FPIs pump over Rs 19,700 crore in November, highest in eight months

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0
After taking a break from buying into Indian equities in August and September, FPIs bought equities in abundance in November.

Foreign investors pumped over Rs 19,700 crore into the country’s stock markets in November, the highest in eight months, mainly due to government’s plan to recapitalise PSU banks and surge in India’s ranking in the World Bank’s ease of doing business.

In addition, such investors put in Rs 530 crore in the debt markets during the period under review.

According to depositories data, foreign portfolio investors (FPIs) invested a net amount of Rs 19,728 crore in equities last month.

This is the highest net investment by FPIs since March, when they had poured in Rs 30,906 crore in the equity market.It has been a tremendous journey for the Indian equity markets in 2017. After taking a break from buying into Indian equities in August and September, FPIs bought equities in abundance in November.

The strong inflow could be largely attributed to the government’s decision to recapitalise public-sector banks, which is expected to enhance lending and propel economic growth, said Morningstar India’s senior analyst manager (research) Himanshu Srivastava.

“This is particularly seen as a positive step after the questions have been raised from various quarters on the government’s ability to effectively implement economic reforms. Further, the slow pace of economic growth was also believed to be due to rising non performing assets (NPAs) problem in public sector banks, hence this decision provided a much-needed impetus to FPIs to again look back at Indian equity space,” he added.

Finance Minister Arun Jaitley had announced the PSU bank recapitalisation plan of Rs 2.11 trillion, out of which Rs 1.35 trillion will come from recapitalisation bonds, and the rest from markets and budgetary support.

Additionally, the news about India faring well in the World Bank’s Ease of Business index and a jump in core sector growth also turned the tide in India’s favour, Srivastava said.

India gained 30 places in the World Bank’s ease of doing business index for 2018 to 100th among 190 nations.

“These (bank’s recapitalisation plan and world bank’s ranking) and positive developments in the recent times provided a much-needed breather to FPIs who were concerned about the short-term impact of demonetisation and goods and services tax (GST) on the domestic economy and sluggish pace of economic recovery,” he added.

Yet another positive piece of news has come from Moody’s Investor Services, which upgraded its India rating by a notch to ‘Baa2’ from ‘Baa3’ with a stable outlook, citing improved economic growth prospects driven by the government reforms.
Overall, FPIs have invested Rs 53,800 crore in equities so far in 2017 and another Rs 1.46 lakh crore in debt markets.

CBDT signs first ever two Indian APAs with Netherlands in Nov-2017

by | posted in: Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies, India & International - Corporate updates | 0
CBDT signs first ever two Indian APAs with Netherlands in Nov-2017. The total number of APAs entered into by the CBDT has gone up to 186

CBDT signs first ever two Indian APAs with Netherlands in Nov-2017. The total number of APAs entered into by the CBDT has gone up to 186

 

 

 

Press Information Bureau
Government of India
Ministry of Finance
01-December-2017 11:53 IST
Central Board of Direct Taxes (CBDT) signs two Indian Advance Pricing Agreements (APAs) in November, 2017

The Central Board of Direct Taxes (CBDT) has entered into 2 Bilateral Advance Pricing Agreements (APAs) during the month of November, 2017. These Agreements are the first ever Bilateral APAs with The Netherlands. With the signing of these Agreements, the total number of APAs entered into by the CBDT has gone up to 186. This includes 171 Unilateral APAs and 15 Bilateral APAs.

These two APAs pertain to the Electronics and Technology sectors of the economy. The international transactions covered in these agreements include Distribution, Provision of Marketing Support Services, Provision of Business Support Services, etc.

The APA provisions were introduced in the Income-tax Act in 2012 and the “Rollback” provisions were introduced in 2014. The APA Scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance. Since its inception, the APA Scheme has been well-accepted by taxpayers.

The progress of the APA Scheme strengthens the Government’s resolve of fostering a non-adversarial tax regime. The Indian APA programme has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner.

*****
DSM/SBS/KA 

Source: http://abcaus.in/income-tax/cbdt-signs-first-ever-two-indian-apas-with-netherlands-in-nov-2017.html

M&M opens $230-m manufacturing facility in Detroit

by | posted in: Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0
Will roll out in early 2018 off-highway vehicle Roxor

Automotive major Mahindra & Mahindra broke fresh ground as an Indian multinational when it inaugurated its factory in the original Land of Automobile Manufacture, Detroit.

