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/

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

Xiaomi, Foxconn to set up two more units in India

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Chinese smartphone maker Xiaomi today said it is looking to set up two more manufacturing facilities in India through its Taiwanese contract manufacturer Foxconn Technology Group.

Manu Jain, Xiaomi’s India Chief, said they are in talks with various state governments for finalising the land and other issues for the plants.

In August last year, Xiaomi, together with Foxconn, started assembling phones locally in Chittoor district of Andhra Pradesh.

“We have not finalised the locations for the facility yet. We are talking to multiple governments to see where we should be setting up (the plants). The factories are owned and operated by Foxconn, but dedicatedly (make production) for us. It is not a joint venture. We have some sort of financial arrangement between us,” Jain said.

Jain said the company may also launch air purifiers in India before the beginning of winter season.

“We think that it is a category which is about to take off. We are trying to bring that this year. The perfect time to launch is before winter, because that is when fog combines with smoke and becomes smog,” he said.

Xiaomi, which presently registers 90 per cent of its sales from online channel in India, is planning to double offline presence over the next few months.

Xiaomi recently launched Redmi 3S and Redmi 3S Prime in the country priced at Rs 6,999 and Rs 8,999, respectively. The phones will be initially available at Mi.com and Flipkart. The handset maker sells over one million phones a quarter in the country.

Source: http://www.newindianexpress.com/business/news/Xiaomi-Foxconn-to-set-up-two-more-units-in-India/2016/08/13/article3576806.ece

Forex reserves hit life-time high at $365.49 bn

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Country’s foreign exchange reserves rose by USD 2.81 billion to reach a life-time high of USD 365.49 billion in the week to July 29, helped by rise in foreign currency assets, the Reserve Bank said today.

In the previous week, the reserves had dropped by USD 664 million to USD 362.69 billion.

Foreign currency assets (FCAs), a major component of the overall reserves, rose USD 2.79 billion to USD 341.04 billion in the reporting week, RBI data showed.

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.

Gold reserves remained unchanged at USD 20.58 billion.

The country’s special drawing rights with International Monetary Fund increased by USD 8.5 million to USD 1.48 billion while the reserve position rose by USD 13.6 million to USD 2.39 billion, RBI said.

Source: http://www.financialexpress.com/industry/banking-finance/forex-reserves-hit-life-time-high-at-365-49-bn/339688/

FDI inflows rise 7% to $10.55 bn in Q1

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Foreign direct investment (FDI) inflows grew 7 per cent to $10.55 billion during the first quarter against $9.88 billion in January-March 2015.

According to the Department of Industrial Policy and Promotion (DIPP) data, the sectors, which attracted maximum FDI during the period, include computer hardware and software, services, telecommunications, power, pharmaceuticals and trading business.

In terms of countries, India received maximum overseas inflows from the US, Singapore, Mauritius, Japan and the Netherlands.

An official said with the government further liberalising foreign investment policies for services sector in the Budget, more inflows would come.

The government has recently relaxed FDI norms in about eight sectors, including defence, civil aviation, food processing, pharmaceuticals and private security agencies.

Foreign investment is considered crucial for India, which needs around $1 trillion for overhauling infrastructure sector such as ports, airports and highways to boost growth.

A strong inflow of foreign investments will help improve the country’s balance of payments situation and strengthen the rupee value against other global currencies, especially the US dollar.

 

Source: http://www.thehindubusinessline.com/economy/fdi-inflows-rise-7-to-1055-bn-in-q1/article8916909.ece

Cairn India to invest in existing projects

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Cairn India, the petroleum exploration arm of London-listed Vedanta Resources, plans to continue investing in its existing projects to enhance domestic hydrocarbon production despite tough operating conditions and uncertain economic environment mainly because of strong demand outlook for the commodities.

Based on the International Energy Agency’s World Energy Outlook, by the year 2040, 91% of India’s demand for oil and 49% demand for gas would be met by imports. This high dependence would entail significant cost to the economy, it said.

“We will continue to invest in our existing assets to increase production and maximize economic recovery. I remain confident that your company will play a pivotal role in India’s quest for energy security,” said Cairn India’s FY16 annual report quoting chairman Navin Agarwal.

