A new year means a new beginning for many. The calendar year followed by the world indicates 1 January as the start of a new year. However, in a diverse country like India people follow different traditions each year.
For most Hindus, the New Year begins in the summer. However, in Gujarati and Marwari traditions, it starts in Diwali.
India’s stock markets are dominated by brokers belonging to these two communities. Hence, every year, Diwali assumes a special place for those in the stock market.
Here are few things to know about Muhurat trading:
· Stock exchanges would open for trading at 6 pm on 3 November 2013 for Muhurat trading. The session lasts for an hour and a half. Muhurat means an auspicious moment to start something new. This is a tradition for over 100 years on the Bombay Stock Exchange and the mostly Gujarati and Marwari stock broking community. The session marks the end of the traditional financial year and the beginning of the new one.
· People look at stock markets from a point of view of wealth creation. Stockbrokers execute token trades on behalf of their clients or their own account to mark the occasion. Stock exchanges and broker offices are decorated to seek blessings of Lakshmi, the goddess of wealth.
· Chopda or Sharda Puja is performed. ‘Chopda’ is an account book. On the New Year day, you close your previous year accounts and start writing your financial statements in a new book. However, since most stock brokers are corporatized, accounts are no longer maintained physically. They are in electronic format. Also, for most companies in the business, the financial year starts on 1 April.
· Typically, the trading activity on Muhurat trading is thin. Over the years, statistics from the Bombay Stock Exchange data (available since 1992) shows that the Sensex has ended in positive territory 7 out of 10 times. The average gain or loss is not more than one per cent. Transactions mostly have a sentimental value than any impact on the portfolio.This work is produced by Simplus Information Services Pvt Ltd. Customer engagement through content. Like this article? Click here for more articles from the same provider.
Sunday, 3 November 2013
Diwali brings cheer to markets in Braj Mandal
Agra/Mathura/Vrindavan, Nov 3 (IANS) Sri Krishna's land Braj, comprising Agra, Mathura, Vrindavan, Hathras and Aligarh districts, is on a new high this Diwali with markets flooded with gift packets and Chinese lights Sunday. The sweet shops are virtually swamped with demands for the large variety of sweets lining the sale-counters.
"The markets and the busy lanes are choked with people and vehicles. It's one massive traffic jam all over Agra," said advocate Rajvir Singh, grumbling after he had to return without purchasing anything from Raja ki Mandi market in Agra.
Even when there is no space for movement or parking, people are buying vehicles.
"God knows from where the money is coming and they all keep wailing about price rise and financial crunch," Rajvir Singh told IANS. Market reports in Agra said that in just two days before Diwali, sales of all products had crossed Rs.400 crore.
In Mathura, the main market from Dwarkadheesh Temple to Holi Gate is dazzling with lights and a striking range of consumer products are being attractively displayed to lure consumers.
Vrindavan is buzzing with intense emotional buildup as Sri Krishna's devotees not only from India but hordes of foreigners have been making a beeline to various religious sites associated with Sri Krishna folklore.
The Braj Chaurasi Kos Yatra, covering a distance of almost 200 km on foot around Mathura, with a record number of pilgrims this year, is on. The religious fervour in Goverdhan, the holy hill town, 25 km from Mathura, is at its peak with preparations for religious meal-ceremonies Annakoot and Chhappan Bhog in full swing.
District authorities in Mathura are particularly anxious after reports of a massive influx of pilgrims expected for the ritualistic Yamuna Snan on Yam Dwitiya Parva, two days after Diwali. Brothers and sisters jointly take a holy dip in the river to be free of the shackles of Yamraj whose sister is Yamuna.
Meanwhile, expecting a huge Diwali rush, the state-run roadways corporation has made additional arrangements for transportation, deploying hundreds of buses to ferry pilgrims between Agra, Mathura and Vrindavan on Diwali.
The market for jewellery, clothes and other consumer durables has picked up momentum after a dull start last week. Sweet and gift shops are working overtime.
This year there has been a great demand for home-made chocolates. A large number of women entrepreneurs have entered this field. The Agra jail's petha retail counter is also doing brisk business.
"One good reason for the upbeat market this time is that the festival falls in the first week when pockets are flush with salaries and additional incomes," explains Bankey Lal Maheswari of Sri Nath Textiles in Johri Bazar close to Agra Fort.
The tourist inflow is steady. "But the same day return (to Delhi) due to the Yamuna Expressway, has hit smaller hotels," says hotelier Sandeep Arora.
The Diwali momentum has also hit the smaller towns on the periphery.
"With rain gods smiling this year, the crops have been good and the prices of agricultural commodities have remained largely stable and profitable for the cultivators, which means more money in the kitty for Diwali purchases. Looks like everyone's going for new mobiles, electronic goods, even computers," says Shravan Kumar Singh, a social activist.
The only segment reporting dull business is real estate.
"Full page advertisements have been placed in local newspapers for flats and complexes from Vrindavan to Firozabad but the demand is just not there. All kinds of fancy schemes are latched to booking of flats but still buyers are hard to find," says real estate agent Vinod Kumar.
Himachal Pradesh to set up controlled atmosphere stores
Shimla, Nov 2 (IANS) The Himachal Pradesh government would soon set up controlled atmosphere stores to enable horticulturists earn more for their produce, Chief Minister Virbhadra Singh said Saturday.
Speaking at the closing ceremony of the 15th All India Volleyball and Kabbadi Championship at Kotkhai in Shimla district, he said the government was committed to the welfare of farmers and horticulturists.
"Despite bumper apple produce this year, the horticulturists could not reap the profits as desired," the chief minister said.
He said there was a need for strengthening the marketing network and adopt modern infrastructure.
