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Modi warns “dishonest” of ruin, says market participants should pay more taxes

Mumbai: Warning of “ruin” for the “dishonest” after 30 December, Prime Minister Narendra Modi
on Saturday said his government will not shy away from taking difficult decisions in the interest of the country and favoured more taxes from capital markets.

Addressing public events, he also asked the dishonest not to underestimate the mood of the country against corruption.

Prime Minister Narendra Modi  addressing at the inauguration of new campus of National Institute of Securities Markets (NISM), at Patalganga, in Mumbai on 24 December 2016. Image courtesy PIBPrime Minister Narendra Modi  addressing at the inauguration of new campus of National Institute of Securities Markets (NISM), at Patalganga, in Mumbai on 24 December 2016. Image courtesy PIB

Prime Minister Narendra Modi addressing at the inauguration of new campus of National Institute of Securities Markets (NISM), at Patalganga, in Mumbai on 24 December 2016. Image courtesy PIB

“Dishonest people, you should not underestimate the mood of 125 crore people. You will have to be afraid of it… Time has come for ruin of dishonest people. This is a cleanliness campaign,” Modi said just with a week to go for the expiry of the December 30 deadline when the scrapped Rs 500 and Rs 1,000 notes can be deposited in banks.

“After 50 days (from 8 November), the troubles of honest people will start to reduce and the problems of dishonest people will begin to increase,” Modi said at MMRDA ground in the Bandra Kurla Complex (BKC) in Mumbai after laying the foundation of various big-ticket infrastructure projects.

Earlier in the day at a Sebi function, Modi promised more “sound and prudent economic policies” which would be “not for short-term political point-scoring” but for “larger national interests.

“Let me make one thing very clear: This government will continue to follow sound and prudent economic policies,
to ensure that we have a bright future in the long-run. We’ll not take decisions for short-term political point-scoring. We’ll not shy away from taking difficult decisions if those decisions are in the interest of the country,” Modi said.

He favoured increasing the tax contribution from various market participants in a “fair, efficient and transparent way”.

Asking the regulators and taxmen to think about the contribution of market participants to the exchequer, Modi
said, “The low contribution of taxes may be due to the structure of our tax laws. Low or zero tax rate is given to certain types of financial income.”

The Prime Minister’s remarks assume much significance ahead of the Budget to be presented on 1 February.

“We took a big decision against black money and corruption on 8 November and 125 crore Indians endured pain
but did not stop supporting me. I want to assure people of the country that this battle won’t end till we win it,” he said.

Hitting out at parties opposing demonetisation, he said, “This is not a simple battle. Those who have consumed
malai (cream) did not leave any stone unturned to foil this (demonetisation).”

Modi said, “The corrupt have made all efforts to defeat the decision (demonetisation). They even thought of managing bank officials to get their black money converted into white. And that’s how many of them got caught.”

“I said there will be pain for 50 days (after demonetisation announcement),” he said, adding people are ready to bear the pain in the country’s interest.

The Prime Minister inaugurated a new campus of capital markets regulator Sebi’s National Institute of Securities
Markets (NISM) at Patalganga on the outskirts of Mumbai at an event also attended by functionaries of the Maharashtra government led by the governor and the chief minister, Union Finance Minister Arun Jaitley and Sebi chairman UK Sinha.

Describing the 8 November announcement of cancelling as much as 86 percent or Rs 20.51 trillion worth of currency in circulation as a “difficult decision”, he said, “Demonetisation has (brought about) short-term pains, but it
will bring in long-term gains.”

On the need to increase levies on the capital markets in the light of amendments to the many of the bilateral
investment and taxation treaties, Modi said, “Those who profit from financial markets must make a fair contribution to nation-building through taxes…. We should consider methods for increasing it in a fair, efficient and transparent way.

“… Now it is time to re-think and come up with a good design which is simple and transparent, but also fair and
progressive,” Modi said, adding for various reasons, contribution of tax from those who make money on the markets
has been low due to illegal activities and frauds or due to the structure of our tax laws which offers low or zero tax rate is given to certain types of financial income.

The Prime Minister said his government has brought back the economy to good health from the brink when it was saddled with high fiscal and current account deficits and high inflation and falling rupee, since he took over in May 2014.

He further said that when the global economy is fighting lingering slowdown, “India is being seen as a bright spot.

“Our growth is projected to remain among the highest in the world.”

First Published On : Dec 24, 2016 20:54 IST

Demonetization a short-term pain, won’t shy away from taking tough decisions: PM Modi

<!– /11440465/Dna_Article_Middle_300x250_BTF –>PM Narendra Modi on Saturday inaugurated a new campus of Sebi-run National Institute of Securities Markets (NISM) at Patalganga in neighbouring Raigad district near Mumbai, and said that he will not shy away from taking difficult decisions if they are in country’s interest.Addressing a gathering, Modi said that the demonetization is a short-term pain, but it will benefit in long-term.Stating that the government is very keen to encourage start-ups and stock markets are essential for the start-up ecosystem, Modi added,”Our markets should show that they are able to successfully raise capital for projects benefiting the vast majority of our population.”Here are the 12 things PM Modi said during his address # This is time of slowdown in global economy; India is being seen as a bright spot with growth projected to be highest in world.# India’s place as the fastest growing large economy has not come about by accident.# In less than 3 years, government has transformed economy, cut fiscal deficit, CAD; foreign exchange reserves have grown, inflation is lower.# Long awaited GST will soon be a reality; FDI is at record levels.# Financial markets can play an important role in the modern economy. However history has shown that financial markets can also do damage if not properly regulated.# Government will continue to follow sound and prudent economic policies. We will not take decisions for short-term political point scoring.# Will not shy away from taking difficult decisions if they are in country’s interest. # Demonetization is a short-term pain, but will benefit in long-term.# My aim is to make India a developed country in one generation.# India has earned a good name for its well regulated securities markets.# Government is very keen to encourage start-ups. Stock markets are essential for the start-up ecosystem.# Stock markets should help in raising capital for productive purpose; bond market must become source of long-term infra finance.

