56,700 Indians face deportation from Saudi Arabia in the next one-and-half months and ten officials have been despatched to the kingdom to help the Indian mission prepare emergency certificates for their exit, External Affairs Minister Salman Khurshid said. “As of now, 56,700 Indians have registered with the Indian mission for getting exit permits as they have no valid passports or other travel documents,” Khurshid told a reporters. He said he is leaving on a two-day visit to Saudi Arabia to meet his counterpart Faisal Al Saud and other dignitaries and discuss various bilateral matters including problems of Indian workers due to the “Nitaqat” policy under which all companies are required to provide 10 percent of jobs to Saudi youth. Khurshid said the 10 officials sent to the kingdom will help the mission to prepare no objection certificates for the Indian workers, adding it is a “cumbersome procedure as we are required to get details of the worker from the district authorities”. He said this time, more than 4,000 Indian volunteers are helping the mission to complete formalities, while the mission is working round the clock and has also set up offices in various Saudi cities to facilitate workers to fill up form for the emergency certificates. The Saudi government has fixed July 6 as the deadline for all foreign illegal workers to leave the country. The Saudi authorities have assured the Indian government that they will not harass Indian workers because of their good behaviour, and no one will be penalised or sent to jail for violations of these norms if they leave country before the deadline. · Source – IANS ©2009 Copyright by Invest In India
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Insurance Regulatory and Development Authority (Irda) said life insurance, non-life insurance and reinsurance companies, who have completed here three years of operation in India will be eligible to set up office outide the country as well. The above mentioned companies should have should have a net worth of Rs 500 crore, Rs 250 crore and Rs 750 crore, respectively, to apply for opening offices abroad. The guidelines said the registered Indian insurance company should not suffer from any adverse report of the authority on its record of regulatory compliances, for three years out of the past five years from the date of application. According to Irda, the term ‘foreign insurance company’ would mean a company registered outside India, whose paid-up capital was subscribed to by an Indian insurance company. It shall include a foreign subsidiary company wherein the Indian insurance firm has a holding of more than 50 per cent of its paid-up capital or is in a position to control the composition of its board of directors. It shall also include a branch office of the Indian insurance company. Apart from compliance with the host country solvency requirements, Irda has asked the companies to comply with the know your customer (KYC) and anti-money laundering (AML) guidelines. On a quarterly basis, these insurers should report business numbers of foreign branch offices, claims performance and expenses incurred. Source – Business Standard ©2009 Copyright by Invest In India
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Fortune magazine has a long and detailed story about Ranbaxy and the reason for its $500 million settlement with the FDA. But in Gurgaon, as Thakur’s project managers gathered data and interviewed company scientists and executives, he says, they stumbled onto Ranbaxy’s open secret: The company manipulated almost every aspect of its manufacturing process to quickly produce impressive-looking data that would bolster its bottom line. “This was not something that was concealed,” Thakur says. It was “common knowledge among senior managers of the company, heads of research and development, people responsible for formulation to the clinical people.” Lying to regulators and backdating and forgery were commonplace, he says. The company even forged its own standard operating procedures, which FDA inspectors rely on to assess whether a company is following its own policies. Thakur’s team was told of one instance in which company officials forged and backdated a standard operating procedure related to how patient data are stored, then aged the document in a “steam room” overnight to fool regulators. The whole thing is damning and it’s surprising (if true) that Ranbaxy top honchos were not investigated for fraud. In fact, given the huge clout that large pharma has in the …
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RBI held a teleconference for Inflation Indexed Bonds (IIBs) where they clarified a few points. In summary: IIBs will work according to the way I mentioned it in my original post. They will release a more detailed FAQ later. It is going to be very tough for you to participate in the auctions directly. You have to find a primary dealer who can bid on your behalf, and then transfer the shares to your demat account. Since the primary listing area will still be the RBI’s platform (NDS-OM) it’s a pain to sell these bonds once you buy them – first you’ll have to transfer from your demat to SGL account, and then sell from there. If there is good trading in the NSE Debt segment, the SGL step is not required. The bonds will qualify for repo, SLR, and short selling. Like any other govt bond, subject to limits like minimum size/liquidity etc. Interest will be paid twice a year (like regular govt bonds) There will be one bond that is continuously reissued for the first six months – the coupon rate will remain the same for them. Subsequently they may issue a new bond or keep the same. …
