In his recent State of the Union address, President Barack Obama vowed to bypass a divided Congress and take action on his own to bolster America’s middle class in an attempt to breathe new life into his second term after a troubled year. Obama unveiled a series of executive orders and decisions — such as wage hikes for federal contract workers, creation of a ‘starter savings account’ to help millions of people save for retirement, healthcare, women’s empowerment, new fuel efficiency standards for trucks — moves likely to inflame already tense relations between the Democratic president and Republicans. “I’m eager to work with all of you,” Obama said. “But America does not stand still — and neither will I. So, wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do.”Stepping On The Gas Honda Motor Co. exported more cars out of the US last year than it imported into the country, claiming a first among major Japanese automakers. More than 30 years after it began building cars in the US, the company’s North American arm said it shipped 108,705 Honda and Acura brand vehicles out of the US in 2013. The company imported 88,537 vehicles into the US from Japan. Rick Schostek, Honda North America’s executive VP, told the media that the milestone was “one that’s been 30 years in the making”. The exported vehicles carried a value of $2.7 billion. The net exporter status is also the product of significant recent investment — Honda has put more than $2.7 billion into expanding its North American auto plants in the past three years. That’s part of a strategy designed to boost production in the US and make cars close to the markets where they are sold. Honda shipped to 50 countries from its US plants last year.Open BooksUS tech firms may give the general public and their customers more details about the court orders they receive related to surveillance, under an agreement with the US government. Firms such as Google and Microsoft were prohibited from disclosing even an approximate number of orders they received from the US Foreign Intelligence Surveillance Court. They could give out only an aggregate number that combined surveillance court orders, FBI queries, subpoenas in criminal cases, among others. The deal frees the firms to state, for example, how many orders they receive in a six-month period from the surveillance court. Ben BernankeLegacy Ben Bernanke adjourned his last policy-setting meeting as Federal Reserve chairman with the announcement that it would trim its bond purchases by another $10 billion as part of the plan to continue winding down its extraordinary economic stimulus despite the recent turmoil in emerging markets. The action was widely expected, as was apparent when the meeting ended without dissent — a first since June 2011, indicative of how tumultuous Bernanke’s tenure has been. In addition to proceeding with scaling back its bond buying, the Fed made no changes to its other policy planks.Not In Sync The level of benefits paid in pensions, jobseeker’s allowance and incapacity benefit in UK is “manifestly inadequate” because it falls below 40 per cent of the median income of European states, said the Council of Europe in Strasbourg. The finding, in a review of the UK’s adherence to the council’s European social charter, is likely to provoke a fresh spat between the UK and European legal structures since the council said the conclusions were legally binding, while the department for work and pensions in London said the findings merely had to be “taken into account” by British courts when assessing claims.Intelligent Buy Google is buying privately held artificial intelligence company DeepMind Technologies. According to reports, the deal is said to be priced at $400 million. Founded in London in 2012 by Demis Hassabis, Shane Legg and Mustafa Suleyman, DeepMind uses general purpose learning algorithms for applications such as simulations, e-commerce and games. Google, which is working on projects such as self-driving cars and robots, has in recent years become increasingly focused on artificial intelligence.Huge CostsQualcomm, the world’s biggest cellphone chip maker, may be hit with a record fine exceeding $1 billion in a Chinese antitrust probe, raising the spectre of harsh penalties for foreign firms facing an increasingly aggressive regulator. China’s National Development and Reform Commission (NDRC) began investigating Qualcomm last year. The probe and the potential fine — the quantum of which could hinge on negotiations — come as the NDRC zooms in on IT providers, especially firms that licence patent technology for cellphones and networks.Changing Hands Lenovo group has agreed to buy Google’s Motorola handset division for $2.91 billion, in what is China’s largest ever tech deal. Lenovo will thus be buying its way into the heavily competitive US handset market, dominated by Apple. It is Lenovo’s second major deal in the US in a week, after it said it would buy IBM’s low-end server business for $2.3 billion. The deal ends Google’s shortlived foray into making consumer mobile devices and marks a pullback from its largest ever acquisition. Google paid $12.5 billion for Motorola in 2012.Cutting NumbersBarclays is set to cut hundreds of jobs in its investment banking division, says a source familiar with the matter, as the British lender keeps pushing to reform its business. The number of jobs being axed is in the “low hundreds”, say reports, and are expected in the next few weeks. Barclays is also apparently restricting travel to meetings, a sign it is clamping down on costs. Last year, CEO Antony Jenkins pledged a fresh course for the bank, in an attempt to restore its reputation following a series of scandals. Early 2013, he had said the bank would shed 1,800 jobs in corporate and investment banking and 1,900 in its European retail and business banking. The planned cuts come in addition to those.Pulled Up BNP Paribas has been censured by Australian regulators after revealing that its traders tried to influence the setting of the country’s benchmark inter-bank interest rate, the latest in a string of scandals over global rate setting. BNP will make a A$1 million ($874,800) donation towards promoting financial literacy after an internal probe found derivatives traders discussed preferred settings for the Bank Bill Swap Reference Rate.(This story was published in BW | Businessworld Issue Dated 24-02-2014)
