MCX to advise FTIL to cut stake in bourse to 2%

Mumbai: The board of Multi Commodity Exchange (MCX) on Thursday has decided to write to Financial Technologies (FTIL), its main promoter, to reduce the latter's stake in the commodity bourse to 2% or even less within the next one month to comply with an order by Forward Markets Commission (FMC), that found FTIL failing to meet the 'fit & proper' criteria to be a promoter of an exchange. The decision by the MCX board was taken after the Bombay high court last week did not put a stay on the FMC directive of December 17. 

    In a communication to BSE, MCX said its board of directors has decided to advise FTIL "to implement FMC order dated December 17 by reducing its stake in the company (MCX) from 26% to 2% or below, within a period of one month." The commodity bourse also withdrew the representation of Miten Mehta on MCX board in view of the FMC letter. Mehta was designated as FTIL's nominee on MCX board after the group's main promoter, Jignesh Shah resigned from MCX board last month. 
    Earlier this month, FMC had found that FTIL, along with Shah and two other former executives at the group, Joseph Massey and Shreekant Javalgekar, not 'fit & proper' to hold more than 2% stake in MCX for their role in the Rs 5,600-crore NSEL scam. The order also implies that Shah, Massey and Javalgekar can neither run nor be on the board of any commodities exchange. 
    In its order, FMC said several shortcomings were noticed in the functioning of NSEL, which included problems with warehousing, risk management, corporate governance and related party transactions. 
    The regulator also said that because of the huge profit of about Rs 125 crore earned by NSEL during fiscal 2013, the value of the shares of Shah in FTIL shot up manifold, which gave him the benefit of a spectacular market capitalization of his investments in FTIL running into thousands of crores of rupees.In an unrelated development, a group of NSEL investors have written to the Economic Offences Wing of city police, pointing out the role of brokers in the NSEL scam.

Price rise has hit school fees the most since 2004 Up 433% In 9 Years Of UPA Rule

 The fact that inflation has been an area of concern for some years now is well known, but exactly what goods and services have seen prices rise most sharply? School fees, a CSO study shows, have seen the most dramatic spike over the tenure of the UPA, up 433% between March 2004 and March 2013. 

    The chart topper is quite ironic given the much-talked about Right to Education law enacted by the UPA. The CSO study tracks rural retail prices and shows school fees were Rs 48.7 per student on average in March 2004 and had risen to Rs 259.6 by March 2013. 
    Mango prices recorded the second highest increase, up 320% from about Rs 16 per kg to just over Rs 67 per kg on average over this nine-year period. Oranges (275%), black pepper (232%), beef (229%), and buffalo meat (228%) were the others at the top of the list. 
    Among more widely consumed items, mutton (210%), salt (182%) and moong dal unwashed (190%) have been others that have really burnt holes in pockets. Cigarettes too have on average become dearer by 188%. These are, of course, rural retail prices, so the actual prices and increases that the average urban Indian faces are likely to be different, in most cases higher. However, the broad trend is clearly unlikely to be very different between rural and urban areas. Rail fares down 7% in 9 yrs of UPA O n the positive side, some goods and services have seen prices stagnate or even decline over these nine years. Among them are postcards, inland letters and local railway fares. 
    The minimum rail fare for an adult has reduced from Rs 8.8 to Rs 8.1 in these last nine years, areduction of 7%. There has been no hike in inland letter cards, which cost Rs 2.50 in March 2004 and were priced at the same level in March 2013. Postcards too have seen their price remaining unchanged at 50 paise each. 
    The average price of a transistor radio was Rs 421 then and has risen to 481 – a modest rise of just under 10% in nine years.

