QBiz: Gold Bonds; Breezy Markets, Ambani Applies to Make Airplanes
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1. Govt proposes gold-linked bonds to lower bullion imports
The finance ministry has put out a discussion paper on gold price-linked sovereign bonds. The Reserve Bank of India will issue the bonds on behalf of the govt, with a minimum interest rate of 2%, according to a draft outline. Banks, non-banking financial companies (NBFCs) and post offices will sell these bonds, but only to resident Indians.
If successful, the twin schemes of gold monetization and sovereign gold bonds will help reduce the demand for physical gold and, consequently, help reduce the import bill. India imports an estimated 800-1,000 tonnes of gold each year.
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2. Now, Anil Ambani Group Seeks Licence to make airplanes
After applying for licences to manufacture helicopters and weapons, Anil Ambani’s firms now seek to make airplanes and warships.
The group has applied to the Department of Industrial Policy and Promotion (DIPP), the nodal agency for foreign direct investment, for licenses to make defence and aerospace products. These companies want licenses to manufacture, among other things, scientific investigation ships, parts and accessories of aircraft and spacecraft, engines, turbines and radar equipment.
The Reliance Group and the Adani Group are the latest to enter the defence market. Adani Group’s unit has already filed an application to make helicopters.
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3. Subrata Roy bail: SC accepts bank guarantee format
In what could come as a measure of relief to jailed Sahara group chief Subrata Roy, the court accepted the format for the bank guarantee to be provided by Sahara. The court’s acceptance of the format brings Sahara a step closer to posting Roy’s bail.
But the Supreme Court also directed on Friday that the group will have to pay the Rs.36,000 crore it owes market regulator Securities and Exchange Board of India (Sebi) within 18 months of his release.
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4. Markets revive as monsoon gathers pace, Fed goes slow
After hitting an almost eight-month low earlier this month, the market recovered this week, rising for six straight sessions.
On Friday, the Nifty closed 50 points up at 8,225 while the Sensex gained 200 points at 27,316. Over the week, the Sensex and Nifty have gone up by 890.83 and 242.05 points, respectively, snapping their three-week losing streak.
The revival of the monsoon and a dovish stand by the US Fed have led to renewed interest in the Indian market.
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5. Attorney General Rohatgi: Probe into corruption cases against Sun TV Network cannot be grounds to deny clearance
Attorney-General Mukul Rohatgi has supported grant of security clearance to 33 channels of the Kalanithi Maran-promoted Sun TV Network, saying investigation into alleged corruption by the network’s promoter cannot be grounds to deny clearance.
The I&B Ministry had recently approached the Law Ministry to seek the opinion of the top law officer after the Home Ministry denied security clearance to the network. In his opinion, the Attorney-General has said that security clearance can be granted as agencies are probing cases related to corruption and not security. Hence, he said, corruption cases cannot be the reason to deny the network security clearance.
Where two ministries differ, the opinion of the Attorney-General is usually accepted though it is not binding. The matter could be reportedly referred to an inter-ministerial group for a final call.
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6. Bond, Currency Traders Gain Amid Mumbai Rain
Torrential rains in the country’s financial capital couldn’t dampen domestic bond market sentiment.
Government bond trading value was at `60,000 crore, versus `40,000 or 45,000 crore seen in the rest of the week. In spite of the deluge in Mumbai, volumes in currency derivatives on exchanges in India has been way above average, thanks to the sharp up move in the rupee from 63.74 to the US dollar, to 63.50 levels.
Gross turnover on NSE was 53.6% above monthly average on Friday.
Bond and currency traders are enthusiastic amid hopes of interest rate reductions due to possible lower inflation, and a likely surge in foreign fund inflows.
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7. Natco Pharma Gets US Relief on Drug
The US court of appeals has invalidated Teva’s Copaxone patent which may help generic pharma companies to launch Copaxone, one of the top-selling multiple sclerosis drugs.
Natco Pharma is awaiting the USFDA nod to launch its product in the US. In 2003, Natco began research to develop a generic version of Copaxone to make a cost-effective version of the drug available to patients in India.
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8. Yoga Mid Flight
SpiceJet has teamed up with Isha Foundation of Sadhguru to conduct mid-air yoga sessions on some of its Boeing flights on Sunday, June 21, the International Yoga Day.
SpiceJet crew and the Isha Foundation instructors will perform Upa Yoga at a height of 35,000 feet.
Over 50 dedicated Isha instructors and SpiceJet crew members will undertake a 10-minute session onboard select flights. Passengers onboard will be encouraged to join.
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9. Congress Sets Tough Conditions for Support in RS on GST Bill
The Congress has set five conditions before the National Democratic Alliance for support to the constitutional amendment Bill on a goods and services tax (GST).
The changes include withdrawal of the imposition of one per cent additional tax over GST for manufacturing states, inclusion of tobacco and electricity in the proposed indirect tax regime, and a revenue-neutral rate of 18 per cent, not about 27 per cent; as also demanding the Centre to compensate states for revenue loss after switching to the GST regime for five years.
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