VPS GROUP NEWS UPDATED  DATED 02/02/2013MARKET EYE WEEK AHEAD - Trading seen cautious; earnings awaited

 Trading is expected to remain cautious next week as a sudden slump in share price of Tata Motors and Ultratech Cement in late market hours on Friday would make investors take cautious bets.

Shares are expected to trade in a narrow range as sentiment remains muted after the central bank's comments on Tuesday and as traders watch out for earnings of auto major Mahindra & Mahindra   and cement companies including ACC .

Market participants will watch for any announcement from the government about the upcoming budget.

India's plan to raise about $2 billion through a stake sale in power producer NTPC Ltd   will likely take place on February 7, according to sources.

Events to watch:

Monday: Bank of Baroda  , United Sprits

Tuesday: UCO Bank , Apollo Tyres , HSBC Markit services PMI

Wednesday: Cipla , Tech Mahindra

Thursday: ACC , Ambuja Cement , MRF , Aurobindo Pharma
Religare Capital says tech error caused unusual trades

A technology glitch at Religare Capital Markets caused "unintended transactions", the brokerage said on Saturday, a day after deeply discounted sale of large blocks of shares in Tata Motors   and UltraTech Cement   hit the markets.

National Stock Exchange Ltd said on Friday it was investigating the block sales in two stocks, the latest in a series of unusual price movements to rattle the market.

"Religare Capital Markets Limited uses third party software for execution of orders on stock exchanges. Due to some technical issue in the software, unintended transactions got executed," the brokerage said in a statement.

"There was no broker error and no loss to any clients," it said, adding the matter was being looked into by the software provider. It said there was no impact on client business and the brokerage would operate normally on Monday.

A total of 2.07 million shares in Tata Motors were sold in six blocks at an average price of 274.92 rupees in the afternoon on Friday, well below the roughly 292 rupee level at which the shares were trading at the time.

Tata shares fell as low as 268.25 rupees before ending the session down 5.49 percent at 281.64 rupees.

Shares in UltraTech, a cement maker, ended down 3.4 percent after an earlier block sale of 41,863 shares took place at an average 1,853.80 rupees, also well below where shares were trading at the time.

Both trades took place around the same time.
 
Mahindra & Mahindra sales up 11% in January

Auto major Mahindra & Mahindra has reported a growth of 10.70 per cent in its total sales ended January 2013 at Rs 49,503 units, driven by surge in passenger vehicle segment. The company had sold 44,718 units during the same period a year ago, said Mahindra & Mahindra in its filing to the Bombay Stock Exchange on February 1, 2013. Commenting on the development, M&M Chief Executive (Automotive Division) Pravin Shah said, “We are happy to have grown in some of our major segments during January 2013... The recently announced reduction of 25 bps both in the repo and CRR rates is a positive step and is expected to bring in the much desired momentum in the market.” In the domestic market, the company registered a 15.64 per cent rise in sales to 47,841 units during the month compared to 41,369 units in the year-ago period, M&M said in its filling.
Among the passenger vehicles segment, which includes Scorpio, XUV500, Xylo, Bolero and Verito, sales shoot up by 32.94 per cent to 26,555 units against 19,975 units in January 2012. However, the company has reported 9.76 per cent decline in its total tractor sales in January 2013 at 17,473 units corresponding to 19,362 units sold in the same month last year. Meanwhile, shares of the company closed at Rs 885.95 a piece, down 0.48 per cent from previous closing on BSE.Bank of Baroda cuts base rate by 25 bps


Bank of Baroda, on Friday, said it has reduced its base rate and BPLR by 25 basis points in response to the RBI’s move to reduce the key policy (Repo) rate by 25 bps and the Cash Reserve Ratio by 25 bps in its Third Quarterly Review of Monetary Policy unveiled on January 29, 2013. The new lending rates will be effective from February 9, 2013, said Bank of Baroda in a filing to the BSE on February 1, 2013. Following the rate cut, bank’s base rate will be at 10.25 per cent and BPLR at 14.50 per cent. In line with the lending rate cut, the bank also realigned its deposit rates in the band of 15 to 20 bps in the shorter maturities.
The move follows base rate cut announced by State Bank of India, Punjab National Bank, Union Bank of India and IDBI Bank in last few hours, aimed at passing on the benefits of repo rate cut to the borrowers to spur investments and spending in the economy.Deutsche Bank to cap bonus payouts at 300,000 euros

 Deutsche Bank AG  will cap bonus payouts for 2012 at 300,000 euros per employee, a source familiar with the bank's thinking said on Friday.

