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India to soon have navratna universities
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| 03. INVESTMENT UPDATES |
| Norms for OTC Forex Derivatives issued by RBI |
| SOURCE: IBEF: December 29, 2010 |
New Delhi: The final guidelines on over-the-counter (OTC) foreign exchange derivatives and overseas hedging of commodity and freight prices were issued by Reserve Bank of India (RBI) on December 28, 2010. The guidelines include allowing the use of cost-reduction structures and embedded cross-currency options for foreign currency-rupee swaps, as per a release from the Central Bank.
The new norms will come into effect from February 1, 2011, according to RBI. The Central Bank has allowed companies having net worth of US$ 22.20 million to enter such contracts. But, companies cannot write options on a stand-alone basis and cannot enter exotic options such as leveraged structures and barrier options.
Moreover, the maturity of the hedge by the companies must not exceed the maturity of the underlying, according to RBI.“In case of trade transactions being the underlying, the tenor of the structure shall not exceed two years,” as per the Central Bank.Additionally, banks must periodically inform companies about the mark-to-market position of the contract. Furthermore, the companies could enter into buy and sell positions simultaneously for plain vanilla options, as per RBI. |
| Chennai gets first major investment from Turkey |
| SOURCE : The Economic Times: December 29, 2010 |
Chennai: Galipoglu Hidromas from Turkey, a leading manufacturer of hydraulic telescopic cylinders , pumps, valves, power take off and other kits for commercial vehicles, has come to close to launch its facility at Mahindra world city SEZ at Maramalai nagar near Chennai . It is the first major investment from Turkey and the company's first facility outside the country.
Galipoglu Hidromas’ promoter and chairman , Mehmet Yasar GUL and his only son and director, Talip GUL told ET, while it was looking at setting up the facility at Pune, it chose the site near Chennai because of its proximity to the two major ports ( Chennai and Ennore) and better infrastructure.
The company, which has taken two acres at the SEZ is keen to get three more acres for expansion.It is set to commission the plantin February 2011 with an initial investment of Rs 16 crore funded fully through equity. It will have a capacity to produce 2000 hydraulic telescopic cylinders per month in one shift. It will start with producing 400 cylinders per month.At full capacity in the first year, the plant is expected to achieve a turnover of Rs 24 to Rs 25 crore. Initial import content will be 70% as it has to source steel tubes with correct dia meters from Italy and South Korea.
Mr Talip GUL, who is steering the Indian operations, said the entry of global auto majors and the robust growth of tippers and trailers' segment have opened up a big market for hydraulic cylinders, piston pumps, valves, oil tanks, gear pumps and other hydraulic tool kits.In India, for the last two years, Hidromas has been supplying hydraulic systems to Asia Motor works ,the latest entrant to the CV industry and having its facility at Bhuj in Maharashtra.
Besides AWM, Hidromas is targeting other major OEMs like Tata Motors , Ashok Leyland , Daimler ( which is setting up its truck facility near Chennai), Volvo, Mahindra & Mahindra, Man Force Truck and Kamaz Trucks, Russia which has assembly plant at Hosur. It will have service points at six major cities to cover the Indian market.
He said it will be competing in the market with Netherlands-based Hyva, the world's largest producer of hydraulic tipping cylinders and the complete range of power take off ( POT). It has three plants in India ( Kolkata and Pune and near Bangalore) with an annual capacity to produce one lakh kits. Hidromas hopes to penetrate the market with its competitive pricing and offering a complete range of kits to customers.Mr GUL said it will also use the Indian plant for exporting 30% of production to countries like Malaysia, Singapore, Taiwan, Italy, South Korea and other markets. The company also wants to contribute to community development and is scouting for land promote a school for the under privileged. |
| NSE to offer European-style stock options from today |
| Business Standard: January 03, 2011 |
Mumbai: In order to attract higher volumes, the National Stock Exchange (NSE) will replace American-style stock options with European-style contracts with effect from Monday.
All stock option contracts expiring on or after January 27 will follow the European style.
Positions in European-style options can be settled only on the day of expiry, whereas American-style options can be squared off before the expiry date, too.
While options are quite popular with investors due to their limited downside, stock options have proved to be a laggard in the Indian equity markets due to a number of illiquid counters, say market players. Also, the delivery-based volumes are 15-20 per cent of the daily average in the Indian equity markets.European-style stock options usually go well with cash-settled derivatives, the system currently followed by NSE.
