Tuesday, July 30, 2013

IMF approved the EUR 1.7b funds for Greece's bailout program after completing the review.

 EU said yesterday that Greece would need to make EUR 1.6b from privatization, down from prior target of EUR 2.6b.
 
IMF chief Lagarde noted that "urgent steps need to be taken to address concerns about the structure and governance of the privatization program and to improve its effectiveness." Meanwhile, Lagarde also criticized that "given the slow progress in public administration reforms, efforts should focus on ensuring exit of unqualified personnel to create room to hire new staff with the relevant skills."
 
Greece is expected to get another EUR 1b from the bailout EUR 173b bailout program in October, subject to further review.
 
Euro strengthens today, in particular against Sterling on solid Italian bond auction and improvement in confidence indicators.
 
Italy sold maximum target in EUR 6.75b of debts today. EUR 3.75b in 10 year BTP was sold with yield at 4.46%, down from 4.55% in an auction of similar debt. Bid to cover ratio was at 1.32, comparing to prior 1.46. EUR 3b in 5 year BTP was sold with yield at 3.22%, down from prior 3.47%. Bid to cover ratio was at 1.36, comparing to prior 1.30. After today's auction, Italy has completed around 80% of its 2013 funding target.

Dollar is mixed as investors remain cautious ahead of FOMC announcement tomorrow.

 Markets are expecting Fed to provide better guidance on quantitative easing, which much include the trigger for the first scale back of the $85b per month asset purchases. While the triggers could be unspecific, they should include at least criteria like improvement in unemployment rate or job creation at current pace. Also, markets will scrutinize the statement to get more hints on whether Fed would reduce the program in September. Adjustment in such expectations would trigger much volatility in dollar. But before, that, markets would likely tread water.
 
Data from US saw S&P Case-shiller 20 cities house price rose 12.2% yoy in May. Canadian IPPI rose 0.3% mom in June, RMPI rose 0.3% mom. Unemployment rate in Japan dropped more than expected to 3.9% in June, household spending dropped -0.4% yoy, industrial production dropped -3.3% mom in July. New Zealand building permits dropped -4% mom in June.

Nifty August Futures - Important Levels for Wednesday, 31.07.2013.

TREND DECIDING LEVELS : Today, the Important Trend Deciding Levels on Lower Side is  5775-5750.  Below this, next important level is  5720-5700.     (This levels, Either Acts as a support while Nifty is moving in downward direction or Acts as a down side Break out/Break down Trigger level which fuels further downward movement from here).

Today, the Important Trend Deciding Levels
on Higher Side is 5820.  Above this, next important level is  5840-5860
(These levels, Either Acts as a hurdle while Nifty is moving in upward direction or Acts as a Upside Breakout Trigger level which fuels further upward movement from here).
Disclaimer :

The stock Tips and recommendations given in this blog is for information and educative purpose only. No representations can be made that the tips given here will be profitable or that they will not result in loss. Trading involves risk of loss of money. The Tips in this news letter are given with the understanding that readers acting on this information assume all the risks involved and that they are trading at their own risk. The above recommendations are based on the theory of price related technical analysis and they do not reflect the fundamental strength or weakness of the respective stocks . We shall not be responsible for any loss incurred for acting on the tips given above.

RBI decided to leave the key benchmark rates unchanged in its monetary policy review.

While the rain Gods have blessed us more than adequately, the risks to growth continue to increase. On one hand there are issues for growth. On the other hand, there is the Indian Rupee which has been steadily falling. As a result, the job of the Reserve Bank of India (RBI) has become even tougher. With external stability taking precedence, the RBI decided to leave the key benchmark rates unchanged in its monetary policy review today. As such the repo rate and cash reserve ratio (CRR) currently stand at 7.25% and 4% respectively.

The point of concern however was that RBI continued to raise concerns over growth. In this regard, it has revised its FY14 GDP projection downwards to 5.5% from the earlier 5.7%. In its opinion the onus for reversing the slowdown lies on the government. The RBI has urged the government to take the necessary steps for reigning in the current account deficit and stabilization of the Rupee are the two most important things to consider. These are structural issues that need to be fixed up if RBI is expected to reverse its hawkish stance.

Japanese industrial output drops in June.

Japanese industrial production unexpectedly dipped in June by 3.3% on month, trailing expectations for a 1.7% drop. A decline in the production of transport equipment, including autos, led the fall, followed by electronics and machinery. However, manufacturers offered an upbeat outlook for July, with a survey showing they expect growth of 6.5%, up from 3.3% projected in last month's print.

