REUTERS - The RBI is close to finalising the guidelines for new bank licences, Duvvuri Subarao, the governor of the Reserve Bank of India said on Tuesday.
The central bank has responded to the government's recommendations, and is awaiting New Delhi's response on the points raised by the RBI, Subbarao said.
Earlier in the day, the central bank cut the key repo rate and banks' cash reserve ratio by 25 basis points each.
(Reporting by Neha Dasgupta)
Also read: RBI repo, CRR rate cuts decoded; what does it mean for you
Dasgupta also added that market share is another positive story. They have launched some new products last summer and have done extremely well over the last three quarters. They have grown the market share by almost two percentage points. So, overall their market position has strengthened.
Below is the edited transcript of his interview to CNBC-TV18
Q: What do you think about the rate cuts? Do you think 25 basis points cut that we are likely to see again from the bankers will help improve demand materially? How much do you think easy monthly installment (EMI) should go down for consumer good demand to pick up?
A: From a sentiment point of view this is the only silver lining in an otherwise dark cloud. Therefore, we will have to see how this translates into getting consumers back to buy goods that they deferred.
Having said that the throughput for at least home appliances availing loans etc, you used the word EMI is actually low. The number of financial institutions who lend have come down to barely two. So, there isn't a lot of financing that happens. There is a bit of EMI that happens when one converts credit card purchases into installment payments.
For Whirpool the throughput with financing is not very significant. Going back to the overall sentiment, if this helps to reduce some of the outflows that people are paying through housing loans etc and that translates into a bit of consumer confidence to go back and buy appliances.
Q: What has been the anecdotal evidence so far? Have you been able to improve upon your pricing? Has demand held up? Do you see signs of a revival?
A: Pricing is now no longer an event. It is a continuous affair. For several quarters now we have been seeing pressure on pricing. Whether it is commodity, inflation or it is currency related. So, pricing is very dynamic now. Prices have moved up. Year ago prices were probably 10 percent or 15 percent lower than what it is today. That indeed has impacted the off take because consumers are in any case battling with inflation on several fronts.
Our industry thrives when there is disposable income. This quarter our result was severely impacted. For our industry and not just us because Diwali sales did not happen the way it usually happens. Consumers chose to spend their money differently if they spent at all. Certainly they did not spend in home appliances. Therefore our top-line took a bit of beating.
Q: A quick word with regards to your earning. Can you just give us a sense in terms of the market share that the company is clocking at this point in time in terms of volumes? How exactly are the margins going to pan out going forward?
A: While this quarter might have disappointed a number of our shareholders at a cumulative level, we are growing on our top-line by about seven percent and net by almost 30 percent. This quarter was so reliant on Diwali. If Diwali off take is not as buoyant as it ought to be then it puts pressure on your top-line. Then there is a cascading effect all the way down.
This is also a time when traders tend to build up stock in the expectation that there will be sales. There is also a lot of promotional spend that takes place. So, net realisations do tend to be slightly lower in this quarter than the others.
This time because consumers did not shop the way they usually do, the remaining months of the quarter the industry actually ran down inventories. So, it put a lot of pressure on sales which is why our top-line is flat.
Coming to market share again that is another positive story. We launched some new products last summer and we have done extremely well over the last three quarters. So, we have grown our market share by almost two percentage points. So, overall our market position has strengthened.
To some extent net realisation is low. One also had continuous pressure on commodities. So, all of it could not be passed on through prices.
By Nandini Vaidyanathan
Much has been written about the typical mistakes entrepreneurs make. They have become part of entrepreneurial lore. I would like to discuss a use case which was as unusual as it was shocking.
Three fairly seasoned corporate professionals working in a large IT company decided to join hands with one of their customers to start a new company. The customer was a well-known industrial group who also promised to give a large volume of his group business to the new entity. The company was formed.
Whilst the three techpreneurs owned the majority stake, the industrial group owned 26 percent. All the documentation was handled by the industrial group and the techpreneurs never bothered to get them validated by their own legal contacts. They signed everywhere on the dotted line and in effect, wrote their epitaph.
They gave away 26 percent as equity without the industrial group bringing in capital to the table. The money that the group invested was treated as debt, repayable over a three-year period with market rate of interest and stringent penalty clauses for non-payment. There was no bank signatory from the techpreneurs' side, so the entire treasury management was under the investor's control. The team handling accounts, audit and statutory and legal compliance were men trusted by the investor. The investor promised a certain volume of business over a three-year period, but there was no 'what if' clause in the eventuality that the promised business was not forthcoming. And to cap it all, the techpreneurs signed an agreement which said that they could be terminated with a month's notice!
