Jewellery stocks tank, Titan Industry slumps 14 pct on RBI measures

Led by Titan Industries, jewellery stocks today tanked as much as 14 per cent, after the Reserve Bank prohibited inward shipment of gold coins, medallions and dores without licence and said importers will be required to make full upfront payment for the shipments.

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Reacting to this, shares of Titan Industries slumped 14 per cent to Rs 235 on the BSE in morning trade.

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Similarly, PC Jeweller Ltd tanked 5.83 per cent, while Tribhovandas Bhimji Zaveri Ltd tumbled 6 per cent.

Among others, Rajesh Exports was down 3.69 per cent and Thangamayil Jewellery fell 1.15 per cent.

Seeking to reduce the import of gold, the Reserve Bank had on Wednesday prohibited inward shipment of gold coins, medallions and dores without licence.

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"From now onwards, import of gold in the form of coins and medallions is prohibited and henceforth all import of gold in any form or purity shall be subject to a licence issued by DGFT prescribing 20-80 scheme," Economic Affairs Secretary Arvind Mayaram had said.

The latest measures are part of the series of steps taken to curb gold import, the single biggest contributor to the widening Current Account Deficit (CAD).

Also importers will be required to make full upfront payment for the shipments.

Customs duty on gold, silver and platinum was hiked to 10 per cent on Tuesday.

Meanwhile, the broader market was weak with the Sensex falling 530.27 points to 18,836.31 in late morning trade.

Govt works on plan to ask private coal miners to sell surplus to CIL

After exhausting all available options to increase coal production, the government has decided to incentivise private sector coal mines to sell their surplus produce to state-run Coal India but with the assurance they can get it back at a profit in future.

To ensure the proposal has wide-ranging support, the government plans to set up a committee that will include financial sector luminaries like HDFC Bank chairman Deepak Parekh, ICICI Bank chief Chanda Kochhar and others to fine tune it.

The plan is essentially a simple one. Private sector coal miners will be encouraged to produce more coal than they need for their units. The excess production will be sold to Coal India and the producers will have the right to buy back the coal in future if they need but at a price close to the current price.

Coal India will basically act as a coal bank. Endorsing the proposal, deputy chairman of Planning Commission Montek Singh Ahluwalia has, however, said the government should not be seen as extending subsidies to independent power plants through the plan.

Commission member BK Chaturvedi, who oversees the energy sector in the Plan panel, has pointed out that it is quite possible that this could become a reality if the price of coal rose in future since the committed offtake of the mineral at current prices could be seen as a subsidy.

"Obviously, if the price behaviour is in reverse direction, no such criticism will be made. But it is not possible to predict the price behaviour of coal," Chaturvedi has reasoned.

Endorsing the contention, Ahluwalia has asked Chaturvedi to chair a committee of experts in which eminent personalities like Parekh, Kochhar and coal secretary Sanjay Kumar Srivastava would be the key members. While Ahluwalia was also keen that the finance ministry's chief economic adviser Raghuram Rajan is inducted into the panel, but with his elevation as the RBI governor, another Commission member, Saumitra Chaudhuri, is likely to be inducted as a member.

China trade surplus falls 29.6% as imports gain

China's July trade surplus fell 29.6 percent year-on-year to $17.8 billion, government data showed on Thursday as a bigger-than-expected gain in imports outpaced one in exports.

Exports increased 5.1 percent year-on-year to $186.0 billion, according to figures from Customs, while imports rose 10.9 percent to $168.2 billion.

The results marked a rebound in trade in both directions after exports and imports declined in June, with the gain in imports being the first since April.

Two-way trade rose 7.8 percent year-on-year, slightly lower than the government's eight percent growth target for this year but "showing a stabilising and recovering trend", according to Customs.

The figures surprised economists.

A survey of 14 economists by Dow Jones Newswires had forecast exports to gain a median 2.8 percent and imports to rise 1.3 percent. The median prediction for the trade surplus was $27.2 billion.

Alaistair Chan, an economist at Moody's Analytics, called the results surprisingly good, though cautioned against overoptimism.

"We had expected imports to perform better than exports and hence for the trade surplus to fall, but the jump in imports was higher than expected," he wrote in a report.