Wall Street recedes and Dow 20,000 slips further away | Reuters

By Noel Randewich

U.S. stocks fell on Thursday as investors stepped back from a recent rally fuelled by optimism that President-elect Donald Trump will invigorate economic growth.The dip pulled the Dow Jones industrial average further away from the 20,000 mark after it nearly breached the level this week for the first time. Following a sharp rally since the Nov. 8 U.S. election, the Dow is up about 14 percent for the year and the S&P 500 is 11 higher on bets that the economy will benefit from Trump’s plans for deregulation and infrastructure spending.Some investors believe that recent gains may have made stocks too expensive, and that Congress may water down or prevent major infrastructure spending or tax cuts proposed by Trump.”There are issues hanging over the market,” said Donald Selkin, chief market strategist at Newbridge Securities in New York. “You need to digest these gains, and once he becomes president, we’ll see what is actually going to get passed.” Billionaire investor Carl Icahn, tapped by Trump on Wednesday as a special adviser for regulatory issues, said in an interview on CNBC that he was concerned about the stock market in the short term following its recent surge.

A report earlier showed that the U.S. economy grew faster than initially thought in the third quarter, notching its best performance in two years. Gross domestic product increased at a 3.5 percent annual rate instead of the previously reported 3.2 percent pace, the Commerce Department said.Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.2 percent in November, below the estimated 0.3 percent gain.The Dow Jones Industrial Average .DJI was last down 0.07 percent at 19,928.76 points and the S&P 500 .SPX had lost 0.15 percent to 2,261.79. The Nasdaq Composite .IXIC dropped 0.36 percent to 5,451.49.

Seven of the 11 major S&P sectors were lower, with the consumer discretionary index’s .SPLRCD 0.94 percent fall leading the decliners. The discretionary sector was weighed by a 0.57 percent drop in Amazon (AMZN.O) shares.The S&P telecommunications index .SPLRCL led the gainers with a 1.08 percent rise.Apple (AAPL.O) fell 0.74 percent after Nokia (NOKIA.HE) said it had filed a number of lawsuits against the iPhone maker for patent infringement. The stock was the biggest drag on the S&P 500 and Nasdaq.

ConAgra (CAG.N) rose 3.30 percent after the packaged foods maker’s quarterly profit beat estimates.Red Hat (RHT.N) slumped 12.6 percent after the Linux software distributor’s quarterly revenue missed estimates.Declining issues outnumbered advancing ones on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.55-to-1 ratio favored decliners.The S&P 500 posted 11 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 100 new highs and 43 new lows. (Additional reporting by Tanya Agrawal in Bengaluru; Editing by Meredith Mazzilli)

This story has not been edited by Firstpost staff and is generated by auto-feed.

First Published On : Dec 22, 2016 23:38 IST

A beginner’s guide to stocks, shares and trading

<!– /11440465/Dna_Article_Middle_300x250_BTF –>If you’ve ever visited the local vegetable market with your mother, you would have probably noticed how she makes her pit stop at a few selected vendors. Try arguing with her to try some new vendor, and be sure that she’s going to convince you about how her favourite vendors sell the best veggies and that too at a good price. This is similarly how the stock market works; only it is much bigger with a lot more money and it is companies instead of vendors selling their products.Share marketUnlike the vegetable market where you buy vegetables which is a commodity or a product, in the stock market you buy a part of the ownership of the company through stocks. What this essentially means is, through a stock you can buy a piece of the company. This piece of company can be bought through shares. If you buy shares of a company, then it means you are entitled to the assets and earnings of the company. Assets include equipment, trademark etc. On the other hand earnings is the income earned by the company through selling of the products and services. If the company earns profits, then the shareholder also earns dividend (a small part of the profits).Indian stock marketThe biggest stock markets in India are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). BSE has over 5500 listed companies with market capital of over Rs 104 lakh crore. NSE has over 1600 listed companies with market capital of Rs 97 lakh crore. The stock markets are regulated by the Securities and exchange Board of India (SEBI), which takes care of investor interests making sure the market is regulated with no fraudulent practice.Why does a company issue shares?When a company is in need of money to expand its business or cover costs, it has two options. It can either borrow money through debt financing or issue shares through equity financing. Issuing shares might be a better option as it is less risky and the question of interest to the paid does not arise. The company issues shares through ‘Initial Public Offering’ (the first time the shares of the company are offered to the public). The price of the share is determined by the value of the company and the number of shares issued. These shares continue to be bought and sold by the people.How are shares bought and sold?The buyer (investor) buys and sells shares through stockbrokers or stock brokerage firms who act as an intermediary between the investor and the stock market. The intermediary tries to find a match for the buyer and seller of the share for the transaction to go through. This is all done through electronic medium, which is why finding buyer and seller for the stock takes place in minutes. The prices of the stocks depend upon the demand and supply of the shares. This in turn depends upon the performance of the company and what analysts say about the company as well the market conditions.Investors vs tradersInvestors and traders are the two main players of the stock market. Investors are interested in building their pool of wealth by investing in a number of stocks and other financial instruments over a long period of time.Traders buy and sell shares over a short period of time with frequent transactions. Traders make profits or at times losses within a specified time. They set loss limits for the specified period and if the stock goes below it, they would sell it in spite of the loss. While an investor might want to make 10% profits annually, a trader might hold the same goal for a much shorter period.