“They reduce the overnight risk for uncovered sellers of stock options. But they can be termed as just an experiment before they really take off,” J R Verma, professor of finance at Indian Institute of Management, Ahmedabad, told Business Standard.
The expiry date of a stock option specifies when the contract will become void. European-style stock options are only exercisable on the expiry date, cutting the overnight risk of volatility in the underlying asset for sellers. American-style stock options are exercisable any time before the expiry date, the reason traders are afraid to take positions on NSE, as volumes show.
If NSE’s volumes rise after the shift to European-style stock options, its liquidity pool will widen. It will also be able to retain traders’ attention and will not be vulnerable to losing derivatives volume to the Bombay Stock Exchange, as anticipated after the latter launches physical settlement in derivatives.
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| FII inflows touch record $39bn in 2010 |
| The Times of India: December 02, 2010 |
New Delhi: Mirroring their faith in the Indian economy, overseas funds have infused a staggering $4.78 billion in the capital market in November, taking the year-to-date total to $39 billion.
With an investment of $4.78 billion in November, the total inflows of foreign institutional investors (FIIs) so far in 2010 have crossed the record $38.76-billion mark.
According to data available with Sebi, FIIs have made investments worth $4.11 billion in equities and poured $667.71 million into the debt market. According to analysts , FIIs have been pumping funds into emerging markets like India because of growth potential. |
| FDI in renewable energy sector touch US$ 498 million in FY '10 |
| IBEF: November 30, 2010 |
New Delhi: Foreign Direct Investment (FDI) in renewable energy sector has witnessed an upward trend and investment in 2009-10 has been robust, according to the Government.
"The FDI in renewable sector has been growing rapidly. During 2006-07, 2007-08, 2008-09 and 2009-10, the investment to the sector was $2.11 million, $43.15 million, $85.27 million and $497.91 million respectively," according to Mr Farooq Abdullah, Union Minister for New and Renewable Energy (MNRE) in a written statement to Rajya Sabha.The investment in 2009-10 has been very attractive," said Mr Abdullah.
He further added that wind energy is the fastest growing renewable energy sector and the FDI inflow in the sector has been increasing over the years.Mr Abdullah also said that the Ministry has announced a Generation Based Incentives (GBI) scheme for grid connected wind power projects with the objective of broadening the investors' base by attracting FDI and independent power producers.
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| Rs 23,700 cr worth FDI proposals cleared in 2010 |
| The Hindu Business Line: January 03, 2011 |
New Delhi: The Foreign Investment Promotion Board (FIPB) recommended proposals entailing foreign direct investment (FDI) inflow of Rs 23,700 crore for approval by the Finance Minister/the Cabinet Committee on Economic Affairs during 2010, an official statement said.
FIPB (the body mandated to consider and recommend FDI proposals under the Government route) held 14 meetings in 2010. It received 387 proposals for consideration during last year, of which 212 entailing FDI inflow of around Rs 23,700 crore were recommended for approval. While 77 proposals were rejected, others are at various stages of consideration.
Major proposals recommended for approval included India Infrastructure Development Fund, Enam India Infrastructure Fund, Oman Refineries and AES India Holdings, the statement said. |
| Infrastructure investment to reach US$ 1,025 billion |
| IBEF: December 17, 2010 |
New Delhi: The projected investment in the infrastructure sector is expected to double to US$ 1,025 billion in the (2007-2012), wherein the private companies are likely to contribute around 50 per cent, according to the Planning Commission.
Further, private companies are estimated to contribute 36 per cent or around US$ 186 billion to the infrastructure investment by the end of 2007-2012 Plan, registering an increase of 25 per cent from the 2002-2007 Plan.
Several initiatives by the Indian government that created opportunities for the private players to invest into the infrastructure sector include provision of incentives and tax holidays, introduction of sector specific policies, permission of 100 per cent foreign direct investment (FDI) in infrastructure sector and public-private partnership (PPP) approach. The government has also announced various policies in core sectors providing a blueprint for the development of the sector.
The county is expected to require investments worth around US$ 1 trillion in the sector during 2010-2019, with roads needing US$ 427 billion, power US$ 288 billion and railways US$ 281 billion, as per Goldman Sachs, a global investment banking and securities firm. |
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