As Executive Chairman, Anand Mahindra, and the Lt. Governor of Michigan, Brian Calley, cut the ribbon to declare open the plant of Mahindra Automotive North America (MANA), they heralded the first investment in 25 years in a new OEM operation in Detroit.

That this is a major breakthrough for the city, which was badly hit by the financial and housing crisis, was evident from the official turnout at the inauguration. Two members of Congress, the Michigan Lt. Governor and a State Department official were all not only in attendance but also spoke evocatively about the investment.

M&M has invested $230 million and created 250 jobs in the plant, which will have a capacity to produce 10,000 units of Roxor, an off-highway vehicle.

MANA will invest another $600 million in the facility by 2020, adding a further 400 jobs.

The Roxor, designed and developed by MANA, was not unveiled but Richard P Haas, President and CEO, MANA, said that it would be launched in the market early 2018.

Speaking at the inauguration, Anand Mahindra struck a personal note on how he first came to the US in 1973 as a freshman student and how this was his way of giving back to the country for all that he had learnt as a student, which he said he had applied in his business.

Answering a question at a media interaction on whether the next step is to enter the US utility vehicles market Mahindra said that it is “not imminent, though it remains an aspiration”.

“Americans are familiar with Korean brands and the logical step is for Korean group company Ssangyong to come in with its models. But it is for the Ssangyong board to take the call,” he said.

Richard Haas added: “We’re watching how people react to the brand and are preparing for different scenarios. Over the next year or two we’ll learn, understand and move forward.”

Mahindra emphasised that MANA was not playing the volumes game saying that sometimes scarcity works better and that the days of requiring enormous scale to succeed are over.

He explained the rationale for the business as bringing together the engineering expertise of Detroit and a start-up culture.

“We’ve created an incubator here — Richard (Haas) has come with rich start-up experience from Tesla and the operation is based in Detroit to leverage conventional manufacturing skills. MANA will be an asset-light operation with a start-up mentality.”

Source: The Hindu Business Line

CBDT signs 7 more unilateral APAs with taxpayers

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0
The seven APAs signed over the last month pertain to sectors like FMCG, semi-conductor, information technology, travel and leisure, office furniture and engineering.

The Central Board of Direct Taxes (CBDT) has signed seven more advance pricing agreements (APAs) with Indian taxpayers as it looks to reduce litigation by providing certainty in transfer pricing.

The seven APAs signed over the last month pertain to sectors like FMCG, semi-conductor, information technology, travel and leisure, office furniture and engineering.

“The Central Board of Direct Taxes (CBDT) has entered into seven more Advance Pricing Agreements (APAs) during October 2017. All these agreements are unilateral,” the CBDT said in a statement.

With the signing of these agreements, the total number of APAs entered into by the CBDT has gone up to 184, which includes 171 unilateral and 13 bilateral APAs.

In 2017-18, a total of 32 APAs (2 bilateral and 30 unilateral) have been signed till date.

The APA scheme was introduced in the Income-Tax Act in 2012 and the ‘Rollback’ provision in 2014.

The scheme aims to provide certainty to taxpayers in the domain of transfer pricing by specifying methods of pricing and setting the prices of international transactions in advance.

According to the statement, the progress of the APA scheme strengthens the government’s resolve of fostering a non-adversarial tax regime. The Indian APA programme has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner.

 

– ZeeNews

India should prioritise public banking sector reforms: IMF

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0
Country's growth is expected to accelerate in the medium-term as temporary disruptions due to demonetization and GST.
Country’s growth is expected to accelerate in the medium-term as temporary disruptions due to demonetization and GST.

India must prioritise implementation of public banking sector structural reforms, enhance the efficiency of labour and product markets, and modernise agriculture sector to accelerate its growth, the IMF said Friday.

The country’s growth is expected to accelerate in the medium-term as temporary disruptions due to demonetisation and the Goods and Services Tax (GST) fade, the International Monetary Fund said in its Asia and Pacific Regional Economic Outlook Update.

The economic growth slowed in India in recent quarters due to the temporary disruptions from the currency exchange initiative demonetisation that took place in November 2016, and the recent rollout of the GST, it said.

 

The GST is a landmark tax reform that should help unify the domestic market and encourage businesses to move from the informal to the formal sector, the IMF noted.

Inflation has been low compared with the mid-point target in recent months, driven by lower food prices, allowing the central bank to cut its policy rate in August, it added.

“Growth in 2017 was revised downward to reflect the recent slowdown, but is expected to accelerate in the medium term as these temporary disruptions fade,” it said.

