3 Indian cities among world's top centres of commerce

Reflecting the growing global economic clout of the Asian region, three Indian cities -- Mumbai, New Delhi and Bangalore have been ranked among the 75 top centres of commerce in the world.

According to a study titled ’Mastercard Worldwide Centres of Commerce Index’, London has been ranked as the most influential city in the world in the 75 cities index.

However, it stated that future appears to belong to Asia and Eastern Europe, whose cities represent the fastest rising regions within the index.

The index is an annual research initiative designed to evaluate and rank how major cities compare in performing critical functions that connect markets and commerce around the world.

"The booming Chinese and Indian economies have clearly continued the shift of economic power to Asia. The strong presence of Asia/Pacific, Middle East and Africa cities is further evidence of the growing influence of the region not just in manufacturing and services, but also in broadly based commercial strength," the report stated.

This year, three Indian cities have been ranked in the index of 75 cities with Mumbai at the 48th position, New Delhi at 61 and Bangalore at 66th place, the report revealed.

New Delhi and Bangalore are new additions to the index this year which was extended from 50 cities last year to 75 cities in 2008, while Mumbai, which had been ranked at the 45th place in 2007, has fallen three positions this year.

In comparison, China has five cities in the index including Shanghai, a rapidly growing and massive city that ranks 24th this year, up from 32 in the 2007.

Most world stock markets to end 2008 in red

Global stock markets will not be able to overcome a lethal mix of rising inflation and a spill-out from the global credit crisis this year, with most indexes likely to end 2008 with annual losses, a poll showed.

As a group, strategists have lost faith in the ability of stock markets to achieve anything more than a partial rebound, even though the US Federal Reserve has hacked rates down to 2.0 per cent and markets have made a strong comeback from March lows.

They fear that soaring oil prices, which made their biggest daily jump ever on Friday surging $11 to a new record above $139 a barrel, along with a steady stream of bank write-downs are likely to see the US market make its first loss for six years in 2008.

The quarterly poll of around 120 equity strategists from New York to Tokyo showed only the Toronto and Taipei exchanges posting gains this year. Nine of 13 global indices in the survey saw downgrades made to consensus forecasts taken in March. Pessimism may have deepened further since, because the polls were taken before markets were rocked on Friday by the worst reading for US unemployment in 22 years.

World stocks reached a 1-1/2 month low on Monday. US investment bank Lehman Brothers added to the gloom, unveiling forecasts for a huge second quarter loss along with plans to raise $6 billion of new capital to tidy up its books. Its shares tumbled in pre-market trading. "Equities are attractively valued, it’s just uncertainty is very high," said Patrick Schowitz at HSBC.

"We need to see a turn in the cycle and at the moment the easy call is that we will see some near-term strength with stimulus from the US, but after that things are uncertain." US Congress passed a $152 billion economic stimulus this year to help ensure the economy does not slide into recession, but this may not prove anywhere near enough. Strategists agreed that volatility would remain high during the rest of the year.

On Friday, the Volatility Index jumped some 26.46 per cent to close at 23.56, its biggest daily percentage jump since markets fell sharply on March 13.
OIL DOUBTS

Much will depend on the outlook for oil, which some predict will hit $150 a barrel before long as the dollar falls anew. The European Central Bank warned last week it stands ready to raise interest rates as soon as next month to combat rocketing inflation, sparking some fears that the Bank of England could follow suit. "The next six months are expected to be tough for equity markets ... Inflation worries may fade, if oil and food prices drop back, but could be sustained if they do not," said Tony Dolphin at Henderson Global Investors in London.

Frankfurt’s DAX and Paris’ CAC-40 are both set for around a 10 per cent loss this year as well as the pan-European DJ Stoxx 50 index.

Many stock markets in Asia do not look in much better shape. Tokyo’s Nikkei 225 index is forecast to end the year down about 2 per cent, while the Hang Seng index is seen down 6.5 per cent by year-end. Higher interest rates could see equity markets cooling even further than currently expected. Equity markets in the euro zone are forecast to fall by around 10 percent this year, much higher than the marginal slips strategists pencil in the US and UK.

Euro zone exporting companies may also feel the pinch this year from a renewed bounce in the euro, which spiked to a six-week high on Monday to $1.58 to the dollar. Strategists are split on how to find returns this year in the face of a slowdown. Many are prepared to stick close to the benchmark, while others spot bargains in hard hit sectors such as financials.