"We are serious to take appropriate steps in this direction and would set up controlled atmosphere stores so that the produce may have longevity."
He said as the horticulturists sold majority of their produce in the markets of Delhi and other terminal markets in large quantity which resulted in surplus accumulation of apple in these markets, leading to low prices for their produce.
Singh said that besides heavy rains, the government had been successful in maintaining the roads in the apple belt especially the Theog-Hatkoti road.
He said that Theog-Hatkoti-Rohru road would be completed in two phases with financial assistance of the World Bank. The project would be completed in two years, he added.
Horticulture is a vital sector in the state's economy as it generates more than Rs.3,200 crore annual income.
Apple alone constitutes about 93 percent of the total fruit produce in the state.
Sensex scales new high on special Diwali trading
Mumbai, Nov 3 (IANS) The Indian equities markets key indices closed at record high in the special Diwali trading Sunday led by good buying support in auto, FMCG and oil and gas stocks.
The 30 scrip sensitive index S&P Sensex of the Bombay Stock Exchange (BSE), which opened at 21,278.08 points, ended the session at 21,239.36 points, up 0.20 percent or 42.55 points from its previous close at 21196.81 points.
This is the record closing high for the benchmark Sensex. The previous record high was 21196.81 points hit Friday.
The special session called Mahurat trading was organised to mark the beginning of Samvat year 2070, a new year according to Hindu calendar.
Nifty of the National Stock Exchange (NSE) also scaled a new closing high. Nifty ended the day 10.15 points higher at 6,317.35 points.
Chinese premier warns slowing growth raises job concerns
BEIJING (Reuters) - China's slowing growth poses a major challenge to job creation for the world's most populous nation and the country will need to achieve a "golden" balance between structural adjustment and growth, Premier Li Keqiang was quoted as saying on Sunday.
China's economy is set to grow at its slackest pace in 23 years in 2013, at 7.5 percent, as its export sales falter on fragile global demand.
The country's leaders have pledged deep economic reforms to shift away from an export-led economy to one more reliant on domestic consumption, while making it clear they will accept lower growth rates during the transformation. But Li said such a path would present challenges.
"China has already entered a new stage of development. To maintain a growth rate as rapid as in the past is not realistic, but development is the foundation to solving many problems," state media quoted Li as telling a recent meeting with business leaders.
"As a big country with 1.3 billion people, there is no certain pace of development that can cope with so many difficulties and problems, especially preserving jobs."
The premier added that China would need to find a "golden balancing point" between upgrading the economy and maintaining a reasonable growth rate to ensure further job creation.
China's leaders gather from November 9 to November 12 at a Communist Party plenum to discuss deepening reforms of the world's second largest economy.
Li told Chinese and foreign business leaders last week that China would further reform its government finances, financial markets and industry, among other areas.
(Reporting By Dominique Patton; Editing by Ron Popeski)
Sensex hits record high in Muhurat trading
MUMBAI (Reuters) - The BSE Sensex rose to a second consecutive record high in a special trading session on Sunday, led by gains in Indian Bank, Tata Motors and ONGC on expectations of better quarterly earnings, while strong foreign flows continued to boost sentiment.
Stock markets opened for a special 90-minute Muhurat session to mark the festival of Diwali, considered an auspicious time for Indians.
The Sensex has been propelled by foreign inflows of around $3.5 billion since the Federal Reserve unexpectedly delayed tapering of its monetary stimulus.
The index rose to a record high of 21,321.53, surpassing the previous all-time high set just on Friday. It closed up 0.2 percent.
Hindustan Petroleum Corporation Ltd and Indian Oil Corp rose 3-4 percent while banking stocks Corporation Bank , Dena Bank and Indian Bank rose 2.6-15 percent.
(Reporting by Swati Pandey; Editing by Robin Pomeroy)
Banks hope futuristic flagships can tempt new customers
By Lionel Laurent
VELIZY, France (Reuters) - Installation art, interactive walls and a robot doorman; the flagship branches of the world's top banks have come a long way from the iron grilles and potted plants of old.
To compete against online-only rivals and to attract a new generation of customers to branches, banks are installing sleek interiors and hi-tech gadgetry.
ATMs that read fingerprints, touch-screen desks to flick through your finances and videoconference units for expert advice are all on display at payments-technology firm Wincor Nixdorf's showroom in the Paris suburb of Velizy.
"Banks are investing a lot in their retail branches," said Steve Bousabata, head of Wincor's French banking services arm. "They want customers to come back."
The reason is clear: after years of relying on branches to drive retail revenue, European banks expect such networks to supply only 62 percent of sales by 2020 from today's average of 81 percent, according to Equinox Consulting.
Banks, especially those still nursing losses from the financial crisis, are under pressure to cut costs and are balancing the need to pare back branch networks by sprucing up select outlets.
But branches are still the first point of contact for many customers and are still the primary location for product sales like mortgages, new accounts and insurance, underlining the importance of upgrading them for a more tech-savvy generation.
The difficulty is knowing exactly what belongs in the branch of the future and what is better left behind.
"Are all the things we see in branches today going to be seen in branches tomorrow? I very much doubt that," said Mike Baxter, head of management consultancy Bain's Americas Financial Services practice.
"There's an awful lot of experimentation of stuff that turns out to be unsuccessful and uneconomic."
Flashy "bank of the future" branches mixing gadgetry with design similar to Apple's
They include lounge areas, giant interactive screens and other trimmings such as handbags for sale and pieces of art.
Gauging their success is tricky. BNP was willing to give data on its refurbished flagship branch near the Paris Opera - which three years ago was fitted with a wall covered in plants, iPads for customer use and a touch-screen desk - saying that footfall was up 40 percent and new clients up 25 percent.
