1. Market outlook – 31.1.2014
Market seen opening higher. The Reserve Bank of India (RBI) on Thursday, 30 January 2014
laid out a road map to deal with a surge in bad loans in the banking system. The framework
outlines a corrective action plan that will offer incentives for early identification of stressed
assets by banks, timely revamp of accounts considered to be unviable, and prompt steps for
recovery or sale of assets in the case of loans at the risk of turning bad.
On Thursday, 30 January 2014 the central bank issued final rules similar to the measures
outlined in the working paper after taking public feedback into account. Lenders will need to
carve out as special category of assets termed special mention accounts (SMAs) in which
early signs of stress are visible.
Accounts within this category will be put under three sub-categories, based on the period for
which their principal or interest payments are overdue. The duration of overdue payments can
range from under 30 days to 90 days. Loan repayments that are more than 90 days overdue
are classified as non-performing assets (NPAs) under existing regulations.
If a borrower's interest or principal payments are overdue by more than 60 days, a joint
lenders' forum must be formed by the bankers for early resolution of stress, RBI said.
The new rules also offer incentives to lenders to quickly and collectively agree to a resolution
plan by offering better regulatory treatment for stressed assets where such a plan is under
implementation. As a way to discourage long-drawn-out negotiations between bankers, RBI
said accelerated provisioning will be applicable if no agreement can be reached.
Restructuring proposals in accounts where the aggregate exposure of banks is above Rs 500
crore will now be subjected to assessment by an independent evaluation committee (IEC) of
experts. “The IEC will look into the viability aspects after ensuring that the terms of
restructuring are fair to the lenders,” said RBI.
The committee will submit its recommendations to the corporate debt restructuring (CDR)
cell within a period of 30 days.
“Appropriate incentive structures may be built so as to provide greater role to PE (private
equity) firms and other institutions in restructuring of troubled-company accounts. These
institutions can be expected not only to bring additional funds for restructuring, but also bring
in expertise for management of the business unit in question,” RBI said in a statement.
Further, banks will not be allowed to offer finance to such specialized entities put together for
acquisition of troubled companies.
In the interest of better information sharing within the banking system, RBI said it will set up
a central repository of information on large credits to collect, store and disseminate credit
data to lenders. For this, banks will have to furnish credit information on all their borrowers
having aggregate fund-based and non-fund-based exposure of Rs 5 crore and above.
India's consumer inflation should ease in the next two months, and will fall to 8% by the end
of the year, Reserve Bank of India (RBI) Governor Raghuram Rajan was quoted as saying in
an interview with TV news channel on Thursday, 30 January 2014. The comments came after

2. the RBI surprisingly raised the repo rate by 25 basis points on Tuesday, 28 January 2014. The
consumer price index eased to a three-month low of 9.87% in December 2013.
Japanese industrial production rose 1.1% on month in December, the Ministry of Economy,
Trade and Industry said Friday, on a demand rush ahead of an April sales tax increase. It also
comes after a 0.1% decline in November. The increase in industrial output was due to a rise
in production in the general purpose and production machinery sectors as well as electronic
parts and devices.
Meanwhile, Japanese consumer prices rose at their sharpest rate in over five years in
December, the government said Friday. Consumer prices also increased for the whole of
2013, the first annual increase in five years, according to data released by the Ministry of
Internal Affairs and Communications.
The core consumer price index, which excludes volatile fresh-food costs, climbed 1.3% from
a year earlier in December, faster than a 1.2% gain in the previous month, according to data
released by the Ministry of Internal Affairs and Communications. It was the biggest rise since
a 1.9% increase in October 2008. The core index for 2013 increased 0.4% after a 0.1% fall
the previous year. The CPI including fresh food prices rose 1.6% on year in December.
Employment data released Friday also suggested a strongly recovering economy. The jobless
rate fell to 3.7% of the work force, down from 4% in November and the lowest rate since
December 2007. The closely watched ratio of available jobs to applicants also improved to
1.03, meaning 103 jobs were on offer for every 100 job seekers.
US stocks rebounded on Thursday, 30 January 2014 as investors welcomed data showing a
robust pace of growth in the economy in the final quarter of last year, while upbeat earnings
from Facebook Inc. boosted the tech sector.
The US economy expanded rapidly in the final quarter of 2013, the Commerce Department
said on Thursday, 30 January 2014 as consumers shrugged off a government shutdown, with
the data fueling hopes of even faster growth ahead. The gross domestic product grew at 3.2%
annual pace. The economy's strong year-end performance follows on the heels of a 4.1%
growth rate in the third quarter. For the full year, US growth slowed to 1.9% from 2.8% in
2012.
The Federal Reserve on Wednesday, 29 January 2014, took another gradual step toward
exiting its controversial bond-buying program, remaining stoic in the face of market turmoil.
As expected, the Fed decided to reduce the pace of monthly asset purchases to $65 billion,
from January's $75 billion. The Fed will purchase mortgage-backed securities at a pace of
$30 billion per month and add to its holdings of Treasurys at a pace of $35 billion per month
beginning in February.
The Fed also signaled that it is likely to keep reducing its purchases in the coming months,
citing a pickup in economic activity and improvement in the labor market.
In addition to proceeding with plans to scale back its bond buying, the Fed made no changes
to its other main policy plank: its pledge to keep interest rates low for some time to come. It

