Thought for the day
"To see and listen to the wicked is
already the beginning of wickedness."
-
Confucius (Chinese, 551-479BC)
Word for the day
Cacophonous (adj)
Having a harsh or discordant sound.
(Source: Dictionary.com)
Malice towards none
Can Rahul Gandhi sustain his new found aggression till 2019?
Most of the issues he raising are likely to fizzle out in next one year
itself.
The earnings' show so far
Asian Paints' 4Q results provide further evidence of slowdown in
consumer demand. The company could sustain profitability due to lower raw
material prices, which has again been the trend across the consumer segment.
A primary analysis of the results and consequent corporate
commentaries brings out the following broad trends:
(a) The consumption
demand has slowed down considerably, and likely to remain subdued for another
quarter, primarily due to poor show in rural income. However, most managements
have guided for gradual pickup from 2HFY16.
(b) Both the consumer
durable and FMCG companies have managed the cost well and improved margins on
normalized basis. None of the management so far has guided any material
deterioration in the demand and price conditions going forward.
(c) Exporters (IT and
Pharma) have suffered due to poor demand conditions in some key markets like
Europe, and Latin America. The cross currency headwinds have hit most companies.
However, unlike 2008-09, most companies have managed their currency exposures
well and no material forex losses have been reported.
(d) Industrial
segment has expectedly suffered due to poor investment demand. However, most
large companies have been able to meet the subdued expectations. The stress in
visible in mid and small cap, especially highly indebted companies.
(e) Reality sector
companies have reported mixed results so far. The well managed south based
companies have reported decent numbers and have guided decent growth going
forward.
(f) Financial
companies and banks have reported huge rise in delinquencies in restructured
assets. The credit growth has been on the lower side. However, the cost
efficiencies have improved across the board. Operation numbers are as per
expectations or better.
SC clears doubts on obligation to buy power from green sources
In a precedent-setting
judgement pronounced last week, the Supreme Court of India has laid down that
owning a captive power plant does not absolve a company of its obligation to
purchase part of its power consumption from green sources, such as wind and
solar.
The judgement implies that
the various companies who have not been buying green power by taking shelter
under a legal ambivalence, now face enforcement of their obligations.
The case pertains to an
appeal of Vendanta group’s Hindustan Zinc Ltd against a 2012 verdict of the
Rajasthan High Court, which said that the State electricity regulatory
commission was right in imposing the ‘renewable purchase obligation’ on the
company, even though the company runs its own captive power plants, of about
475 MW capacity.
“The renewable purchase obligation imposed
upon captive power plants and open consumers through the impugned regulation
cannot in any manner be said to be restrictive or violative of the fundamental
rights conferred on the appellants…..we do not find any reason to interfere
with the impugned judgement (of the Rajasthan High Court),” the apex Court’s
order said.
Impact of the order
The Supreme Court’s order
brings clarity to the point as to whether or not companies that have captive
power plants are covered by the law that mandates green power purchase.
Some other companies had
impleaded themselves in the case, filing counter affidavit with the Supreme
Court — Ultratech Cements, Mangalam Cements, Binani Cements, Trinetra Cements,
Shree Cement, Rajasthan Textile Mills Association, DCM Shriram Consolidated
Ltd, JK Tyre Industries and Lucid Coloids Ltd.
“All other interlocutory
applications for impleadment/ intervention/ stay/ directions are disposed off,”
the order says.
As such, the order will have
far reaching implications on India Inc. Vishal Pandya, Founder of REConnect, a
consultancy that operates in the area of renewable energy certificates trading,
observes that several High Courts have stayed the imposition of RPO on captive
power producers.
“With the Supreme Court,
these stays will become redundant,” Pandya said.
“The order will provide
support to the State electricity regulators to impose RPO regulations more
forcefully and enforce them effectively,” he said. (Business
Line)
Oil prices rise on Middle East fighting;
OPEC output in focus
Oil prices edged up on Monday
following fighting in Iraq and Yemen, but Iranian comments that OPEC was
unlikely to cut output as well as signs of strengthening U.S. production capped
gains.
Front-month Brent futures
were up 12 cents at $66.93 a barrel by 0556 GMT. U.S. crude rose 26 cents to
$59.95.
Prices were supported by
concerns that conflict in Iraq and Yemen could disrupt supplies after Islamic
State militants said they had taken control of the Iraqi city of Ramadi in a
big blow to the government.
In Yemen, a Saudi-led
coalition resumed air strikes against Houthi militia in Aden, a port-city on
the shores of key Middle East oil routes.