No change expected from Fed.

The FOMC is due to hold its latest policy meeting today and tomorrow, when policy makers are expected to debate how best to prepare markets for a tapering of QE, although they're also ultimately expected decide to do nothing for the time being. Markets went all a flutter last time around after Ben Bernanke said the bond-buying would end in mid-2014, which forced officials to make speeches that weakened the strength of the guidance.

Monday, July 29, 2013

Tokyo leads Asian stocks into the red.

Japanese shares (DXJ) led Asian stocks lower, pulled down by a possible delay or scaling back of a proposed increase in sales tax, as well as by yen (FXY) strength ahead of the Fed's monetary policy meetings this week. The yen has also been boosted by fears about China's (FXI) slowing growth and rising credit, factors that weighed on sentiment in Shanghai as well. U.S. stock futures were lower at the time of writing, although European shares were mostly higher, buoyed by mergers and earnings.

S. 195(2) TDS: AO has no power to issue Nil TDS certificate

BIOCON Biopharmaceuticals Pvt. Ltd vs. ITO (ITAT Bangalore)

The assessee entered into a Joint Venture agreement with CIMAB SA, Cuba, to set up a JVC in India. It was agreed that CIMAB would provide technology to the JVC in consideration for which it would be allotted 49% of the equity capital of the JVC. The assessee filed an application u/s 195(2) claiming that the technology was not chargeable to tax in India and that the shares should be permitted to be allotted without TDS. The AO passed an order u/s 195(2) in which he accepted the assessee’s contention that no TDS was required to be deducted on the allotment of shares. However, later the AO took the view that the allotment of shares in consideration of the technology transfer was chargeable to tax and that the assessee was in default u/s 195 & 201. This was upheld by the CIT(A). Before the Tribunal the following issues arose: (i) whether u/s 195(2) the AO has the jurisdiction to issue a certificate that no tax need be deducted at source, (ii) whether s. 195(1) applies where payment is made in kind and not in money terms & (iii) whether the consideration (in the form of shares) for technology transfer can be said to be “transfer of a capital asset” outside India so as to be exempt from tax? HELD by the Tribunal:
(i) S. 195(2) presupposes that the person responsible for making the payment to a non-resident is in no doubt that tax is payable in respect of the some part of the amount to be remitted to a non-resident, but is not sure as to what should be portion so taxable or is not sure as to the amount of tax to be deducted. Consequently, in an application made u/s 195(2), the AO cannot assume jurisdiction to hold that the entire payment is not chargeable to tax and the payer need not deduct tax at source. As the AO had no power u/s 195(2) to hold that no tax is deductible at source, the order passed by him holding that no tax is deductible at source on the technology transfers is non est in law. As there is no estoppel against the law, the assessee cannot take advantage of such an order (GE India Technology Centre 327 ITR 456 (SC) referred)
(ii) The argument that s. 195(1) does not apply to a case where shares are allotted is not acceptable because the expression “any other sum chargeable under the provisions of the Act” in s. 195(1) has to be read in conjunction with the words “at the time of credit of such income …. in cash … or by any other mode”. Thus payment in terms of the money is not the only mode contemplated u/s 195(1) of the Act. The use of the expression “or by any other mode” makes the intention of the legislature clear that s. 195(1) applies even to cases where payment is made otherwise than by money.
(iii) The definition of “royalty” in Explanation 2 to s. 9(1)(vi) excludes consideration which would be income of the recipient chargeable under the head ‘capital gains’. For application of the above exclusion clause, it is necessary that (a) technical know-how should be a capital asset in the hands of CIMAB, (b) the said technical know-how should be capable of being transferred and should have been transferred by CIMAB, (c) the machinery provisions viz., the computation of capital gain as given in s. 48 should be capable of being applied & (d) the transfer of technical know-how should have taken place outside India. On facts, the assessee has not shown that the transfer of technical know-how took place outside India. Further, the terms make it clear that there was no transfer of the know-how by CIMAB to the assessee but the assessee had a mere right to use the know-how, though the nomenclature used in the Agreement is ‘transfer of technology’. Consequently, the consideration for the know-how constitutes “Royalty” under Explanation 2(iv) to s. 9(1)(vi).

Nifty August Futures - Important Levels for Tuesday, 30.07.2013.