Snapchat files for one of the biggest tech IPOs in years -sources | Reuters

By Lauren Hirsch and Liana B. Baker

Snapchat has filed for an initial public offering, sources familiar with the situation said on Tuesday, which puts the messaging app a step closer to the biggest U.S. stock market debut since 2014.The Venice, California-based company could go public as soon as March and be valued at $20 billion to $25 billion, making it the largest IPO since Chinese e-commerce giant Alibaba Group Holding Ltd’s (BABA.N) went public two years ago valued at $170.9 billion. It would be the largest U.S. technology IPO since Facebook Inc’s (FB.O) debut in 2012 with a value of $81.2 billion.Snapchat filed with the Securities and Exchange Commission under the U.S. Jumpstart Our Business Startups Act. Companies with less than $1 billion in revenue can secretly file for an IPO, allowing them to quietly test investor appetite while keeping financials confidential. The filing was made before Republican Donald Trump’s unexpected victory in the U.S. presidential election on Nov. 8 which has increased uncertainty in global markets, but the Dow Jones Industrial Average .DJI has hit record highs for four straight sessions.The sources asked not to be named because the information is private. A spokesman for Snap Inc, Snapchat’s parent company, declined to comment.Reuters was first to report news of the confidential filing.

BELLWETHER FOR ‘DECACORNS’
A Snapchat IPO is seen by many investors as a bellwether for many of the largest so-called “unicorns,” private, venture-backed companies that are valued at more than $1 billion. Nicknamed “decacorns,” these companies are valued in the tens of billions of dollars and include Snapchat, car-sharing company Uber Technologies Inc [UBER.UL] and home-sharing company Airbnb. No decacorn has yet tested the public market, and it is unproven whether they can beat or even replicate such astronomic valuations with more scrutinizing public investors. The market for technology IPOs for this year has been rocky, with investors left skittish due to volatile technology stock performance and uneven returns from recent IPOs. Year to date, 123 U.S. technology companies have gone public, raising $7.1 billion, a 58 percent decline in proceeds and 20 percent drop in the number of offerings from this time last year.

Snapchat started in 2012 as a free mobile app that allows users to send photos that vanish within seconds. It has more than 100 million active users, about 60 percent of whom are aged 13 to 24, making it an attractive way for advertisers to reach millennials.Awash in venture funding, the company raised $1.81 billion in May, which valued it at about $20 billion, media reports said at the time. But investors worry that Snapchat’s advertising sales, which began last October, is the company’s only significant revenue source.

Snap in September starting describing itself as a camera company and earlier this month it debuted its $130 video-camera sunglasses. The glasses are equipped with a camera that connects wirelessly to a smartphone to take and send “snaps” – the company’s terms for video and photo messages sent on its app. According to postings on Twitter, a line of more than 100 people quickly formed in front of a vending machine on a Venice, California, boardwalk where the glasses were being sold. The company’s investors include General Atlantic, Sequoia Capital, T. Rowe Price and Lone Pine. Previous rounds included Fidelity Investment, Kleiner Perkins Caufield & Byers and Yahoo Inc (YHOO.O).Earlier this month, Alphabet Inc’s (GOOGL.O) venture capital arm CapitalG, earlier known as Google Capital, disclosed an investment in Snapchat by adding the social networking firm’s logo to a page on its investment portfolio website. (Reporting by Lauren Hirsch in New York and Liana B. Baker in San Francisco; Additional reporting by Matthew Toole in New York; Editing by Lisa Shumaker)

This story has not been edited by Firstpost staff and is generated by auto-feed.

First Published On : Nov 15, 2016 21:55 IST

SEBI tightens rules for credit rating agencies | Reuters

SEBI tightens rules for credit rating agencies | Reuters

Updated: Nov 1, 2016 21:21 IST

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By Abhirup Roy
| MUMBAI

MUMBAI India’s capital market regulator, Securities and Exchange Board of India (SEBI), on Tuesday tightened disclosure norms for Indian credit rating agencies in a bid to boost transparency and accountability after a number of sudden sharp corporate rating changes created concern among investors.Credit rating agencies will be required to publicly provide more details of the criteria and process behind rating changes and review each criteria periodically, SEBI said. Agencies will also have to disclose details of ratings even if a rating is not accepted by a debt issuer, or if a review is not made by the time an updated rating is due, SEBI said, adding the new guidelines need to be implemented by the agencies in the next 60 days. SEBI said in cases where a debt issuer did not co-operate with an agency by withholding information or not paying fees, the agency would continue to rate the instrument based on the best available information and disclose the situation.India has a handful ratings agencies, including local arms of the big global operations. They mainly blame debt issuers for not cooperating with them and cite the fact that they can only give ratings based on what they know.

Some agencies said the tighter guidelines were largely in line with expectations.”There was a lot of talk about rating agencies being given the option of suspending ratings due to non-cooperation, but the guidelines don’t say so, which is a very good development,” said a senior official at a rating agency, who declined to be identified because he was not authorised to talk to the media.The tighter regulations follow sudden sharp downgrades debt securities of auto parts maker Amtek Auto Ltd and Jindal Steel and Power Ltd last year that hurt investors.

The system of rating has long been challenged as agencies are paid by the companies whose securities they rate. Since the companies benefit from higher ratings, there is a direct conflict of interest between the rating agency and the issuer.Global regulators have been cracking down on credit rating agencies in the aftermath of the 2008 financial crisis, which many say was a result of inflated ratings assigned by agencies on complex mortgage-backed securities.

