DAILY SECTORS ALERT: 06.06.2012

[rupeedesk]

DAILY SECTORS ALERT: 06.06.2012

* AUTOMOBILE: VE Commercial Vehicles, a joint venture between the Volvo Group and Eicher Motors, has restructured the organisation by merging Eicher Trucks and Buses, Volvo Trucks, and the powertrain unit. Toyota Kirloskar Motor has launched a limited edition petrol variant of its car Corolla Altis priced at 1.14 mln rupees.

* BANKING: The Reserve Bank of India has notified that banks cannot charge prepayment penalty on floating rate home loans. CARE has said public sector banks will have to set aside 140 bln rupees before January 2013 as unamortised pension liabilities to comply with Basel III norms.

* COAL: Government has chosen Home Minister P. Chidambaram to head the group of ministers tasked to decide whether to set up a regulator for the coal sector. Government is looking at the possibility of allocating coal mines, earmarked for the power sector in the upcoming auction, to new power plants only.

* CORPORATE: A wing of the Central Board of Direct Taxes has asked Adidas to file income tax returns in India as it reckons that Adidas is generating some of its income from the country, but has not been paying taxes here. The government will come out with new guidelines on special economic zones, which have lost sheen after imposition of certain levies and proposal to take away tax incentives.

* ECONOMY: Confederation of Indian Industry President Adi Godrej has said that in order to spur growth Reserve Bank of India should cut the repo rate and the cash reserve ratio by 100 bps each.  India has prepared a contingency plan should Greece exit the Eurozone and even if the monetary union collapses.

* EXCHANGES: BSE has put in place a system to alert market participants against abnormal trading pattern in any stock. The exchange will issue observation or caution letters to members immediately on observing any unusual activity in the market.

* FMCG: Government may defer implementation of rules on packaging for consumer goods, besides easing some of the proposed norms.

* INFRASTRUCTURE: Government plans to set up a company on the lines of India Infrastructure Finance Co to ensure low-cost, long-term finance for urban transportation projects.

* INSURANCE: Insurance Regulatory and Development Authority will come out with product designing guidelines for life insurance companies within a month.

* IPO: The 25-bln-rupee initial public offer of Rashtriya Ispat Nigam Ltd has been delayed by at least three weeks on advice of merchant bankers that an early July launch may not yield desired results.

* OIL AND GAS: The petroleum regulator has recommended cancellation of licences of five pipelines that GAIL (INDIA) and Mukesh Ambani-controlled Reliance Gas were planning to build to transport natural gas from RELIANCE INDUSTRIES' D6 block.

* POWER: Power companies that use imported coal have got a respite as global coal prices have softened considerably and are projected to fall further, but rupee depreciation has limited the gains. Power ministry wants COAL INDIA to increase the penalty mentioned in the latest fuel supply agreements. Existing power exchanges are pursuing the National Power Exchange to carry out business jointly.

* STEEL: Profit margins of steel companies may remain under pressure with a fall in demand and rising operational costs.

* TAX: The government has levied anti-dumping duty of $5.26-$6.60 a sq mtr on digital offset printing plates imported from China and Japan for six months.

* TELECOMMUNICATION: BHARTI AIRTEL, IDEA CELLULAR and Vodafone India have sought a separate consultation paper on refarming of spectrum before the government takes any decision on the matter. Telecom Minister Kapil Sibal has said that Empowered Group of Ministers on spectrum has taken some decisions to be detailed later. According to media reports, the Empowered Group of Ministers on spectrum approved auction of at least two blocks of 5 Mhz spectrum for global system for mobile communications in every circle.

- The EGoM headed by Finance Minister Pranab Mukherjee has decided to sell up to 13.75 MHz of spectrum in the 1800 MHz band in the upcoming auctions.

- Qualcomm has approached the telecom department's tribunal against the government reducing the validity of broadband wireless access spectrum allotted to the company to 18 years and six months from 20 years.

- BHARTI AIRTEL, IDEA CELLULAR, and Vodafone have written to the finance minister, seeking his intervention on telecom ministry's decision on migrating mobile phone operators to 1800 MHz spectrum from 900 MHz.

- EGoM has cleared auction of minimum 10 MHz of 2G spectrum but put off a decision on the reserve price for the auction.

- BHARTI AIRTEL, IDEA CELLULAR, and Vodafone said the proposal to re-arm spectrum will cost them over 1 trln rupees

By RUPEE DESK
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