Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 3 points at the opening bell. The market may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month September 2013 series to October 2013 series. The September 2013 F&O contracts expire tomorrow, 26 September 2013.
TCS announced after market hours on Tuesday, 24 September 2013, that the company, Saudi Aramco and GE launched the first all-female business process services center in Riyadh, Kingdom of Saudi Arabia. The center will be staffed by Saudi females, with TCS and GE owning 76% and 24% equity in the new venture, which will initially serve Saudi Aramco and GE as anchor clients. The new business process services center will serve as a building block to localize the business process outsourcing (BP0) industry in the Kingdom. The three partners will work together with the intention of scaling up the new venture to create up to 3,000 jobs for Saudi professional females. GE will create up to 1,000 employment opportunities for this initiative.
PSU OMCs will be in focus after the Minister of Petoleum & Natural Gas Dr. M. Veerappa Moily on Tuesday, 24 September 2013, warned that India needs to do more to conserve fuel or face tougher choices such as steep price increase or even quantitative restrictions. He said that the bulk of India's fuel consumption is in the transport sector. Consumers in the transport sector, agriculture sector as well as domestic consumers can adopt simple but effective conservation tips so as to reduce consumption of these products, he said. The oil ministry will be launching a nationwide campaign to generate awareness amongst the consumers for conserving petroleum products, with special focus on the transport sector. The total funds allocated for this campaign is over Rs 45 crore, to be shared by 6 Oil PSUs and the PCRA (Petroleum Conservation Research Association) budget. The objective will be to motivate the consumers in cities and towns to minimize their fuel bills, thereby helping the nation in reducing oil imports.
Dr. Moily said that PCRA has formulated benchmarking norms for LPG stoves, and diesel pumps, in consultation with Bureau of Energy Efficiency (BEE) and other stakeholders. This programme will facilitate availability of more fuel efficient appliances to the consumers, thereby reducing consumption of LPG and Diesel, he said.
PSU OMCs are marketing performance enhanced petrol and diesel. Some special additives are mixed in these fuels which enhance fuel efficiency, reduce maintenance cost and reduce pollution. However, these fuels are more costly due to higher statutory duties. The oil ministry will take up the issue with the finance ministry so that the duty structure is rationalized which will promote their mass consumption, Dr. Moily said.
He also said that the oil ministry has requested the Urban Development Minister to introduce "Free Cycle Scheme" in select cities for saving fuel and offered funding support from oil sector companies.
At present the state transport undertakings (STUs) are purchasing diesel at market driven prices without any subsidy. The oil ministry has received representation from various states on this issue. PSU OMCs have also reported that the dual pricing mechanism is not working since STU bus fleets are taking fuel from retail outlets causing hindrance in the smooth functioning of ROs and in the process wasting fuel. The oil ministry will consider allowing STUs to purchase diesel at the subsidized price in view of the need to encourage public transport but this would be subject to their active cooperation in the fuel conservation campaign, Dr. Moily said.
Coal India and power generation firms will be in focus as the Union Cabinet on Tuesday approved the methodology for auctioning coal blocks, enabling the government to allot coal mining licences through competitive bidding for the first time. The Cabinet Committee on Economic Affairs (CCEA) approved the production-linked payment on rupee per tonne basis, plus a basic upfront payment of 10 per cent of the intrinsic value of the coal block. The intrinsic value of coal block will be calculated on the basis of net present value of the block arrived through Discounted Cash Flow (DCF) method.
The DCF method relates the value of an asset to the present value of expected future cash flows of the asset. It is based on the principle that for any initial investment an investor will assess future cash flows from that entity to provide a minimum return. To help benchmark the selling price of coal, the international freight-on-board price from the public indices like Argus/Platts will be used to calculate the mine mouth price. As a buffer against short-term volatility, the average sale price will be calculated by taking prices of the last five years.
For the power sector, the CCEA directed providing 90% discount on the intrinsic value for tariff-based bidding, which will help in rationalising the electricity tariff. To ensure early operationalisation of blocks, there would be an agreement between the coal ministry and the bidder to perform an agreed minimum work programmes at all stages. There would be development stage obligations in terms of milestones to be achieved such as getting mining lease, obtaining environment or forest clearances, etc. The bidder will have to give performance guarantee during the developmental stage. The successful bidder will get two years for exploration and five years for block development.
The new auction blueprint allows relinquishment of a block without penalty, provided the bidder has carried out minimum work programme. The environment ministry will review the details of the coal blocks before they are up for auction. However, final approval will be subject to the statutory clearances under the law.
ONGC and Oil India will be in focus as the Cabinet Committee on Economic Affairs (CCEA) has approved shale gas and oil exploration programme to boost domestic output. In the first phase, ONGC and Oil India (OIL) have been permitted to explore for and produce shale oil and gas from onland blocks that were allotted on a nomination basis before advent of the New Exploration Licensing Policy in 1999.
This policy will allow national oil companies to carry out exploration and exploitation of unconventional hydrocarbon resources particularly shale gas and oil in their already awarded onland Petroleum Exploration License/Petroleum Mining Lease acreages under the nomination regime, an official statement said. The government will offer shale oil and gas blocks to other companies through an auction planned after such a policy is taken to the Cabinet for approval in next few weeks.
After fluctuating between gains and losses, key benchmark indices managed to end slightly higher on Tuesday, 24 September 2013 as gains in European stocks supported domestic bourses. The S&P BSE Sensex rose 19.25 points or 0.10% to settle at 19,920.21 on that day, its highest closing level since 20 September 2013.
Foreign institutional investors (FIIs) sold shares worth a net Rs 21.09 crore on Tuesday, 24 September 2013, as per provisional data from the stock exchanges.
Most Asian stocks fell for a second day on Wednesday after US consumer confidence slumped in September to a four-month low. Key benchmark indices in Indonesia, Japan, Singapore, Taiwan and South Korea were off 0.08% to 1.07%. Key benchmark indices in China and Hong Kong rose by 0.28% to 0.3%.
US stocks ended volatile trading session mostly lower on Tuesday, as investors watched a Washington budget debate as the deadline for funding the government looms. Investors are anxious amid a fierce bipartisan battle in Congress over funding the government for the fiscal year that begins on October 1.
The Conference Board's index of U.S. consumer confidence slumped in September to a four-month low and a separate report showed a gauge of manufacturing in the region covered by the Federal Reserve Bank of Richmond shrank in September. The Case-Shiller report on US home prices showed prices rose in July, but at a slower pace.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus.
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