But he added: "July seems to reflect a return to a 'normal', relatively uninspiring trend after a weak June, rather than the beginning of an acceleration in growth. While the worst seems to be over, the upturn will be relatively flat."

Yao Wei, a Hong Kong-based economist with Societe Generale said that while the export growth was "reasonable" and reflected a stabilising yet weak foreign demand, the rebound in imports was "confusing".

"Even though the government had announced some supportive measures, they should not show effects so soon — the fundamentals in the economy did not support such a strong rebound," she told AFP.

The trade data come after mixed messages on China's economy last week when private and official surveys of the country's important manufacturing sector showed differing results.

British banking giant HSBC's purchasing managers' index indicated contraction while the government's showed a surprise expansion.

China's economy managed growth of 7.8 percent in 2012, its slowest since 1999.

The economy has since weakened further, with growth in the April-June period dipping to 7.5 percent, from 7.7 percent in the first quarter and 7.9 percent in October-December.

Yao warned that uncertainties would remain in the fourth quarter as authorities turned cautious about credit expansion.

"The key issue is that the central bank does not want credit growth to be too fast or continue for too long a time," she said.

"But infrastructure investment cannot carry on without credit support. This is a contradiction that has yet to be dealt with properly."

CNG prices to jump by up to Rs 11.7 due to gas price hike

The government decision to double natural gas prices from April next year will translate into a hike of Rs 8.20-Rs 11.72 per kg in CNG rates in cities like Delhi and Mumbai.

The government had in late June decided to price all domestically produced natural gas at an average of global hub rates and cost of imported LNG. Accordingly, gas price is expected to be in the range of USD 8.2 to 8.4 per million British thermal unit in April as against current USD 4.2.

"If it is presumed that the city gas distribution entity is operating entirely on domestic gas, the impact of USD 1 per mmBtu increase in price of domestic gas would result in a price hike of Rs 2.93 per kg of CNG," Minister of State for Petroleum and Natural Gas Panabaaka Lakshmi said.

While CNG supplier in national capital Indraprastha Gas sources 70 per cent of its needs from domestic fields, Mahanagar Gas Ltd buys almost all of its gas from domestic producers. Also, CNG retailers in Gurgaon and Faridabad source almost all of their gas needs from domestic fields.

For cities like Mumbai, the USD 4 per mmBtu hike in natural gas price will translate into Rs 11.72 per kg increase while in Delhi the increase may be about Rs 8.2 per kg.

CNG or compressed natural gas in Delhi currently costs Rs 41.90 per kg and the same in Mumbai is priced at 35.95.

Lakshmi also said a USD 1 per mmBtu increase in gas price would result in USD 24.893 per tonne hike in urea production cost. This additional production cost would be the increase in subsidy the government paid on urea.

"So long as the MRP of urea is not increased by the government, there will be no impact on the farmers," she said.

Sensex recovers by 42 points in early trade

Snapping its eight-day losing streak, the BSE benchmark Sensex recovered by nearly 42 points in early trade today on fresh buying by funds amid a mixed trend in other Asian markets.

The 30-share index, which had lost over 1,139 points in

the previous eight sessions, recovered by 41.67 points, or 0.22 per cent, to 19,205.69 with stocks of consumer durables, auto and IT sector firms leading the recovery.

Similarly, the National Stock Exchange index Nifty rose by 9.90 points, or 0.17 per cent, to 5,687.80. Brokers said fresh buying by funds amid a mixed trend in other Asian bourses mainly influenced the sentiment.

In other Asian markets, Hong Kong's Hang Seng index was up by 0.16 per cent, while Japan's Nikkei was down by 1.02 per cent in early trade.

Idea Q1 net almost doubles to Rs 463cr, board okays share issue

Telecom operator Idea Cellular today said it has nearly doubled consolidated net profit at Rs 462.71 crore in the first quarter ended June 30, 2013, on the back of robust voice and mobile data revenue. The company registered net profit of Rs 234.14 crore during the same period a year ago.

"The multiple drivers of this sharp profitable growth have been robust voice and mobile data revenue coupled with scale benefits and better cost management," Idea Cellular said in a statement.

The consolidated revenues of the company increased 19 per cent to Rs 6,538.77 crore during the reported quarter from Rs 5,503.69 crore posted in corresponding period of last fiscal. Idea said its minutes of voice calls increased by 12.5 per cent on year-on-year basis to 147.3 billion in Q1 of FY 2013-14, supported by net annual new customer addition of 7.8 million and cumulative subscriber base reaching 125 million as on June 30, 2013.

