Fiscal deficit rises to $67.5 billion; 71.6% of budgeted target

The country's fiscal deficit during the April-October period rose to Rs 3.68 trillion ($67.5 billion), or 71.6 per cent of the budgeted full fiscal year 2012/13 target, government data showed on Friday.

During the same period in the previous fiscal year, the deficit was 74.4 per cent of the budget target.

Net tax receipts during the April-October period stood at Rs 3.34 trillion ($61.6 bln) and the total expenditure was about Rs 7.79 trillion.

The government is aiming to keep the deficit at 5.3 per cent of GDP this fiscal year, a revision to the target of 5.1 per cent in the March 2012 budget.

Economists forecast that the FY13 fiscal deficit will overshoot the government target of 5.3%. High current account deficit will continue to impact the rupee.

The Gross Domestic Product (GDP) grew at 5.3% versus 5.5% in the first quarter of the current financial year. An ET Now poll had estimated a growth rate of 5.3%. The consensus estimates of the poll range between 5% to 6%.

India's economy could gather pace in the new year, putting behind a dismal year, Goldman Sachs said in a report released on Thursday. Goldman Sachs said Indian economy is expected to expand 6.5% in 2013 thanks to an improvement in external demand and pick-up in reforms, and further accelerate to 7.2% in 2014.

Its upbeat assessment was based on "easing financial conditions, in part driven by some reduction in policy rates, a continuation of reforms boosting confidence, and a normal agricultural crop."

The investment bank pegged 2012 growth at 5.4% and listed a number of measures to accelerate the economy.

Stock to watch

KARNATAKA BANK LTD: Has implemented the Reserve Bank of India‘s revised guidelines on the Kisan Credit Card scheme
 
KINGFISHER AIRLINES: The carrier's pilots have said they will approach the Directorate General of Civil Aviation if the management does not pay them their pending salary for May by today
 
OBEROI REALTY: Is planning to develop integrated township projects
 
RAJESH EXPORTS: Is understood to have finalised a plan to leverage on its land bank worth around 20 bln rupees

RANBAXY LABORATORIES: Company's recall of its generic of cholesterol-lowering drug Lipitor affects 41 lots in various strengths due to the potential presence of a foreign substance

SIEMENS: Plans to cut its capital expenditure due to depleting order book and low profitability
 
TATA MOTORS: Will halt production at its Jamshedpur plant for three days from today following poor demand
INDOCO REMEDIES: Has bought 60.04% in Indoco Industrial Designers & Engineers for 2.25 mln rupee

UNICHEM LABORATORIES LTD: Has received abbreviated new drug application approval from the US Food and Drug Administration for Tizanidine tablets
 
GEOMETRIC LTD: Will develop applications complementing Dassault Systemes' products, the Indian software

LARSEN & TOUBRO LTD: Its construction arm has received orders worth a total of 11.78 bln rupees in November so far

Ranbaxy's recall of generic Lipitor in US impacts 41 lots

Drug maker Ranbaxy's recall of its generic version of cholesterol lowering drug Lipitor impacts 41 lots in various strengths due to potential presence of foreign substance. According to information available on the US Food and Drug Administration Ranbaxy Inc initiated a voluntary recall of 41 affected lots of Atorvastatin Calcium tablets (10 mg, 20 mg and 40 mg), which is a solid oral dosage form, upto the retail level.

German Unemployment Rose for an Eighth Month in November

German unemployment climbed for an eighth straight month in November as Europe’s debt crisis curbed company investment and economic growth. The number of people without a job increased a seasonally adjusted 5,000 to 2.94 million, the Federal Labor Agency in Nuremberg said. Economists forecast a gain of 16,000, the median of 37 estimates in a Bloomberg News survey shows. The adjusted jobless rate held at 6.9 percent. Separately, a gauge of economic confidence in the euro area unexpectedly rose. With the 17-nation currency bloc in recession and growth slowing in emerging markets, German firms are postponing investment and hiring decisions.

Abu Dhabi energy firm to buy $1 bn assets from BP Oil&Gas

Abu Dhabi National Energy Company PJSC (TAQA) has agreed to buy assets worth over USD 1 billion from BP oil and gas in the UK North Sea.

The investment secures thousands of jobs that TAQA supports in the North Sea, and reinforces the status of TAQA, a company based in Abu Dhabi, as the leading UAE investor in the UK, according to an official release.

It follows a constructive dialogue between the oil and gas industry and the UK Treasury, which resulted in changes to the tax treatment of North Sea assets.

Welcoming the announcement, Prime Minister David Cameron said: "I'm delighted that following my recent visit to Abu Dhabi to spearhead greater commercial ties, TAQA have decided to invest in their North Sea operations. This is a vote of confidence in the UK economy and once again, highlights the North Sea's position as a global energy hub.

"We're committed to making Britain the investment destination of choice and today's announcement shows how recent changes to the North Sea tax regime are helping to create and sustain thousands of jobs in Scotland and across the rest of the UK, ensuring we thrive in the global race".

Hamad Al Hurr Al Suwaidi, Chairman of TAQA, Chairman of Abu Dhabi Department of Finance and Member of the Executive Council of Abu Dhabi Emirate said: "We are pleased to have this opportunity to continue investing in our UK business.

