NSEL scam: Sebi declares Motilal Oswal and India Infoline (IIFL) as not ‘fit and proper’

NSEL scam: SEBI declares commodity arms of Motilal Oswal, IIFL ‘not fit and proper’

Some of the other leading brokers who are being probed in the NSEL case are Anand Rathi Commodities, Philip Commodities and Geofin Commodities.

Clients can withdraw or transfer their securities or funds within 45 days, without any additional cost.

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The Securities and Exchange Board of India (SEBI) has declared the commodity broking arms of Motilal Oswal and India Infoline (IIFL) as ‘not fit and proper’, as part of action in the NSEL case.

SEBI is investigating as many as 300 brokers on charges of colluding with NSEL to defraud investors. In the NSEL case, the exchange was found to have not maintained sufficient underlying stock on trades it allowed, even as brokers sold lucrative contracts to investors. In 2013, the exchange defaulted on payments worth Rs.5,600 crore.

In an order uploaded on its website on February 22, SEBI said that the brokers had a close association with NSEL and allowed themselves to “become a channel”.

“The notice is not a fit and proper person to be granted registration to operate as a commodity derivatives broker”.

SEBI said clients of the commodity broking firms to withdraw or transfer their securities held with the brokers within 45 days without any additional cost.

Some of the other leading brokers who are being probed in the NSEL case are Anand Rathi Commodities, Philip Commodities and Geofin Commodities.

Over the past few years, however, several brokers, including Motilal Oswal and IIFL have moved their commodity broking arm under the same unit that operates stock broking under SEBI’s unified licence regime.

While SEBI’s ‘not fit and proper’ status applies to the commodity arms, it is unclear in terms of what it would mean for the unified broking business of the firms.

Source: MoneyControl.com

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PNB plans to seek Rs.5,431 crore capital support from government

Punjab National Bank to seek Rs.5,431-crore capital infusion from government

The finance minister Tuesday committed capital support to banks after meeting heads of public sector lenders.

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Punjab National Bank (PNB) Wednesday said it plans to seek Rs.5,431 crore capital support from the government a day after Finance Minister Arun Jaitley assured state-owned banks of all support from the government.

The meeting of the bank’s board will take place Thursday for considering infusion of Rs.5,431 crore by the government by way of preferential issue of equity share and fixing date of extra-ordinary general meeting (EGM) for obtaining shareholders approval in this regard, PNB said in a filing to stock exchanges.

The finance minister Tuesday committed capital support to banks after meeting heads of public sector lenders.

“Some of them did mention that the PCA (prompt corrective action) guidelines should be revisited because that is indirectly impacting their lending ability and that government should be more upfront in the capital requirement of some of these banks.

“I have assured them that we will immediately look at this subject because we are as keen as them, as every Indian is, that this opportunity is not missed because we want the cycle of high consumption, high growth, NPA recoveries, credit offtake really to be utilised to the fullest in order to help economy,” he had said.

The government infused Rs.2,816 crore as capital infusion via preferential allotment of equity shares this month to meet regulatory ratios.

The government in July decided to infuse Rs.11,336 crore in five state-owned lenders including PNB, Corporation Bank and Andhra Bank to help them meet regulatory capital requirement.

The infusion was part of remaining Rs.65,000 crore out of Rs.2.11 lakh crore capital infusion over two financial years.

The government announced Rs.2.11 lakh crore capital infusion programme October last year. As per the plan, the public sector banks (PSBs) were to get Rs.1.35 lakh crore through re-capitalisation bonds, and the balance Rs.58,000 crore through raising of capital from the market.

Out of the Rs.1.35 lakh crore, the government has already infused about Rs.71,000 crore through recap bonds in the banks and balance would be done during this fiscal.

Besides, PSBs are also planning to tap the markets to raise more than Rs.50,000 crore this fiscal to shore up their capital base for business growth and meeting regulatory global risk norm.

Source: ET PTI

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DAILY MARKET INSIGHTS – 22nd Feb 2019

After market update – Second session of gains, Nifty reclaims 10800 intra-day

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Indian Indexes

The benchmark indices moved in narrow range throughout the day on February 22, amid mixed Asian markets. The Sensex was down by 0.07% or 26.87 points to 35871.48. The Nifty was up by 0.02% or 1.80 points to 10791.70.

Oil marketing companies gained in trade today as crude prices slipped.

Market breadth was in favour of advances with an advance-decline ratio of at 4:2.

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21Top Gainer Losers

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Stocks in the news

1. Dynamatic Technologies signed a Memorandum of Understanding with SAAB Technologies.

2. BEML partners with Lockheed Martin to explore global & domestic opportunities.

 

Buzzing stocks on BSE

1. Shares of GMR Infrastructure gained 2.80% to Rs.16.55, after the company signed concession agreement to develop a new international airport at Greece.

