India Forex - Forex Trading in India

India Friday 30 July 2010 - Despite a dip in revenues, Great Eastern Shipping today reported 11 per cent jump in net profit at Rs 171.80 crore on foreign currency gains during the quarter ended June 30, 2010, over the same period last fiscal.

The company had posted a consolidated net profit of Rs 154.17 crore during the same quarter of 2009-10.
GE Shipping’s consolidated revenues, however, were down 18.9 per cent at Rs 688 crore during the April-June quarter this fiscal, as against Rs 840 crore in Q1 of FY10.

“Gain on foreign currency transactions (net) for the quarter ended June 30, 2010 includes a non-cash gain of Rs 40.47 crore on revaluation of the outstanding foreign currency bank balances and debtors/creditors,” the company said in a filing to the stock exchanges.

In the same quarter last year, the company had recorded a loss of Rs 92.99 crore, the company statement added.

GE Shipping’s offshore services unit Greatship (India) Ltd has filed a draft red herring prospectus (DRHP) with market regulator Securities and Exchanges Board (Sebi) to raise up to $100 million by selling 22.05 million shares in an initial public offering.

India Saturday 01 May 2010 - While India’s Reserve Bank has often been awarded a AAA on monetary policy management and banking regulation, it has been frequently criticised for ignoring even opposing market development.Gopika Gopakumar of CNBC-TV18 examins the state of various products in the financial markets and reports on their performance in terms of volumes.

In the Indian financial markets, equities have been the proverbial hare while the interest rate market is the tortoise that is yet to win the race. To be fair the tortoise has made some steady even spectacular if slow progress over the past five years.

Sample this: In 2004-05, companies raised about 55,000 crores via corporate bonds. In 2009-10 they have raised Rs 1.8 lakh crore. Through commercial paper, they have raised 91,000 crore in the just ended year. Five years ago the number was just 10 thousand crore. Again in 2005, banks raised 12, 800 crores via CDs. In FY10 they raised a whopping Rs 4.3 lakh crore. Trading VoLumes too have picked up exponentially in several markets. Spot forex trading over the counter used to average USD 11 billion a day in 2004-05; now they average nearly USD 30 billion. Currency futures, a market that didn’t exist until August 2008, has already grown into a USD 4 billion a day market per exchange. Government bonds used to generate trading volumes of Rs 33,000 crore in 2004-05, now it is often Rs one lakh crore of trades a day. The overnight index swap market was still fledgling in 2004-05. Now these markets are deep and trade over 1.5 lakh crore a day, according to CCIL data.
Besides these, banks write a whole range of derivative products. The total outstanding value of derivatives in India were about Rs 2.6 lakh crore in 2005. They rose to Rs 8.6 lakh crore in 2009.

India Saturday 27 February 2010: The Indian rupee will this fiscal join the elite league of global currencies like US dollar, British Pound and Euro that have their unique symbols, Finance Minister Pranab Mukherjee said on Fridaly.

“In the ensuing year, we intend to formalise a symbol for the Indian rupee, which reflects and captures the Indian ethos and culture,” he announced in his Budget speech in Parliament.

“With this, Indian rupee will join the select club of currencies such as the US Dollar, British Pound Sterling, Euro and Japanese Yen that have a clear distinguishing identity,” he said.

While these foreign currencies have their own unique symbols, other than their abbreviations like USD and GBP, Rupee is only referred to by the abbreviation ‘Rs’. Moreover, the same abbreviated forms are also in neighbouring countries like Pakistan, Nepal and Sri Lanka rupee.

The decision to have a symbol for rupee was taken by the government last year. It was also decided to invite designs from the public for the new symbol. The shortlisted designers would present their designs to a seven-member jury, comprising of officials from the government and RBI as also people from institutes like J J Institute of Applied Art, National Institute of Design, Lalit Kala Akademi and Indira Gandhi National Centre.

India Friday 26 February 2010 : The rupee has strengthened against the USD as the rupee USD exchange rate appreciated to Rs. 46.64 per dollar on January 1, 2010, which was Rs. 50.95 per dollar in end-March 2009.

The Indian rupee has appreciated by 9.2 per cent over its March 31, 2009 level, says Economic Survey 2009-10 presented in Parliament by Union Finance Minister Pranab Mukherjee on Thursday.

This has been attributed to significant turnaround in FIIinflows, continued inflows under FDI and NRI deposits, better macroeconomic performance of the Indian economy and weakening of the USUSD in international markets.

The foreign exchange reserves have increased by USUSD 31.5 billion during the period April to December 2009. The level of foreign exchange reserves stood at USUSD 283.5 billion compared to USUSD 252.0 billion at the end of March 2009.

India’s Balance of Payment (BoP) exhibited considerable resilience during fiscal 2008-09 despite one of the severest external shocks.

During the fiscal 2009-10, the net invisibles surplus i.e. invisibles receipts minus invisibles payments stood lower at USUSD 39.6 billion during April-September 2009 registering a sign of overall improvement in Balance of Payment scenario during the first half of 2009-10 over the corresponding period 2008-09.