SEBI on Tuesday made it mandatory for agencies to assign an outlook for each rating that has to be disclosed in a statement to media. The regulator also said that anyone with a business responsibility in an agency cannot be a part of the rating committee – expect the managing director or chief executive officer but only if the majority of the rest of the members are independent.Sharp changes in rating and ones assigned in cases of non-cooperation from the issuer will be reviewed by the chairperson of the committee annually and presented to the board, SEBI said. (Reporting by Abhirup Roy; Editing by Euan Rocha and Alison Williams)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Embraer deal: CBI probe to continue; new blacklisting policy soon, says Defence Minister

<!– /11440465/Dna_Article_Middle_300x250_BTF –> Brazilian aircraft manufacturer Embraer cannot escape Indian laws just because it has struck a settlement with American authorities over corruption in sale of planes to India and three other countries, Defence Minister Manohar Parrikar said today.He said a new blacklisting policy will be finalised next month. “The CBI investigation into the USD 208 million deal will go by Indian laws on corruption, kickbacks, whatever it is, subject to evidence,” he told reporters.The minister stated that the American laws were different from Indian laws. “In American law, criminal processes can be compounded (settlement through payment of fines). However, in India, criminal law is not compounded unless the acts are of very minor nature,” he said.On being asked whether the three planes supplied by Embraer to the IAF for Airborne Early Warning and Control System (AEW&CS) will be grounded, the Defence Minister said there was no question of grounding the planes.”I can assure you that national requirement is a priority. In fact, I am coming out with a proposal or guidelines for blacklisting. The next Defence Acquisition Council (DAC) will finalise it,” he said. “It cannot be a knee jerk reaction. Proper decision making is required,” he added. The move comes months after the Defence Ministry laid down norms for engaging agents in defence deals. Sources said the new norms will be a mixture of heavy fines, graded blacklisting and other penalties.The Brazilian aircraft manufacturer has come under the scanner of the US Justice Department after the former admitted to having paid kickbacks for a range of defence deals with many countries. Embraer has agreed to pay over USD 205 million to resolve charges of corruption and making bribe payments to officials in foreign nations, including USD 5.76 million allegedly being paid to an agent in India, in connection with the sale of three military aircraft for Indian Air Force.Under the settlement, apart from the USD 107 million penalty to the US Justice Department as part of a deferred prosecution agreement, Embraer must also pay more than USD 98 million in disgorgement and interest to the Securities and Exchange Commission (SEC). According to the company’s admissions, Embraer executives and employees paid bribes to government officials and falsified books and records in connection with aircraft sales to foreign governments and state-owned entities in multiple countries.Parrikar said the Embraer deal was being discussed and efforts were being taken to fine-tune it. “The basic concept is that a criminal activity should be punished with a ban. But to what extent the ban should be, will be decided as per the national security. Giving exemption will also be based on national security,” he said.”If I have a platform where a company has been banned, I cannot stop operating the platform, because the company which is now blacklisted had supplied me the platform. Whose loss is it?,” he asked.The Embraer deal was signed in 2008 between Embraer and the DRDO for three aircraft equipped with indigenous radars for AEW&C (airborne early warning and control systems).

Embraer paid US $5.76 mn to shell company for IAF plane deal

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Brazilian aircraft manufacturer Embraer paid US $5.76 million to a shell company in connection with a contract it secured to sell the Indian Air Force (IAF) three aircraft for about US $208 million, the US Department of Justice said today.Such a revelation came as Embraer, as per a Justice Department announcement, entered into a resolution and agreed to pay US $205 million to resolve charges of corruption and making bribe payments to foreign nations, including to an agent in India for the IAF deal.Embraer will pay a penalty of over US $107 million in connection with schemes involving bribery of government officials in the Dominican Republic, Saudi Arabia and Mozambique, and millions more over falsely recorded payments in India via a sham agency agreement.In a parallel resolution with the Securities and Exchange Commission and Brazilian authorities, the company will also have to pay US $98 million in disgorgement.Embraer earned profits of nearly US $84 million on the aircraft sale to India. In 2009, Embraer paid an agent US $5.76 million pursuant to a false agency agreement with a shell company in connection with a contract it secured to sell the IAF three aircraft for approximately US $208 million, the Justice Department said.”Embraer paid millions of dollars in bribes to win government aircraft contracts in three different continents,” said Assistant Attorney General Leslie R Caldwell.”Embraer tried to bribe their way into several profitable aircraft contracts around the world,” said Assistant Special Agent in Charge William J Maddalena.According to court documents, on July 3, 2008, Embraer executed a contract to provide three highly specialised military aircraft to the IAF for nearly USD 208 million.In connection with the deal, it retained the services of an unknown agent identified in the court as “Agent D” pursuant to a 2005 agency agreement.”It later paid US $5.76 million to Agent D pursuant to a false agency agreement signed in or around 2008,” federal prosecutors alleged.Federal prosecutors said in January 2005, Embraer executed an agency agreement with a shell company domiciled in the UK and affiliated with Agent D (although the name never appeared in the agreement).Under the agency agreement, Embraer agreed to pay the shell company a commission of nine per cent of the value of any defence contracts Embraer obtained in India because it believed the agent could help ensure that any contract would be awarded on a single-source, rather than competitive, basis.”Embraer personnel thought the agreement with Agent D was illegal under Indian law and thus took steps to conceal its existence, including secreting the sole fully-executed version of the agreement in a safe deposit box in London that could be opened only when both an Embraer employee and Agent D or an associate of Agent D were present,” federal prosecutors said.Less than a month after executing the agency agreement with the shell company, on February 8, 2005, Embraer announced that it had signed a memorandum of understanding with Defence Research and Development Organisation to support the development of a new early warning radar system for the IAF which Embraer believed could ultimately result in it securing a contract for the sale of three Embraer-145 aircraft.The agreement for purchase of three planes for IAF was signed on July 3, 2008. The very next day, on July 4, 2008, Agent D contacted Embraer employees and demanded payment of the commission pursuant to the contract.”Agent D continued making demands for payment and, in or around February and March, 2009, an Embraer executive met with lawyers representing Agent D to discuss Agent D’s payment demands. Following these discussions, Embraer executives agreed to pay US $5.76 million to Agent D to settle the claim,” court papers said.To conceal the payment Embraer created a false agency agreement.On November 21, 2009, more than a year after it was awarded the India contract, Embraer through its wholly-owned subsidiary – ECC Investment Switzerland AG – executed an agency agreement with a shell company domiciled in Singapore and affiliated with Agent D for its purported services as an agent in a sale Embraer had made to an unrelated customer in another country that had purchased an Embraer aircraft more than a year earlier in July, 2008.”The Singaporean shell company never performed any services related to that sale or to the sale to the Indian Air Force,” US federal prosecutors alleged.”The same day that the agency agreement was executed, the Singaporean shell company delivered three invoices to ECC, each for US $1.92 million. Embraer, through ECC, remitted three payments to the shell company shortly thereafter. Embraer’s books and records did not reflect that this transaction was related to its arrangement with Agent D,” the Justice Department alleged.