The 'Interest and Finance Cost (net)' was lower by Rs 9.5 crore, even after accounting for foreign currency exchange rate loss of Rs 2.3 crore.

The company's net debt reduced from Rs 11,588.1 crore in Q4, FY13 to Rs 10,219.9 crore in the reported quarter. "Net Debt to annualised EBITDA (an indicator of cash flow) level now is at an enviable 1.39, by far the lowest in the industry," the statement said. In a separate filing to the BSE, the company said that its board has approved raising up to Rs 3,000 crore from qualified institutional investors by issuing company's equity shares.

The board has also approved issuing company equity shares worth up to Rs 750 crore on preferential basis to Axiata Group Berhad, the company said.

Shares of Idea today closed at Rs 167.35 apiece, down nearly one per cent on the BSE.

Sensex snaps 6-day losing streak, up 179 pts in early trade

Snapping a six-day losing streak, the BSE benchmark Sensex recovered by 179 points in early trade today on emergence of buying by funds and retail investors after the government announced plans for further liberalisation amid a firming trend in the Asian region.

The 30-share barometer rose by 179.37 points, or 0.93 per cent, to 19,525.07, led by the gains in oil and gas, metal, realty, power and capital goods stocks. The index had plunged 957 points in the previous six sessions.

Similarly, the wide-based National Stock Exchange index Nifty, gained 54.55 points, or 0.95 per cent, to 5,796.55.

Brokers said fresh round of buying by participants triggered by the government announcing plans for further liberalisation and a firming trend on the other Asian bourses, following the US Federal Reserve's decision to keep its stimulus scheme in place, mainly influenced the sentiment.

In Asia, Japan's Nikkei was trading 1.14 per cent higher, while Hong Kong's Hang Seng index up 0.622 per cent in early trade today.

Sensex down 147 pts in early trade

The BSE benchmark Sensex today fell over 147 points in early trade dragged down by realty, power and banking sector stocks on sustained selling by funds and retail investors, after RBI lowered GDP forecast amid a falling rupee. Extending losses for the sixth straight session, the 30- share barometer fell by 147.86 points, or 0.76 per cent, to 19,200.48. Sensex has lost almost 955 points in the previous five sessions.

On similar lines, the wide-based National Stock Exchange index, Nifty, declined by 53.80 points, or 0.93 per cent, to 5,701.25. Brokers said steady selling by funds on growth concerns after the Reserve Bank lowered GDP estimates to 5.5 per cent from earlier projection of 5.7 per cent for the current fiscal, dampened the trading sentiment.

Besides, weakening rupee which fell by 60 paise to 61.07 against the dollar in early trade today, was another dampening factor, they said. Meanwhile in the Asian region, Hong Kong's Hang Seng index was up by 0.30 per cent, while Japan's Nikkei Index was down 0.48 per cent in early trade.

Jindal Steel and Power Limited Q1 profit up 28 per cent at Rs 494 crore

Jindal Steel and Power (JSPL) today reported a 28.27 per cent increase in its consolidated net profit at Rs 494.28 crore for the April-June quarter over the corresponding period a year ago.

The Naveen Jindal-led firm had reported a net profit of Rs 385.33 crore during the corresponding quarter of 2012-13.

The net sales registered a marginal decline of 4

per cent to Rs 4,490.80 crore. Other income, however, surged to 135 per cent to Rs 49.47 crore, helping the company clock higher profit.

The other income was recorded at Rs 21.06 in the 2012-13

quarter previous fiscal while the net sales stood at Rs

4,680.41 crore in the June-ended quarter of the previous

fiscal.

The steel maker's total income from operations marginally

dropped to Rs 4,540.27 crore in the quarter ended June from Rs 4,701.47 crore in the same period a year ago, it said in a

regulatory filing. Total expenses of the company rose 5.6 per cent during the qurter under review to Rs 3,656.74 crore from Rs 3,461.08 crore in the April-June quarter of 2012-13.

On standalone front, teh company posted "a net profit of

Rs 238.86 crore for the quarter ended June 30, 2013 as

compared to Rs 12.42 crore for the quarter ended June 30,

2012, it said.

