GLOBAL
Noted economist Nouriel Roubini expects markets to meltdown in 2013, as problems with US fiscal position, European debt crisis and over-heating of Chinese economy will result in a widespread global crisis. Similarly Michelle Meyers from BOFA-ML is of an opinion that a fiscal-cliff had been reached, as businesses have started to crub investments and hiring plans. Further BOFA-ML sees a US annual GDP growth at 1.5 per cent and a 1.3 per cent growth in the current quarter. (CNBC)
ASIA
Japan’s current account surplus declined to its lowest in 27 years for May 2012 period. The account declined 63 percent on a y/y basis to JPY 215.1 b (USD 2.7 b) vs estimates of a surplus of JPY 493.1 b. The dismal news was followed by a slowdown in machinery orders by 14.8 percent in May over April 2012. Major cause of the shrinking deficit was the rise in imports of fuel and energy on account of the nuclear disaster in its reactors following the tsunami. Trade deficit for period ended 31 March widened to JPY 4.4 t on rising energy imports and lower exports. (Bloomberg)
OECD’s economic activity index for China eased to 99.2 in May versus 99.4 in April. (MoneyControl/Reuters)
INDIA
According to a survey conducted by Standard Chartered, 72 percent of the respondents out of 125 believed that India’s GDP would expand less than 6 percent for FY12-13 and twenty percent of the survey yielded expectations of GDP growth below 5 percent. The same survey also revealed that by 2016, India’s economic output would touch pre-crisis growth levels of 9 percent driven by election results in 2014 and policies undertaken by the government. (Economic Times)
The Reserve Bank of India relaxed norms for foreign banks in an attempt to get them to meet its capital adequacy requirements. If its Tier I capital of banks with overseas offices exceeded 10 percent, that amount would be deducted from its Tier I capital account for regulatory purposes effective 30 September. (Economic Times)
The Indian government is optimistic of achieving its textiles exports target of USD 40.5 b for FY12-13 even on slowdown in demand from Europe and the US. Previous year’s targeted value remained at USD 33 b. Emerging markets such as Latin America, Africa and Middle East would comparatively have better growth potential in the coming period. (Economic Times)
According to a report by the World Trade Organization, India would safeguard its steel industry from imports of certain types of 300-series hot rolled flat steel from China. A complaint from Jindal Stainless Ltd prompted the government to undertake these measures as imports of such products rose sharply from 10 percent to 50 percent over the last three years. (Economic Times)
OECD’s economic activity index for India fell to 97.8 from 98. (MoneyControl/Reuters)
FII’s made gross purchases of INR 1598.62cr and gross sales totalling INR 1345.64cr. DII’s made gross purchases of INR 1942cr and sales totalling INR 1333.80cr. (Business Standard)
Reliance Industries Ltd – Co. would commence its natural gas supply network to Pragati Power Corp’s Bawana power project from its KG-D6 oil fields. (Economic Times)
SAIL – Co. plans to invest INR 1.31 lakh cr investment to expand production capacity to 45 million tonnes per annum by 2020. (Money Control/PTI)
Tata Motors – Standard & Poor revised co.’s ratings to BB from BB- due improved business and financial risk profile. (Yahoo/IANS)
Tata Power – Standard & Poor downgraded the outlook on co. to ‘negative’ from stable, citing limited ability of co. to arrange funds for the 4000 megawatt project in Gujarat, after co. breached its debt pact. The rating agency expects co.’s cash flow and financial risk profile to deteriorate over the next six to nine months. (Yahoo/Reuters)
Jain Irrigation – Co. along with its partners to invest INR 100cr its new Non-Banking Financial Company (NBFC) venture. (Economic Times)
IndiaBulls Finance – Co. lends INR 450cr to Sheth Developers for completion of its mall project in Thane and paying off existing debt. (The Hindu Business Line)
Indraprastha Gas Ltd – Co. raised prices of compressed natural gas by INR 2.90 per kg in Delhi and adjoining towns. (IndianExpress)
Everest Kanto Cylinder – Crisil research maintains a fundamental grade 3/5 for co. and fair value maintained at INR 53 per share. (MoneyControl)
EUROPE
European Central Bank’s President Mario Draghi suggested in his speech that further rounds of rate cuts could be conducted if the economic outlook suffers across the eurozone. With its next policy meet on 2 August, the ECB would undertake unconventional measures as long as it does not affect its mandate of controlling inflation in the eurozone. He also stated that the permanent bailout fund the European Stability Mechanism (ESM) would not be able to recapitalize banks of distressed nations all throughout as it would raise borrowing rates for these countries. (Bloomberg)
Bank of England’s Deputy Governor Paul Tucker denied allegations of him being involved in the Libor manipulation scandal. He refuted claims that the ministers of the previous labour government prompted him to encourage banks to manipulate the Libor rate. (Financial Times)
The European Union has given some extra time to Spain to cut its fiscal deficit with clauses such as an increase in taxes. Spain would seek to reduce its deficit on the back of the EU agreement to 6.3 percent from the more stringent 5.3 percent of GDP. In related news yield on the Spanish 10 year bond hit 7 per cent, at levels considered unaffordable for Spain to raise money. (Financial Times/Economic Times/AP)
According to the Foundation for Economic and Industrial Research (IOBE), Greece’s economy could slump more than 6.9 per cent this years. The foundation was headed by Yannis Stournaras. (Economic Times/Reuters)
The yields on 6 months German debt hit a record low at -003 per cent, with investors bidding EUR 5.5b against EUR 4.4b on offer. (Economic Times/AFP)
Volkswagen – Audi’s June sales up 13.1 per cent to 133,050 unit, while 1H sales up 12.3 per cent to 733, 250 units. Chinese sales accounted for 193,871 units registering a 37.8 per cent gain. (Economic Times/Reuters)
NORTH AMERICA
According to San Francisco Federal Reserve President John Williams, in an effort to bring down unemployment and stimulate the economy the Fed could make additional purchases of longer dated securities, including agency mortgage backed securities. (Reuters)
According to Goldman Sachs and Bank of America, a weaker than expected forecast of jobs in June could prompt the US Federal Reserve to lower in benchmark interest rates to zero until 2015. (Bloomberg)
Boeing Co. – Co would finalize an agreement whereby it would manufacture 100 Boeing 737 jets to United Continental Holdings Inc. The deal is valued at around USD 8.4 b. (Bloomberg)
Thomson Reuters Corp – Co. to buy electronic foreign exchange platform FX Alliance Inc for about USD 625m in cash. (Reuters)
Raytheon – Co. wins USD 636m US missile defence contract running through 2018. The contract was awarded by Boeing the prime contractor for the missile defence program. (Reuters)
GE Aviation – Co. signed a USD 150m agreement with Jet Airways for repair and overhaul operations. (The Hindu Business Line/PTI)
Amerigroup – WellPoint Inc to acquire co. for USD 4.9b in cash. (LaTimes)
Sirius XM – Co. raised its full-year subscriber forecast to about 1.6m from 1.3m and raised its revenue outlook to USD 3.4b versus USD 3.3b. (CNBC)