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Indian factories started 2014 on a high note, with activity growing at its fastest pace in nearly a year as domestic and overseas orders increased, according to a survey that also showed inflation accelerated. The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, bounced to 51.4 in January, its highest since March, from 50.7 in the previous month. The index, which gauges business activity in Indian factories but not utilities, spent three months below the 50 mark that separates growth from contraction before rising above it in November. "Manufacturing activity moved into higher gear led by faster growth in new orders," said Leif Eskesen, chief economist for India at survey sponsor HSBC. A steady economic recovery in India's major export destinations of the United States and the euro zone over the past few months brought orders in at an increased pace. After faltering late last year, the new orders sub-index rose to 52.4 last month from 51.3 in December while the pace of incoming export orders picked up for the second straight month. That prompted firms to ramp up output last month. The latest PMI reading may offer some relief for policymakers who have been struggling with stubbornly high inflation, government policy paralysis and fragile global demand, which put India in a rut of slowing growth. But chances are that any respite might be short lived. A sell-off in emerging markets in past weeks, driven by expectations of another reduction in the U.S. Federal Reserve's asset purchases, pushed central banks in Turkey, South Africa and India to raise key benchmark rates in surprise moves to ease pressure on their currencies and discourage capital flight. The Reserve Bank of India unexpectedly hiked its repo rate 25 basis points last week to 8 per cent to dampen inflation, but said the economy was now better prepared to deal with the risk of major capital outflows. The PMI survey showed output prices grew at a faster pace last month while input cost pressures eased very slightly. "Inflation pressures also firmed, suggesting that the RBI has to keep up its inflation guards," Eskesen said. Consumer prices eased to a three-month low of 9.87 per cent in December while the main inflation gauge, wholesale prices, slowed to 6.16 per cent. (Reuters)
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The rupee was trading at 62.59/60 versus its close of 62.68/69. The dollar was down against major currencies.The index of the dollar versus six majors trading down 0.06 per cent.The euro licked its wounds near a 10-week low against the dollar on Monday after soft euro zone inflation data rekindled speculation the European Central Bank may ease policy to stave off deflation.Traders will continue to monitor the domestic share market which is currently down 0.4 per cent for cues on foreign fund flows. The HSBC Markit manufacturing PMI data due to be released at 0500 GMT will also be monitored for cues.
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Indian factories started 2014 on a high note, with activity growing at its fastest pace in nearly a year as domestic and overseas orders increased, according to a survey that also showed inflation accelerated.The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, bounced to 51.4 in January, its highest since March, from 50.7 in the previous month.The index, which gauges business activity in Indian factories but not utilities, spent three months below the 50 mark that separates growth from contraction before rising above it in November."Manufacturing activity moved into higher gear led by faster growth in new orders," said Leif Eskesen, chief economist for India at survey sponsor HSBC.A steady economic recovery in India's major export destinations of the United States and the euro zone over the past few months brought orders in at an increased pace.After faltering late last year, the new orders sub-index rose to 52.4 last month from 51.3 in December while the pace of incoming export orders picked up for the second straight month.That prompted firms to ramp up output last month.The latest PMI reading may offer some relief for policymakers who have been struggling with stubbornly high inflation, government policy paralysis and fragile global demand, which put India in a rut of slowing growth.But chances are that any respite might be short lived.A sell-off in emerging markets in past weeks, driven by expectations of another reduction in the US Federal Reserve's asset purchases, pushed central banks in Turkey, South Africa and India to raise key benchmark rates in surprise moves to ease pressure on their currencies and discourage capital flight.The Reserve Bank of India unexpectedly hiked its repo rate 25 basis points last week to 8 percent to dampen inflation, but said the economy was now better prepared to deal with the risk of major capital outflows.The PMI survey showed output prices grew at a faster pace last month while input cost pressures eased very slightly."Inflation pressures also firmed, suggesting that the RBI has to keep up its inflation guards," Eskesen said.Consumer prices eased to a three-month low of 9.87 per cent in December while the main inflation gauge, wholesale prices, slowed to 6.16 per cent.(Reuters)
