Daily Markets, Economy and Tech. Sector – 12Dec 2011

Global – Economy and Market

  • ECB outlines measures to ease pressure on banks

The European Central Bank unveiled initiatives to help banks as EU leaders meet in Brussels to form a plan to resolve the sovereign-debt crisis and save the eurozone. The central bank lowered its key interest rate to 1% and will start offering three-year loans. However, the ECB offered nothing for troubled countries, such as buying more government bonds.

Asia’s economy heading for ‘yo-yo’ year in 2012

SINGAPORE – Asia’s economic growth looks set to stumble over the next few months, prompting a flurry of interest rate cuts and a spike in stimulus spending that may ultimately pave the way for a strong recovery in the second half of 2012.

Bank of England maintains key rate and stimulus size

The Bank of England left its benchmark interest rate at 0.5% and kept its bond-buying program at £275 billion. However, the central bank is expected to ramp up efforts to buoy the economy in early 2012. "In our view, the [Monetary Policy Committee] will raise its target for asset purchases at this stage by another £50 billion to £325 billion," said Philip Shaw, an economist at Investec. "As things stand, a subsequent round of [quantitative easing] is likelier than not, resulting in a further £50 billion being sanctioned in May, pushing the target up to £375 billion."

Consumer inflation slows in China

Consumer inflation fell to an annual rate of 4.2% last month, compared with 5.5% in October, China’s National Bureau of Statistics said. The cooling of inflation gives China’s leaders more flexibility to loosen monetary policy and stimulate growth, economists said.

Korea and Indonesia kept their policy rates unchanged, in line with market expectations.

CPI inflation for China, Taiwan, and the Philippines all slowed in November and surprised the market on the downside.

China’s fixed asset investment, industrial production, and retail sales remained resilient in November.

Taiwan’s November trade data fell sharply. In contrast, Malaysia’s October exports and industrial production both surprised the market on the upside.

India – Economy and Market

  • Everyone gains as gold loans soar to Rs 55,000 crore

According to industry estimates, around 200 tonnes of gold have been used as collateral to raise loans by end November in 2011-12 fiscal.

India’s forex reserves rise by $2.48 billion

India’s foreign exchange reserves climbed by $2.48 billion to $306.84 billion for the week ended Dec 2, rising for the first time in five weeks.

Vague cross-border transaction norms keep private equity firms in lurch

MUMBAI: Large private equity transactions and strategic stake sales have hit a tax hurdle as buyers and sellers fret over potential tax demands on capital gains exemption under the Indo-Mauritius tax treaty.

Senior executives of major PE firms, including Actis, Matrix Partners and Warburg Pincus, have admitted that lack of clarity on whether companies based in Mauritius are entitled to benefits of the tax treaty between India and Mauritius is affecting the closures of deals.

Indirect tax rises 16.8%, CBEC optimistic of meeting target

Indirect tax collections rose 16.8% during the first eight months of the current fiscal to Rs 2,52,544 crore, prompting the Central Board of Excise and Customs (CBEC) to express "optimism" in achieving the revised Budget estimate target.

However, Central Excise collections dropped by 6.5% to Rs 11,761 crore in November, mainly on account of cut in petroleum duties and lesser clearances.

Credit Suisse estimates – the RBI to keep the policy rate unchanged next week against

the backdrop of weakening growth and slowing inflation. India’s November WPI inflation will slow to 9.2% yoy ; while

industrial production may have contracted 5% yoy in October.

Indian shares rise 0.6 pct; banks gain

NEW DELHI, Dec 12 – Indian shares rose 0.6 percent early on Monday, led by HDFC Bank and State Bank of India, as Europe’s moves to tackle the euro zone debt woes bolstered sentiment.

Technology News –

  • E-commerce Industry: Online price war forces Taggle to shut shop

In the first sign of an impending shakeout in the Indian e-commerce industry, online retailer Taggle shut operations last week

YouTube acquires RightsFlow

YouTube has acquired RightsFlow, a firm that manages royalty payments for songwriters and music publishers, for an undisclosed amount.

Huawei debuts enterprise business solutions; launches telepresence

Huawei offers the full range of ICT products in its enterprise business portfolio which encompasses 5 business verticals-IP, CT, IT, Vertical Industry and Services.

Daily_Markets_Eco_12Dec2011.doc

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