TREND DECIDING LEVELS : Today, the Important Trend Deciding Levels on Lower Side is  5855-5840.  Below this, next important level is  5810-5790.     (This levels, Either Acts as a support while Nifty is moving in downward direction or Acts as a down side Break out/Break down Trigger level which fuels further downward movement from here).

Today, the Important Trend Deciding Levels
on Higher Side is 5885-5895.  Above this, next important level is  5925-5935.
  (These levels, Either Acts as a hurdle while Nifty is moving in upward direction or Acts as a Upside Breakout Trigger level which fuels further upward movement from here).
Disclaimer :

The stock Tips and recommendations given in this blog is for information and educative purpose only. No representations can be made that the tips given here will be profitable or that they will not result in loss. Trading involves risk of loss of money. The Tips in this news letter are given with the understanding that readers acting on this information assume all the risks involved and that they are trading at their own risk. The above recommendations are based on the theory of price related technical analysis and they do not reflect the fundamental strength or weakness of the respective stocks.We shall not be responsible for any loss incurred for acting on the tips given above.

 

Sunday, July 28, 2013

Govt debt to GDP:India relatively better off.

Government debt to GDP has come to be one of the most critical indicators of the massive fiscal cliff that the US and European economies are staring at. The US seems to have applied a temporary band aid to the problem. But Europe has yet to feel the jitters. Even a relatively sound economy like Germany had government debt as high as 87.9% at the end of FY13. In comparison, India seems far better off.

However, as per equity masters, the UPA government's magic formula of poverty reduction and the Food Security bill could bring India much closer to the US and Europe on this metric. In FY13, the US' government debt to GDP ratio at 108% was nearly double that of India's 66.4%. But the Food Security bill has the potential to narrow the gap.
 
                                 
                                                                       Data source: Finance Ministry, IMF, OECD 

China tells 1,400 firms to cut production.

China has ordered over 1,400 companies in 19 sectors to reduce excess output this year as part of the government's strategy of re-balancing the economy. The firms affected include those in the steel, ferroalloys, electrolytic aluminium, copper smelting, cement and paper industries. "This is a real move and is very specific," says ANZ economist Raymond Yeung. "They maintain the overall tone that they're not focusing on the quantity of growth but the quality of growth."

Japanese inflation highest in five years.

Japan's core CPI, which excludes food, rose for the first time in 14 months in June and increased a greater-than-expected 0.4%, a level that was also the highest for five years. However, the CPI reading that excludes food and energy dropped 0.2%, which, along with the weak dollar and tepid earnings, helped to send Japanese shares 3% lower. What the country needs is rising wages so that consumers can afford the higher prices.

Nifty August Futures - Important Levels for Monday, 29.07.2013.

 
TREND DECIDING LEVELS :

Today, the Important Trend Deciding Levels
on Lower Side is  5910-5890.  Below this, next important level is  5870-5850.     (This levels, Either Acts as a support while Nifty is moving in downward direction or Acts as a down side Break out/Break down Trigger level which fuels further downward movement from here).

Today, the Important Trend Deciding Levels
on Higher Side is 5945-5955.  Above this, next important level is  5975-5995.
  (These levels, Either Acts as a hurdle while Nifty is moving in upward direction or Acts as a Upside Breakout Trigger level which fuels further upward movement from here).
Disclaimer :

The stock Tips and recommendations given in this blog is for information and educative purpose only. No representations can be made that the tips given here will be profitable or that they will not result in loss. Trading involves risk of loss of money. The Tips in this news letter are given with the understanding that readers acting on this information assume all the risks involved and that they are trading at their own risk. The above recommendations are based on the theory of price related technical analysis and they do not reflect the fundamental strength or weakness of the respective stocks. We shall not be responsible for any loss incurred for acting on the tips given above.

Thursday, July 25, 2013

German business confidence improves slightly.

Germany's closely watched Ifo index of business confidence has risen for a third consecutive month in July, edging up to 106.2 from 105.9 in June and topping consensus of 106.1. The current assessment reading also rose, although the six-month outlook slipped a bit.

U.K. growth speeds up.

As expected, U.K. GDP growth accelerated to a quarterly 0.6% in Q2 from 0.3% in Q1 as all the main sectors of the economy expanded for the first time in almost three years. Still, critics say living standards remain stagnant, while GDP is 3.3% below its peak. The pound (GBB) fell following the data but was +0.1% at $1.5332 at the time of writing.

Spanish jobless rate drops for first time in two years.