In the US some said technology will be the sector to shine in 2008 as it jumps the financial sector in terms of size in the S&P 500. And that may just provide the boost that strategists crave despite the pernicious effects of surging inflation. "I think we’ll see a nice rally toward the end of the year based on an economic recovery," said Peter Cardillo, chief market economist at Avalon Partners in New York.

Stocks snap losing streak; Sensex gains 296 points

Equities staged a smart recovery Wednesday backed by positive global cues and as traders bought stocks at lower levels and covered short positions.Mirroring the trend in East Asian markets, key indices gained over 2 per cent at the high of the day, with shares of banks and capital goods leading the advance.

The rally appeared to be losing momentum mid way, till heavy covering in the real estate sector saw the market close significantly higher.

"This was a pull-back rally fueled by short covering. The market had been steadily falling for the past couple of sessions and made a new low yesterday. But its looks like the Nifty will hold around 4500 level. The broad range I’m looking at is 4475-4650," said Hitesh Sheth, head of technical research at Prabhudas Lilladher.

National Stock Exchange’s Nifty closed at 4523.60, up 74 points or 1.66 per cent from Tuesday. The index touched a high of 4541.05 and low of 4468.05 intraday.

Bombay Stock Exchange’s Sensex closed at 15,185.32, up 296 points or 1.99 per cent. The index touched a high of 15,225.81 and low of 15,009.48 during the day.

Biggest Sensex gainers were BHEL (up 7.19%), Ambuja Cements (7.17%), DLF (6.53%), HDFC Bank (4.74%), HDFC (4.1%), Bharti Airtel (3.78%) and ACC (3.09%).

Index losers comprised Tata Motors (down 1.42%), Reliance Communications (1.41%), Grasim Industries (1.13%), ITC (1.09%), Maruti Suzuki (1.07%), Hindustan Unilever (0.79%) and Wipro (0.1%).

Secondline stocks too picked up steam driving the BSE Mid-cap and Small-cap indices 1.42 per cent and 1.72 per cent higher respectively. Market breadth on BSE showed 1,828 advances and 811 declines.

Sector wise, the recently beaten down realty and capital goods attracted investor interest. The BSE Realty Index closed 3.07 per cent higher and BSE Capital Goods Index gained 2.44 per cent.

Meanwhile, most markets in Asia, barring China and Hong Kong, ended with gains. Equities in Europe also moved higher and US index futures were indicative of a positive opening later this evening.

The rupee rose against the dollar to close at 42.89.

Oil prices have slumped 5.2 per cent in the past two sessions to close at $131.31 a barrel on the NYMEX Tuesday. However, the commodity rose to $134.60 on Wednesday.

Can a fling save your marriage?

It may not seem likely, but having an affair can be the very thing that saves your failing marriage, says a new controversial self-help book. Marriage therapist Mira Kirshenbaum the author of the tome ‘When Good People Have Affairs’ says that the ’right kind’ of affair is not such a bad thing for a marriage.

According to the Telegraph , Ms Kirshenbaum says that an affair acts as the catalyst that jolts "people from their inertia". "Sometimes an affair can be the best way for the person who has been unfaithful to get the information and impetus to change," she told The Observer .

"I’m not encouraging affairs, but underlying the complicated mess is a kind of deep and delicate wisdom. It’s an insight that something isn’t working and needs to change." However, her book is not aimed by ‘creeps’ but decent people, who know that they have made a mistake while looking for real happiness and love.

"These people are suffering terribly and need to be relieved of their sense of guilt and shame because those emotions are paralysing," she said. "If handled right, an affair can be therapeutic, give clarity and jolt people from their inertia. You could think of it as a radical but necessary medical procedure. If your marriage is in cardiac arrest, an affair can be a defibrillator."

But Ms Kirshenbaum is convinced that the last thing a philanderer should do, is confess the affair to their partner. "This is the one area in which the truth usually creates far more damage in the long run," she said.

"If you care that much about honesty, figure out who you want to be with, commit to that relationship and devote the rest of your life to making it the most honest relationship you can."

'Smoking cuts life span by 5 years'

Several studies have time and again stuck a warning chord for the smokers worldwide and here comes another. According to a mortality risk chart released Tuesday in the US Journal of the National Cancer Institute, smoking cigarettes has the same effect as cutting the life span by close to five years.