However, total remuneration for 2012 will not be limited to 300,000 because the cap does not apply to deferred payouts, the source added. Employees are set to find out in the next couple of days what the extent of their remuneration will be for 2012.

Deutsche Bank unveiled a quarterly loss on Thursday after it took nearly $4 billion in charges to try and draw a line under a slew of scandals.

The bank said its bonus pool for 2012 had been cut by 11 percent to 3.2 billion euros. The number of employees in the Corporate Banking and Securities unit - the investment bank - has fallen 13 percent year-on-year.

Average compensation for Deutsche investment bankers was 332,785 euros in 2011, down 12 percent on 2010 levels.

In September, the bank said it would alter remuneration to encourage its bankers to focus on "longer-term sustainable performance". Senior managers will have to wait five years to receive bonus share awards, rather than have them staggered over three years, the bank said at the time.

Overall, Deutsche Bank's headcount had fallen 2.7 percent year-on-year to 98,219 employees at the end of 2012India to take baby steps towards gold

 The RBI plans to introduce three to four gold-linked products in the next few months, in an effort to bring 20,000 tonnes of gold held in households into the banking system, but the measure is unlikely to cut bullion imports sharply, a senior official said.

India is the largest importer of gold, which is its second biggest import item after oil and contributes around 10 percent to the total import bill.

Large gold imports are a worry for the government and the RBI, with the current account deficit shooting to a record high in the September-quarter, pressuring the rupee and adding to inflationary pressures.

The Reserve Bank of India (RBI) plans to mobilise the unused gold by lending it to importers and exporters of the yellow metal, in a move it hopes will bring down the demand for physical gold.

It wants banks to encourage products linked to accepting physical gold as deposits and investing public money in gold related products, and extend loans against gold as collateral.

Indians own about 20,000 tonnes of gold, or three times the holdings of the U.S. Federal Reserve, in jewellery, bars and coins.

"Overnight there won't be any reduction in imports, but people need to be made curious about new products," the RBI official with direct knowledge said.

"The main conduits of gold imports are banks, forming 50-60 percent of the total imports and supplies to jewellers. The way banks are suffering from huge NPAs (non-performing assets), this is a good product to work on."

The RBI is likely to release its final report on issues related to gold imports and gold loans mid-next week, the official said.

The RBI is designing products that could replace physical gold demand to yield similar returns, with easy liquidity, and documentation.

Indian banks' total gold loans are worth 1 trillion rupees. Manappuram Finance and Muthoot Finance, two of the top gold loan financing institutions, together have loan books of 500 billion rupees, the official said, indicating a large business opportunity.

"The problem of gold imports can be solved only when the economy enjoys inflationary and macroeconomic stability," added the official.

Headline inflation has been above 7 percent in the last three years, prompting savers to invest in gold, stocks and real estate, which yielded higher returns compared with bank deposits.

The RBI estimates gold imports to fall by 25 percent in the current fiscal year ending March to 750 tonnes from a record of 1,079 tonnes in the previous year due to high import duty, a jump in prices, slowdown in economic growth, and a month-long jewellers' strike.

India's current account deficit would had been lower by $6 billion at 3.9 percent in 2011/12 instead of 4.2 percent, had imports grown by an average of 24 percent instead of 39 percent, the RBI said in a recent report.
Service tax evasion at 98 billion rupees in April-Dec

 Tax evaders deprived India's coffers of about 98 billion rupees in service taxes during April to December 2012, a finance ministry official said on Friday.

"Of the 98 billion rupees, about 20 billion rupees have been recovered," Lipika Majumdar Roy Choudhury, member, service tax, said.

The department is making efforts to recover the remainder, she added.

Battling tax evasion has become one of the key agendas of Finance Minister P. Chidambaram as he looks to keep an already bloated fiscal deficit target to 5.3 percent for the full year.