In India, growth was revised down to 6.7 per cent in FY2017 and to 7.4 per cent in FY2018.

“Growth will be underpinned by private consumption, which has benefited from low food and energy prices, as well as civil service allowance increases,” IMF said.

Headline inflation is projected to stay close to the midpoint of the target band (4 per cent 2 per cent) in FY2017, while moving to the upper half of the target band in the medium term as food prices recover, it said.

The current account deficit should remain modest, financed by robust foreign direct investment inflows, it noted.

According to the outlook, in India, priorities should be strengthening public banks loss-absorbing buffers, implementing further public banking sector structural reforms, and enhancing public banks debt recovery mechanisms.

“Reform efforts should aim at tackling supply bottlenecks, enhancing the efficiency of labour and product markets, and modernising the agricultural sector,” the IMF said, adding that labour market reforms should be a priority to facilitate greater and higher-quality job creation.

 

Source: Deccan Chronicle

India growing pretty robustly: World Bank President Jim Kim

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0
Jim Kim said Japan, Europe and the US along with India were growing and there was a levelling-out in developing countries.

India has been growing “pretty robustly”, World Bank President Jim Yong Kim has said as he predicted a strong global growth this year.

Speaking at the Bloomberg Global Business Forum meeting here on Wednesday, Kim also called for more cooperation among the multilateral system, private sector and the governments to take advantage of the current win-win situation.

“That dormant capital will earn a higher return, where developing countries will have access to much more capital for the infrastructure needs, even for investing in health and education, investing in resilience to climate change and other factors,” Kim said.

He said Japan, Europe and the US along with India were growing and there was a levelling-out in developing countries.

“A country like India is growing, has been growing pretty robustly. We think, Japan is growing. Europe is growing in a much more healthy way. The United States continues to grow. There is a levelling-out in developing countries,” he said, adding that the growth will be more robust this year.

In June, the World Bank predicted a 7.2 per cent growth rate for India this year against 6.8 per cent growth in 2016. India remains the fastest growing major economy in the world, the World Bank officials had said.

“It used to be that commodity importers were doing much better than commodity exporters. But that’s levelling out. So the growth is relatively more evenly distributed,” Kim said.

He said in terms of indebtedness, the bank was watching very carefully the debt-to-GDP ratios of every single country.

“In Africa, the debt-to-GDP ratios are still very manageable…We would not be moving toward providing more financing for countries if we thought there was a real problem with over indebtedness in the countries. Because we follow this very closely, along with the IMF,” he said.

“We think that there are tremendous opportunities for investment. But sometimes, purely based on perception, investors in sovereign wealth funds – I’ve heard them say, Africa is risky. Right, as if Africa was a single country.

Africa’s not a single country and the risk profiles from country to country have enormous differences,” he said.

Source: Economic Times

 

FDI likely to rise further after GST: Moody’s

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0
FDI in India grew by 18% during 2016 to touch $46 billion, data released by the Department of Industrial Policy and Promotion showed.

India is likely see increased foreign direct investment (FDI) inflows on the back of reforms such as introduction of the goods and services tax and the bankruptcy code, international ratings agency Moody’s said in a report on Monday.

“Combined with reforms such as the introduction of a goods and services tax, which lowers the cost and complexity of doing business, and a simplified and clarified bankruptcy code, FDI is likely to rise further,” the agency said in its report on how structural reforms by Asia Pacific sovereigns could become more effective from stronger global demand.

In India, Moody’s said, the government has raised ceilings for authorised FDI in a number of sectors. “FDI has already increased substantially, albeit from a low base,” the report said.FDI in India grew by 18% during 2016 to touch $46 billion, data released by the Department of Industrial Policy and Promotion showed.

The Narendra Modi government has liberalised FDI framework for a number of sectors including insurance, defence and civil aviation and also taken steps towards the ease of doing business. Moody’s said the positive economic impact of India and Indonesia’s measures to attract higher levels of FDI, combined with steps to improve business conditions, are likely to be more apparent in a stronger global macroeconomic environment. The agency has maintained India’s sovereign rating at Baa3 positive.

“India and Indonesia’s governments have both implemented reforms over the past few years to improve the overall business climate and, more specifically, to attract FDI,” Moody’s said, adding that a robust global environment is likely to amplify the positive impact of the reforms on the two countries’ attractiveness to foreign investors.

Moody’s Investors Service said the strengthening in global demand since the end of last year has buoyed Asia Pacific’s trade-reliant economies, but added that faster export growth has yet to feed into a sustainable acceleration in output growth.