2. Bharat Electronics rose by 1.61% to Rs.570, after the company signed an MoU with Nagpur-based JSR Dynamics.

Global Signals

Asian stock markets were mostly mixed on February 22, after a slide on Wall Street as investors nervously watched the US-China trade talks in Washington.

European stock markets were mixed, as market participants closely monitored signs of progress in trade talks between the world’s two largest economies.

 

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Domino’s sales growth, profit disappoint in fourth quarter

Domino’s Pizza Slumps After Missing Q4 Earnings & Revenue Estimates

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Warrior Trading News: Domino’s Pizza posted disappointing financial results for its fiscal fourth-quarter ended December 30, 2018 before markets opened on Thursday. The Michigan-based fast-food company missed on both top and bottom lines, sending its shares down 8.7% in premarket trade.

Comparable store sales also fell short of the estimates of Wall Street analysts. Domino’s Pizza opened a net 560 stores during the quarter, with a net 125 new locations in the United States.

DPZ Earnings & Outlook

Domino’s Pizza posted fiscal fourth-quarter net income of $111.6 million, or $2.62 per share, compared with $93.3 million, or $2.09 per share in the prior-year period. The pizza chain said the increase in earnings was due to a lower tax rate stemming from the 2017 tax reform legislation. Earnings, adjusted for one-time costs and gains, came to $2.62 per share.

Revenue was $1.08 billion, up 21% from $891.5 million in the same period last year. On average, analysts surveyed by Refinitiv were expecting adjusted earnings of $2.69 per share on revenue of $1.10 billion.

U.S. comparable store were up 5.6% while analysts had called for 6.3% growth. International comparable store sales grew 2.4%, missing market expectations of 4.2% growth.

The company said that it is still expecting international retail sales growth to be in the range of 8% to 12% and U.S. comparable store sales growth of between 3% to 6% for the next three to five years.

Domino’s Pizza CEO Comments

“I am pleased with our fourth quarter, which capped a very strong 2018 for Domino’s,” said Ritch Allison, Domino’s Chief Executive Officer. “Our long-game approach, driven by fundamentals and the finest franchisee base in QSR across the globe, continues to pace the industry – and we are excited to execute our global strategy in 2019 and beyond.”

Domino’s Pizza Inc Profile

Domino’s Pizza, Inc. is a pizza delivery company, which operates a network of company-owned and franchise-owned stores in the U.S. and international markets. The company operates though the following segments: Domestic Stores, Supply Chain and International Franchise.

The Domestic Stores segment consists of its domestic franchise operations, which oversees a network of franchise stores located in the contiguous U.S. and domestic company-owned store operations, which operates a network of company-owned stores located in the contiguous U.S.

The Supply Chain segment operates regional dough manufacturing and food supply chain centers, thin crust manufacturing center, supply chain center providing equipment and supplies to certain of its domestic and international stores and vegetable processing chain center.

The International Franchise segment comprises of its network of international franchise stores in international markets. Domino’s Pizza was founded by James Monaghan and Thomas Stephen Monaghan in 1960 and is headquartered in Ann Arbor, MI. – CNN Money

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Standard Chartered sets aside $900 million to cover US, British fines

Reuters: Standard Chartered sets aside $900 million to cover US, British fines

StanChart has been under scrutiny by authorities in both Britain and United States for at least seven years.

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Standard Chartered PLC (StanChart) has set aside $900 million to cover fines resulting from investigations by regulators in Britain and the United States, it said on February 21, sending its shares down 1 percent.

The bank also disclosed in a February 21 filing to the Hong Kong Stock Exchange that it has been fined 102.2 million pounds ($133.3 million) by Britain’s Financial Conduct Authority (FCA), which it said would be covered by the $900 million provision.

StanChart said it was considering its options in relation to the fine from the FCA’s Regulatory Decisions Committee in relation to the bank’s historical financial crime controls. The FCA declined to comment when contacted by Reuters.

In the filing, StanChart also said the provision related to the potential resolution of US investigations into past violations of US sanctions, and for investigations relating to foreign exchange trading issues.

“The provision is huge and unexpected,” said Steven Leung, a sales director at brokerage UOB Kay Hian. However, the impact on StanChart stock might be limited if the hit to profit meant future earnings could be flattered by the low comparison with 2018, Leung said.

StanChart has been under scrutiny by authorities in both Britain and United States for at least seven years.

“Though the provision amount is not small, it removes some of the uncertainties related to past issues,” said Hao Hong, brokerage BOCOM International’s head of research.

In its 2018 half-year update, StanChart said it was in discussion with U.S. authorities about an investigation into the bank’s controls over blocking sanctions-violating trades from 2007 through 2012. It said at that point it was “not practicable” to estimate any financial impact of the probe.

Last month, New York’s financial watchdog fined StanChart $40 million for attempting to rig foreign exchange transactions from 2007 through 2013, which the bank said in Thursday’s filing was also included in the $900 million provision.