Gold premiums hit another peak on scarce supplies Local prices were USD 150-160 an ounce higher than London prices, compared with USD 125 earlier this week, traders said. Read more at: http://www.moneycontrol.com/news/commodities/gold-premiums-hit-another-peakscarce-supplies_1002968.html?utm_source=executive-briefing

ndian gold premiums hit another record on Thursday, driven by lower supplies to meet firm demand for weddings, which will continue till May. Local prices were USD 150-160 an ounce higher than London prices, compared with USD 125 earlier this week, traders said. "Only Scotia Bank, State Bank of India  and some trading agencies like MMTC etc are importing and most of it is going to exporters. There is no other option for domestic jewellers but to pay high premiums," said Harshad Ajmera, proprietor of JJ Gold House, a wholesaler in the eastern city of Kolkata. Most of the wedding demand is being met through recycling old jewellery or through smuggling, traders said. Gold is often gifted to brides in India, which is vying with China for the world's number one consumer. India, struggling with a record high trade deficit, has made it difficult and expensive to get supplies of gold by imposing a record 10 percent import duty on the metal, and stipulating that 20 percent of imports should be used for exports. "Imports have reduced to 25 percent of the normal average imports... domestic jewellers are facing the brunt of this in the wedding season," said an official with a private bank importing bullion. The government would wait till the first quarter of the next fiscal year and may not relax rules now after implementing a policy which has faced so much opposition, the official added. Imports plunged to 23.5 tonnes in October from a peak of 162 tonnes in May. Demand in the rest of Asia picked up after prices fell below USD 1,220 an ounce, dealers said. Premiums in Hong Kong and Singapore remained stable this week.

Re gains 29p to hit 5-week high of 61.77

Mumbai: The rupee rose to a five-week high against the dollar as the foreign exchange markets moved in line with sentiment in the equity markets after exit polls forecast a strong performance by the BJP. 

    The domestic currency touched a high of 61.52 against the dollar before closing at 61.77, up 29 paise from its previous close of 62.06 against the dollar. 
    What is also boosting the rupee is the $34 billion mobilized by RBI by swapping dollars raised by banks through non-resident deposits and ECBs. The dollar mop-up by RBI is expected to increase the foreign exchange reserves by $18-19 billion, according to Yes Bank.

CAD shrinks to $5bn on gold curbs Deficit At 1.2% Of GDP In Q2 RBI Advances Release Of Data To Reassure Mkts

Mumbai: The country's current account deficit shrunk to $5.2 billion (1.2% of gross domestic product) for the quarter ended September 2013, which is nearly 76% less than the deficit of $21.8 billion for the quarter ended June 2013.      The reduction in CAD is attributed to curbs on gold imports coupled with a smart recovery in exports following the depreciation of the rupee.      The current account deficit – which reflects the shortfall of export earning over import income – has dropped because merchandise exports have risen by nearly 10% over the first quarter of FY13 even as exports shrunk 8%.      The Reserve Bank of India (RBI) on Monday advanced its release of trade data, which was due toward the monthend, ostensibly to reassure markets as it withdrew most of the support measures introduced in the previous quarter to bolster the rupee. The rupee rose to a near twoweek high on Monday before settling down at 62.32 against the greenback.      The measures that were withdrawn include a facility whereby RBI lent dollars to oil marketing companies, which was discontinued last week.      "Given the backdrop of broad stability returning to the forex market, on the basis of an ongoing review of the demand conditions in the market, OMCs have been allowed to source dollars even beyond their normal daily requirements," RBI said in a statement. The central bank also discontinued a facility where it subsidized banks for mobilizing foreign deposits and converting them into rupees. RBI said that it raised $34 billion by exchanging dollars mobilized by banks – through NRI deposits and ECBs – for rupees through a swap facility. To encourage banks raise dollars through NRI deposits and foreign borrowings, RBI had subsidized the cost of converting these deposits into dollars and hedging currency risk.      The announcement came on a day when Morgan Stanley raised its 2013 and 2014 GDP growth estimates to 4.7% and 5.1%, respectively, from 4.4% and 4.6% based on improving macro numbers and reduced chances of the US Fed withdrawing its stimulus package.      While the trade deficit showed a marked improvement, the overall balance of payments (which factors in capital flows in addition to trade flows) showed a worsening of the deficit. The BoP deficit stood at $10.4 billion of the second quarter compared to a $200 million deficit in the same period last year. The BoP deficit, despite the improvement in trade numbers, was on account of foreign institutional investors pulling out money from the country on fears of US Fed tapering.