The current account deficit increased to USUSD 18.6 billion in April-September 2009, despite lower trade deficit as compared to USUSD 15.8 billion in April-September 2008, mainly due to lower net invisible surplus.

During the first half of 2009-10 total external debt increased by USUSD 18.2 billion i.e. 8.1 per cent to USUSD 242.8 billion. In rupee turms the external debt stands at Rs. 1.166.217crore. Long-term debt posted an increase of USUSD 19.2 billion to stand at USUSD 200.4 billion while short-term debt fell by USUSD 985 million and stood at USUSD 42.4 billion.

The Economic Survey 2009-10 however has recognized the interest rates at their historic low in most advanced economies as one of the major challenges. With this the possibility of larger capital flows from these countries into the fast growing Asian economies including India is stated to pose the risk of overheating the economy by excess inflows over the domestic absorptive capacity.

India Friday 12 February 2010 –Patni Computer Systems Ltd. (532517.BY), a medium-sized Indian software exporter, said Thursday its fourth-quarter net profit more than doubled from a year earlier, boosted by a tax write-back and foreign-exchange gains, and forecast almost flattish sequential revenue growth for January-March.

Consolidated net profit for October-December rose to INR1.88 billion ($40.5 million) from INR780.1 million, said the company that reports results based on U.S. accounting standards.

The company reversed INR135.5 million of tax provisions made earlier, and also had a foreign-exchange-related gain of INR148.5 million in the past quarter compared with a loss of INR612.7 million a year earlier.

Excluding extraordinary items, it posted earnings of $29.4 million.

Patni, listed both in India and the U.S., was expected to report a net profit of INR1.23 billion, according to the average of estimates in a Dow Jones Newswires poll of five analysts. The company’s own forecast was for a profit of $24 million-$25 million, excluding impact from foreign-exchange fluctuations.

Consolidated revenue fell to INR7.90 billion ($170.2 million) from INR8.57 billion a year earlier.

The results come at a time when the information-technology industry in India is gradually emerging out of the global slowdown, with clients reviving stalled projects and willing to give more contracts.

Patni’s larger rivals such as Infosys Technologies Ltd. and Wipro Ltd. have reported strong quarterly results for the October-December period and have forecast robust growth in the coming quarters.

But, Patni made a cautious outlook for the current quarter, forecasting revenue of $170 million to $174 million. It expects a profit of $28 million-$29 million, excluding any impact from foreign-exchange fluctuations.

The outlook disappointed markets. Patni’s shares were down 1.1% at INR467.30 on the Bombay Stock Exchange at 0845 GMT, underperforming the benchmark Sensitive Index that was up 1.5%.

Chief Financial Officer Surjeet Singh said the outlook takes into account seasonally weak business at Patni’s clients in the insurance sector.

The company gets nearly 30% of its revenue by providing services such as client enrollment, claims process and IT support to insurers.

Singh said Patni too is witnessing improved business conditions and that it is close to signing a couple of large contracts. “We are guiding to visibility,” based on the orders Patni already has, he said on the January-March forecast.

Singh said the two contracts it is expected to get are worth $150 million-$200 million each. He didn’t provide other details on the contracts.

“Patni’s quarterly results were decent and more or less in line with expectations,” said Centrum Brokings’s Nitin Padmanabhan.

On Patni adding 20 new clients in the past quarter, Padmanabhan said that pointed to improved performance from the company in future.

Padmanabhan, however, said the company is unlikely to significantly outperform its financial outlook for January-March with less than two months left for the quarter to end, but it is likely to improve performance subsequently.

Meanwhile, Singh said billing rates were expected to remain flat in 2010, with operating margin likely to be at 15%-17%. Operating margin adjusted for extraordinary items was 15.2% in 2009.

Singh said the company expects to maintain staff utilization, or the percentage of employees working on active contracts, in a range of 75%-77%. Its staff utilization in the past year was 74.9%.

On potential acquisitions, Singh said the company has identified some assets and that it would use most of its about $450 million cash on hand for acquisitions. He didn’t elaborate further.

India Wednesday 10 February 2010: The rupee strengthened on Wednesday, in line with other regional currencies, but could not sustain its early highs as concerns of another decline in risk appetite in global equities pushed local stocks down.

At 10:45 a.m. (0515 GMT), the partially convertible rupee was at 46.57/58 per dollar, off an early high of 46.5050 but still stronger than its close of 46.66/67 on Tuesday.

“The rupee gained at open tracking the dollar’s fall, but then stocks turned negative which has pressured the unit a bit. Stocks will now wait for the European markets to open, trading would be rangebound till then,” said Sudarshana Bhat, head of foreign exchange trading, at state-run Corporation Bank.

“46.62 is likely to be the topside for the dollar, but rupee may edge up later in the day. Relaxation of the external commercial borrowing norms is also positive for the rupee. It should hold in a 46.45-60 range today,” he added.