Despite these Middle East
conflicts, analysts said oil markets remained oversupplied, and that the glut
could worsen if U.S.-production picked up and output by producer-club OPEC
remained strong.
"Oil prices appear to
have outpaced the improvement in underlying fundamentals," Barclays said
on Monday.
Iran's Deputy Oil Minister
Rokneddin Javadi told Reuters on Monday that OPEC was unlikely to cut output at
its next meeting in June, and that Iran hoped its crude exports would return to
pre-sanctions levels of 2.5 million barrels per day (bpd) within three months once
a deal to lift an oil embargo is finalised.
A deal over Iran's disputed
nuclear programme between Tehran and world powers could see sanctions on Iran
lifted if a more permanent pact is finalised in June. Because of the sanctions,
Iranian oil exports have fallen to about 1 million bpd since 2012, mainly to
Asia.
In the United States, Goldman
Sachs said that despite an expected dip in output in the second half of this
year, production would increase by 205,000 bpd in 2016. (Reuters)
...Gold too climbs to fresh three-month high
Gold jumped for a fifth
straight session on Monday, climbing to fresh three-month highs, as soft U.S.
data bolstered hopes the Federal Reserve would not hike interest rates soon.
The metal has been supported
in recent days by sluggish U.S. economic data, which has hurt the dollar and
altered expectations regarding the Fed's monetary policy.
The dollar languished around
a three-month low against the euro on Monday, after weak data on U.S.
industrial production and consumer sentiment.
The weak data bolstered views
the economy was not recovering strongly enough for the U.S. central bank to
raise rates from record lows. This has supported non-interest-paying bullion,
which would have seen demand decline with higher rates. (Reuters)
58% of Indian employers facing talent
crunch
Notwithstanding
the recovery in job market, 58 per cent of India employers are finding it
difficult to fill positions and there
is a significant talent shortage in accounting and finance sector, a survey
showed.
Globally, 38 per cent of
employers face talent shortage. In India, however, the number stood at 58 per
cent, ManpowerGroup's 10th annual Talent Shortage Survey said today.
Even though talent crunch
persists for Indian companies, they are better off than last year. In 2014, 64
per cent of employers said they faced difficulty in finding the right people.
"The demand index for IT
and accounting professionals have been on a continuous rise. Focus on
technology up-gradation and better financial access will drive the sectors
growth in the coming months," said A G Rao Managing Director of
ManpowerGroup India.
Employers in India are
finding it most difficult to fill jobs in accounting and finance, IT staff,
secretaries, receptionists, administrative assistants and office support.
The other jobs that are most
in demand in India this year include, teachers, engineers, communications
staff, sales manager, engineers, communications staff, sales manager,
executives, legal staff and researchers.
As per the survey, around 13
per cent of Indian employers said talent shortages are having a negative impact
on their ability to meet client needs.
However, few employers are
putting in place strategies to address the talent crunch problem, the survey
added. (ET)
For first time in 20 years, Indian
mobile phone sales drop
Mobile sales dropped 14.5% in
Q1 (January to March) 2015, on a quarter-to-quarter basis, compared to Q4
(October to December) 2014; from 62 million handsets in Q4 2014 to 53 million
handsets in Q1 2015.
The decline in smartphone
sales from quarter-to-quarter was 7.14%. Cheaper “feature” phones performed
worse, with an 18.3% sales decline over the same period.
FM seeks rate cut from RBI
Trivia
Each crisis that materially
disrupts social, physical, or economic life of people institutes some changes
of far reaching implications.
For example, a cardiac arrest
forces material changes in the life style of the person. The national emergency
imposed by Mrs. Gandhi changed the socio-political fabric of the Indian society
forever. The currency crisis of late 1990s changed the economic structure of
countries like Thailand and South Korea.
The global financial crisis
that started 2007-08 is also shaping many changes of far reaching impact in
global markets.
While the non-conventional
monetary policies used to diffuse the crises are still being tested and yet to
find recognition in the economic text books, the new stringent norms for
banking, cross border investments, money laundering, and leash on fiscal
profligacy of many countries are some changes of far reaching implications that
are already coming into effect.
One serious change that is
increasingly becoming evident is the global aid for poverty alleviation due to
fiscal constraints of the donor nations. The stress and non-compliance in the
aid receiving jurisdictions is rising and may continue to rise in coming years.
Africa that emerged as favored investment destination a decade ago must be "under
review" at investment banks.
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