Italy's Unicredit also said that footfall and new business were up at its newly revamped flagship branch in the Bulgarian capital of Sofia, which offers "welcoming scents" and a touch-screen wall. Visits are up by an average of 60 percent while loans and deposits have doubled, a spokeswoman said.
On the other hand, BNP has done away with some ideas that failed to click with consumers: it has scrapped the iPads and touch-screen desk in favour of an interactive wall.
Deutsche Bank and Barclays declined to give data on single branches.
More broadly, some 88 percent of bank executives view their flagship branches in main street areas as being "successful" in promoting brand awareness, according to a survey by Equinox.
ROBOT BANKERS
Beyond Europe, the experiments are even bolder.
In South Korea, where mobile banking has flourished faster than in the West, Hana Bank allows mobile users to transfer money to one another by physically "bumping" smartphones. Shinhan Bank has also introduced unmanned "smart" branch kiosks that communicate with handsets.
Commonwealth Bank of Australia is using a mobile app to drive mortgage sales by offering clients data on houses for sale, while BBVA's
Customers of the Washington D.C. branch of Carolina Premier Bank
Although some of these advances may prove too gimmicky or not functional enough to catch on, long-distance banking via videoconference is seen as a way to reduce branch staffing without hurting service, though customers still prefer a physical point of contact somewhere along the line.
"Mortgage specialists sitting at headquarters, connecting via videoconference to the relationship manager; that works," said Bain's head of global retail banking, Dirk Vater.
"But bank-to-consumer, with people sitting on the sofa using Skype and Facetime, has not been adopted yet. It will eventually ... But not yet."
Increased ATM functionality as used by Citibank Asia and more secure biometric readers are also promising, he added.
The ultimate question of whether to scrap the branch entirely is one that is not being considered, consultants said.
The preference is for a "hub-and-spoke" model that pools resources in urban areas and reduces smaller, rural branches.
While this may lead to more ambitious flagship outlets, it can create gaps for new competitors to fill: France's Nickel, which offers a low-cost current account, is creating a branch network with the country's 27,000 tobacconists.
"Even in developed markets, the death of branches is somewhat exaggerated," Ernst & Young wrote in a 2012 report.
"We will see further evolution of the branch experience from something that looks like a local government office ...(to) a hybrid between coffee shop and technology store." (Additional reporting by Steve Slater in London, Tsvetelia Tsolova in Sofia, Jackie Range in Sydney and Douwe Miedema in Washington; Editing by Carmel Crimmins and Giles Elgood)
Asian shares eke out slim gains, dollar holds firm
By Wayne Cole
SYDNEY (Reuters) - Asian stocks drifted higher on Monday in sluggish trade as investors chose discretion over valour ahead of central bank meetings in Europe and the always-critical U.S. payrolls report.
MSCI's broadest index of Asia-Pacific shares outside Japan was just a shade firmer at 479.92.
Japanese markets were closed for a holiday.
Modest gains in Hong Kong and Australia were countered by losses in South Korea. Australian shares edged up 0.1 percent as another domestic bank reported record profits.
"We are bullish going into next year, but it wouldn't surprise to see some sort of breather ... We think any pullback is going to be very shallow," said Martin Lakos, division director at Macquarie Bank, of the Australian market.
Major currencies were likewise quiet with the dollar still well supported in the wake of upbeat U.S. manufacturing data that stirred speculation the Federal Reserve might scale back its bond-buying in December, rather than in March as many in the market currently anticipate.
There are no less than four Fed officials speaking on Monday, starting with Fed Bank of Dallas President Richard Fisher in Sydney. Fed Governor Jerome Powell and the heads of the St. Louis and Boston Feds all appear later in the day.
The dollar index was holding firm at 80.691 having climbed to a six-week peak on Friday. It was also up on the yen at 98.76 and threatening a major chart target at 99.00.
The dollar fared best against the euro which was undermined by speculation the European Central Bank (ECB) would have to ease again given disappointing news on unemployment and a startlingly low reading of inflation.
The common currency was pinned at $1.3494 on Monday, well below its recent high of $1.3832. The ECB holds a policy meeting on Thursday and it will be under intense pressure to stimulate the economy.
"We expect the opening statement, and Q&A, to have a distinctly dovish tone," wrote analysts at RBC Capital Markets in a note to clients.
"For now, we think that the Governing Council will refrain from any immediate action, but we expect the downbeat tone of next week's meeting to lay the groundwork for a policy response over the next few months."
The Bank of England holds it policy meeting on Thursday and is expected to stay on hold following a run of improving economic data recently.
A bigger event for markets will be Friday's U.S. payrolls report which is expected to show a modest rise of just 125,000 in October, amid some uncertainty about the impact of the government shut down.
A soft report, and particularly any rise in the jobless rate, would lean against the Fed tapering in December.
Also of note will be the U.S. gross domestic product (GDP) due on Thursday, expected to show annualised growth of 1.9 percent in the third quarter, down from 2.5 percent the previous quarter.
All the talk of Fed tapering saw U.S. Treasury yields rise for a third straight session on Friday. Yields on the benchmark 10-year U.S. Treasury note jumped to 2.63 percent, leaving behind the week's low of 2.47 percent.
Cash Treasuries were not trading in Asia on Monday due to the Japanese holiday, but Treasury futures were 2 ticks lower.
In commodity markets, prices were held back by the bounce in the U.S. dollar. Spot gold was trading at $1,315.06 an ounce, having crumbled from a peak of $1,361.60 last week. Copper was a touch firmer at $7,251 a tonne.
Oil prices steadied following last week's losses as a firmer dollar and ample supplies outweighed concerns about a drop in Libyan crude exports.