"This investment shows our commitment to the future of the North Sea. It is underpinned by the UK government's commitment to long term fiscal stability."

Carl Sheldon, Chief Executive Officer of TAQA, said this investment is a great strategic fit for TAQA, ensuring growth for their UK business and establishes TAQA as a leading operator in the UK North Sea.

The UK Chancellor of the Exchequer, George Osborne, said oil and gas is one of the UK’s greatest industrial success stories, supporting a third of a million jobs.

The acquisition consists of interests in the Harding (70 percent), Maclure (37.03 percent), and Devenick (88.7 percent) fields in the Central North Sea.

TAQA will also increase its non-operated interests in the Brae area and associated transport infrastructure including the SAGE system, Forties-Brae and Forties-Braemar pipelines.

On completion, the acquisition is expected to increase TAQA's net production by approximately 21,000 barrels of oil equivalent per day (boe/d), and will add a second major development hub to TAQA's UK North Sea business, which is currently centered around the Northern sector.

Leo Koot, Managing Director of TAQA's UK operations, said this transaction will provide them with new exploration and development opportunities in the central sector of the UK North Sea

PVR shares jump over 10% on Cinemax deal

Extending gains for the second consecutive day today, shares of multiplex major PVR today soared by over 10 percent after the company entered into an agreement with Cinemax India to acquire up to 95.27 percent stake in the company for Rs 543 crore.

Defying a weak opening, the stock made a smart comeback, gaining 9 percent to touch a 52-week high of Rs 278.60 on the BSE.

At NSE, the stock zoomed up by 10.56 percent to Rs 278.80.

A similar upsurge was seen in Cinemax India counter. The stock shot up by 5 percent to Rs 193.45, its record high level on the BSE.

PVR yesterday had said it would acquire up to 95.27 percent stake in Cinemax India, a Kanakia Group firm which is into movie exhibition business in India, in a deal worth about Rs 543 crore.

According to the agreement, PVR's wholly-owned subsidiary Cine Hospitality would acquire 69.27 percent stake owned by the promoter group of Cinemax at a price of Rs 203.65 for an all cash consideration of Rs 395 crore.

As per Sebi rules, this will be followed by an open offer for an additional 26 percent (up to 72.80 lakh equity shares) at Rs 203.65 per share, taking the total deal size to about Rs 543 crore.

The acquisition will help PVR has market leadership in the movie exhibition segment in India with a combined strength of 351 screens at 85 locations.

Sahara group moves SC against SAT order

Sahara Group on Friday moved the Supreme Court against the order of the Securities Appellate Tribunal (SAT) dismissing its appeal against market regulator SEBI in a case involving refund of about Rs 24,000 crore with interest to about three crore investors.

A bench headed by Chief Justice Altamas Kabir listed the matter for hearing on Monday.

The counsel for Sahara told the bench that the company was ready with a draft of Rs 5,100 crore for deposit in the apex court's registry.

In their appeal before the SAT, two Sahara Group firms had sought the Tribunal's intervention in refund of investors' money and had accused the market regulator SEBI of wrongly charging them of non-compliance with a Supreme Court order in that regard.

The Tribunal, however, had said that any further direction in the case could be sought and granted by the Supreme Court alone and dismissed the appeal.

The apex court had asked Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL) to refund an estimated Rs 24,000 crore with an annual interest of 15 per cent, while SEBI was directed to facilitate the refund of this money to about three crore investors of the two firms.

The court had asked the companies to furnish the documents related to these investors to SEBI within 10 days and refund the money within three months, failing which the regulator was asked to freeze the accounts and attach properties of the two firms(zeebiz)

Petroleum Minister discusses subsidised LPG cap issue with oil firms’ officials

Petroleum Minister Veerappa Moily yesterday held a meeting with the top officials of oil companies to discuss the proposal to raise the cap on subsidised LPG cylinders from six to nine, but Moily also declared that it was up to the oil marketing companies to make the final decision on if they want to raise the cap or not.
 
In an interview, Moily said, "We've given a lot of freedom to the oil companies. We have deregulated a lot of things now ... the decision to hold the price increase is for the respective companies to take."
People with direct knowledge of the meeting said that oil marketing firms, viz. Indian Oil, Bharat Petroleum and Hindustan Petroleum, didn't welcome the proposal to hike the cap on subsidised LPG cylinders from six to nine.
Speaking on the condition of anonymity, the people added that the ailing oil companies wanted full compensation for any hike in the number of subsidised cooking gas cylinders.
Another source in the Petroleum Ministry said that onus to hike the proposed cap was on the Finance Ministry.
If the cap on subsidised LPG cylinders is hiked by three, then the oil companies will have to bear an additional burden of Rs 3,000 crore for the current financial year.
It may be noted here that the prices of kerosene, diesel and LPG are controlled by the government. As the oil marketing companies sell these fuels at subsidised rates fixed by the government, they incur huge losses. However petrol is a deregulated fuel, and thus oil companies are free to revise its price from time to time.