JSPL shares closed at Rs 202.25 apiece, up 1.45 per

cent from the previous close on the BSE.

Reliance Capital Q1 profit jumps three-fold to Rs 133 cr

Reliance Capital today posted nearly three-fold rise in consolidated net profit at Rs 133 crore for the first quarter ended June, 2013 on the back of all-round growth. The company had reported net profit of Rs 45 crore for the April-June quarter of last fiscal, Reliance Capital said in a statement. According to Reliance Capital CEO Sam Ghosh, three subsidiaries contributed to the company's performance.

There was turn around in case of Reliance General which recorded a profit of Rs 10 crore as against a loss of Rs 20 crore for the quarter ended June 30, 2012, he said. Besides, there was increase in both topline and bottomline of the Reliance Mutual Fund, he said, adding that consumer finance arm also contributed as there was turnaround in the segment. The total income of the company rose to Rs 1,930 crore in the quarter, against a total income of Rs 1,662 crore in the year-ago period, an increase of 16 per cent.

This was mainly on account of increase in topline of General Insurance and Asset Management businesses, he added. As on June 30, the total assets of the company stood at Rs 42,155 crore. Reliance Capital is the financial services arm of Anil Ambani-led Reliance Group and is present in businesses such as asset management, mutual fund, insurance, brokerage besides other segments of the financial services sector. As on June 30, 2013, the net worth of the company stood at Rs 12,138 crore, an increase of 3 per cent.

However, shares of the company closed at Rs 360.85, down 2.76 per cent on the BSE. On standalone basis, Reliance Capital's Q1 net profit surged to Rs 115 crore at the end of June 2013 as against just Rs 8 crore in the year-ago period. The total income on standalone basis rose to Rs 839 crore as compared to Rs 704 crore in the first quarter of the previous fiscal. Reliance Mutual Fund, a subsidiary of Reliance Capital, recorded a profit before tax of Rs 77 crore for the quarter ended June 30, an increase of 32 per cent. Another subsidiary, Reliance Life Insurance achieved a profit of Rs 56 crore, an increase of 196 per cent.

Ambuja Cements, ACC plunge on Holcim rejig

Shares of Ambuja Cements on Thursday fell 10.5 per cent after Swiss cement-maker Holcim said it will increase stake in the company as part of restructuring its Indian operations.

ACC scrip was down 3 per cent at Rs 1,194.10 on the BSE.

After falling 14.6 per cent to Rs 163.20 in intra-day trade, Ambuja's scrip finally ended at Rs 171, down 10.52 per cent from its previous close.

At the NSE, the stock plummeted by 10.62 per cent to settle at Rs 170.90. Ambuja Cements was the worst performer on the 50-share benchmark Nifty.

Following the sell-off, the market value of the company dipped by Rs 3,104 crore to Rs 26,397 crore.

Both ACC and Ambuja wilted under selling pressure following Holcim's restructuring move involving them.

"No material benefits likely, as both the companies continue to operate separately. We expect the deal to have neutral impact on fundamentals of both the companies and expect the stock to trade range bound in short-term," said Vivek Mahajan, Head of Research, Aditya Birla Money.

Holcim on Thursday said it will merge holding firm Holcim India with its unit Ambuja Cements in a cash and share deal to restructure India operations in a two-step process.

Besides, as part of the process, Holcim India's over 50 per cent stake in ACC will go to Ambuja.

Holcim's stake in Ambuja will rise to 61.39 per cent, from a little over 50 per cent after merger of Holcim India with Ambuja.

Ambuja Cements would merge Holcim India through cash and share transactions. Ambuja will first acquire a 24 per cent stake in HIPL for Rs 3,500 crore, followed by stock merger between HIPL and Ambuja.

"As part of the merger, Holcim will receive 58.4 crore new equity shares of Ambuja resulting in an increase of its ownership in Ambuja from 50.55 per cent to 61.39 per cent," Holcim said in a statement yesterday.

At present, Holcim has a controlling stake in both ACC and Ambuja. The Swiss major directly owns 40.79 per cent stake in Ambuja and another 9.76 per cent through Holcim India (HIPL). Holcim has 0.29 per cent in ACC directly and 50.01 per cent through HIPL.