3. has pledged to hold rates steady "well past" the point that the unemployment rate falls below
6.5% as long as inflation remains low
Nifty 26Feb2014 contract
Prev close – 6103.85
Go long at 6135 with stop loss of 6101 and target of6166
Foreign institutional investors (FIIs) sold shares worth a net Rs 430.20 crore yesterday
USDINR 25Feb2014 contract
Prev close – 62.9650
Go short at 62.8 with stop loss of 63 and target of 62.58
Japan will release the following data on 31 January 2014
Markit Manufacturing PMI
Inflation Rate
Household Spending
Unemployment Rate
Core Inflation Rate
Core CPI
Industrial Production
Housing Starts
Construction Orders
European Union will release the following data on 31 January 2014
Germany Retail Sales
Core Inflation Rate
Unemployment Rate
Inflation Rate
Canada will release GDP data on 31 Jan. 14
US will release the following data on 31 January 2014
Personal Income

4. Personal Spending
Core PCE Price Index
Reuters Michigan Consumer Sentiment
UK will release GFK Consumer Confidence data on 31 January 2014
Australia will release the following data on 31 January 2014
Private Sector Credit
PPI
Investment and business opportunities in India
Target audience
I Non-Resident indian ->180 days
Foreign nationals
What are all the investment opportunities to them
Who is foreign investor and
More investment and business scope will be discussed in next issue
Business and investment advisory services provided ……
State Bank of India said that it has raised Rs 8031.64 crore by selling shares through qualified
institutional placement.
Coal India will be in focus after the Ministry of Corporate Affairs said that CCI has ordered
investigation in respect of information filed by Wardha Power Company (Informant) against
Western Coalfields (WCL) and Coal India (CIL).
The CCI in the past also ordered investigations against Coal India and its subsidiaries for
their alleged anti-competitive conduct in other similar cases, the Ministry of Corporate
Affairs said.
Hero MotoCorp reported 7.53% rise in net profit to Rs 524.66 crore on 11.13% rise in total
turnover (net sales and other operating income) to Rs 6876.78 crore in Q3 December 2013
over Q3 December 2012.
NTPC turns ex-dividend today, 31 January 2014, for interim dividend of Rs 4 per share for
the year ending 31 March 2014.

5. Shree Cement turns ex-dividend today, 31 January 2014, for interim dividend of Rs 10 per
share for the year ending 30 June 2014.
Japanese industrial production rose 1.1% on month in December, it also comes after a 0.1%
decline in November.
Japanese core consumer price index, which excludes volatile fresh-food costs, climbed 1.3%
from a year earlier in December, faster than a 1.2% gain in the previous month
The jobless rate fell to 3.7% of the work force, down from 4% in November and the lowest rate since
December 2007.
State Bank of India rose 1.25% after the bank said it raised Rs 8031.64 crore by selling shares
through qualified institutional placement.
Punjab National Bank rose 4.7% as the bank's ratio of net non-performing assets to net
advances declined to 2.8% as on 31 December 2013, from 3.07% as on 30 September 2013
Neyveli Lignite Corporation rose 3.04% after net profit jumped 120.6% to Rs 489.02 crore
on 4.7% growth in net sales to Rs 1314.95 crore in Q3 December 2013 over Q3 December
2012
Balkrishna Industries surged 7.08% after net profit jumped 66.4% to Rs 123.85 crore on
24.2% growth in net sales to Rs 867.32 crore in Q3 December 2013 over Q3 December 2012.
Suven Life Sciences rose 3.5% after the firm said it has received 3 product patents one each
from Canada, China and India corresponding to NCEs for treatment of disorders associated
with neurodegenerative diseases.
Bayer CropScience fell 4.13% after net profit fell 95.68% to Rs 39 crore on 12.07% rise in
net sales to Rs 626.60 crore in Q3 December 2013 over Q3 December 2012.
Punjab National Bank and IDFC will unveil Q3 results today, 31 January 2014.
Bank stocks may be in focus after the Reserve Bank of India (RBI) on Thursday, 30 January
2014 laid out a road map to deal with a surge in bad loans in the banking system.

