SECTORS ALERT (29.06.2012)

[rupeedesk]

SECTORS ALERT (29.06.2012)

* AVIATION: The Centre is considering a proposal to provide subsidy to private airlines operating flights on loss-making northeast India routes.

* BANKING: The RBI said tighter scrutiny is needed for risk posed by interbank linkages. 

    -RBI said migration to Basel III norms might increase cost of capital.

    -RBI caps merchant discount rate on debit card usage from Jul 1.

    -RBI's Real Time Gross Settlement, transfer of funds, and settlement of securities would not be available on Monday.

* CORPORATE: The government and RBI plan to create a fund to bail out companies facing headwinds in foreign currency convertible bond redemptions.

* ECONOMY: RBI said inflation risks likely to remain high. Planning Commission Deputy Chairman Montek Singh Ahluwalia said achieving 9% growth in the 12th Five Year Plan is not feasible and even an 8.0-8.5% growth will require massive reforms. Key ministries of the United Progressive Alliance government have written to Prime Minister Manmohan Singh, demanding bold decisions to kick-start the economy.

* INSURANCE: The Insurance Regulatory and Development Authority has slapped a 14.7-mln-rupee fine on HDFC Life Insurance for violation norms on commission paid to corporate agents and denial of death claims.

* MARKETS: RBI said review of Clearing Corp of India risk management practices needed. RBI said need to watch implications of high frequency trades.

* METALS: The Aditya Birla Group plans to shut a part of its aluminium foil making mill in the UK and relocate the plant to its unit near Nagpur , Maharashtra .

* MUTUAL FUNDS: The finance ministry and the Securities and Exchange Board of India will meet mutual fund industry officials on Monday before drawing up a plan to give a leg up to investments in the industry.Ultra short-term or liquid schemes of asset management companies may lose their popularity as uncertainty in returns will rise as these funds shift to a new valuation model.

    -L&T Mutual Fund, which recently acquired the equity assets of Fidelity Mutual Fund, has hired Soumendra Nath Lahiri as a senior fund manager.

    -Finance ministry may advise SEBI to consider re-introduction of entry load in mutual funds.

* OIL AND GAS: Public sector oil companies have cut petrol price by 2.46-3.22 rupees per litre.

* POWER: The government will form a special fiscal package for ailing distribution companies in seven states, including Rajasthan, Andhra Pradesh, and Tamil Nadu. Bidding rules for new domestic coal-based power projects will depend on the source of the fuel.

* RETAIL: The Foreign Investment Promotion Board will today take a decision on the investment proposal of clothing retailer Inditex. The government may make an announcement on allowing 51% foreign direct investment in multi-brand retail after the presidential election is over.

* TAXATION: The finance ministry has turned down foreign institutional investors' demand that capital market transactions be exempted from the proposed General Anti Avoidance Rule.

* TELECOMMUNICATIONS: The Department of Telecommunications plans to formally slap fines totalling 15.94 lbn rupees on BHARTI AIRTEL, RELIANCE COMMUNICATIONS, IDEA CELLULAR, Tata Teleservices, and TATA COMMUNICATIONS for allegedly understating revenues and paying less levies.

    -Vodafone, which faces a possible retrospective tax on a 2008 deal in India , has said it has been assured of a "level playing field" by the government.

By RUPEE DESK

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