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The JustDial IPO has been fully subscribed with bids for more than 12 times the amount at hand. While institutions bid for more than 10 times their allocation, retail investors who pitched for less than 200K worth have bid for 3.3x their quota. For retail the rule is that every single investor gets at least one lot, so if you applied you should be able to get 25 shares. The surprise was that HNIs bit this up 22x. They don’t have a safety net, so why do they care? Apparently, they do! Bids seem to now be concentrated at the higher end of the band. Now to see what happens on listing. Disclosure: I’ve bought a bit in the IPO, so I’m biased. …
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Algorithmic trading has now become the rage, officially. With 18% of trades in April being algorithmically generated, SEBI has now gotten more active in regulation. In guidelines released today , the regulator has mentioned that All algos need to be reviewed by system auditors every six months Stock exchanges need to specifically monitor orders from trading algorithms and ensure they can better detect manipulation and disruption. Apart from these generic obligations, stock exchanges have been asked to double the fines for high order-to-trade ratios of algo clients. Most market making algorithms will place an order and modify or cancel the order very quickly to maintain a viable trade at any point (that is, for every order, there could be a corresponding other side like a future or a put-call-parity trade). In many cases, such unexecuted orders are huge in number while actual trades are low. This is like a “missed call”, and puts stress on a trading system, but also hampers price discovery. If you see a bid and try to place an order to hit that bid, chances are that the algo keeps bumping the price around to see how low you will go, which is useless and frustrating …
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The JustDial Bids come in on the second day filling in 70% of all shares. Read my analysis of the issue. Institutions take in nearly 0% of what they’re allocated, and Retail pumps in 73% of theirs. HNIs don’t get in much – and that could be due to the lack of a safety net (only available to retail). And then, you have the bids, mostly at 530 (the price at which other “anchor” investors have been allocated the issue already (that is 30% of the issue apart from the above allocations) Tomorrow is the last day and most of the money is likely to move in then. I haven’t yet put in my bids. Unless tomorrow is an insane subscription day, I am going to apply at 3 pm through my bank online. (I found out the procedure is simple!) …
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These figures astound me. Winsome Diamonds, a jewellery exporter, has defauted on loans to buy gold and the figures run up to a mammoth 7,000 crore. Says Indian Express : A team of bankers is visiting Dubai to find out the reasons for loan repayment default by Mumbai-based Winsome Diamonds and Jewellery after the company claimed that it could not clear dues as its Gulf customers failed to pay instalments. “A team of bankers is visiting Dubai to find out the actual position. The exposure of the banks is around Rs 7,000 crore,” Oriental Bank of Commerce Chairman and Managing Director S L Bansal said. Yesterday, Crisil downgraded the rating of the company to ‘D’ and placed it under watch list in view of continuous default of the company’s overseas customers and consequent development of Letters of Credit (LCs). Crisil’s note states that the company’s been crippled since March, and it has had some Letters of Credit invoked. (typically an exporter borrows from a foreign bank to pay suppliers, and that loan is guaranteed by an Indian bank as export credit – when Winsome couldn’t pay up, the guarantees were invoked and now the Indian banks are on the hook …
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The JustDial IPO has opened and at the end of the first day, has only 50% of the shares bid till now. About 67 lakh shares (6.7 million) of the 1.75 crore shares (17.5 million) have been bid for. Bids at various price points are as follows: Interestingly, no mutual fund or domestic institution has invested (yet). Nearly all the bids have come from FIIs, and most bids of those are at Rs. 530 per share. The demand chart has been derived from the NSE+BSE data, and the total demand at a price is shown in the second column. (If there is a bid at 475, it’s obvious that bid is valid at Rs. 470 as well, so the demand at 470 includes all bids above it) There has been no hype at all for the IPO, which in my mind means there is some chance it will go up. I haven’t yet applied, largely for reasons involving laziness and having to print forms and sign them. Going through online brokers is okay for some but I prefer the ASBA route. I expect that FIIs will cover the demand by Wednesday, the last day of this IPO. Most retail participation …
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We’ve discussed how Inflation Indexed Bonds might work in India, and like in the US, the difference in the yields between the two is likely to be the expectation of inflation. Let’s look at how the spread between the known WPI has been in the past: (this is the 10 year government bond) Technote: for pre-2004, I have used a base-conversion factor as WPI was reported with a different base year. I know that base splicing should have been used, but I am too lazy to base-splice at this time. In the last 16 years, we’ve seen that: Till 2002, the 10 year bond traded at a significant premium to the inflation number. At one point the difference between yields and inflation was nearly 10%! Till 2001, 10 year bonds paid you more than 10%, an indication of how relatively new our “low” interest rate regime is. There was then a period of “negative” yields – where inflation was higher than the 10 year bond yield for a while. Post 2005, as the RBI raised rates, 10 year bonds traded at rising yields between 6 and 8%, and inflation stayed lower than these yield. The crisis in 2008 led to …
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