StanChart will release a strategy update along with its 2018 full year earnings on Feb. 26.

In October, Chief Executive Bill Winters said US authorities were investigating whether StanChart breached Iran-related compliance rules as recently as 2013, a year after the bank settled with them over earlier allegations of breaches.

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Ecuador inks $4.2 billion financing deal with IMF: President Lenin Moreno

Reuters: Ecuador inks $4.2 billion financing deal with IMF: President Lenin Moreno

Moreno said the maturities on the loans extended “up to 30 years” and that the interest rates “on average” did not exceed 5 percent.

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Ecuador has reached a $4.2 billion staff-level financing deal with the International Monetary Fund (IMF), President Lenin Moreno said on February 20, as the Andean country grapples with a large fiscal deficit and heavy external debt.

The country will also receive $6 billion in loans from multilateral institutions including the World Bank, the Inter-American Development Bank, and the CAF Andean development bank, Moreno said in a message broadcast on national television and radio.

Ecuador’s sovereign bonds surged last week after the IMF confirmed it was engaged in formal talks with Moreno over a possible financial arrangement. Staff-level agreements between the IMF and member countries are subject to approval by the Washington-based lender’s executive board.

The OPEC nation’s debt grew under former leftist President Rafael Correa. Moreno earned Correa’s support during the 2017 election campaign, but has implemented more market-friendly economic policies since taking office.

Moreno said the maturities on the loans extended “up to 30 years” and that the interest rates “on average” did not exceed 5 percent.

“This money will create work opportunities for those who have not yet found something stable,” he said.

Moreno has begun to implement an austerity plan that includes layoffs of workers at state-owned companies and cuts to gasoline subsidies, also plans to find a private operator for state-run telecoms company CNT and other state-owned firms.

In his address, Moreno said most of the money would be dedicated to “social investment,” citing a rising number of police officers and promising retirees they would not lose out on an annual bonus.

Skepticism of the IMF runs strong in Ecuador and throughout Latin America, where many blame Fund-imposed austerity policies for economic hardship.

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Indian economy fundamentally sound, set to reach $5 trillion soon: PM Modi

PTI @moneycontrolcom: Indian economy fundamentally sound, set to reach $5 trillion soon: PM Modi

PM Modi said no other large economy in the world has grown at 7% year after year.

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Prime Minister Narendra Modi on February 21 said fundamentals of the Indian economy are sound and it is on the way to becoming a $5 trillion economy soon.

Addressing the India Korea Business Symposium here, he said India is now a more open economy and has attracted $250 billion foreign direct investment (FDI) in the last four years.

He said no other large economy in the world has grown at 7 percent year after year.

India, he said, has jumped to 77th spot on the World Bank’s ease of doing business ranking on the back of reforms and is determined to break into the top 50 next year.

The role of the government is to provide a support system, Modi said, adding that India has emerged as a land of opportunities. 

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Chairman of Tata Sons, N Chandrasekharan plans to shrink over 1,000 subsidiaries

N Chandrasekaran plans to merge over 1,000 Tata subsidiaries: Report

The process of reducing the number of Tata group’s operating companies will take 12-18 months.

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MoneyControl: As he enters his third year as the Chairman of Tata Sons, N Chandrasekharan plans to shrink over 1,000 subsidiaries of the Tata Group, to make it easier to manage. He will also try to stabilise loss-making Jaguar Land Rover unit on priority and pave a better way for its weak aviation and infrastructure businesses, a senior official told The Economic Times.

The Tata Group will foray into the e-commerce business, and it has applied to register at the ministry of corporate affairs. The official added that the business model will be different than that of Flipkart and Amazon.

“The group has over 1,000 subsidiaries. We don’t need so many. A restructuring of this kind is going on in every large Tata operating company. The number of subsidiaries that are tackling runs to a dozen in some companies,” the person said.

The process will take 12-18 months as the company is yet to obtain the required consents. Apparently, one group company has 33 subsidiaries and 33 boards. Hence, Tata Sons will work on reducing the number of operating companies it owns.

The official said that on the retail front, the company is doing much better with a quick rollout of Titan, Westside and Croma outlets as compared with previous years. The company will also ramp up Star Bazaar’s model, as it is bullish on the retail business. Meanwhile, JLR needs to be “nursed back to profitability”. Tata Motors had to write down 3.1 billion pounds as impairment charges due to Brexit and problems in the China market, and the official dismissed talk of any further impairments.

A group director, on condition of anonymity, said that Chandrasekaran has a better understanding of issues of the company now. “Instead of the initial narrative of just focusing on growth and deal-making, the strategies are well-considered,” the director added.

Chandrasekaran has been pushing the company to focus on India rather than the overseas market. “In India, there is a lot of demand. Once the European merger goes through for Tata Steel, we’ll be completely focussed on India,” the executive said.

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