The key enablers for Cairn India’s growth would be strength in ‘execution’, technology along with a strong balance sheet, he added.

Cairn India’s Rajasthan block has significant national importance as it has considerably helped reduce country’s crude oil imports.

The company operates over 27% of domestic crude oil production. During the year, Cairn India’s operations helped reduce India’s import bill by over Rs 21,000 crore and its gross contribution to the government exchequer was over Rs 10,000 crore.

Cairn India’s success, over the years, has been reinforced by innovative application of technology. This has enabled early adoption of technology including enhanced oil recovery in the Rajasthan field.

One of the world’s largest polymer flood projects at Mangala, continued to yield positive results and contributed an average of 14,000 barrels of oil equivalent per day, during FY2016, said the report.

During the year, amid low oil price environment, Cairn India has focussed on optimising costs, building talent and capabilities from within, and keeping employees focussed on goals and priorities of the organisation, said the report. This enabled the company to generate free cash flow over $637 million, it said.

Despite steep drop in crude oil prices, Cairn India adhered to its stated dividend policy with a pay-out amounts to 31.6% of the company’s annual consolidated normalized net profit, informed Agarwal.

Regarding merger of the oil company with Vedanta, Agarwal said Cairn India continues to work towards completion of merger which would generate value for the shareholders and de-risk the company. Upon the merger, Cairn India will get access to Vedanta’s tier-one metal and mining assets, which are well-invested, low cost and have a long life.

On Thursday, Cairn India reported a 28 per cent fall in its June quarter net profit at Rs 360 crore against Rs 501 crore in the corresponding period a year earlier. Revenues dipped to Rs 1,885 crore from Rs 2,627 crore due to slump in crude oil prices.

Source: http://www.business-standard.com/article/companies/cairn-india-to-invest-in-existing-projects-116072100828_1.html

Alternative Investment Funds coming to India

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Markets regulator SEBI is learnt to be in process of creating a new category of Alternative Investment Funds(AIFs) to encourage long-term funds to use the AIF route to invest in the listed space.

 

Sources privy to the development said the Securities and Exchange Board of India (SEBI) will reclassify the existing category III into two groups – one comprising long-term funds like pension funds and the other consisting of hedge funds and other arbitrage funds who look to invest on a short-term basis.

 

Further, SEBI is also expected to consult the government in providing a ‘pass through’ status to the new category of AIF on par with Category I and Category II AIFs. According to legal experts, this categorisation would help the long-term overseas funds to receive a favourable tax treatment in the AIF space as currently they are taxed on par with arbitrage funds.

 

As per the current tax regulations, any investments made in listed companies which are held for more than 12 months are termed long-term investments, while others are called short-term investments. Capital gains tax is applicable only for short-term investments and investors needn’t pay any capital gains tax in case of long-term holding.

 

However, if a fund invests in the listed space through the AIF route, irrespective of the nature of holding, the investor would be taxed at uniform slab applicable for category III AIFs.

 

“Current SEBI AIF regulations are like one size fits all. Category III AIFs comprise several types of short-term and long-term funds and the purpose of each of them is different. However, the tax they are paying is the same. Long-term funds would rather take the direct route or would invest via P-notes instead of AIFs,” said a lawyer.

 

These measures are a part of efforts made by SEBI and union government to promote AIFs. During the union budget 2015, the government had provided pass-through status for Category I and Category II AIFs. Last November, the government had allowed foreign funds to invest in AIFs through the direct route.

 

In the last two years, inflows into AIFs have witnessed a significant increase. According to a SEBI data, cumulative funds raised via the AIFs as on March 31, 2016 was `22,691.18 crore — a fourfold increase compared to `5,847.5 in Q2FY15.

 

According to Jay Gandhi, Partner at Shardul Amarchand Mangaldas, the SEBI AIF regulations have found great traction in the market in a relatively short period of time. “The AIF regulations have permitted investment managers great flexibility in structuring various kind of fund structures targeted at specific segments of the investor community,” Gandhi said.

Source: http://www.financialexpress.com/markets/alternative-investment-funds-coming-india-heres-need-know/314881/