FPIs infuses $1 billion in capital markets in September

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Foreign investors have pumped in nearly Rs 6,800 crore (USD 1 billion) into the country’s capital markets so far this month, driven by global and domestic factors.

The latest infusion comes on top of a whopping inflow of Rs 25,904 in the preceding two months (July-August). Prior to that, foreign portfolio investors (FPIs) had pulled out a total of Rs 4,373 crore from the capital markets (equity and debt) in June and July.

Experts attributed the latest flurry in inflow to factors including good and widespread monsoon, better corporate earnings, sound progress on rollout progress of the Goods and Services Tax (GST) and positive data coming from the US economy.

Sentiments also rode high after domestic passenger vehicle sales grew for the 14th straight month in August, they added.

According to depositors’ data, net investment by FPIs stood at Rs 3,178 crore in equities during September 1-9, while the same for debt markets was at Rs 3,617 crore, taking the total inflow to Rs 6,795 crore (USD 1.02 billion).

So far this year, FPIs have invested Rs 44,028 crore in equities while withdrawing Rs 3,730 crore from the debt market. This resulted in a net flow of Rs 40,297 crore.

Source: http://www.financialexpress.com/economy/fpis-infuses-1-billion-in-capital-markets-in-september/373416/

Kaya acquires “beneficial interest” in 2 UAE skincare firms

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Skincare firm Kaya Ltd today said it has acquired majority “beneficial interest” in UAE’s Minal Medical Centre and Minal Specialized Clinic Dermatology for an undisclosed sum.

“Kaya Middle East, DMCC, a foreign subsidiary of Kaya Ltd has entered into an agreement dated September 8, 2016 for acquiring 75 per cent beneficial interest in Minal Medical Centre, Dubai and Minal Specialized Clinic Dermatology, Sharjah.

“However, the agreement will become effective on fulfilling of certain conditions precedent and obtaining the requisite statutory approval/s, which will take approximately 4 months,” the company said in a BSE filing.

It further said: “The above said entities carry out business of skincare, body and hair services and reported revenue of Arab Emirate Dirham (AED) 11.17 million (around Rs 20.26 crore), as per the audited financial statements for the year ended December 31, 2015.”

Kaya Ltd said: “This acquisition will further strengthen company’s network of clinics in the UAE region and add new set of customers to our existing base in the region. With its special expertise in body contouring, it would help Kaya in leveraging across the region.”

With this acquisition, the total network of Kaya’s clinics in the Middle East region would increase to 23.

Source: http://www.financialexpress.com/companies/kaya-acquires-beneficial-interest-in-2-uae-skincare-firms/372083/

British Columbia first foreign govt to issue masala bond

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Canada’s Province of British Columbia has become the first foreign government entity to issue a masala bond by floating Rs 500 crore rupee denominated overseas bonds on the London Stock Exchange.

The bond raised $75 million (about Rs 500 crore) with 6.62 per cent semi-annual yield, securing high-quality investor support from across Europe, Asia and America. It is a AAA rated bond by the three major rating agencies and will mature on January 9, 2020, The Province of British Columbia said in a statement on Friday.

Masala Bonds are rupee-denominated bonds issued to overseas buyers, aimed at investments into India’s infra needs.

The proceeds of the bond were immediately reinvested in HDFC’s second masala bond listing on the exchange.

India’s mortgage lender Housing Development Finance Corporation (HDFC) had on Friday said The Province of British Columbia has subscribed the entire of its second tranche of Rs 500 crore rupee denominated overseas bonds.

“This transaction is a landmark deal as it opens up a new market for sovereign issuers and investors,” HDFC Ltd Chairman Deepak Parekh said in a statement on Friday.

“The pioneering simultaneous transactions on the LSE confirm RBI Governor Rajan’s recent statement that Masala bond issuances reflect ‘a coming of age of Indian debt’,” said Nikhil Rathi, CEO of London Stock Exchange.

The latest issuances bring the total number of masala bonds listed on the LSE to 33, raising the equivalent to about $3.86 billion for Indian infrastructure.

British Columbia Minister of Finance Michael de Jong said: “The international reputation and platform provided by the LSE sets the stage for more Masala bond issuances from around the world and will be most welcome for sustaining the Masala bond market’s success.”

HDFC Ltd, one of India’s leading banking and financial services companies, had listed the world’s first masala bond by an Indian corporate in July.

Source: http://www.business-standard.com/article/markets/british-columbia-first-foreign-govt-to-issue-masala-bond-116090200652_1.html

Second instalment of FDI reforms cleared

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The Union Cabinet today approved the second instalment FDI of reforms, which the Centre has announced in June covering diverse sectors including Defence, food-processing, single brand retail and broadcasting.

