Stock market
This week the stock market rallied and benchmark indices ended at the highest levels for the calendar year. The Sensex touched a high of 26,100 and a low of 25,424.
Indian equity indices ended the week on a flattish note as global headwinds were at play. Indices lost ground in afternoon trade as ICICI Bank reported a sharp drop in fourth quarter earnings.
Indian Economy: Growth on a sound footing
The Economic and Social Survey of Asia and the Pacific-2016 is a comprehensive annual review of economic and social development in Asia and the Pacific brought out by the United Nations.
According to the report, the Indian economy is likely to maintain its growth at 7.6% in 2016 and 7.8% in 2017, led by high urban household spending, steady employment and relatively low inflation. The Indian economy is estimated to have grown at 7.3% in 2014 and 7.6% in 2015.
MNI India Business Sentiment Indicator low
The MNI India Business Sentiment Survey for April showed that business confidence fell for the second straight month, albeit marginally, as firms’ financial position deteriorated.
The MNI India Business Sentiment Indicator, which measures sentiment among BSE-listed companies, confidence among businesses fell to 62.4 in April from 62.7 in March. Confidence was down 2.3% compared with the same month a year ago.
The MNI India Business Sentiment acts as a guide of current conditions and expectations for the Indian economy. It is designed to track and predict Indian economic conditions and allow investors, economists, and companies to identify economic trends.
The EPF tussle
The finance ministry approved a lower EPF rate of 8.70%, from 8.80%. A lower interest rate would allow the EPFO to keep surplus of over Rs 1,000 crore. An interest rate of 8.80% would lower the reserves to Rs. 673 crore.
Firstpost noted that the decision to lower the EPF rate is good economies (but bad politics) since the overall lending rates in the economy can come down only if the savings rate come down.
Union Labour Minister Bandaru Dattatreya continues to justify his decision to declare an 8.8% return on EPF savings saying it cannot be compared with PPF or other small savings schemes.
SEBI to look at redemption norms
According to an article in Mint, the regulator – Securities and Exchange Board of India, in an effort to enable retail investors to freely withdraw their money from mutual fund schemes, plans to ease the norms on the redemption limits imposed by asset management companies, or AMCs, typically during times of crisis.
Following the redemption crisis in two schemes of JP Morgan Asset Management India Pvt. Ltd in September, SEBI wants to ensure that investors do not suffer during such a crisis and are able to withdraw their investments, fully or partially, when they want to.
SEBI issues clearances to commodity brokers
The Hindu reported that SEBI has started issuing the first set of registrations for commodity brokers. While official data shows that 144 entities have been registered as brokers in the commodity derivatives segment as on March 31, SEBI officials say more than 400 entities have been granted registration to function as commodity brokers till date.
In September last year, the Forward Markets Commission, or FMC, was amalgamated with capital markets watchdog SEBI, marking the first major case of two regulators being merged. Post Post the merger, commodity brokers were given three months’ to submit their applications for SEBI registrations.
SEBI defers disclosure requirements
In Should investors know their fund manager's salary? and Should fund managers invest in their own funds? we discussed the circular from SEBI dated March 18.
Business Standard now reports that SEBI has deferred the deadline for ‘enhancing scheme related to disclosures’ for mutual fund houses. In a letter to the industry body Association of Mutual Funds in India, or AMFI, the deadline has been pushed back by a month.
