% stake, will be held by NMDC Power, a wholly owned subsidiary of NMDC.

NMDC, India's top ore miner, accounts for about 15 per cent of iron ore mined in the country, with annual production capacity of 30 million tonnes.

L&T gains as consortium signs contract for Western Dedicated Freight Corridor project

Larsen & Toubro's consortium with Japan's Sojitz has signed an EPC rail contract with the Dedicated Freight Corridor Corporation of India (DFCCIL) for the construction of 626 km of a double track corridor from Rewari in Haryana to Iqbalgarh in Gujarat, via Rajasthan. The engineering, procurement and construction order secured by the Sojitz-L&T Consortium involves construction of 626 km of a double track corridor from Rewari in Haryana to Iqbalgarh in Gujarat, via Rajasthan, spanning three states.

The consortium’s scope includes construction of 1388 track km of railway line, 112 major bridges, 1188 minor bridges, 20 stations along with supply of equipment. The project will be executed using mechanized means of sleepers and track lining machines using the latest technology in railway construction. Adopting advanced construction technologies, the consortium is expected to complete the project in 48 months.

Global mkts mixed; RBI to ease liquidity, eyes on banks

It was a mixed close for the US markets on Tuesday as investors stayed cautious ahead of the release of FOMC minutes. European markets closed in the red.

Indian equities fell for the third consecutive session yesterday, but closed off day’s low. The BSE Sensex crashed 336.54 points intraday trimmed losses to close at 18246.04, down 61.48 points and Nifty that touched an intraday low of 5306.35 also managed to close above 5400 level at 5401.45, down 13.30 points from previous close.

Asian markets were down in morning trade today. Emerging markets are expected to remain in focus after a brutal sell-off over the past two days.

Back home, the 10-bond yields also made a sharp recovery in trade yesterday. After hitting a five-year high of 9.4 percent, bond yields clawed back to end the day way below 9%.

Stocks to watch

The Reserve Bank swings into action with another set of measures to rescue the rupee, bonds, and bank stocks. The RBI said that it will purchase Rs 8,000 crore worth of bonds via open market operations on Thursday. It added that it will calibrate its purchases in the future, when needed.

It has allowed banks to shift a part of their AFS portfolio to HTM. The measures will restrict a sharp rise in long-term yields and reduce MTM losses on banks' investment portfolios banks will benefit more from the reduction in MTM losses, with OBC and Canara Bank the biggest beneficiaries of these measures. Lower wholesale rates will also benefit private banks.

The Reserve Bank has disallowed any further FII investment in the Federal Bank stock after the foreign institutional holding in the stock reached the trigger limit of 49 percent.

The Patiala house court is set to hear Tina Ambani's plea in the 2G spectrum case. This after Ambani filed a plea seeking deferral of her appearance as a CBI witness.

The JBF Industries board will consider buy-back of equity shares today.

In what will come as a positive trigger for Fortis Healthcare , it has announced the completion of the divestment of their subsidiaries in Singapore for USD 80 million.

Newspaper reports suggest that the Apollo Tyre cooper acquisition is facing opposition from Chinese workers.

US

Stocks eased off their highs in the final minutes of trading to close narrowly mixed with the Dow logging its fifth-straight day lower. But losses were limited owing to a handful of retailers and as bond yields receded from two-year highs. Investors also awaited further indications over the timing of the Federal Reserve’s widely expected reduction in asset purchases. The CBOE volatility index finished below 15.

The 10-year treasury yields recovered a tad but still remain at elevated levels of 2.82% as the market awaits details of the Fed's tapering programme.

In key data to watch out for - existing home sales are expected to rise to 5.15 million units. Also the Federal Reserve will be releasing the minutes of its last meeting today.

Europe

Markets closed broadly lower on Tuesday amid continuing concerns over a potential reduction in asset buying by the US central bank. BHP Bilton fell 2 percent after an earnings miss leading miners to exert pressure on markets.