Checks and measures
Whilst the techpreneurs were experienced technology professionals, not one of them knew how to build an organization. In the early days, they left everything in the hands of accountants and focused only on bringing in the business. Since they came from large organizations, they had no clue to thinking and behaving like a startup. So they rented fancy offices, hired large teams and generally went to town in spending the money that they had access to, by way of debt. Whilst they had a good order pipeline, cash flow was an issue as they were all projects with long gestation from start to 'going live'. I also suspect there wasn't enough discipline in the founding team to make sure money was collected in time. So when the investment dried up the first casualty was interest and statutory payments!
The investor then decided to use strong arm tactics. Salaries of teams were held up. The techpreneurs had to plead every month to get the salaries released. Then the techpreneurs' salaries went unpaid and every expense was scrutinized. The board meetings became diktats from the investor. The techpreneurs suddenly found themselves in the midst of balancing between their unhappy teams and the unhappy investor and willy-nilly, customer focus was lost. The company ground to a standstill as disgruntled employees bad-mouthed it to the customers too. At this point, the investor sent a termination notice to the techpreneurs! There was little they could do as they had signed documents that permitted it! There are lots of obvious lessons to be learnt from this use case. But the biggest is: don't sign any document without getting it validated by experts on your side.
© Entrepreneur India December 2012
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Expect RBI to ease rates by 25bps tomorrow: StanChart Bank
"Looking ahead, we expect the RBI to cut by 75 bp by June, pause in 2H13 as inflation crosses 7.5 per cent on diesel price and power tariff hikes and cut 50 bp again in March 2014 quarter as inflation subsides," it added.
According to the American investment banking major, most of the investors are in "show me mode". They want to see rate cuts and Cabinet Committee on Investment speeding up project clearances, among other things.
Exporters body FIEO too is seeking a cut in the key policy rate.
"With inflation ebbing to levels of a 36 month low, anticipating a rate cut is only natural and a combination of repo and CRR cut of a quarter percentage point each may yield some results in terms of lowering interest rates by banks," FIEO President M Rafeeque Ahmed said.
Industry body ASSOCHAM has made a demand for a "big rate cut" of at least 100 basis points.
25bps rate cut will be non event for bond market: Nomura
"It is time, the RBI went in for a bold move and slashed the repo rate by at least 100 basis points. Only then the prolonged high interest rate cycle will be broken and the growth would get some breathing space for revival," the
chamber said in a statement.
Inflation based on wholesale prices declined to a three-year low of 7.18 per cent in December. However, retail inflation rose for the third successive month in December to 10.56 per cent.
Industrial output contracted by 0.1 per cent in November. The economy grew by 5.4 per cent in April-September this fiscal, as against 7.3 per cent in the same period of 2011-12. It is estimated that the year-end GDP would be 5.7 per cent, a 10-year low.
Mon, Jan 28, 2013 at 16:12
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Consolidated Securities appoints company secretary
Consolidated Securities has informed that Mr. Akash Gupta, Member of the Institute of Company Secretaries of India, has been appointed as the Company Secretary & Compliance Officer of the company with effect from January 01, 2013.
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Consolidated Securities appoints company secretary
Consolidated Securities has informed that Mr. Akash Gupta, Member of the Institute of Company Secretaries of India, has been appointed as the Company Secretary & Compliance Officer of the company with effect from January 01, 2013.
Read all announcements in Consolidated Se
From DJ EU Officials Spain Aid Cap Of 100 Bn Euros 'should Be Enough'
The latest earning numbers FIRST on CNBC-TV18
East leads with highest price increase in the range of Rs25-40/bag: Benefitted by better demand and reduced flow of material from Satna cluster due to unavailability of rakes, prices in Bihar rose by Rs35-40/bag till date over December end levels. Prices in Orissa rose by Rs35-40, primarily on the back of better discipline. Prices in Kolkata witnessed lesser increase of Rs20/bag.
Central UP garners majority of increase in Central region: Prices in Lucknow rose by Rs30-35/bag on the back of reduced supplies from Satna belt and restocking by stockists, despite slow secondary demand. On the other hand, price increase in MP and rest of the UP was limited to the extent of Rs10-15.