"The effect of smoking on the chance of dying is similar to the effect of adding five to 10 years of age," the study said.

"For both men and women, smoking increases the risk of death by nearly the same magnitude as adding five years to a person’s age."

The figures were derived by compiling death and health risk statistics from various agencies such as the American Cancer Society and National Center for Health Statistics, and were arranged into 10-year risk charts.

"For example, a 55-year-old man who smokes has about the same 10-year risk of death from all causes as a 65-year-old man who never smoked," it said.

Among women who never smoked, the 10-year risk rates of dying from breast cancer and heart disease were similar until age 60, after which heart disease was the biggest killer.

"For women who currently smoke, the chance of dying from heart disease or lung cancer exceeds the chance of dying from breast cancer from age 40 on."

The study, which aimed to help doctors convey the risks of smoking, was led by Lisa Schwartz of the Department of Veterans Affairs Medical Center in Vermont.

"We hope that the availability of these simple charts will facilitate physician-patient discussion about disease risk and help people understand where to focus risk reduction efforts," the authors wrote.

Ranbaxy fairly priced at current levels, say analysts

Ranbaxy Laboratories shares on Wednesday closed unchanged at Rs 560.80 on the BSE, despite Daiichi Sankyo announcing a buyout of the promoters’ stake in the company and open offer at Rs 737 per share.

The flat closing of the stock is explained by analysts saying it is fairly priced at these levels and there may be some upside left in the counter.

During the day, the stock rose to a high of Rs 592.70. The low was Rs 565.

Promoters Malvinder Singh and Shivinder Singh have sold their entire 34.8 per cent stake in Ranbaxy to the Japanese drug maker at Rs 737 per share, a premium of around 32 per cent to today’s close. The stock had already rallied around 20 per cent in the past one month on a stake sale buzz.

“Out of the 65.2 per cent holding in the market, 20 per cent will be accepted in the open offer. That is, for every three shares held, one will be tendered in the open offer,” said Ranjit Kapadia, head of research of private clients group--pharma and midcap at Prabhudas Lilladher.

Thus, for an investor who bought three shares of Ranbaxy at Rs 560 per share, the total purchase price would be Rs 1,680. Of this, only one share would be tendered at Rs 737 in the open offer. The remaining two would be at a cost Rs 943, or Rs 471 per share, to the investor.

“The stock is fairly priced at current levels. Investors will have to wait for the open offer to surrender the stock at Rs 737 per share,” Kapadia said.

Sarabjit Kour Nangra, vice president-research at Angel Broking, said, “Ranbaxy has run up a lot recently. We have a target price of Rs 603 on the stock and after taking into account the open offer price of Rs 737 per share, it still leave some upside in the counter.”

She went on to add, “The deal is a win-win situation for Ranbaxy and Daiichi, as the latter can leverage the low cost advantage offered by India complemented by the world-class infrastructure. In turn, Ranbaxy would benefit from the product pipeline of Daiichi.”

Prabhudas’ Kapadia acquiesced, “Ranbaxy will be part of a global group and amongst the top 15 pharma companies. It will be a hybrid model of innovator and generic company. The deal is 4.2 times CY07 sales and 20.4 times EBITDA, which is very good.”

RBI may raise CRR if oil prices continue to rise

The Reserve Bank is likely to tighten the monetary situation further if the oil prices continue to surge which could to add to inflationary pressure, a top banking official said here. "You may probably see some more liquidity controls like the cash reserve ratio being altered again...if oil prices go beyond tolerable levels..," J&K Bank’s Chairman and Chief Executive Officer Haseeb A Drabu told reporters on the sidelines of a seminarin Mumbai.

CRR is the amount of cash the banks need to maintain with the central bank without interest.

J&K Bank has seen pressure on its margins in the last fiscal due to the general market environment and slowdown in the Economy, which is more visible in its retail and credit portfolios, he said.

"We do see some impact. This is because of the general environment and also due to a slowdown in the country’s Economy. While there is a visible slowdown in retail and real estate portfolios, industrial credit segment has been less affected," he said.

The bank has targeted a 35 per cent growth in its net profit for this fiscal year and a 30 per cent growth in its credit off-take, he said.

J&K Bank, presently, has a deposit base of Rs 28,000 crore which is expected to go upto Rs 36,000 crore by the year-end.