Currency

Dollar weakened to trade sub 81 levels. The euro-dollar saw a smart upmove to a 6-month high of 1.34 levels as the yield premium that 10-year US treasury notes offer over German bunds narrowed.

Commodities

Brent continued to trade at USD110/barrel. However, Nymex has slipped to USD105/bbl levels ahead of the futures contract expiration and in reaction to halting of shipments to the Gulf coast.

From precious metals space, after falling as much as 1 percent in the session, gold settled higher above USD1370/oz as the dollar weakened ahead of the Fed minutes. Silver too recovered after initially tumbling 4 percent.

8,000 Cr ...RBI announces OMO Purchases

RBI on Tuesday took steps to ease long-end bond yields after it crossed 9% on Monday

On July 15, 2013, the Reserve
Bank of India had announced measures for liquidity tightening in order to raise the short-term interest rate and thereby curb volatility in the exchange rate. These measures were recalibrated on July 23, 2013. A review of these measures suggests that the immediate objective of raising the short-term interest rates has substantially been achieved as evidenced by the money market rates anchoring to the marginal standing facility (MSF) rate of 10.25 per cent. Going forward, the Reserve Bank will calibrate the issue of cash management bills (CMBs), including scaling it down as may be necessary, to keep the money market rates around MSF rate until the volatility of rupee eases.

It is important to address the risks to macroeconomic stability from external sector imbalances. At the same time, it is also important to ensure that the liquidity tightening does not harden longer term yields sharply and adversely impact the flow of credit to the productive sectors of the economy. It may be recalled that in its first quarter monetary policy statement of July 30, 2013, the Reserve Bank had said that the stance of its monetary policy is intended, among other things, “to manage liquidity conditions to ensure adequate credit flow to the productive sectors of the economy.” In pursuance of this objective, it has been decided that:
The Reserve Bank will conduct open market purchase operations (OMOs) of long dated Government of India Securities of Rs. 8,000 crore on August 23, 2013, and thereafter calibrate them both in terms of quantum and frequency, as may be warranted by the evolving market conditions.

The hardening of long term yields has resulted in banks incurring large mark-to-market (MTM) losses in their investment portfolio. Since these MTM losses are partly resulting from abnormal market conditions and could be expected to be largely recouped going forward, the Reserve Bank has decided to provide the following prudential adjustments for a limited period:

Current regulations require banks to bring down their statutory liquidity ratio (SLR) securities in held to maturity (HTM) category from 25 per cent to 23 per cent of their Net Demand and Time Liabilities (NDTL) in a progressive manner in a prescribed time frame. The requirement stood at 24.5 per cent as at end June 2013. It has now been decided to relax this requirement by allowing banks to retain SLR holdings in HTM category at 24.5 per cent until further instructions.

Further, banks will now be allowed to transfer SLR securities to HTM category from available for sale (AFS) / held for trading (HFT) categories up to the limit of 24.5 per cent as a one-time measure. Such transfer of securities from AFS/HFT category to HTM category should be made at the lower of the book value or market value. Banks have the option of valuing these securities for the purpose of such transfer as at the close of business of July 15, 2013.
In addition, banks can spread over the net depreciation, if any, on account of MTM valuation of securities held under AFS/HFT categories over the remaining period of the current financial year in equal instalments.

Petroleum Ministry examining RIL gas supply issue

RIL failed to deliver in past three years at old rate of $ 4.2.

Media report said that Petroleum Ministry is “examining” suggestions that Reliance Industries gas supply issue.
RIL failed to deliver in past three years at old rate of $ 4.2.
Minister of State for Petroleum and Natural Gas Panabaaka Lakshmi told Lok Sabha that the issues mentioned in the July 4 office memorandum of finance ministry “are under examination.”