6. Market settled with small gains on last trading day of the week and month after seeing high
intraday volatility throughout the day. The market breadth, indicating the overall health of the
market, was positive. In the foreign exchange market, the rupee edged lower against the
dollar. Indian stocks today, 31 January 2014 snapped five-day falling trend.Sensex was up
0.08% to 20,513.85 and Nifty was up 0.26% to 6,089.50. Among the 30-share Sensex pack,
19 stocks gained and rest of them declined. Sensex drops 3.1% in January
In the foreign exchange market, the rupee edged lower against the dollar. The partially
convertible rupee was hovering at 62.67, compared with its close of 62.56/57 /11 on
Thursday, 30 January 2014.
Foreign direct investment (FDI) inflows into India rose 54.8% in November to $1.64 billion
compared with $1.06 billion a year ago, a government statement said on Friday. Total FDI
inflows in the first eight months for the current fiscal year that ends in March were down 2%
from a year earlier at $15.46 billion, compared with $15.85 billion during the year-ago
period, the statement said.
India's consumer inflation should ease in the next two months, and will fall to 8% by the end
of the year, Reserve Bank of India (RBI) Governor Raghuram Rajan said in an interview with
TV news channel on Thursday, 30 January 2014. The consumer price index eased to a threemonth low of 9.87% in December 2013. "There is some disinflation in the system. What was
9.87 is going to come down further next month, and probably a little further into March,"
Rajan said. "We are setting rates at a level that we think is consistent with that disinflation for
us to get some bite and for the inflation in the system to come down to about 8% at the end of
the year," Rajan said.
Rajan warned of a breakdown in global policy coordination after the Federal Reserve further
cut stimulus, noting how emerging markets helped pull the global economy out of crisis
starting in late 2008. "Industrial countries have to play a part in restoring that, and they can't
at this point wash their hands off and say we'll do what we need to and you do the
adjustment. Fortunately the IMF has stopped giving this as its mantra, but you hear from the
industrial countries: We'll do what we have to do, the markets will adjust and you can decide
what you want to do," Rajan said. "We need better cooperation and unfortunately that's not
been forthcoming so far," he said.
Rajan said developed countries might not like adjustments emerging markets take to cope
with the outflows, without elaborating on specific measures.
The Reserve Bank of India (RBI) on Thursday, 30 January 2014 laid out a road map to deal
with a surge in bad loans in the banking system. The framework outlines a corrective action
plan that will offer incentives for early identification of stressed assets by banks, timely
revamp of accounts considered to be unviable, and prompt steps for recovery or sale of assets
in the case of loans at the risk of turning bad.
On Thursday, 30 January 2014 the central bank issued final rules similar to the measures
outlined in the working paper after taking public feedback into account. Lenders will need to