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India is one of the five countries where instances have been found that trade accounts of diamond business are being used to launder illegal funds to the tune of millions of dollars, according to a report by a global financial crimes combating body.The report by the Financial Action Task Force (FATF), a Paris-based global body to set standards to combat money laundering and terrorist financing, says that India has reported instances where diamond prices were overvalued for purposes of laundering and suspected financing.The report said as there were no set standards of diamond pricing in the country, agents were overvaluing the costly and prized gemstones, and even one such big instance is under the scanner of financial enforcement agencies.The report has been brought out with the aim to provide a general overview of the global diamond industry, the way it works and the characteristics of diamonds as merchandise, "through an anti-money laundering and combating financing terror lens"."The case presented by India exposes how through over-valuation diamonds were shipped at a value that was tens of millions of USD higher than the real value."This kind of over-valuation cannot be done in goods with a fixed or even relatively fixed price," the FATF report on "money laundering and terrorist financing through trade in diamonds" stated.These instances were also reported from four other countries -- Israel, Belgium, Canada and the US.China and India are major markets where diamond trade is done on a large scale, the report said.The report cited an unidentified case where some Indian importers, based in Surat and Mumbai, imported diamonds from Hong Kong and China by "grossly overvaluing these diamonds to USD 544.8631 per carat".This case shows the level of manipulation which may be conducted through the diamond trade due to its specific characteristics, such as the very high value and the lack of known and stable prices which allow for the manipulation of price, the report stated in the Indian context.The report states that in a number of suspected cases of diamond smuggling, a majority of funds was transferred to Belgium from accounts in Hong Kong, China, Israel, UAE, the US and India.In?cases of suspicious money laundering instances of diamond trade, the funds transfer occurred from India, Israel and Switzerland to the UAE."India reported a relatively large number of sanitised cases (12) in which suspicious transaction reports were received (in connection with diamond trade). In these specific cases, Hong Kong, China is a destination for illicit cash flows...," the report said.Belgium, Brazil, China, Canada, the US, the United Kingdom and Switzerland also feature alongside India in this report.The report also puts forth its findings which comprises enhancement of regulatory mechanism to combat and control laundering and financial crimes in this trade worldwide."Diamond trade, as an international phenomenon, needed a complete and global analysis to understand and determine money laundering and terrorist financing threats and vulnerabilities related to this unique trade," the report stated.This report has aimed not only to provide a general overview of the diamond trade with its specific business practices, funding methods and risks, but also seeks to highlight a number of significant issues that require further consideration.The report has identified different issues that require consideration as to the sufficiency of the current measures to mitigate new risks, it stated.(PTI)
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India's top power producer NTPC Ltd said on Saturday (1 February, 2014) it might cut supplies to a company that distributes electricity to parts of New Delhi, something that could plunge the heart of India's capital into darkness.State utility NTPC said distribution company BSES Yamuna Power Ltd, which sells electricity in the central and eastern parts of the city of about 16 million people, must clear its dues or else supplies would be cut from February 11.Citing lower tariffs and a shortfall in revenues, BSES Yamuna Power Ltd, an arm of Reliance Infrastructure Ltd, has already expressed its inability to pay state-run power generation companies.The row could result in an outage of up to 10 hours a day, exacerbating problems for Delhi's newly-elected Chief Minister Arvind Kejriwal, elected on the promise of cutting electricity tariffs for millions of Delhi's voters.Kejriwal, a former anti-corruption activist, recently asked the state auditor to look into the accounts power distribution companies to see if they are profiteering. The companies have challenged the move in a court.BSES Rajdhani Power Ltd and Tata Power Delhi Distribution Ltd are the other companies that sell electricity to consumers of Delhi.BSES Yamuna Power Ltd on Friday warned the local government of power cuts and Kejriwal responded with a warning of a possible cancellation of its licences. But Delhi's power sector regulator approved a 6-8 percent tariff increase.(PTI)