She reported that the finance ministry asked her ministry to examine if “there must be ceiling under the formula.
Earlier Cabinet approved pricing of domestic gas at an average of cost of imported LNG into India and international hub rates.
Last fiscal, the gas production of 27 mmscmd was short of target of 86.73 mmscmd

Parliament disrupted over coal scam; govt says will push food bill in Lok Sabha on Thursday

The issue of missing files relating to coalgate paralysed proceedings in Parliament on Tuesday with BJP demanding an immediate response from Prime Minister Manmohan Singh, even as the government said it will leave no stone unturned in tracing the documents.

Amid cries of "shame-shame" and "pradhan mantri jawab do", Leader of the Opposition in Lok Sabha Sushma Swaraj raised the issue and said the Prime Minister should come to the House and assure members that the CBI probe will not be hampered due to the missing files.

She said as the Prime Minister had recently taken full responsibility in the Lok Sabha, it was incumbent upon him to take the House into confidence as to what had happened to the 147 missing files.

Claiming that the files included applications for coal blocks, she alleged that they have gone missing as some big shots of the Congress were involved.

Swaraj wanted the Speaker to direct the Prime Minister to come to the House and make a statement. Singh had held the coal portfolio from 2006 to 2009 when the coal blocks were allocated.

Rajya Sabha also witnessed uproar after which coal minister Sriprakash Jaiswal made a statement saying that a committee has been constituted to go into the issue of missing files which has held two meetings.

"I would like to assure the House that my ministry would leave no stone unturned in tracing and providing the documents sought by the CBI," he said.

Jaiswal said he was ready to undergo any punishment if his involvement was established.

But, the opposition was not satisfied with the statement with Leader of the Opposition Arun Jaitley finding loopholes asking whether any FIR has been lodged by the coal ministry about missing files.

As Rajya Sabha met for the day, BJP members started demanding statement from the Prime Minister on the missing files.

M Venkaiah Naidu (BJP) said the Prime Minister should come to the House and assure it that the files are safe. He demanded that the issue related with files should be taken up first.

Coal minister Sriprakash Jaiswal, who came to the House after the first adjournment, tried to make a statement, but BJP members insisted that it should come from none other than the Prime Minister. Jaiswal could not complete his statement.

Deputy Leader of Opposition Ravi Shankar Prasad termed the coal scam as the biggest one and alleged that some of the missing files are related with companies associated with members of the ruling party.

"We want it (statement) from the Prime Minister. Serious questions are being raised about the Minister," he said.

TDP MPs were in the Well with their protest entering the third week. MPs from Congress opposing creation of Telangana held placards and shouted slogans from their benches.

On the other hand, the government has decided to push Food Security Bill in Parliament on Thursday and said it will "try its level best" to secure the passage of the bill in House.

The bill, expected to be a game-changer for the ruling Congress ahead of five assembly polls this year-end and the 2014 general elections, aims to provide subsidised food grain at prices much below the market rate to around 67% of India's 1.2 billion people. The bill would thus benefit about 800 million people.

"We will be trying our level best to get the food bill passed. We are talking to everybody (all political parties)," minister of state for parliamentary affairs Rajeev Shukla told reporters in New Delhi.

Parliamentary affairs minister Kamal Nath said: "We will use all rules to ensure that the House runs."

Food minister KV Thomas said he was confident of getting the legislation passed. "I am always a confident man. It is a very important  bill."

The government is keen to secure passage of the food security bill, which is Congress chief Sonia Gandhi's pet welfare legislation, but is concerned over the large number of amendments (over 260) moved by opposition parties.

Both Samajwadi Party (SP) and Bahujan Samajwadi Party (BSP) have indicated their support for the bill, but have demanded certain changes in the legislation.

BSP supremo Mayawati said: "We support the bill as it is for the poor, but we want certain changes for which we will move amendments."

The bill, part of the Congress manifesto for the 2009 polls, is expected to bring it electoral benefits, just as the rural job plan did.


The Mahatma Gandhi National Rural Employment Guarantee Scheme is considered responsible for the second term that the United Progressive Alliance (UPA) won in the 2009 polls.