7. carve out as special category of assets termed special mention accounts (SMAs) in which
early signs of stress are visible.
Accounts within this category will be put under three sub-categories, based on the period for
which their principal or interest payments are overdue. The duration of overdue payments can
range from under 30 days to 90 days. Loan repayments that are more than 90 days overdue
are classified as non-performing assets (NPAs) under existing regulations.
If a borrower's interest or principal payments are overdue by more than 60 days, a joint
lenders' forum must be formed by the bankers for early resolution of stress, RBI said.
The new rules also offer incentives to lenders to quickly and collectively agree to a resolution
plan by offering better regulatory treatment for stressed assets where such a plan is under
implementation. As a way to discourage long-drawn-out negotiations between bankers, RBI
said accelerated provisioning will be applicable if no agreement can be reached.
Restructuring proposals in accounts where the aggregate exposure of banks is above Rs 500
crore will now be subjected to assessment by an independent evaluation committee (IEC) of
experts. “The IEC will look into the viability aspects after ensuring that the terms of
restructuring are fair to the lenders,” said RBI.
The committee will submit its recommendations to the corporate debt restructuring (CDR)
cell within a period of 30 days.
“Appropriate incentive structures may be built so as to provide greater role to PE (private
equity) firms and other institutions in restructuring of troubled-company accounts. These
institutions can be expected not only to bring additional funds for restructuring, but also bring
in expertise for management of the business unit in question,” RBI said in a statement.
Further, banks will not be allowed to offer finance to such specialized entities put together for
acquisition of troubled companies.
In the interest of better information sharing within the banking system, RBI said it will set up
a central repository of information on large credits to collect, store and disseminate credit
data to lenders. For this, banks will have to furnish credit information on all their borrowers
having aggregate fund-based and non-fund-based exposure of Rs 5 crore and above.
The government had on Thursday, 30 January 2014, raised the cap on number of subsidised
domestic LPG cylinders from 9 to 12 per year effective from 1 February 2014. The
government agreed to demand from 9 to 12 after Congress Vice President Rahul Gandhi told
Prime Minister Manmohan Singh the present allocation wasn't enough.
The hike will cost the government between Rs 3300 crore and Rs 4400 crore in additional
subsidies it will have to pay state-run fuel retailers, according to estimates by the oil ministry.
The government already pays about Rs 46000 crore every year to subsidize cooking gas.
Bank stocks gained after the Reserve Bank of India (RBI) on Thursday, 30 January 2014 laid
out a road map to deal with a surge in bad loans in the banking system. State Bank of India

8. (SBI) rose after the state-run bank said that it has raised Rs 8031.64 crore by selling shares
through qualified institutional placement. In IT pack, HCL Technologies scaled a record
high. Offshore oil services were in demand on fresh buying.
Idea Cellular rose after two bulk deals were executed on the counter on BSE today, 31
January 2014. Other telecom stocks were also in demand. Motherson Sumi Systems jumped
after robust Q3 earnings. Many metal stocks gained. NTPC dropped as the stock turned exdividend today, 31 January 2014, for interim dividend of Rs 4 per share for the year ending
31 March 2014.
Neyveli Lignite Corporation rose 2.59% after net profit jumped 120.6% to Rs 489.02 crore
on 4.7% growth in net sales to Rs 1314.95 crore in Q3 December 2013 over Q3 December
2012.
Union Bank of India rose 4.48% after net profit rose 15.39% to Rs 348.94 crore on 18.26%
increase in total income to Rs 8230.17 crore in Q3 December 2013 over Q3 December 2012.
Oriental Bank of Commerce rose 5.22%. The bank's net profit fell 31.28% to Rs 224.30 crore
on 4.49% increase in total income to Rs 5063.98 crore in Q3 December 2013 over Q3
December 2012.
IDFC reported 10.02% rise in consolidated net profit to Rs 500.68 crore on 3.67% rise in
total income to Rs 2122.84 crore in Q3 December 2012 over Q3 December 2012.
ING Vysya Bank reported 3.08% rise in net profit to Rs 167.34 crore on 4.37% rise in total
income to Rs 1487.85 crore in Q3 December 2012 over Q3 December 2012.
TCS announced that it has been designated as a Leader in the IDC MarketScape: Worldwide
Life Science Manufacturing and Supply Chain ITO.
Hero MotoCorp reported 7.53% rise in net profit to Rs 524.66 crore on 11.13% rise in total
turnover (net sales and other operating income) to Rs 6876.78 crore in Q3 December 2013
over Q3 December 2012.
NTPC turns ex-dividend today, 31 January 2014, for interim dividend of Rs 4 per share for
the year ending 31 March 2014.
Balkrishna Industries surged 7.08% after net profit jumped 66.4% to Rs 123.85 crore on
24.2% growth in net sales to Rs 867.32 crore in Q3 December 2013 over Q3 December 2012.
Bayer CropScience fell 4.13% after net profit fell 95.68% to Rs 39 crore on 12.07% rise in
net sales to Rs 626.60 crore in Q3 December 2013 over Q3 December 2012.