Embraer to pay $205 million to settle corruption charges in India, 3 other countries

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Aircraft manufacturer Embraer has agreed to pay over USD 205 million as settlement with American and Brazilian authorities for resolving corruption charges in India and three other countries.The corruption charges in India relate to alleged payment of USD 5.76 million to an agent in India in kickbacks for clinching a deal for the sale of three aircraft for the IAF’s Airborne Early Warning and Control System (AWACS). The CBI has already registered an FIR in the case.”The Securities and Exchange Commission (SEC) today announced a global settlement along with the US Department of Justice and Brazilian authorities that requires aircraft manufacturer Embraer SA to pay more than USD 205 million to resolve alleged violations of the Foreign Corrupt Practices Act (FCPA),” an official statement said.The SEC’s complaint alleges that Embraer made more than USD 83 million in profits as a result of bribe payments from its US-based subsidiary through third-party agents to foreign government officials in the Dominican Republic, Saudi Arabia, and Mozambique.Embraer allegedly created false books and records to conceal the illicit payments, and also engaged in an alleged accounting scheme in India, the statement said.According to the SEC’s complaint, USD 3.52 million were paid in bribes to an official in the Dominican Republic s air force to secure a military aircraft contract in that country, and USD 1.65 million in bribes were routed to an official in Saudi Arabia to win business there.An alleged payment of USD 800,000 was made at the behest of a Mozambican government official as a condition of obtaining a contract with a state-owned airline in that country.Approximately USD 5.76 million was allegedly paid to an agent in India in connection with the sale of three highly specialised military aircraft to Indian Air Force, and the payments were falsely recorded in Embraer’s books and records as part of a consulting agreement that was not legitimate.”As alleged in our complaint, Embraer realised significant revenues by surreptitiously using third parties to mask bribes paid to government officials with influence over contracts it was competing to win,” said Andrew J Ceresney, Director of the SEC Enforcement Division.Kara N Brockmeyer, Chief of the SEC Enforcement Division s FCPA Unit, added, “Embraer s alleged misconduct spanned multiple continents, and it has taken significant ongoing coordination among international regulators and law enforcement agencies to uncover the company’s complex bribery schemes.”Under the settlement, Embraer must pay a USD 107 million penalty to the Justice Department as part of a deferred prosecution agreement, and more than USD 98 million in disgorgement and interest to the SEC.Embraer may receive up to a USD 20 million credit depending on the amount of disgorgement it will pay to Brazilian authorities in a parallel civil proceeding in Brazil.Embraer must retain an independent corporate monitor for at least three years, the statement said.

GST: One nation, one tax

<!– /11440465/Dna_Article_Middle_300x250_BTF –>The biggest tax reform in the country is on its way to implementation with the recently concluded Goods and Service (GST) Council meet that deliberated over the tax rates. The Council announced a 14% compensation to states that would face a loss of revenue and decided that a ‘four slab’ structure will include 6,12,18 and 26 per cent rates, with lower rates for essential items and the highest band for taxing luxury goods.GST Council will be meeting again on November 3-4 to finalise the GST rate structure, and on November 9-10 to decide the draft legislations for the bill.The ‘one nation, one tax’ reform – as proclaimed by Finance Minister, Arun Jaitley, has been 16 years in the making as it was initially proposed by the then Prime Minister of India, Atal Bihari Vajpayee, back in 2000. The unified tax is proposed to come into effect from April 1, 2017.What is GST?GST is one indirect tax for the whole nation, which will make India one unified common market. It is a single tax on the supply of goods and services, right from the manufacturer to the consumer.What is the need for GST?An overlap is seen in the economy as services are used in the production and distribution of goods and similarly goods are used in delivering services.GST will work as an ‘All in one’ tax as the various indirect taxes being levied by the centre and the state will be ‘subsumed’ or included in GST.What is the current tax structure?Currently, each state taxes goods that move across its borders at various rates, leading to multiple taxation.The earlier model of separate taxation placed on goods and services would require splitting of transaction value (prices paid for products) into value of goods and services for taxation.Therefore, the multiplicity of taxation on commodities and the complexities in our current tax structure will be eliminated once GST comes into play.How will GST help the Indian economy?The Indian economy’s growth rate is expected to increase by 0.9% to 1.7% as per estimates of the National Council of Applied Economic Research (NCAER).Analysts from Morgan Stanley said that the overall impact of GST is likely to improve growth due to better allocation of resources, improving efficiency of domestic production and exports.Investments in the Indian economy will seemingly become more attractive as growth improves with GDP growth that could see a minimum boost of 0.5% after GST implementation.Will GST bring down the prices for you?The cost of certain goods and services that are camouflaged under multiple taxes levied are foreseen to become cheaper once GST is implemented.Goods like cement, wood articles and plyboard, satellite TV, batteries, cars, food items, online shopping, cab rides, couriers and mobile bills are estimated to become cheaper depending on the finalized tax slabs.The analysts from Edelweiss Securities said, “It is widely believed that under the proposed GST, effective tax rate on goods (nearly 70-75% of the CPI basket) will decline, while taxes on services (nearly 25-30% of CPI basket) will increase.”This may imply that certain services in the economy like trips to the beauty parlour, telephones, restaurants, cinemas, air travel, insurance, DTH, credit and debit cards, courier, healthcare, banking and professional consultancies might become more expensive.