Brent crude for December delivery was up 16 cents at $106.01 a barrel. U.S. oil for December delivery added 8 cents to $94.69.
(Additional reporting by Thuy Ong in Sydney; Editing by Eric Meijer)
Gold edges lower for sixth session on Fed stimulus worries
SINGAPORE (Reuters) - Gold eased for a sixth straight session on Monday to trade near two-week lows as renewed uncertainty over when the U.S. Federal Reserve will scale back its stimulus measures weighed on sentiment.
FUNDAMENTALS
* Spot gold fell 0.1 percent to $1,313.54 an ounce by 0014 GMT, after posting a near 3 percent weekly drop. It fell to a low of $1,305.69 on Friday - its lowest since October 17.
* A top Federal Reserve official said on Friday the U.S. labour market has recovered enough in the last 14 months to allow the central bank to reduce its bond-buying stimulus.
* Another official said inflation has to be higher before the Fed decides to scale back.
* The Fed's $85 billion monthly bond purchases have burnished gold's appeal as a hedge against inflation, boosting prices, but signs that the bank is nearing a tapering of the purchases have hurt prices this year.
* The U.S. Mint's American Eagle gold coin sales rose to a two-year high on Friday, lifting 2013 sales above the previous year's total and reflecting the consistently strong demand for physical bullion coins among retail investors.
* Hedge funds and money managers broadly raised bullish bets in futures and options of U.S. gold, silver and copper for the week ended October 22, a report by the Commodity Futures Trading Commission showed on Friday.
* For the top stories on metals and other news, click, or
MARKET NEWS
* Asian markets started the week on a sluggish note on Monday, while the euro languished at two-week lows.
(Reporting by A. Ananthalakshmi; Editing by Richard Pullin)
Mahurat Trading: 5 stocks to buy this Diwali
A new year means a new beginning for many. The calendar year followed by the world indicates 1 January as the start of a new year. However, in a diverse country like India people follow different traditions each year.
For most Hindus, the New Year begins in the summer. However, in Gujarati and Marwari traditions, it starts in Diwali.
India’s stock markets are dominated by brokers belonging to these two communities. Hence, every year, Diwali assumes a special place for those in the stock market.
For most Hindus, the New Year begins in the summer. However, in Gujarati and Marwari traditions, it starts in Diwali.
India’s stock markets are dominated by brokers belonging to these two communities. Hence, every year, Diwali assumes a special place for those in the stock market.
Here are few things to know about Muhurat trading:
· Stock exchanges would open for trading at 6 pm on 3 November 2013 for Muhurat trading. The session lasts for an hour and a half. Muhurat means an auspicious moment to start something new. This is a tradition for over 100 years on the Bombay Stock Exchange and the mostly Gujarati and Marwari stock broking community. The session marks the end of the traditional financial year and the beginning of the new one.
· People look at stock markets from a point of view of wealth creation. Stockbrokers execute token trades on behalf of their clients or their own account to mark the occasion. Stock exchanges and broker offices are decorated to seek blessings of Lakshmi, the goddess of wealth.
· Chopda or Sharda Puja is performed. ‘Chopda’ is an account book. On the New Year day, you close your previous year accounts and start writing your financial statements in a new book. However, since most stock brokers are corporatized, accounts are no longer maintained physically. They are in electronic format. Also, for most companies in the business, the financial year starts on 1 April.
· Typically, the trading activity on Muhurat trading is thin. Over the years, statistics from the Bombay Stock Exchange data (available since 1992) shows that the Sensex has ended in positive territory 7 out of 10 times. The average gain or loss is not more than one per cent. Transactions mostly have a sentimental value than any impact on the portfolio.
Diwali is the time of the year when investors review their investments. They shuffle the stock portfolio based on their assessment for the year gone by and the road ahead. Various brokerage firms give recommendations for investors.
Here are five stocks most recommended for buying this Diwali:
1. ICICI Bank:
Target price: Rs 1,195
The second-largest private bank is one of the top picks this Diwali. Deposits are a key method of raising funds for a bank, and are cheaper than borrowing from the RBI. So a high ratio of current and savings account deposits to total deposits (CASA ratio) means the bank is attracting money at very low cost. This increases its profitability. ICICI Bank has the highest ratio among private sector banks. Its overall balance sheet also improved in the July-September quarter despite a slowdown in the economy.
2. Axis Bank:
Target Price: Rs 1,430
The bank has been increasing its presence in the retail banking segment by attracting more consumers to open current and savings accounts. It has also been consistently delivering better-than-industry growth due to this, according to Religare, a brokerage firm. Also, its asset quality has not worsened significantly in the first half of this fiscal. It has also turned cautious in offering loans on account of uncertain macro-economic conditions.
“Notwithstanding moderate concerns on its corporate book asset quality, we expect the retail business to drive earnings,” Angel Broking said in a report.
3. Tech Mahindra:
Target Price: Rs 1,830
India is seeing a pickup in exports. IT services exports account for a significant chunk of total exports. With the rupee hovering at 60/$-levels, the IT sector has the most to gain as it earns in dollars and other foreign currencies. Tech Mahindra, the first largest IT company in India post its merger with Satyam, has aggressively acquired deals. This is expected to help post a strong revenue growth. Also, the stock price is currently at attractive levels. “Its growth momentum likely to continue due to the pick-up in discretionary spending and strong deal momentum in the US and some parts of Europe,” Religare said in a report.
Other favourites in the IT space are Wipro and Infosys.
4. Colgate
Target Price: Rs 1,450
Oral care company Colgate has consistently reported strong volume growth by maintaining an aggressive strategy to reduce competition. This is expected to drive future growth too. Also, changing trends in consumption of tooth paste in rural areas and the power to increase prices without affecting demand are other positive factors for the consumer goods company. “We prefer Colgate India in the fast moving consumer goods (FMCG) space due to a better growth outlook and a better performance on the volume growth, which remains at 9-10% despite intense competition,” Sharekhan said.