India’s central bank said on Tuesday banks may allow changes in the repayment of foreign currency borrowings if the average maturity of such debt is maintained.

It also said changes in the currency of borrowing may be allowed as long as the currency is freely convertible.

Indian shares were down 0.1 per cent after having risen 0.6 per cent earlier. Shares are closely watched for cues on the direction of foreign fund flows, which are key in determining direction for the rupee.

Most Asian units were stronger compared to the dollar.

The euro fell on Wednesday, with investors awaiting details of a rescue package for Greece, keen to see how it could impact the euro zone economy.

One-month offshore non-deliverable forward contracts was quoting at 46.61/71, weaker than the onshore spot rate.

“Rupee is likely to hold in a 46.20-90 range until the budget. European problems, US recovery, upcoming initial public offerings and government’s disinvestment plans will all be crucial going ahead. But rupee is mostly seen edging up in the long run,” Bhat said.

The budget is due to be presented on February 26. In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both quoting at 46.6125, with the total traded volume on the two exchanges at about $1.1 billion.

India Tuesday 9 February 2010 - India’s economy is likely to grow 7.2% in the 2009-10 fiscal year, advance estimates of the Central Statistical Organization showed on Monday. The economy had expanded 6.7% in 2008-09.

For the fiscal year ending on March 31, the financing, insurance, real estate & business services sector is forecast to show the biggest growth of 9.9%, slightly less than the 10.1% logged in the previous year. Manufacturing, one of the key sectors driving GDP growth, is expected to grow a robust 8.9%, much greater than the 3.2% recorded for the previous fiscal.

Mining and quarrying, utilities as well as trade, hotels, transport and communication are expected to show more than 8% growth each in 2009-10. However, construction sector is forecast to show only 6.5% expansion compared to 5.9% in the previous year. Further, farm output is expected to shrink 0.2% in 2009-10 after growing 1.6% in the previous year.

India Thursday 4 February 2010: The Reserve Bank of India (RBI) said on Wednesday it had decided to withdraw a short-term foreign currency funding facility provided to
non-banking financial and home finance firms, with immediate effect.

“The decision has been taken after a review of the prevailing macro-economic conditions and improvements in the domestic credit and liquidity conditions,” the Reserve Bank of India said in a statement.

It had introduced this facility in October 2008, which allowed the firms to raise foreign currency borrowings from the central bank to refinance short-term liabilities.

India Wednesday 3 February 2010 - The rupee rose, rebounding from near a four-week low, on speculation that overseas investors will boost holdings of local assets as India’s economic recovery gathers pace. The currency strengthened after an index compiled by HSBC Holdings and Markit Economics showed on Monday that India’s manufacturing output rose the most in 17 months in January.

Exports rose 9.3% in December, after rising the previous month for the first time in 2009, according to government data released on Monday. The rupee also gained on speculation exporters converted their foreign-currency earnings. “The rupee is gaining support from the improving economic outlook,” said Vikas Babu, a currency trader at Andhra Bank. Also, “exporters are selling dollars because they want to hedge their receivables.”

The rupee rose 0.3% to 46.2325 per dollar at the close of trade on Tuesday. The currency, which advanced 5.8% in the past year, will extend its advance by 5.1% by December 31, according a median estimate. Offshore contracts indicate bets the rupee will trade at 46.28 to the dollar in a month, compared with expectations of 46.43 on Monday. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars rather than the local currency.

The Purchasing Managers’ Index compiled by HSBC and Markit stood at 57.6 last month, compared with 55.6 in December, according to a report released on Monday. That was the 10th monthly reading above 50 levels that reflect expansion.

India Saturday 30 January 2010: Tata Tea, India’s largest tea plantation and processing company, on Thursday announced a 77% drop in consolidated quarterly net profit
despite higher sales, thanks to notional loss on foreign currency assets.

Net profit nosedived to Rs 92 crore in the December quarter from Rs 396 crore in the year-ago period. Net sales, during the period, went up by 21% to Rs 1,540 crore from Rs 1,278 crore.

Operating profit rose by 17% to Rs 165 crore due to improved performance and lower interest costs, the company said in a stock exchange filling. But the notional loss on translation of short term foreign currency financial assets has pulled down the net profit.

The loss stood at Rs 9 lakh in the December quarter, as against a gain of Rs 582 crore in the corresponding previous quarter. On the standalone basis, net profit declined to Rs 37 crore for the December quarter from Rs 48 crore in the same period last year. Total income rose to Rs 471 crore from Rs 428 crore.

Since the major part of the company’s business is in the overseas markets, the consolidated results are better indicator of Tata Tea’s performance. Tata Tea MD Percy Singaporia said the company would make its major brands such as Tetley, Good Earth, Himalayas and Tata Tea global. “All innovations in the beverage space will take place on these brands.” Shares of Tata Tea lost 1% to close at Rs 918.85 in a flat Mumbai market.