Prices pick up in all key markets of North: Punjab witnessed highest increase of Rs35-40/bag, primarily led by steeper cut during December relative to other states. Prices in Delhi and Haryana rose by Rs15/bag during the month. While, Rajasthan lagged rest of the states with a price increase of Rs10/bag on account of volatile demand, making tough for implementation of price increases.
Western region extends the lean patch: Wholesale prices in entire Maharashtra remained flat in the month due to weak demand across the sectors. Price increase in Gujarat restricted to Rs10-12 due to high prices and muted demand.
Weak AP hits discipline hard; rest of South sluggish: Prices in AP corrected by Rs7-10/bag during the month on the backdrop of overly tough demand conditions, fragmented discipline and excess supplies. Sentiments in so-far stable Bengaluru and Tamil Nadu markets turned negative due to dearth of new govt projects, poor order bookings and tight liquidity positions.
Valuation and Outlook: We strongly believe that current strength in prices don't reflect the true fundamentals. Weak secondary sales and reduced off-take in non-trade segment clearly substantiates the poor demand sentiments. We believe that over-stretched discipline, tough demand environment and increased supplies would make it increasingly difficult for the sector to meet the high expectation of the street. We continue to maintain Underweight rating on UTCEM, ACC and ACEM, given their expensive valuations. We continue to like Shree Cement , backed by strong earnings outlook and attractive valuations.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
By Khaled Yacoub Oweis
AMMAN (Reuters) - More than 20 people were killed in the Syrian city of Homs on Saturday, a doctor said, as fighting raged around a road junction on a supply line to government forces in the interior of the country.
The opposition accuses shabbiha militia loyal to President Bashar al-Assad of killing some 200 Sunni Muslim civilians in Homs in massacres over the last two weeks, but a Syrian ban on most independent media makes such reports difficult to verify.
In a video statement from a makeshift hospital in the city, Mohammad Mohammad, a doctor who has been treating the wounded underground for months, displayed the bodies of five people whose remains had been charred to unrecognisable bits.
"They are the Uzam family. The father, mother and three children - the shabbiha burnt them completely, as part of the annihilation the regime is bringing on the area of Jobar-Kfar Aaya," Mohammad said, referring to districts of Homs.
"We are here surrounded. We have more than 20 dead today. They have been documented by name." He said the victims had died in fighting, bombardment and summary executions.
At least 60,000 people have been killed in Syria's civil war. Mostly Sunni Homs, a commercial and agricultural hub 140 km (90 miles) north of Damascus, has been at the heart of the 22-month uprising against Assad.
Syrian authorities have not commented on the latest fighting in the city. In the past, official media have described army operations as designed to 'cleanse' Homs from what they described as terrorists.
'ETHNIC CLEANSING'
Speaking from Istanbul after visiting Homs, Mohammad Mroueh, a member of the Higher Leadership Council of the Syrian Revolution, told Reuters: "The rebels are holding their ground but the shabbiha are getting to the civilians.
"It's hard to describe what's happening in terms other than ethnic cleansing of Sunni districts in the way of Alawite supply lines," said Mroueh, who was in Homs earlier this week.
The Alawites, who follow an offshoot of Shi'ite Islam and comprise about 10 percent of the population, have dominated Syria's power structure and its security apparatus since the 1960s. Assad and most of the ruling elite are Alawites.
A highway that passes near Homs has been used to supply Alawite forces deployed on hilltops in Damascus from bases in the coastal cities of Tartous and Latakia, which have a sizeable Alawite population, according to opposition sources.
Sunnis fear that the city could become part of an Alawite enclave stretching to the coast, where major military bases are located, if Assad was forced to leave Damascus.
"The massacres are increasing and Bashar al-Assad has began to draw borders of this mini-state and associate the Alawites more with blood so that they have no other option but to join him," wrote opposition campaigner Fawaz Tello in an article published on All4Syria news website.
Syria's conflict has grown more sectarian, deepening the Sunni-Shi'ite divide in the Middle East which burst into the open when Shi'ites gained political ascendancy in Iraq following the 2003 U.S. led invasion that deposed Sunni dictator Saddam Hussein.
A statement by an insurgent group, the Syrian Revolution against Bashar al-Assad, said neighbourhoods of southern and western Homs were being hit with battlefield artillery and barrages from rocket launchers.
