Govt asks public sector banks to save money and grow at same time

A cash-starved government is wielding a stick on public sector banks by asking them to conserve capital through cost-cutting while sticking to loan growth targets, throwing bank executives into a tizzy.

The government, which has admitted that it will fail in borrowing and fiscal deficit targets, has told banks to strengthen their tax departments to ensure there are no slippages in revenue to the exchequer.

State-run banks, which control three-fourths of bank lending, should take insurance cover on loans to exporters and small & medium companies, and cut costs to boost profitability, a bureaucrat in the finance ministry has written to banks recently listing half-a-dozen such items. These and other measures will improve the capital position, it said.

"While a bank can conserve capital by stumping growth, that is something they do not want," said a chairman of a bank who did not want to be identified.

"In the board meetings, Finance Secretary DK Mittal has said we should grow by 30-40% instead of the average 20%. He also told us to look at ways to generate capital to reduce reliance on government."

Prime Minister Manmohan Singh's government is dithering on investing capital into banks due to crippled fiscal position as slowing growth cuts revenues and welfare schemes eat up resources.

This letter comes amid uncertainty over whether the nation's biggest lender, State Bank of India, which has been demanding about Rs 20,000 crore of capital, will get it. The government doesn't want to reduce its holding in these banks either, preventing them from accessing capital from investors.

Source: www.economictimes.com

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Mid-year review: Govt cuts growth forecast between 7.25% & 7.75%; investors cut exposure

The BSE's benchmark index Sensex extended losses to the second day and closed 1.7% lower on Friday as concerns over a slowdown in the economy intensified after the finance ministry cut the country's growth forecast for the current fiscal year.

The economy is likely to grow by between 7.25% and 7.75% in the fiscal year ending March, sharply lower than the original estimate of 9%, a mid-year review of the economy tabled by the finance minister in parliament showed.

The 30-share BSE index fell 274.78 points to 16,213.46, with 27 of its components in the red. The benchmark fell as much as 2% during the day. The index lost 3.76% for the week. Shares of index heavyweight Reliance Industries led the losses and fell nearly 3% to end at Rs 755.70, their lowest close since November 25.

Nomura downgraded the stock to "neutral" from "buy", citing diminishing exploration and production possibilities, and declining refining margins.

"The market has over-reacted to the mid-term review. The lower GDP projections were already known and there is nothing new that you can derive from the review," Kishor Ostwal, chairman and managing director, CNI Research, said.

"The market should bounce back next week before the RBI reviews its policy on Friday," Ostwal said, adding he saw 5,100 as next support level for the Nifty.

The Reserve Bank of India is widely expected to pause its rate tightening cycle next Friday at its monetary policy review as a slowing economy and a fragile global economic situation take centre stage. Appetite for riskier assets was hit further after India's trade secretary Rahul Khullar said the country was facing a serious balance of trade problem. Private lender ICICI Bank and HDFC Bank fell 1.77 and 2.2%, respectively.

Broking firm Macquarie said it would continue to be bearish on the Indian banking sector because of deteriorating asset quality and a possible tightening of margins due to an increase in savings rate. A slew of economic data, including industrial output and headline inflation, is expected next week and will influence stock market moves.

Industrial output likely shrank 0.5% in October from the same month a year ago, its first decline in over two years, hurt by a slowdown in export growth, a Reuters poll showed. The data is due on Monday. The 50-share NSE index Nifty fell 1.56% to 4,866.70.

Source: www.economictimes.com

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Weekly Market Update from 5th Dec 2011 to 9th Dec 2011

Weekly Market Update from 5th Dec 2011 to 9th Dec 2011





Source: www.iseindia.com

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Infra Bonds Details

Under Section 80CCF an individual can invest upto Rs.20,000/- in a financial year and claim tax benefits for the same. There are currently three issues:

Product Features:

• Rs.20,000/- limit is in addition to 1,00,000/- limit of section 80C, 80CCC, 80CCD
• Only Rs.20,000/- can be invested in a Financial year to avail deduction under section 80CCF
• Tenure of the Bonds will be 10 Years.
• The minimum lock in period for an investor shall be five years.
• After 5 years investor may exit either through the buyback facility as specified by the issuer in the issue document.