9. Suven Life Sciences rose 3.7% after the firm said it has received 3 product patents one each
from Canada, China and India corresponding to NCEs for treatment of disorders associated
with neurodegenerative diseases.
European stock markets extended losses in midmorning action on Friday, after data showed
euro-zone inflation fell unexpectedly in January, further adding to fears of deflation in the
region. Most Asian markets were closed today, 31 January 2014, for the Lunar new year
holiday. Trading in US index futures indicated that the Dow could fall 84 points at the
opening bell on Friday, 31 January 2014. US stocks rebounded on Thursday, 30 January
2014, as investors welcomed data showing a robust pace of growth in the economy in the
final quarter of last year, while upbeat earnings from Facebook Inc. boosted the tech sector
The annual rate of inflation across the 18 countries that shared the euro fell to a record low in
January. The European Union's statistics agency said Friday consumer prices rose by just
0.7% in the 12 months to January, down from an 0.8% annual rate of inflation in December,
and further below the ECB's target of just under 2%.
Eurostat Friday said the number of people without jobs across the 17 countries that then
shared the euro fell by the largest amount since April 2007.
The statistics agency said the euro zone's unemployment rate was unchanged in December at
12%, having revised the November figure down from 12.1%. But the number of people
without jobs fell by 129,000, the largest drop in a single month since April 2007, well before
the onset of the financial crisis.
The decline in the number of jobless was led by Spain, but also included Germany, Italy and
Portugal.
French consumer spending inched down in December, as households cut purchases of clothes
and accessories, the national statistics bureau said Friday. Consumer spending in the euro
zone's second-largest economy dropped 0.1% last month, but posted a 1.4% increase on the
year.
Spain's inflation rate was unchanged in January from the previous month and continues to be
well below the European Central Bank's own target, preliminary data released Friday show.

10. In its preliminary estimate, the National Statistics Institute, known as INE, said Spain's
European Union-harmonized consumer price index rose 0.3% on the year, the same as in
December.
The ECB aims to keep the annual inflation rate in the euro zone below but close to 2% over
the medium term.
By Spain's own methodology, January's CPI increased by 0.2%, compared with a 0.3% rise in
December.
UK consumers were the most optimistic in over six years in January, buoyed by
improvements in both personal finances and the economy, a survey showed Friday.
The monthly consumer confidence index from research firm GfK rose to -7 in January from 13 in December. That was the highest level since September 2007 and more than reversed the
single-point declines reported in the index in recent months.
Japanese industrial production rose 1.1% on month in December, the Ministry of Economy,
Trade and Industry said Friday, on a demand rush ahead of an April sales tax increase. It also
comes after a 0.1% decline in November. The increase in industrial output was due to a rise
in production in the general purpose and production machinery sectors as well as electronic
parts and devices.
Meanwhile, Japanese consumer prices rose at their sharpest rate in over five years in
December, the government said Friday. Consumer prices also increased for the whole of
2013, the first annual increase in five years, according to data released by the Ministry of
Internal Affairs and Communications.
The core consumer price index, which excludes volatile fresh-food costs, climbed 1.3% from
a year earlier in December, faster than a 1.2% gain in the previous month, according to data
released by the Ministry of Internal Affairs and Communications. It was the biggest rise since
a 1.9% increase in October 2008. The core index for 2013 increased 0.4% after a 0.1% fall
the previous year. The CPI including fresh food prices rose 1.6% on year in December.
Employment data released Friday also suggested a strongly recovering economy. The jobless
rate fell to 3.7% of the work force, down from 4% in November and the lowest rate since
December 2007. The closely watched ratio of available jobs to applicants also improved to
1.03, meaning 103 jobs were on offer for every 100 job seekers.
.
The US economy expanded rapidly in the final quarter of 2013, the Commerce Department
said on Thursday, 30 January 2014, as consumers shrugged off a government shutdown, with
the data fuelling hopes of even faster growth ahead. The gross domestic product grew at 3.2%
annual pace.
The number of people who sought US unemployment benefits near the end of January rose to
the highest level in six weeks, but it's unclear whether the increase is the residue of holidayseason distortions or reflects a deterioration in the labor market. The less-volatile, four-week
average rose by a fraction.

11. Meanwhile, Janet Yellen will be sworn in as chairwoman of the Federal Reserve on Monday,
3 February 2014, the US central bank announced Thursday, 30 January 2014. Yellen will
replace outgoing Fed Chairman Ben Bernanke, whose term as chairman expires on Friday, 31
January 2014.
The Federal Reserve on 29 January 2014 took another gradual step toward exiting its
controversial bond-buying program. As expected, the Fed decided, after a monetary policy
review, to reduce the pace of monthly asset purchases to $65 billion, from January's $75
billion. The Fed also signalled that it is likely to keep reducing its purchases in the coming
months, citing a pickup in economic activity and improvement in the labour market