Cigarette-maker ITC and Godrej Consumer Products Ltd are other favourites in the space.
5. L&T
Target Price: Rs 1,130
Despite a slowdown in the Indian economy, analysts are bullish about the infrastructure major L&T. It is expanding its presence outside India, which is now expected to contribute 30% of its total revenues. Even in the domestic front, it has posted a strong growth in terms of winning orders. This shows its ability to withstand a slowdown. “With a healthy order book, strong balance sheet, wide ranging capabilities and international presence, the company is optimistic about its growth,” Religare reported.
China reform checklist: How to tell that this time it's for real?
By Tomasz Janowski
TOKYO (Reuters) - The message from Beijing could not be clearer: China needs to shift to a more balanced economy that is socially and environmentally sustainable.
That was the conclusion of a key Communist Party meeting a decade ago, yet what followed was more of the same: rapid investment-led expansion, which turned China into the world's no.2 economy, but left it laden with debt, environmental damage and excess capacity.
Fast forward to 2013 and China's new leadership is again promising more harmonious development and the question is how to tell whether, this time, it is for real.
One encouraging sign suggesting that President Xi Jinping, Premier Li Keqiang and their team mean business is their greater tolerance for slower economic growth while they carry out reforms. After three decades of double-digit rises in GDP each year, the leaders have pencilled in 7.5 percent for 2013 - the weakest pace since the late 1990s.
"Since the reforms of the late 1970s, leaders have always without exception said that the growth rate is the first priority," said Zhao Xijun, deputy head of the Finance and Securities Institute at Renmin University in Beijing.
"The new leaders don't say they don't pay attention to growth, but the new priority is the stability of growth rather than a high growth rate."
The new approach was evident earlier this year when investors fretted the economy may be slowing down too much. Rather than adopting the sort of massive economic stimulus of the past, Beijing announced small-scale and targeted measures to support economic activity.
Chinese leaders have repeatedly said China needs to wean itself off a reliance on investment and exports, which in parts of the country have led to industrial overcapacity and pollution, and rely more on services and consumption, more akin to the developed economies of the West.
To do that means encouraging tens of millions of Chinese to move to cities to live while creating a social safety net and laws, particularly on land ownership, that will give them the confidence to do so.
The ultimate test of the new team's appetite for reform will be its actions, but the four-day third plenary session of the Communist Party's leadership starting on Saturday will offer some early clues.
Such meetings have served in the past as launch pads for major economic reforms like those unveiled in 1994 that paved the way for China's World Trade Organization membership, though some, such as the one a decade ago, failed to deliver.
By nature, the pronouncements are broad and often deliberately cryptic, but China watchers believe the tone and level of detail can reveal where the policy focus will be.
"For example, the state owned enterprises' reform will be touched on, but it will probably be in very general language and similar to one used before," said Haibin Zhu, chief China economist with JPMorgan in Hong Kong.
"But in some key areas, like fiscal or land reform they will be using more detailed language."
In the end, what will matter more is what the authorities do in the next six to 12 months. General expectations are that the follow-up will not be as dramatic as in 1994, but also that it will not be a non-event like a decade ago.
The consensus view in Beijing is that the authorities are not ready to take on state-owned giants that dominate sectors such as finance or energy or to let the struggling ones fail.
The focus therefore will be on the rest of the agenda: financial, fiscal, land and government administration reforms, pricing of resources, changes to social security and opening protected sectors to private and foreign competition.
All are seen contributing in one form or another to China's push towards more private investment, consumption, services and high-value manufacturing, so any progress there would be welcome by investors and economists.
"Many of these things hang together and you can't really go the full length on one without another, so any significant step on any of these will be welcome," Markus Rodlauer, deputy head of the International Monetary Fund's Asia Pacific Division in Washington, told Reuters.
What few seem to be advocating is for Beijing to break with its gradual, cautious approach.
"In a way, a gradual move on all of those (reforms) is what will in the end deliver," Rodlauer, who heads the Fund's China mission, said. "China has been well served by its strategy of gradual, careful reforms and does not need nor should it venture suddenly to implement Big Bang reforms."
Of all reforms, a financial overhaul is considered low hanging fruit. Markets and the currency are closely controlled and capital movements in and out of the country are restricted.
Driven by the central bank's governor, Zhou Xiaochuan, the gradual move towards market-driven interest and exchange rates and capital flows liberalisation is already under way and there is a clear roadmap.
In the least, investors expect to see a further broadening of the yuan's trading band next year and the establishment of a deposit insurance scheme - a prelude to a gradual freeing up of deposit rates and full liberalisation of interest rates.
"If we don't see anything on financial reform in 2014, that will be a very big disappointment," said JPMorgan's Zhu.
On the fiscal front, economists and investors will look for steps to share more evenly revenues and expenditure between central and local governments and the expansion of the use of value added tax in the services sector. Local governments now get about half of tax and other revenues, but are responsible for more than 80 percent of public spending.
Economists and observers will also look for progress towards a bilateral investment treaty with Washington and a similar pact with the European Union as proof of Beijing's intention to further open up its economy.
Some also expect to see land and residence registration reforms tested in some areas, translated into a nationwide policy that would support China's stated goal to boost its urban population.
By contrast, a proliferation of pilot schemes, such as the Shanghai Free Trade Zone trumpeted as a laboratory for sweeping financial market reforms, could signal a lack of political consensus to roll out the changes on a national scale.
Economists say some caution is understandable given many of the reforms mean handing over controls to market forces and coming months will show how quickly the authorities want to go.