Sensex, rupee crash after surgical strikes on terror camps; Karachi bourse ends a sober 0.2% down

Key domestic equity benchmark indices witnessed the worst one-day fall in last three months after panic-stricken investors turned jittery and sold stocks in hordes following news of a surgical strike by the Indian army across the LoC. The action by the Indian military was in retaliation to a  18 September terrorist attack at the Uri army base.

As the news of a strategic attack by the Indian military started trickling-in in late morning trades, heavy selling unravelled on the bourses leading to a steep 573 points fall in Sensex that touched the day’s low of 27,719.92.

ReutersReuters

Reuters

Despite some recovery in late trades on selective buying, the 30-share benchmark Sensex still ended 465.28 points lower, or 1.64 percent, at 27,827.53. The broader 50-stock Nifty closed 153.90 points lower, or 1.76 percent, at 8,591.25.

As markets buckled under selling pressure, investor wealth fell by Rs 2.42 lakh crore to Rs 109.62 lakh crore on the BSE.

The local currency market, too, felt the heat as rupee plunged 48 paise intra-day or 0.73 percent lower to touch the day’s low of 66.95 against previous day’s close of 66.47 to the dollar. The rupee finally ended 39 paise lower or 0.59 percent down at 66.86 to the dollar.

On a day, when the Indian stock and currency markets came under heavy selling pressure, Pakistan’s Karachi Stock Exchange or KSE witnessed moderate selling and the index closed 0.18 percent or 71 points lower at 40,283.71 as the government there denied of any such attack in its country. However, the KSE index had its share of a bearish moment on 21 September, when the index crashed 569 points or 1.41 percent amid worries of a India-Pakistan military face-off in the near-term following the recent Uri attack.

“Nobody knows how long this situation will exist. Today’s fall was more of a panic reaction by the investors. India is a mature country and it has been clearly specified by the army that the attack was surgical. One can hope that situation would improve in the next few sessions. We would soon see a bounce-back as India’s fundamentals are good,” said Deven Choksey, Chief Executive Officer and Managing Director at KR Choksey Shares & Securities.

In fact, the Sensex had shot up 183 points in early trade mirroring gains in other Asian gauges after an OPEC meeting yesterday signalled oil production cuts to boost prices, which fuelled rally across the global indices.

Most of the stock market experts feel the stock market sentiment will rebound soon due to strong fundamentals of Indian economy.

“From a fundamental perspective markets are still attractive for long term investors. Therefore such dips present a good buying opportunity which is visible in the recovery from the day’s lows. Escalation in geo political tensions was the reason behind today’s fall in the markets,” said Nitasha Shankar, senior vice president and Head of Research, YES Securities.

Dipen Shah, Senior Vice President & Head PCG Research, Kotak Securities, said, “Markets witnessed an event-driven fall today even as the global markets strengthened post the positive close in the US markets yesterday.

“In times of uncertainty an investor must adopt a bottoms-up approach and focus hard on stock – specific fundamentals. Sharp corrections should be utilized as an opportunity to buy stocks with credible managements and sustainable growth prospects, which are available at relatively better valuations,” added Shah.

Economic Affairs Secretary,  Shaktikanta Das  said that both currency and stock markets would stabilise in few days as the surgical strikes would have a positive impact on the Indian economy.

Among the laggards that dragged the Sensex were Adani Ports which fell the most, tumbling 5 percent at 256.95.

Other losers such as Sun Pharma dropped 3.8 percent to Rs 737.05, ICICI Bank also shed 3.8 percent to Rs 251 and Gail was down 3.2 percent at Rs 362.95.

Shares of Tata Steel, Lupin, Power Grid Corp, Tata Motors, SBI, Bajaj Auto, Wipro, Asian Paints and Bharti Airtel, too, ended lower, falling over 2-3 percent each.

The broader market, too, ended weak, with 2,340 stocks declining against 411 advances on BSE.

Data inputs by Kishor Kadam

Ponzi schemes: Govt sets up experts committee to suggest measure to regulator

<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Centre has set up an inter-ministerial group to regulate the collection of illegal money through Ponzi schemes and the experts body will identify the gaps in the existing regulatory framework for deposits taking activities.It will draw the lines for clear demarcation between regulated and unregulated schemes. In addition, it will also suggest the legislative and administrative measures to the regulators.Informing the Supreme Court that the experts committee has been set up in the Department of Economic Affairs, the Corporate Affairs ministry said the committee was set up in pursuant to the recommendations of the Securities and Exchange Board of India (SEBI).Besides, the ministry said the Reserve Bank of India (RBI) has also set up state level co-ordination committees to prevent misuse of the money collected from the people falling in the lower income category.The government has filed its reply on a PIL, filed by one civil society –Humanity Salt Lake seeking direction to bring mechanism to prevent illegal collection of money particularly through chit funds and other Ponzi schemes.Earlier, SEBI had suggested to set up an experts committee saying due to multiplicity of the regulators and lack of clarity in the legal provisions, some entities have taken advantage and collected money illegally from people in violation of the laws.The Centre also told the court that the prosecution have been launched against the people who were involved in the chit fund scam. The Apex Court is likely to take up the PIL next week.

Panama papers: SC issues notice to CBI on PIL seeking probe

New Delhi: The Supreme Court on Monday issued notice to the CBI on a PIL seeking a probe against the people named in the Panama papers.

Supreme Court. AFPSupreme Court. AFP

Supreme Court. AFP

An apex court bench of Justice Dipak Misra and Justice Shiva Kirti Singh issued notice on the plea by advocate ML Sharma, who also sought an investigation against the SEBI head for what he said was the market regulator’s failure to act on the issue.

A notice returnable in four weeks has also been issued to the Securities and Exchange Board of India (SEBI), the Reserve Bank of India and the union finance ministry.