The contribution of current account, savings accounts deposits (CASA) is likely to go up to 42 per cent of the total deposits from the present 40 per cent, Drabu said.

J&K bank has identified the small and medium enterprises (SMEs) and agriculture portfolios as key growth drivers in the current fiscal and has plans to scale up its branch network to around 600, with an addition of 40 branches this year, Drabu said.

The bank had a good recovery of its bad loans in 2007 and hopes to further bring down its net non-performing assets (NPAs), which now stand at around one per cent, he said.

It posted a net profit of Rs 360 crore in FY 08, which is 31 per cent up from the profits recorded in 2006-07 while its total business stood at around Rs 47,475.87 crore in FY 08.

Total advances of the bank as at FY 08 stood at Rs 18,883 crore while it has a capital adequacy ratio of around 13 per cent.

Income tax benefits of EMI on home loans

Very often tax payers take loans either for the purpose of buying a house or a flat or a car or for some other personal purposes. They are required to pay equated monthly instalments (EMI) of interest and principal.

In some cases both the interest and principal are deductible for purposes of income tax and in some cases it is not so deductible. Hence in this article we have discussed the benefits of EMI under the Income Tax Act mainly in relation to home loans. The section in this article pertains to the Income Tax Act, 1961.

House should be ready for occupation:

One of the most important aspects to be remembered by a tax payer is that the house or flat must be complete. If the house is not ready or is still under construction, then no deduction either on principal or interest would be allowable and permissible under the Income Tax Act.

Bifurcate EMI into Interest and Loan:

The next important aspect to be remembered by a tax payer is to bifurcate EMI into two parts. They are (i) Interest and (ii) Principal. This is because the deduction of interest as well as principal is governed by different sections of Income Tax Act. Therefore, this is the most important aspect to be remembered by a tax payer.

Interest on home loan for acquisition and repairs:

Under the provisions of Section 24, a deduction of a maximum of Rs 1,50,000 every year is permissible in respect of interest on home loan if the house is self-occupied. A loss up to Rs 1,50,000 of interest can be adjusted against salary income or business income or income from other sources. If a person has taken a loan for repair of house or flat, a deduction of maximum amount of Rs 30,000 is permissible and that too within the said amount of Rs 1,50,000.

Full interest deductible on let-out house:

If the house is let out by the tax payer, then the entire interest irrespective of the amount is fully deductible under Section 24 against income from House Property. In case the interest amount is more than the net rent, the loss under the heading "Income from House Property" can be adjusted against other income. It can even be carried forward in the future years

EMI instalment for acquisition also deductible:

Under the provisions of Section 80C the amount of EMI pertaining to the payment of principal for acquiring the house is allowable within the overall limit of Rs 1,00,000. This is for the purpose of acquiring a house through DDA or other housing board like HUDA or any other housing authority. The overall limit in this case is Rs 1,00,000.

Repayment of loan deductible:

Under the provisions of Section 80C (2) (xviii) deduction up to Rs 1,00,000 in respect of repayment of loan is permissible. The repayment of the amount borrowed for home loan by the assessee is deductible only if it is from Central Government or any State Government, or any bank, including co-operative bank, or the LIC, or the NHB, or a Public Sector Company providing housing finance, or any co-operative society providing housing finance or where the employer is an authority or a Board or a Corporation or any other statutory body or the employer is a Public Company or public sector company or a university or an affiliated Central Government or a local authority or a co-operative society.

Besides, stamp duty, registration fee and other expenses for the purpose of transfer of such housing property to the assessee is also deductible under Section 80C.

Courtesy: Tax Guru Newsletter

WTO rejects US complaint against India over alcohol

The World Trade Organization rejected on Monday a complaint brought by the US against India over duties on alcoholic beverages.

The US had claimed that the layers of custom duties imposed by India on wines and spirits were in breach of international trade rules. In the conclusion of its ruling, the WTO’s dispute panel said that the US has "failed to establish that the additional duty on alcoholic liquor is inconsistent" with India’s WTO commitments. The US had filed the complaint against India in May 2007, claiming that additional duties on alcoholic beverages were as high as 550% of the value of the product.

Its move came after similar action by the European Union earlier in November 2006. However, the EU dropped its complaint after India modified its legislation and cut some of the tariffs in July 2007. The US, however, maintained its claim. India’s 1.1-billion strong population and fast-growing middle class represent a potentially huge market for wine and spirits exporters.