Post these transactions, Holcim will have 61.39 per cent stake in Ambuja and 0.29 per cent stake in ACC directly.

Ambuja will have 50.01 per cent stake in ACC.

Online real estate business likely to grow: Experts

With a rising number of property portals entering the market, the online real estate business is expected to improve gradually as these websites bring transparency by providing high quality information about projects, believe industry experts.

Property portals are increasingly becoming a tool for research on buying, selling and leasing residential or commercial properties in many parts of the country, as the amount of information listed on these sites is increasing.

"By increasing the quality and quantity of information available to end-users, we attempt to bring in greater transparency to the entire gamut of buying/selling properties. It is our constant endeavour to increase the amount of information listed about a particular property and to avoid spam or incorrect listings," Magicbricks.Com business head Sudhir Pai said.

According to experts tracking the realty sector, sites such as Magicbricks.Com, 99acres.Com, Makaan.Com, IndiaProperty.Com and CommonFloor.Com are fast becoming the choice of consumers looking for renting a property, as well as for developers.

"The online real estate market is yet to reach an inflection point as seen in the travel or e-commerce sector. However, with the penetration of internet more and more consumers in the urban areas have started using this medium as the first point of search for all their real estate needs," HomeShikari.Com chief executive P Sunder said.

Currently, the size of the property portal market is around Rs 250 crore going by the topline of some of the listed portals in the country.

This market is expected to grow at a CAGR of 50-100 percent in the coming years, mainly on the back of increased focus on this medium of communication by buyers as well as developers. This model also helps decision-making faster for buyers.

"The internet and consequently the evolution of e-mail, the company website and the onset of property portals has transformed communication between the developer and potential customer radically and for the better.

"It has lead to the democratisation of information in the real estate space and evolved as a significant communication tool with the customer. Besides, it is highly cost-effective," Poddar Developers managing director Rohit Poddar said.

Omkar Realtors and Developers director Devang Varma, however, said that though such portals bring transparency, they work best for small ticket transactions only.

"Marketing property through web platform helps in reaching out to a large size of consumers who are keen on instant product information.

"Internet has evolved as one of the crucial platforms in sharing information to clients. For engaging your audiences, it is an extremely transparent channel. But these work best in low size transactions between Rs 10 lakh an Rs 80 lakh," he said.

In the relatively high ticket size property, this channel becomes rather ineffective, Varma claimed. 

Hit formula

A new company compares fresh film scripts with those of released movies, looking for clues to box-office success.

Forget zombies. The data crunchers are invading Hollywood. The same kind of numbers analysis that has reshaped areas like politics and online marketing is increasingly being used by the entertainment industry. 

Netflix tells customers what to rent based on algorithms that analyse previous selections, Pandora does the same with music, and studios have started using Facebook "likes" and online trailer views to mould advertising and even films. 

Now, the slicing and dicing is seeping into one of the last corners of Hollywood where creativity and old-fashioned instinct still hold sway: the screenplay. 

A chain-smoking former statistics professor named Vinny Bruzzese - "the reigning mad scientist of Hollywood", in the words of one studio customer - has started to aggressively pitch a service he calls script evaluation. For as much as $20, 000 per script, Bruzzese and a team of analysts compare the story structure and genre of a draft script with those of released movies, looking for clues to box-office success. His company, Worldwide Motion Picture Group, also digs into an extensive database of focus group results for similar films and surveys 1, 500 potential moviegoers. What do you like? What should be changed? 

"Demons in horror movies can target people or be summoned, " Bruzzese said in a gravelly voice, by way of example. "If it's a targeting demon, you are likely to have much higher opening-weekend sales than if it's summoned. So get rid of that Ouija Board scene. " 

Bowling scenes tend to pop up in films that fizzle, Bruzzese, 39, continued. Therefore it is statistically unwise to include one in your script. "A cursed superhero never sells as well as a guardian superhero, " one like Superman who acts as a protector, he added. 

His recommendations, delivered in a 20- to 30-page report, might range from minor tightening to substantial rewrites: more people would relate to this character if she had a sympathetic sidekick, for instance. 

Script "doctors", as Hollywood refers to writing consultants, have long worked quietly on movie assembly lines. But many top screenwriters - the kind who attain exalted status in the industry, even if they remain largely unknown to the multiplex masses - reject Bruzzese's statistical intrusion into their craft. 