Rate cut expected, with RBI seen staying ‘accommodative’ | Reuters

MUMBAI The Reserve Bank of India is expected to cut its policy interest rate by a quarter percentage point on Tuesday, lowering it to a more than five-year low while dangling the prospect of another cut later this year if inflation trends stay benign.

Controlling inflation is the central bank’s priority, but Prime Minister Narendra Modi‘s government would welcome any move to improve business conditions for industrialists who remain hesitant to invest, despite data depicting India as one of the world’s fastest growing economies.

Most analysts polled by Reuters expect the RBI to cut the repo rate INREPO=ECI to 6.50 percent – the lowest since January 2011.

The RBI is also expected to say that it is retaining its “accommodative” stance, raising the prospect of another 25 bps rate cut later this year.

“We expect the RBI to cut the policy rate by 25 basis points and then wait, keeping the door open for more rate cuts,” A. Prasanna, an economist at ICICI Securities Primary Dealership Ltd, said.

Inflation easing to 5.18 percent in February, and a government budget that kept borrowing and spending in check, has given the RBI room to make its first cut since September, resuming an easing cycle that was in full swing last year.

Bonds have rallied on these expectations.

The 10-year bond yield IN075926G=CC slumped 16 basis points in March following the government’s pledge in February to stick to a fiscal deficit target of 3.5 percent of gross domestic product, and data last month showing inflation easing for the first time in seven months.

Chances for further rate cuts could rest on trends in global oil prices and the impact of the monsoon rainy season on food prices after back-to-back droughts in the two previous years.

The RBI is focussed on attaining inflation targets – aiming for around 5 percent by March 2017, and 4 percent in the medium term.

BRIGHTER BUSINESS SURVEY

In all, the RBI reduced by repo rate by 125 bps in 2015, but it has been frustrated by commercial banks failure to pass on the full benefits to the wider economy.

Complaining of tight liquidity in the financial system, banks only passed on about half of the RBI’s rate reductions to borrowers so far.

And, despite the RBI easing last year more aggressively than at any time since the 2008-2009 global financial crisis, annual economic growth slowed to 7.3 percent in the October-December quarter from 7.7 in the previous quarter.

The slowdown left the economy further adrift of the government’s 8.0 percent growth target, a rate needed to generate jobs for the millions of Indians joining the workforce each year.

More positively, a business survey released on Monday showed Indian manufacturing activity expanded for the third straight month in March and at the fastest pace since July, driven by stronger demand which allowed companies to raise prices at the fastest pace in 16 months.

The latest Nikkei/Markit Manufacturing Purchasing Managers’ Index INPMI=ECI showed the new orders sub-index, a proxy for domestic demand, also rose to an eight-month high, encouraging firms to increase output. Foreign demand also rose though at a slightly more moderate pace.

(Editing by Simon Cameron-Moore)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Ponzi scam: Rs 5,000 crore Pearls properties to be liquidated

In a major relief to investors in the Rs 45,000-crore ponzi scheme involving promoters of Chandigarh-based Pearls Group, the Central Bureau of Investigation on Friday started handing over the documents of prime properties of the company to a SEBI panel, appointed by the Supreme Court. According to agency sources, the properties belonging to Pearls Agrotech Corporation Ltd (PACL) are worth around Rs 5,000 crore and will be liquidated to refund the customers.<!– /11440465/Dna_Article_Middle_300x250_BTF –>CBI officials also told dna that funds to the tune of Rs 108 crore, currently in possession of the honourable court, will be transferred to the bank account of Securities and Exchange Board of India (SEBI). Furthermore, documents of as many as 79 luxury cars were also handed over to the SEBI committee. The cars belonged to promoters of the accused companies, and will be auctioned in the coming days.While the estimated worth of the cars is yet to be calculated by the agency, investors expect quite a sum from the auction, given the fact that the seized vehicles include brands like Rolls Royce, Porsche Cayenne, Bentley, Jaguar and BMW7 series.The Supreme Court had appointed a committee under former chief justice RM Lodha to sell the assets of Pearls Agrotech Corporation Ltd (PACL) and refund Rs 45,000 crore to the affected investors. In a typical ponzi scam, belief in the success of a non-existent enterprise is fostered by quick returns to the first investors from money invested by later ones. While schemers may start by taking Rs 1,000 from investors, promising to double it within a month, the amount taken in this case was a massive one.Even though the first installment of money being returned to the investors comes no where close to the actual loss of Rs 45,000 crore, the move will largely be seen as a step forward in one of the largest ponzi schemes witnessed by the country. Among the people allegedly involved in the scam, include promoters of two real estate firms – Pearl Agrotech Corporation Ltd and Pearls Golden Forest Ltd – whose top executives were arrested by the probe agency in January this year. The Supreme Court bench headed by Anil R. Dave had ordered the CBI to handover the documents including title deeds of PACL properties to SEBI.The managing director of Pearls Group, Nirmal Singh Bhangoo, and three others were arrested by the CBI on January 9. Apart from Bhangoo and the ex-chairman of Pearls Australasia Pty Ltd, the other three arrested are Sukhdev Singh, MD and promoter-director (PACL); Gurmeet Singh, executive director (finance) and Subrata Bhattacharya, executive director in PGF/PACL.

Swing to modest surplus sets tone for India’s balance of payments | Reuters

MUMBAI/NEW DELHI India’s balance of payments swung to a surplus in October-December, marking a modest upturn in its financial position that analysts believe may prove resistant to global economic fragility.

Monday’s central bank data also showed a narrowing of the current account deficit and higher foreign investments.

Volatile oil prices and worries about China’s economy have hit foreign appetite for Indian assets and, while the European Central Bank and the Bank of Japan are providing plenty of monetary stimulus, the U.S. Federal Reserve is expected to continue raising interest rates, although only slowly.

“The risks to capital flows could be sharper outflows in foreign direct investments and we could also see some slowing of remittances on account of depressed oil prices for a prolonged period,” said Shubhada Rao, chief economist at Yes Bank.