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Net FII Purchases & Sales during the week 28th Nov 2011 to 2nd Dec 2011

Net FII Purchases & Sales during the week 28th Nov 2011 to 2nd Dec 2011

FII sales during the week:
28/11/2011: 755.90
29/11/2011: -220.70
30/11/2011: -181.80

FII purchases during the week:
1/12/2011: 904.8
2/12/2011: 139.8

FII were net seller of Rs 113.80 crore during the week.

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Sectoral Performance During Week 28th Nov 2011 to 2nd Dec 2011

Sectoral Performance During Week 28th Nov 2011 to 2nd Dec 2011

MAJOR SECTORAL GAINERS:
METAL: 10.50%
BANKING: 8%
OIL & GAS: 6.50%
POWER: 6.20%
CAPITAL GOODS: 4.20%
PHARMA: 3.20%
CONSUMER DURABLE: 1.80%

MAJOR GAINERS IN NIFTY:
HINDALCO: 15.40%
SBI: 14.50%
DLF: 14.20%

MAJOR LOSERS IN NIFTY:
OPTO CIRCUIT: -7%
ALSTOM PROJECTS: -5.50%
BAJAJ HOLDING: -3.75%

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Trend in Global Market during the Week 28th Nov 2011 to 2nd Dec 2011

Trend in Global Market during the Week 28th Nov 2011 to 2nd Dec 2011


DOW JONES: 7%
FTSE: 7.50%
CAC: 10.80%
DAX: 10.70%
BOVESPA: 5.50%
NIKKEI: 5.90%
SINGAPORE: 4.90%
HANG SENG: 7.60%
SHANGHAI: 0.40%
SENSEX: 7.35%

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Important US Economic Data Releases for the Week 5th Dec 2011 to 9th Dec 2011

Important US Economic Data Releases for the Week 5th Dec 2011 to 9th Dec 2011

Monday
Factory Orders
ISM Non Manufacturing Index

Tuesday
ICSC – Goldman Store Sales

Wednesday
Quarterly Service Survey
EIA Petroleum Status Report
Consumer Credit

Thursday
Jobless Claims
Wholesales Trade
EIA Natural Gas Report
Fed Balance Sheet
Money Supply

Friday
International Trade
Consumer Sentiment

Source: www.sharetipsinfo.com

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Head Dealer
DENIP Consultants Pvt Ltd

New Product Launch - Reliance Fixed Horizon Fund XXI Series 16( 368 days)

New Product Launch - Reliance Fixed Horizon Fund XXI Series 16( 368 days)

Scheme Features

NFO Opening Date : 01st December, 2011
NFO Closing Date : 07th December, 2011
Duration of this fund: 368 days from the date of allotment of units

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Kanimozhi, four others get bail in 2G case

DMK MP Kanimozhi and four others have been granted bail in the 2G spectrum allocation scam case. The Delhi High Court granted bail on Monday to five accused while directing them to furnish two bonds of Rs 1 lakh each and ordering them that they cannot leave the country.

The accused had approached the High Court after the Supreme Court granted bail to five corporate executives on November 23.

The Central Bureau of Investigation (CBI) had not opposed the bail applications conceded bail of Kanimozhi and Cineyug founder Karim Morani in the trial court.

DMK MP Kanimozhi and four others have been granted bail in the 2G spectrum allocation scam case. The Delhi High Court granted bail on Monday to five accused while directing them to furnish two bonds of Rs 1 lakh each and ordering them that they cannot leave the country.

The accused had approached the High Court after the Supreme Court granted bail to five corporate executives on November 23.

The Central Bureau of Investigation (CBI) had not opposed the bail applications conceded bail of Kanimozhi and Cineyug founder Karim Morani in the trial court.

Source: www.moneycontrol.com

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DENIP Consultants Pvt Ltd