"This is my worst nightmare, " said Ol Parker, a writer whose film credits include The Best Exotic Marigold Hotel. "It's the enemy of creativity, nothing more than an attempt to mimic that which has worked before. It can only result in an increasingly bland homogenisation, a pell-mell rush for the middle of the road. " 

Parker drew a breath. "Look, I'd take a suggestion from my grandmother if I thought it would improve a film I was writing, " he said. "But this feels like the studio would listen to my grandmother before me, and that is terrifying. " 

But a lot of producers, studio executives and major film financiers disagree. Already they have quietly hired Bruzzese's company to analyse about 100 scripts, including an early treatment for Oz The Great And Powerful, which has taken in $484. 8 million worldwide. 

Bruzzese, who is one of a very few if not the only entrepreneur to use this form of script analysis, is plotting to take it to Broadway and television now that he has traction in movies. 

"It takes a lot of the risk out of what I do, " said Scott Steindorff, a producer who used Bruzzese to evaluate the script for The Lincoln Lawyer, a hit 2011 crime drama. "Everyone is going to be doing this soon. " 

Net closes on tech giants use of loopholes to avoid taxes

Western governments are set to target a range of tax loopholes used by technology giants, including Apple, Amazon, as part of an international drive to tackle corporate tax avoidance, says a draft action plan seen by Reuters.

The Organisation for Economic Co-operation and Development, which advises its mainly rich nation members on economic and tax policies, has been charged by the G20 group of countries with formulating measures to stop big companies shifting profits into tax havens.

Corporate tax avoidance has become a hot political issue following public outrage over revelations in the past year that companies such as Apple and Google had used structures US and European politicians said were designed to minimise the amount of taxes paid.

The OECD is now due to present an "action plan" highlighting broad areas where changes will be discussed to a G20 meeting later in July. A preliminary draft of the plan, dated May 27, seen by Reuters, shows the organisation has already identified a number of specific profit shifting schemes.

"Domestic and international tax rules should be modified in order to more closely align the allocation of income with the economic activity that generates that income," the draft said, echoing comments from politicians in the United States and Europe in the past year.

Business lobby groups have questioned whether companies do engage in activities to shift profits to units in tax havens and whether there is a need for rule changes. But as governments struggle with large deficits following the financial crisis, lawmakers have said enough is enough.

The draft plan aims for OECD members and non-OECD G20 members to agree on specific changes to international tax rules in one to two years - fast by the standards of international tax diplomacy. Among the areas the draft said the OECD would seek to address are situations where companies avoid creating a taxable residence in a market where they have major activities.

British lawmakers have accused Google of using certain arrangements to avoid creating a tax residence in the United Kingdom.

Its low tax bill is a result of channelling revenues through Ireland, from where most revenue is sent to Bermuda, with next to taxes being paid anywhere in the chain. The action plan said the OECD would also examine the avoidance of tax residence, or permanent establishment "through the use of commissionaire arrangements" - a mechanism used by companies including Dell to avoid reporting revenues in markets where they have major sales.

Also up for possible revision are long-standing "specific activity exemptions" which have been used by Amazon to enable it operate major retail businesses in countries like Britain and Germany without creating tax residences for these businesses.

The OECD draft also said it would target arrangements where treaties designed to avoid double taxation of corporate profits are abused through the use of "dual resident entities" to ensure no taxation whatsoever is paid.

A US Senate Committee in May said Apple had created companies which were registered in Ireland and managed from the United States, and thereby qualified as being tax resident nowhere, enabling the company to shelter billions of dollars income from tax.

Kerala IT park on expansion drive

The Technopark IT campus here has finished work on two new blocks at a cost of RS.300 crore, an official said Saturday.

"We already have a few existing clients who have approached us for space for their expansion and also some new clients who want to set up their units with us. Very shortly, we will fix the rates for the new blocks," M. Vasudevan, business development manager of Technopark, told IANS.

With this, the total built up space in the campus has touched six million sq feet.

Currently, the campus is home to 245 IT firms, which employ more than 35,000 professionals.

"We have another 90 acres of land and that will be developed in the third phase. Work for that will be over once we fill up the latest blocks. The current rate here is Rs.28 per sq.ft," he added