Gold headed for biggest weekly loss since early Nov

Gold was trading in a tight $4 range above $1,720 an ounce on Friday, but prices were on track for their biggest weekly drop since the start of the month with an uncertainty about crucial U.S. talks to avert a fiscal crisis continuing to hit sentiment.

While gold has recovered from a 1-1/2-week low of $1,705.64 an ounce hit on Wednesday, it has been unable to break a strong resistance at $1,730 an ounce in a market roiled by conflicting comments from Washington about the U.S. budget negotiations.

Top Republican lawmaker John Boehner said on Thursday that the talks had made little progress, after expressing optimism about reaching a deal with the White House just a day earlier.

If the parties fail to reach an agreement, $600 billion in tax hikes and spending cuts - dubbed as the "fiscal cliff" - will automatically kick off in early January, threatening to push the world's top economy into recession.

"Gold is back in its old $1,700-$1,730 range," said Chen Min, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen, referring to a range in which gold had traded earlier this month.

"On the macro side, the market sees very little direction, while the 'fiscal cliff' talk poses much uncertainty and risk."

Spot gold traded little changed at $1,726.29 an ounce by 0258 GMT, headed for a 1.6 percent weekly drop but a 0.4 percent monthly gain.

U.S. gold was nearly flat at $1,726.50. Technical analysis suggested signals were mixed for spot gold, as it was not clear that a rebound from Wednesday's low had been completed, Reuters market analyst Wang Tao said.

Q2 FY13 GDP grows at 5.3% versus 5.5% in Q1

The Gross Domestic Product (GDP) grew at 5.3% versus 5.5% in the first quarter of the current financial year. An ET Now poll had estimated a growth rate of 5.3%. The consensus estimates of the poll range between 5% to 6%.

According to the released data, the GDP at factor cost at current prices in Q2 of 2012-13 is estimated at Rs 21,83,794 crore, as against Rs 19,23,173 crore in Q2, 2011-12, showing an increase of 13.6 per cent.

The manufacturing sector grew an annual 0.8% during the quarter while the agricultural sector growth rose 1.2 per cent. The mining sector exhibited a growth of 1.9% versus a meagre 0.1% quarter-on-quarter. The construction sector also grew at 6.7% versus 6.3& year-on-year.

Despite the growth coming in line with estimates, Abheek Barua of HDFC BankBSE -0.29 % said that the economic outlook remains weak. "Economic growth may be bottoming out, expect FY1-13 GDP growth to come in at 5.6%," he said.

Commenting on the data, Venugopal Dhoot said that the 5.3% GDP growth rate was expected. RBI has taken some steps to induce growth, he added.

Economists forecast that the FY13 fiscal deficit will overshoot the government target of 5.3%. High current account deficit will continue to impact the rupee.

India's economy could gather pace in the new year, putting behind a dismal year, Goldman Sachs said in a report released on Thursday. Goldman Sachs said Indian economy is expected to expand 6.5% in 2013 thanks to an improvement in external demand and pick-up in reforms, and further accelerate to 7.2% in 2014.

Its upbeat assessment was based on "easing financial conditions, in part driven by some reduction in policy rates, a continuation of reforms boosting confidence, and a normal agricultural crop."

The investment bank pegged 2012 growth at 5.4% and listed a number of measures to accelerate the economy.

"While allowing FDI in retail, the Goods and Services Tax, direct cash transfer of subsidies, and dedicated freight corridor will help, we believe further reforms on fiscal consolidation, financial liberalisation and infrastructure growth will be needed to sustain an improvement in trend growth," the note said.

However, the investment bank warned that the near-term outlook was "difficult" because of weak growth, high inflation, and the twin deficits - fiscal and current account - that makes a quick recovery in investment cycle "unlikely".

MRF reports 58.3% decline in Q4 net profit

Tyre major MRF today reported a 58.3 per cent decline in its net profits to Rs 164.76 crore for the fourth quarter ending September 30.

The Chennai-based company had reported a net profit of Rs 395.44 crore during the corresponding period last year, it said in a statement.

The company attributed the dip in their net profits to fluctuations in raw material prices, increase in power and fuel cost. Depreciation of rupee has impacted the financial performance of the company, it said.

However, the company hoped that it will achieve improved results considering the challenging circumstances, due to better operating efficiencies and cost cutting measures which it has undertaken over a period of time, the statement added.

For the financial year ending September 30, 2012 the net profit of the company marginally dipped by 6.36 per cent to Rs 579.41 crore from Rs 618.78 crore registered during the previous fiscal.

The total income of the company for the fourth quarter rose to Rs 2,993.62 crore from Rs 2,619.79 crore registered during the same period of last year.

For the year ending September 30, 2012 the consolidated total income of the company soared to Rs 11,967.32 crore compared to Rs 9751.81 registered last year.

The company's exports for the year ending September 30, 2012 grew by 55.5 per cent to Rs 1,280.55 crore from Rs 823.30 crore registered during the previous year, the statement said.

The board of directors at its meeting declared a final dividend of 190 per cent, Rs 19 per share for the year 2012.

Shares of the company today closed at Rs 10,526.20 apiece up by 4.79 per cent over the previous close on the BSE.