Activists in Homs said at least 120 civilians and 40 opposition fighters had been killed in the past week and that rebels from the nearby town of Qusair on the border with Lebanon were trying to relieve pressure on the western neighbourhoods.
The armed opposition has been weakened in the city after a drop in ammunition supplies in recent weeks and after Assad's forces tightened a siege on western areas, according to opposition sources.
A counter-offensive by rebels two days ago in the western sector pushed back Assad's forces slightly, but they continued to pound the area with artillery and from the air, the sources said.
(Editing by Mark Trevelyan)
MADRID (Reuters) - Under-fire Real Madrid coach Jose Mourinho again chose not to speak to the media as he celebrated his 50th birthday on Saturday but he did receive a ringing endorsement from one of the squad's youngest players, Raphael Varane.
Coverage of the Spanish champions was dominated this week by a report in Marca sports daily that said club captains Iker Casillas and Sergio Ramos had threatened to leave along with several team mates unless Mourinho was dismissed.
Real president Florentino Perez said the newspaper was lying and trying to destabilise the club but Marca have stuck by their story, the latest in a string of reports suggesting all is not well between Mourinho and some of his leading players.
The combative Portuguese has drawn criticism this season with his side 15 points behind La Liga leaders Barcelona and they host their arch rivals on Wednesday in the first leg of their King's Cup semi-final.
Elimination followed by defeat to Manchester United in their Champions League last 16 tie would almost certainly end Real's hopes of silverware this season and increase the pressure on Perez to replace Mourinho, lured at great expense from Inter Milan in 2010.
Varane, Real's 19-year-old French centre back, was sent out instead of Mourinho on Saturday to give the news conference previewing Sunday's La Liga game at home to Getafe and said the coach had the players' full support.
"We are all behind the coach, who is the best in the world," Varane told reporters.
"The media are being tough on him but he is doing a good job and all this is not necessary."
Varane added that the squad had given Mourinho, who has barely spoken to reporters since the turn of the year, a signed photograph taken during the wild celebrations after they sealed the La Liga title by beating Athletic Bilbao last season.
Real have a number of injury problems ahead of the Getafe match and Wednesday's Cup game, with Casillas sidelined for up to three months with a broken hand and Varane's fellow centre back Pepe still recovering from ankle surgery.
"Losing Iker could destabilise the team but I don't think it will change all that much," Varane said.
(Reporting by Iain Rogers, editing by Tom Pilcher)
SANTIAGO (Reuters) - Siemens wants to grow in Latin America and intends to maintain its investment pace in the dynamically-growing region, the CEO for South America, excluding Brazil, told Reuters on Saturday.
The German conglomerate had said on Wednesday it would stick with its focus on cost cuts to catch up with peers such as General Electric as a weak global economy saps demand for factory equipment.
Daniel Fernandez said mining, energy and infrastructure are the most interesting sectors in export-dependent Latin America, which has significant metal wealth, growing power needs and growing cities.
"Latin America is a very interesting market ... today it's more interesting than ever," Fernandez said on the sidelines of the Community of Latin American and Caribbean States (CELAC) and European Union (EU) business summit.
"We want to continue growing strongly in Chile and the other Latin American countries. We've already been growing strongly and we're going to maintain this rhythm with which we'll better our local presence."
Fernandez declined to give details of the company's investment plans. He added Siemens is not interested in selling assets in Latin America.
The engineering group makes products ranging from fast trains and gas turbines to hearing aids.
EU leaders took their hunt for economic growth to Latin America this weekend as the bloc tries to emerge from three years of crisis.
(Reporting by Alexadra Ulmer; Editing by Vicki Allen)
The proportion of those surveyed supporting the change in the law rose to 63 percent from 60 percent in early January and December.
Support for adoption rights for gay couples also rose by 3 percentage points, although the country remains divided on the issue, with 49 percent in favour, according to the international marketing firm.
The French government underlined its determination to press ahead with a reform bill earlier this month even after roughly half a million people marched through Paris on January 13 to show their opposition to the proposal.
"We have observed that the proportion of people in favour of marriage and adoption has risen three points, compared with our previous survey, done before the large demonstration," said Ifop pollster Jerome Fourquet. "Support for the plan is increasing - particularly on the Left."
Thousands marched in the French city of Lyon on Saturday in support of "marriage for all" ahead of a similar demonstration planned in Paris on Sunday.
The latest Ifop poll was based on the views of 1,026 people aged 18 or over and was carried out between January 22 and 24, Ifop said.