But given no one knows how much time China has before its debt pile up, industrial overcapacity, environmental degradation and social tensions prove hard to control, erring too much on the safe side may be risky too.
"We don't know how much time Beijing has and we don't know whether the incremental approach they've used in the past is still possible," says Gudrun Wacker, a China policy specialist at German Institute for International and Security Affairs, a Berlin-based think tank.
"I believe they will spend the next five years trying to manage the problems and not do anything drastic, but it's like reading from tea leaves." (Tomasz Janowski, Asia Economics Correspondent; Additional reporting by Kevin Yao in Beijing; Editing by Neil Fullick)
Markets closed on Monday for public holiday
MUMBAI (Reuters) - Indian stock, debt and currency markets are closed on Monday for a public holiday. Trading will resume on Tuesday.
The BSE Sensex rose 0.2 percent on Friday, after earlier hitting a record high of 21,293.88 points, which surpassed the previous record set on January 10, 2008. The broader Nifty rose 0.1 percent.
The benchmark 10-year bond yield closed 8 basis points higher at 8.70 percent, while the partially convertible rupee closed at 61.74/75 per dollar compared with 61.50/51 on Thursday.
(Reporting by Mumbai markets team)
Banks hope futuristic flagships can tempt new customers
By Lionel Laurent
VELIZY, France (Reuters) - Installation art, interactive walls and a robot doorman; the flagship branches of the world's top banks have come a long way from the iron grilles and potted plants of old.
To compete against online-only rivals and to attract a new generation of customers to branches, banks are installing sleek interiors and hi-tech gadgetry.
ATMs that read fingerprints, touch-screen desks to flick through your finances and videoconference units for expert advice are all on display at payments-technology firm Wincor Nixdorf's showroom in the Paris suburb of Velizy.
"Banks are investing a lot in their retail branches," said Steve Bousabata, head of Wincor's French banking services arm. "They want customers to come back."
The reason is clear: after years of relying on branches to drive retail revenue, European banks expect such networks to supply only 62 percent of sales by 2020 from today's average of 81 percent, according to Equinox Consulting.
Banks, especially those still nursing losses from the financial crisis, are under pressure to cut costs and are balancing the need to pare back branch networks by sprucing up select outlets.
But branches are still the first point of contact for many customers and are still the primary location for product sales like mortgages, new accounts and insurance, underlining the importance of upgrading them for a more tech-savvy generation.
The difficulty is knowing exactly what belongs in the branch of the future and what is better left behind.
"Are all the things we see in branches today going to be seen in branches tomorrow? I very much doubt that," said Mike Baxter, head of management consultancy Bain's Americas Financial Services practice.
"There's an awful lot of experimentation of stuff that turns out to be unsuccessful and uneconomic."
Flashy "bank of the future" branches mixing gadgetry with design similar to Apple's
They include lounge areas, giant interactive screens and other trimmings such as handbags for sale and pieces of art.
Gauging their success is tricky. BNP was willing to give data on its refurbished flagship branch near the Paris Opera - which three years ago was fitted with a wall covered in plants, iPads for customer use and a touch-screen desk - saying that footfall was up 40 percent and new clients up 25 percent.
Italy's Unicredit also said that footfall and new business were up at its newly revamped flagship branch in the Bulgarian capital of Sofia, which offers "welcoming scents" and a touch-screen wall. Visits are up by an average of 60 percent while loans and deposits have doubled, a spokeswoman said.
On the other hand, BNP has done away with some ideas that failed to click with consumers: it has scrapped the iPads and touch-screen desk in favour of an interactive wall.
Deutsche Bank and Barclays declined to give data on single branches.
More broadly, some 88 percent of bank executives view their flagship branches in main street areas as being "successful" in promoting brand awareness, according to a survey by Equinox.
ROBOT BANKERS
Beyond Europe, the experiments are even bolder.
In South Korea, where mobile banking has flourished faster than in the West, Hana Bank allows mobile users to transfer money to one another by physically "bumping" smartphones. Shinhan Bank has also introduced unmanned "smart" branch kiosks that communicate with handsets.
Commonwealth Bank of Australia is using a mobile app to drive mortgage sales by offering clients data on houses for sale, while BBVA's
Customers of the Washington D.C. branch of Carolina Premier Bank
Although some of these advances may prove too gimmicky or not functional enough to catch on, long-distance banking via videoconference is seen as a way to reduce branch staffing without hurting service, though customers still prefer a physical point of contact somewhere along the line.
"Mortgage specialists sitting at headquarters, connecting via videoconference to the relationship manager; that works," said Bain's head of global retail banking, Dirk Vater.
"But bank-to-consumer, with people sitting on the sofa using Skype and Facetime, has not been adopted yet. It will eventually ... But not yet."
Increased ATM functionality as used by Citibank Asia and more secure biometric readers are also promising, he added.
The ultimate question of whether to scrap the branch entirely is one that is not being considered, consultants said.
The preference is for a "hub-and-spoke" model that pools resources in urban areas and reduces smaller, rural branches.
While this may lead to more ambitious flagship outlets, it can create gaps for new competitors to fill: France's Nickel, which offers a low-cost current account, is creating a branch network with the country's 27,000 tobacconists.
"Even in developed markets, the death of branches is somewhat exaggerated," Ernst & Young wrote in a 2012 report.
"We will see further evolution of the branch experience from something that looks like a local government office ...(to) a hybrid between coffee shop and technology store." (Additional reporting by Steve Slater in London, Tsvetelia Tsolova in Sofia, Jackie Range in Sydney and Douwe Miedema in Washington; Editing by Carmel Crimmins and Giles Elgood)
Investors pour $54.2 billion into equity mutual funds - TrimTabs
REUTERS - Investors poured some $54.2 billion into all equity mutual funds and exchange-traded funds in October, the third-largest inflow on record, data from TrimTabs Investment Research showed on Sunday.