The ex-post-facto approval for the reforms in the Foreign Direct Investment regime was given by the Cabinet in its meeting on Wednesday.

Under the amended rules, 100 per cent FDI with government approval is permitted for trading, including through e-commerce, in respect of food products manufactured and/or produced in India.

In Defence, foreign investment beyond 49 per cent is permitted through the approval route wherever it is likely to result in access to modern technology or for other reasons to be recorded. The state-of-the-art technology condition has been dropped.

In the broadcasting sector, the amendments allow 100 per cent FDI via the automatic route, up from 49 per cent.

To encourage investments in pharmaceuticals, the amendments allow 74 per cent FDI under the automatic route in the brownfield (existing projects) segment. Earlier, all FDI in brownfield projects had to come in through the government approval route.

Similarly, in the civil aviation sector, 100 per cent FDI under the automatic route has been allowed in brownfield projects as against 49 per cent earlier.

Local sourcing norms have been relaxed up to three years, with government approval for entities undertaking single brand retail trading of products having state-of-the-art and cutting edge technology. Thereafter, sourcing norms would be applicable.

Source: http://www.thehindubusinessline.com/todays-paper/tp-news/second-instalment-of-fdi-reforms-cleared/article9057070.ece

FPI equity buys in India touch $5.4 bn this year

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Foreign portfolio investors (FPIs) have bought equities worth $5.4 billion in the Indian markets in 2016 so far, according to data obtained from Bloomberg. This makes India the third biggest destination for FPIs after Taiwan and South Korea which have seen inflows of $13.6 billion and $8.1 billion, respectively, reports fe Bureau in Mumbai.

 

Thailand ranks fourth with foreign inflows of $ 3 billion followed by Indonesia which received foreign investment worth $ 2.8 billion. In 2016 so far, the Sensex gained 7.44% and Nifty50 gained 8.73%.

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Source:

http://www.financialexpress.com/markets/indian-markets/fpi-equity-buys-in-india-touch-5-4-bn-this-year/349325/

Commerce ministry eases rules to promote exports

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The commerce ministry has relaxed certain norms to promote outbound shipments and manufactured products from export-oriented units (EoUs), software technology parks of India (STPIs) and electronic hardware technology parks (EHTPs).

The norm of mandatory warehousing requirement for EoUs and software and electronic hardware technology parks has been done away with.

The Directorate General of Foreign Trade (DGFT) has also eased rules for the existing EHTP and STP units to avail tax exemptions in the case of conversion or merger of EoU and vice versa.

In a notification, the department said an EoU, which is into agriculture, aquaculture, horticulture and poultry, might be permitted to remove specified goods in connection with its activities for use “outside the premises of the unit”.

Earlier, it was allowed only for outside the bonded area. DGFT has said this in a notification, amending the foreign trade policy (2015-20).

The EoU scheme, which was introduced in December 1980, had allowed manufacturing units in export processing zones to enjoy 100 per cent tax exemption on profits from overseas sale and duty-free import of raw material.

As the scheme had a sunset clause, the tax benefits were stopped from March 2010. This scheme was utilised by small and medium enterprises to set up their units for the purpose of exports.

Later, a committee had suggested steps, including tax incentives, to revive these units.

The decision takes on significance as the country’s exports, after rising for the first time in 19 months in June, shrank again in July. It contracted 6.84 per cent due to the decline in shipments of engineering goods and petroleum products.

Source: http://www.business-standard.com/article/economy-policy/commerce-min-eases-rules-to-promote-exports-116081700050_1.html

Forex reserves at record high of $ 365.74 billion

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Continuing the rising trend, forex reserves increased by USD 253.6 million to touch record high of USD 365.749 billion in the week to August 5, the Reserve Bank said today.

The reserves increased despite decline in foreign currency assets (FCAs), a major component of the overall reserves.

In the previous week, the reserves had jumped by a healthy USD 2.81 billion to USD 365.49 billion.

FCAs declined by USD 765.4 million to USD 340.278 billion.

FCAs, expressed in dollar terms, include the effect of appreciation/depreciation of non-US currencies such as euro, pound and yen held in the reserves.

After remaining steady for many weeks, gold reserves shot up by USD 1.008 billion to USD 21.584 billion 20.58 billion.

The country’s special drawing rights with International Monetary Fund rose by USD 4.1 million to USD 1.488 billion, while the reserve position soared by USD 6.7 million to USD 2.397 billion.

Source : http://economictimes.indiatimes.com/articleshow/53672836.cms