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A day after his name figured on Arvind Kejriwal's list of "corrupt" politicians, Union Home Minister Sushilkumar Shinde hit back, saying the Delhi Chief Minister himself was facing charges of misappropriation of funds received for his NGO."There are charges of misappropriation of funds against Kejriwal that he is hiding. The funds pouring in for his NGO is used by him to gain political mileage. The High court has directed Kejriwal to clarify on many issues, which he has not done," Shinde alleged.Shinde was speaking to reporters on the sidelines of a cultural function in Pandharpur in the district.Kejriwal has accused several bigwigs of Indian politics -- including Rahul Gandhi, Kapil Sibal, Shinde and Nitin Gadkari -- of being corrupt, declaring to field candidates against them in the 2014 Lok Sabha elections.On January 22, Shinde, while speaking at Hingoli in Marathwada region had called Kejriwal a "Veda Mukhyamantri" (mad chief minister), while recalling his own days in the police force."When I was in Kherwadi police station in Mumbai's Bandra area, I did not get leave because there were Sena (led) riots...Similarly, yesterday (in Delhi), because of a 'veda mukhyamantri' (mad chief minister) sitting there (on dharna), I had to cancel the leave of policemen," he had said.(PTI)
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India revised down its economic growth for the fiscal year 2012/13 to 4.5 per cent from 5.0 per cent earlier, the government data showed on 31 January' 2014, on lower than provisionally estimated output in farm and manufacturing sectors. The latest numbers are the first revised gross domestic product (GDP) estimates for the last fiscal year. The data also showed lower than estimated growth numbers for exports, capital investment and consumption sectors, suggesting deeper underlying weaknesses in Asia's third-largest economy, which grew at more than 9 per cent before the 2008 global financial crisis. The GDP growth for 2011/12 fiscal year was, however, upwardly revised to 6.7 per cent from 6.2 per cent, but that of the 2010/11 year was revised down to 8.9 per cent from 9.3 per cent, the data from the Ministry of Statistics showed. The government and the central bank have often blamed sharp data revisions for creating problems for policy formulations.(Reuters)
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London-listed oil and mining conglomerate Vedanta Resources Plc's third-quarter core earnings rose 3 per cent, helped primarily by its oil and gas operations in India.The company, controlled by Indian billionaire Anil Agarwal, said group core earnings or earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased to $1.14 billion in the quarter ended Dec. 31 from $1.11 billion a year earlier.Revenue fell about 3 per cent to $3.45 billion.Vedanta simplified its byzantine structure last year when it overhauled its web of subsidiaries and created Sesa Sterlite - an umbrella unit that groups most of its assets.(Reuters)
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Bowing to party pressure, the government today raised the quota of subsidised LPG to 12 cylinders per household in a year from nine at present and also put on hold paying users the subsidy into bank accounts using Aadhaar platform.Announcing the decision taken by the Cabinet Committee on Political Affairs, Oil Minister M Veerappa Moily said raising the LPG quota will cost Rs 5,000 crore in additional subsidy annually.Households will get one cylinder extra, on top of the quota of 9 cylinders, in February and March and from April they will be entitled for 12 cylinders -- one cylinder per month at subsidised rates, he said.Moily also said the direct benefit transfer for LPG (DBTL) scheme, where consumers in as many as get 289 districts in 18 states got the subsidy amount in their bank accounts so that they could buy cooking gas at market rate, has been put on hold.Explaining the reasons behind the move to put on hold a scheme that was dubbed 'game-changer, he said there were complaints about implementation of the scheme and a committee has been formed to look into them."Pending the committee examining the issues, the Aadhaar-linked LPG subsidy transfer has been put on hold," he said.DBTL, under which consumers got Rs 435 advance money in their bank accounts so as to help them buy a LPG cylinder at market price, was this month extended to 105 districts including Delhi and Mumbai.Currently, a subsidised LPG cylinder costs Rs 414 while the market price comes to Rs 1,021. Congress vice president Rahul Gandhi had at the All India Congress Committee session earlier this month asked Prime Minister Manmohan Singh to increase the quota of subsidised LPG to 12 cylinders of 14.2-kg each.There had also been demands from within the Congress to scrap the DBTL as many consumers did not either have the Aadhaar number or banks accounts linked to the Aadhaar number.Moily said 89.2 per cent of the 15 crore LPG consumers use up to nine cylinders in a year and only 10 per cent have to buy the additional requirement at the market price.After the quota is raised to 12, about 97 per cent of the LPG consumers would be covered by subsidised LPG, he said.The government had initially capped the supply of subsidised domestic LPG cylinders to six per household annually in September 2012 in a bid to cut its subsidy bill.The quota was raised to nine in January 2013.Consumers, who have exhausted their quota, have to buy LPG at the market price of Rs 1,258 per cylinder. Subsidised LPG costs Rs 414 per cylinder in Delhi.(PTI)
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