All three of the largest monthly inflows into all equity funds have occurred this year, and this year's inflow of $286 billion into all equity funds is the biggest since 2000, TrimTabs added.
"When fund investors are as upbeat as they are now, a short-term pullback would not be a surprise," said David Santschi, chief executive officer at TrimTabs Investment Research.
Fund Investors keep dumping bonds, however. Bond funds posted five consecutive monthly outflows for the first time since late 2003.
Outflows have picked up even though the average fund was up 1.3 percent in September and 0.9 percent in October, TrimTabs said. Bond mutual funds and ETFs redeemed $13.5 billion in October, almost triple the outflow of $4.9 billion in September, the firm noted.
"We cannot emphasize enough how much recent outflows mark a dramatic shift for the fixed-income world," Santschi said. Bond funds have not posted five consecutive monthly outflows since August 2003 to December 2003, TrimTabs said.
New offerings surged to $23.6 billion in past two weeks, and Dealogic reports $4.3 billion already scheduled for this week, according to the research.
The U.S. economy slowed in October, while real wages and salaries climbed a scant 0.5 percent year over year, the researched showed.
TrimTabs said its demand indicators suggest the U.S. stock market may struggle to move much higher over the short-term but that the longer-term uptrend is secure.
While the S&P 500 is up 23.5 percent year-to-date, TrimTabs said its indicators do not point to a major sell-off anytime soon.
TrimTabs said its Demand Index stood at 77.9 on October 30, up a bit from 73.6 a week earlier (readings above 50 are bullish).
Although the index did not rise much, TrimTabs said it managed to clear the 75 threshold.
The short-term outlook is a lot less favorable, TrimTabs said, noting exchange-traded funds flows suggest stocks will have a tough time moving much higher.
Inflows into leveraged short exchange-traded funds stopped in the past week, which is a cautionary sign from a contrarian perspective, TrimTabs said. (Reporting by Scott DiSavino and Jennifer Ablan; Editing by Maureen Bavdek)
Sensex jumps 69 points on special Diwali trading
Mumbai, Nov 3 (IANS) A benchmark index of the Indian equities markets rose 69 points in the special Diwali trading Sunday, led by good buying support in auto, FMCG and oil and gas stocks.
The 30 scrip sensitive index S&P Sensex of the Bombay Stock Exchange opened the special session at 21,278.08 points and was ruling at 21,265.84 points, at around 6.30 p.m., up 0.33 percent or 69.03 points from its previous close of 21,196.81 points.
The special session called Mahurat trading was organised to mark the beginning of Samvat year 2070, a new year according to the Hindu calendar.
Nifty of the National Stock Exchange was up 19.25 points higher at 6,326.60 points.
Onion prices to come down after Diwali: Dikshit
New Delhi, Nov 2 (IANS) Delhi Chief Minister Shiela Dikshit Saturday said the onion prices in the national capital would come down after Diwali as new stocks were all set to arrive by next week.
Dikshit, who had come to power defeating the then Bharatiya Janata Party government in 1998 riding on high onion prices, said her government has spoken to the onion suppliers from various states in the country and managed to get stock of onions to tackle the crisis.
"The wholesale price of onion will be Rs.10 whereas retail price will be around Rs.45-46," she added.
Dikshit also released a three-minute short film, sung by pop singer-turned-politician Daler Mehendi, showing developments of the Congress government during her tenure of 15 years.
She said the film would be shown in every theatre of the capital and in the Congress vans that visit constituencies.
Saturday, 2 November 2013
Rupee weakens tracking broad dollar rally; share gains limit fall
By Swati Bhat
MUMBAI (Reuters) - The rupee dropped to a three-week low on Friday while also posting its biggest weekly fall in two months as a sharp sell-off in the euro and broad rally in the greenback hurt amid the absence of any fresh domestic triggers.
The euro fell to a two-week low against the dollar on Friday, extending losses into a fifth straight session as slowing euro zone inflation bolstered expectations of looser monetary policy from the European Central Bank.
The rupee which has been relatively stable over the last couple of months after having seen as much as 20 percent fall to a record low in late August has been boosted mainly by robust foreign fund inflows into the stock market. Foreign funds have bought $16.5 billion worth of shares so far this year.
The BSE Sensex surged to a record high as blue chips rallied on the back of strong foreign buying.
"The huge fall in the euro and a rally in the dollar index have pushed the rupee down today, but 62 is a psychological level which will be a key," said Paresh Nayar, head of foreign exchange and debt trading at First Bank Bank.
"The 61.20 support should hold for next week as well, but the overall range could be wider," he added.
The partially convertible rupee closed at 61.74/75 per dollar compared with 61.50/51 on Thursday. Financial markets will remain closed on Monday for a local holiday.
On the week, the rupee fell 0.5 percent, its biggest weekly fall since the last week of August.
The index of the dollar against six major currencies was up 0.4 percent.
Traders will monitor developments on the global front for near-term cues as there is no data or event due on the domestic front.
In the offshore non-deliverable forwards, the one-month contract was at 61.36, while the three-month was at 63.38.
(Editing by Anand Basu)
Nissan posts weaker than expected profits in Q3
Tokyo, Nov. 02 (ANI): Japan's second-biggest automaker Nissan has reported weaker than expected profits for Q3 and reshuffled its management to cope with quality issues and tough market conditions.
The company posted a 107.8 billion yen net profit for the third quarter, with a meager 2 percent increase from 105.7 billion yen last year, the Japan Times reports.