The fourth quarter balance of payments surplus was $4.1 billion, reversing a deficit of $856 million in July-September.

The current account deficit narrowed to $7.1 billion, or 1.3 percent of gross domestic product, from $8.7 billion.

Analysts expect a balance of payments surplus of nearly $15 billion for the full fiscal year ending in March, and a similar surplus in the coming fiscal year.

Those are much healthier levels than in 2013, when anticipation of a reining-in of the Fed’s then stimulus programme led to big outflows that ballooned the balance of payments deficit and sent the current account gap to a record high of 4.8 percent of GDP.

Since then India’s economy has picked up and inflation eased, and the central bank is widely expected to cut interest rates by at least 25 basis points at its policy review on April 5.

But India’s external financial position seems unlikely to improve much from current levels.

Foreign investors have dipped in and out of Indian shares and bonds in the past two quarters, and a weakening global economy is raising concerns about exports and remittances.

The trade balance stayed in deficit in the December quarter, narrowing to $34.0 billion from $37.4 billion in the previous three months.

The capital account, which includes foreign direct investments and portfolio flows, registered a $10.54 billion surplus in October-December, up from $8.58 billion in the previous quarter.

“We expect the balance of payments to be in surplus in 2016/17 but with downside risks,” said Abhishek Upadyay, economist at ICICI Securities Primary Dealership.

(Editing by Rafael Nam and John Stonestreet)

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Apple shares fall most in two years in wake of earnings report | Reuters

Apple Inc (AAPL.O) shares fell more than 6.5 percent on Wednesday, the biggest percentage drop in two years, after the company reported its slowest-ever rise in iPhone shipments and forecast that quarterly sales for the current period would post the first drop in 13 years.

At least 16 analysts cut their price targets on the stock. The median price target is $135, according to Reuters data.

“Cook & Co have a few tough quarters ahead until we get to the buildup around iPhone 7 later this year, which is what bulls are focussed on to turn this ship back into growth waters,” FBR & Co analyst Daniel Ives said.

Shares fell to $93.42, knocking off more than $36 billion from Apple’s market value of about $554 billion. While currently the most valuable publicly traded U.S. tech company, the decline put it closer to Alphabet Inc(GOOGL.O), which ended the day worth roughly $486.5 billion.

The March quarter is likely to be the weakest this year in terms of iPhone sales. But analysts said long-term value investors could view the depressed stock price as a buying opportunity.

“We are looking for March to mark the trough in year-on-year iPhone unit growth, which should provide an attractive entry point into the stock,” Goldman Sachs analysts wrote in a note.

Tepid demand for the latest iPhones, which succeeded blockbuster sales of the iPhone 6 and 6 Plus, led Apple to sell 74.8 million iPhones in the first quarter. One analyst estimated, based on the revenue estimates Apple provided, that it will sell 50 million to 52 million units in the March quarter.

Apple usually launches new iPhones in September and sells the most devices in the December quarter. Unit sales typically drop over the next few quarters, picking up after the next iPhone launch.

Apple said the average selling price for iPhones rose to a record $691 in the holiday quarter.

This indicated that despite a saturated smartphone market, consumers were keen to buy the newer and more expensive iPhone versions – good news for the iPhone 7 cycle, Pacific Crest Securities analysts said.

The iPhone 7 is expected to sport a new look with features such as waterproofing and wireless headphones, according to media reports.

(Reporting by Supantha Mukherjee, Tenzin Pema and Tripti Kalro in Bengaluru; Editing by Sayantani Ghosh, Stephen R. Trousdale and David Gregorio)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Apple shares slip, to stay muted until iPhone 7 rings in growth | Reuters

Apple Inc shares fell as much as 6 percent on Wednesday after the company reported its slowest-ever rise in iPhone shipments, with an uptick likely only after the expected launch of iPhone 7 in September.

The March quarter is likely to be the weakest this year in terms of iPhone sales. Apple on Tuesday forecast its first quarterly revenue drop in 13 years.

Shares fell to $94.04, knocking off more than $20 billion from Apple’s market value of about $554 billion.

But analysts said the depressed stock price could create a buying opportunity for long-term value seekers.

“We are looking for March to mark the trough in year-on-year iPhone unit growth, which should provide an attractive entry point into the stock,” Goldman Sachs analysts wrote in a note.

Tepid demand for the latest iPhones – that succeeded blockbuster sales of the iPhone 6 and 6 Plus – led Apple to sell 74.8 million iPhones in the first quarter. It expects to sell 50-52 million units in the March quarter.

Apple usually launches new iPhones in September and sells most devices in the December quarter. Unit sales typically drop over the next few quarters, picking up after the next iPhone launch.

At least 13 analysts cut their price targets on the stock. FBN was the most bearish, cutting its target by $30 to $120.

The median price target is $142.29, according to Reuters data. At this price, analysts expect Apple to gain $200 billion in value over the next 12 months.

“Cook & Co have a few tough quarters ahead until we get to the buildup around iPhone 7 later this year, which is what bulls are focused on to turn this ship back into growth waters,” FBR & Co analyst Daniel Ives said.

Apple said the average selling price for iPhones rose to a record $691 in the holiday quarter.

This indicated that despite a saturated smartphone market, consumers were keen to buy the newer and more expensive iPhone versions – good news for the iPhone 7 cycle, Pacific Crest Securities analysts said.

The iPhone 7 is expected to sport a new look with features such as waterproofing, wireless headphones and force touch as home button.

Up to Tuesday’s close, Apple’s stock had lost a quarter of its value since April 28, when it hit a record high of $134.54. In contrast, shares of Alphabet Inc rose 10 percent.

(Reporting by Supantha Mukherjee, Tenzin Pema and Tripti Kalro in Bengaluru; Editing by Sayantani Ghosh)

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