Sequester dents US earnings, but full impact still unclear
The US federal government began implementing across-the-board spending cuts last month, known formally as sequestration.The US federal government began implementing across-the-board spending cuts last month, known formally as sequestration.A range of US companies are warning investors that sequestration is starting to bite, but executives are still unclear how deep the wound will be. The US federal government began implementing across-the-board spending cuts last month, known formally as sequestration but more commonly called “the sequester.” It has meant everything from furloughs for air traffic controllers to fewer planes for the US Navy to smaller subsidies for farmers. So far this earnings period, executives from Lockheed Martin to IBM and Delta Airlines are flagging how those US budget cuts cost them some sales in the first quarter. But the bigger concern is how much they might lose in the months to come as the budget cuts begin to really take hold – and getting a detailed forecast has proven hard to come by. ”Sequestration is a reality, but it’s unfolding slowly at this time,” United Technologies Chief Executive Louis Chenevert said in an interview Tuesday. “We will understand more what sequestration does as we get to the end of the year.” Market [...]
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Rangarajan presents FY13 report card, sees FY14 GDP at 6.4%
The Prime Minister’s Economic Advisory Council (PMEAC) projected the economy to grow at 6.4 percent in the new financial year that began on April 1. The panel said the economy probably grew 5 percent in the fiscal year 2013, its slowest pace in a decade, but an upward revision was likely. Presenting the economic review for fiscal year 2013, C Rangarajan, chairman, PMEAC lauded the reform measures taken by the government and claimed it had started yielding desired results. The PMEAC chairman said manufacturing sector is all set to improve its performance over FY13 and may even report numbers higher than what the Central Statistical Office (CSO) had estimated. The improvement in the growth rate in the current fiscal, he said, would mainly be on account of better performance of agriculture, industry and services sectors. He also said FY14 current account deficit (CAD) is expected to narrow down to 4.7 percent (from 5.1 percent in FY13) when the pace of exports pick up. He clarified that exports will remain modest in first quarter but will see gradual momentum from second and third quarters. CAD, which is the difference between inflow and outflow of foreign exchange, rose to phenomenal 6.7 per [...]
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RBI may cut benchmark lending rate by 0.25% in May
RBI Governor D Subbarao will announce the Monetary Policy Statement for FY14 on May 3, 2013 The Reserve Bank may cut the benchmark short-term lending rate by about 0.25% in its annual monetary policy next month in the backdrop of declining inflation and the urgency to promote growth, say economists. “Right now conditions should enable the RBI to cut repo rate. We expect a cut of 25 basis points (or 0.25%) in its policy in May and may be by another 25 bps in the next review,” HDFC Bank Chief Economist Abheek Barua said. RBI Governor D Subbarao will announce the Monetary Policy Statement 2013-14 on May 3, 2013. YES Bank Chief Economist Shubhada Rao said RBI may cut the repo rate or the short-term lending rate by about 0.25% in May as inflation has come down and there is a need to fuel economic growth. “Taking cue from inflation, we believe that RBI could take this time…To cut rate, particularly, the way we have seen inflation in the past coming down. Given the strong deceleration in growth, we think RBI may cut repo rate by 0.25% in May as well as may provide some liquidity easing,” Rao said. Wholesale [...]
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RBI may issue clarification on bank licences by early May
It released guidelines for new bank licences in Feb this year, asking aspirants to submit applications by July 1, 2013 RBI may issue clarification on bank licences by early May. It released guidelines for new bank licences in Feb this year, asking aspirants to submit applications by July 1, 2013. The Reserve Bank is likely to issue by early next month clarifications on new bank licence guidelines as sought by interested entities, a senior RBI official has said. “We have received queries from various entities. RBI will be posting on its website all the relevant clarifications with regard to new bank licence guidelines by this month end or early next month so that they get ample time to file applications,” a senior RBI official said. RBI released guidelines for new bank licences in February this year, asking the aspirants to submit applications by July 1, 2013. Many large business groups such as Anil Ambani-led Reliance Group, L&T, Mahindras, Birlas, Religare and Videocon have already made public their intentions to apply for the licences, while many NBFCs including Shriram group, Indiabulls, India Infoline, IFCI and PFC have also shown interest. Those reported to be interested in banking licence also include Tatas [...]
READ MOREFocus Turns to Hunt for Bombing Motive
Task Force To Question Injured Teen Investigators in the Boston Marathon bombing case shifted their focus Saturday to hunting for a motive and preparing charges after apprehending 19-year-old college student Dzhokhar Tsarnaev Friday night.
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Polls to help economy grow by 6.4% this fiscal: Goldman
Wall Street brokerage Goldman Sachs today projected an ‘above-consensus’ growth of 6.4 per cent for the current fiscal on factors like the upcoming general elections which, it said, will increase government spending, lower interest rates and lead to action on the policy front. “We reiterate our above-consensus GDP growth forecast of 6.4 per cent. The key to an improvement in activity is a pickup in the investment cycle,” it said in a report. It said higher government capex coupled with falling rates and policy reforms to ease bottlenecks and manufacturing export growth will drive investments during the ongoing fiscal. Yesterday, the UN pegged the calender 2013 growth at 6.4 per cent, while the ADB last projected that the domestic economy would reach 6 per cent in the current fiscal. In the budget, the government had pegged growth at between 6.1 and 6.7 per cent. Rating agency Crisil had lowered its FY14 growth estimate to 6 per cent from the earlier 6.4 per cent earlier this week. Official estimates suggest the economy might have expanded 5 per cent in the recently concluded fiscal, the lowest in ten years. “The year before the elections is generally associated with increased government spending. [...]
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