Meanwhile, the company's quarterly sales rose 16 percent to 2.5 trillion yen.
Nissan President and Chief Executive Carlos Ghosn said the main reason was their weakness in many emerging markets and painfully expensive recalls.
The company's Chief Operating Officer (COO), Toshiyuki Shiga, has been made the vice chairman and three other executives were appointed as COOs. (ANI)
Gold hits 2-week low on strong dollar, down for week
By Clara Denina
LONDON (Reuters) - Gold fell to a two-week low on Friday and headed for a weekly drop as upbeat U.S. economic data lifted the dollar, raising anxiety over the Federal Reserve's future course.
The metal was headed for a 2.8 percent weekly drop, after climbing for two consecutive weeks, as expectations the U.S. Federal Reserve will maintain its economic stimulus seemed to have been factored in.
Spot gold was down 0.7 percent to $1,313.96 an ounce by 1244 GMT, extending Thursday's 1.4 percent slide. It earlier fell to the lowest level since October 22 at $1,311.50.
Comex gold futures for December fell $10.30 to $1,313.20 an ounce.
The euro plunged against the dollar after a sharp slowing in euro zone inflation left markets suddenly considering the outside chance of a cut in interest rates soon by the European Central Bank.
The dollar rose to two-week highs against a basket of currencies, in part due to a statement by the Federal Open Market Committee that was not as dovish on the timing of curbing stimulus as investors had expected
"The weakness we have been seeing in gold in the past two days is due to the after-effects of the FOMC statement and also the extremely low inflation rate in the euro zone," Commerzbank analyst Daniel Briesemann said.
"These factors are very supportive of the dollar, which in turn weighed on precious metals prices."
The dollar also got a boost from U.S. data showing the pace of business activity in the Midwest region had risen more than expected in October and weekly jobless claims declined, soothing some worries about sluggish fourth-quarter growth.
A stronger U.S. currency makes dollar-denominated assets such as gold more expensive for foreign investors.
FED FOCUS
Market focus remains heavily on U.S. monetary policy and how soon the Fed will begin tapering its $85 billion a month support programme.
Later on Friday, investors will closely monitor the U.S. ISM survey of manufacturing for October.
Prices had gained 8 percent, since hitting a three-month low in mid-October, after soft U.S. data last month and Washington's budget gridlock led investors to bet the Fed would postpone the tapering of its bullion-friendly stimulus measures.
As a gauge of investor sentiment, New York's SPDR Gold Trust, the biggest gold-backed ETF, reported an outflow of 34 tonnes in October, its biggest monthly drop since July. That brings its outflows for the year to 479 tonnes, or more than $20 billion this year. Holdings of the fund are near four-year lows of 872 tonnes.
Spot silver was unchanged at $21.85 an ounce after falling to its lowest since October 17 at $21.66 earlier in the day. It had fallen 3.5 percent on Thursday, its biggest one-day loss in a month.
The biggest silver ETF, the iShares Silver Trust, also recorded a monthly outflow of 127.4 tonnes in October, its first since June.
Spot platinum was up 0.2 percent at $1,451.74 an ounce, gaining modest support from news that 7,000 members of South Africa's National Union of Mineworkers will down tools at Northam Platinum on Sunday night in a strike over wages.
Spot palladium fell 0.4 percent at $732.00 an ounce.
(Additional reporting by A. Ananthalakshmi in Singapore; editing by James Jukwey and Jane Baird)
Sensex closes at record high; bank stocks gain
Mumbai, Nov 1 (IANS) A benchmark index of Indian stock markets ended Samvat 2069 Friday hitting its third straight record closing high at 21,196.81 points. The market barometer also crossed its highest level so far intra-day.
The 30-scrip S&P Sensex of the Bombay Stock Exchange (BSE) closed 32.29 points or 0.15 percent higher at 21,196.81 points, from the previous day's close at 21,164.52 points. This is the highest closing level of the benchmark index so far.
The Sensex surpassed its highest so far level of 21,206.77 points on Jan 10, 2008 in the intra-day trade when it touched 21,293.88 points.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) also made gains. It ended at 6,307.20 points, up 8.05 points or 0.13 percent.
Healthy buying was observed in bank, automobile and metal sectors. However, fast moving consumer goods (FMCG), consumer durables and oil and gas stocks.
The S&P BSE Bank index was up 189.23 points, followed by automobile index which was higher by 155.63 points and metal index, which gained 129.48 points.
However, FMCG index was 62.49 points down, consumer durables index was down 45.77 points and oil and gas sector was down 45.49 points.
Prominent Sensex gainers were: State Bank of India (SBI), up 4.67 percent at Rs.1,879.40; Mahindra and Mahindra (M&M), up 4.12 percent at Rs.924.95; Jindal Steel, 3.46 percent at Rs.248.35; Seas Sterlite, up 2.30 percent at Rs.206.55; and BHEL, up 1.77 percent at Rs.143.45.
Only ten of the 30 Sensex scrips closed in the red. ONGC, down 1.88 percent at Rs.287.70; NTPC, down 1.71 percent at Rs.146.15; ITC, down 1.66 percent at Rs.328.70; Infosys, down 0.90 percent at Rs.3,278.75; and Gail India, down 0.71 percent at Rs.350.35 were among the major Sensex losers.
The New Samvat year (New Year according to Hindu calendar) begins this weekend
Among the Asian markets, Japan's Nikkei closed 0.88 percent down, Hong Kong's Hang Seng was higher by 0.19 percent, and China's Shanghai Composite Index gained 0.37 percent.
In Europe, London's FTSE 100 was trading 0.08 percent higher, and Germany's DAX Index was down 0.19 percent. The French CAC 40 Index closed the day's trade 0.28 percent down.
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