Spanish unemployment surprisingly fell for the first time in two years in Q2, dropping to 26.26% from 27.16% previously and vs consensus for a rise to 27.3%. A strong tourist season helped improve employment, although there were still 5.98M people without a job, half of whom haven't worked for over a year. Notwithstanding, Spanish shares (EWP) were +0.3% at midday in Europe, bucking the global trend.

Wednesday, July 24, 2013

Japanese export growth slows.

Japanese exports increased for a fourth consecutive month in June, rising 7.4% on year, although that marked a slowdown from +10.1% in May, while the reading also missed consensus of +10.3%. Imports grew 11.8% and the trade deficit widened to ¥180.8B ($1.81B) from ¥996.4B. Exports to the U.S., China and even the EU increased. "The effect of the yen's weakness on exports is becoming very clear," says RBS economist Junko Nishioka.

HSBC China PMI hits 11-month low.

HSBC China flash PMI has dropped for the third consecutive month in July, declining to an 11-month trough of 47.7 from 48.2 in June. The employment sub-index slumped to 47.3, its lowest level since March 2009, while new orders also hit an 11-month bottom. The numbers point to "a continuous slowdown in manufacturing sectors thanks to weaker new orders and faster de-stocking," says HSBC.

PMI suggests eurozone leaving recession.

Eurozone flash manufacturing PMI has increased to a two-year high in July and returned to expansion, rising to 50.1 from 48.8 in June and topping consensus of 49.2. Composite output has climbed to 50.4 from 48.7 and also beat forecasts. "The best (composite) PMI reading for 1 1/2 years provides encouraging evidence to suggest that the euro area could – at long last – pull out of its recession in the third quarter," says Markit.

Nifty July Futures - Important Levels for Thursday, 25.07.2013.

TREND DECIDING LEVELS : Today, the Important Trend Deciding Levels on Lower Side is  5975-5965.  Below this, next important level is  5945-5925.     (This levels, Either Acts as a support while Nifty is moving in downward direction or Acts as a down side Break out/Break down Trigger level which fuels further downward movement from here).

Today, the Important Trend Deciding Levels
on Higher Side is 6010-6020 Above this, next important level is  6040-6060.
  (These levels, Either Acts as a hurdle while Nifty is moving in upward direction or Acts as a Upside Breakout Trigger level which fuels further upward movement from here).
 
Disclaimer :
 
The stock Tips and recommendations given in this blog is for information and educative purpose only. No representations can be made that the tips given here will be profitable or that they will not result in loss. Trading involves risk of loss of money. The Tips in this news letter are given with the understanding that readers acting on this information assume all the risks involved and that they are trading at their own risk. The above recommendations are based on the theory of price related technical analysis and they do not reflect the fundamental strength or weakness of the respective stocks.We shall not be responsible for any loss incurred for acting on the tips given above.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 

Tuesday, July 23, 2013

Spain's economy may be turning the corner.

The contraction in Spain's GDP slowed to 0.1% on quarter in Q1 from +0.5% in Q2, Spain's central bank said, adding that with confidence indicators improving, it expects a complete turnaround by Q3. If correct, the Q2 figure would be the best - or least worst - since the recession hit at the end of 2011. Many economists aren't as optimistic, but investors seem to be buying into the bank's story, and Spanish shares (EWP) were +1.4% at midday in Europe.

Nifty July Futures - Important Levels for Wednesday, 24.07.2013.

TREND DECIDING LEVELS : Today, the Important Trend Deciding Levels on Lower Side is  6065-6055.  Below this, next important level is  6035-6020.     (This levels, Either Acts as a support while Nifty is moving in downward direction or Acts as a down side Break out/Break down Trigger level which fuels further downward movement from here).

Today, the Important Trend Deciding Levels
on Higher Side is 6095-6110.  Above this, next important level is  6135-6155.
  (These levels, Either Acts as a hurdle while Nifty is moving in upward direction or Acts as a Upside Breakout Trigger level which fuels further upward movement from here).

Disclaimer :

The stock Tips and recommendations given in this blog is for information and educative purpose only. No representations can be made that the tips given here will be profitable or that they will not result in loss. Trading involves risk of loss of money. The Tips in this news letter are given with the understanding that readers acting on this information assume all the risks involved and that they are trading at their own risk. The above recommendations are based on the theory of price related technical analysis and they do not reflect the fundamental strength or weakness of the respective stocks.We shall not be responsible for any loss incurred for acting on the tips given above