Market poised for a positive start; NTPC, Cipla earnings eyed

The market is likely to see a firm start as most Asian markets edged higher on Thursday on news that Greece will receive its latest debt bailout payment. However, selling by foreign funds in the prior three trading sessions and weakness in the rupee may cap gains. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 13 points at the opening bell. Power generation major NTPC unveils its FY 2012 results today, 10 May 2012. Pharma major Cipla also declares its Q4 results today, 10 May 2012. State-run oil exploration giant ONGC reportedly plans to foray into city gas distribution business and sale of imported liquefied natural gas business through a new subsidiary ONGC Gas. Reliance Industries (RIL) may see action after the company market hours on Wednesday, 9 May 2012, said it has signed a $2 billion equivalent loan with nine banks covered by Euler Hermes Deutschland AG. ("Euler Hermes") on 7 May 2012 at Berlin, Germany. The loan will be primarily used to finance goods and services procured from German suppliers as part of RIL's petrochemicals expansion projects at Jamnagar, Hazira, Silvassa and Dahej in India. The facility is among the largest underwriting by Euler Hermes in recent years, RIL said. Euler Hermes has for the first time accorded 'Better than Sovereign' rating to a corporate, RIL said. Despite the challenging financial markets, the deal witnessed 50% over subscription, RIL. The facility has a door-to-door maturity of 13 years. This deal help diversify RIL's funding sources and extends the maturity profile of its long term debt in a cost effective manner, RIL said. Key benchmark indices fell for the second straight day on Wednesday, 9 May 2012, to reach their lowest closing level in 16-weeks. The BSE Sensex lost 66.60 points or 0.4% to settle at 16,479.58, its lowest closing level since 18 January 2012. Foreign institutional investors (FIIs) sold shares worth a net Rs 376.34 crore on Wednesday, 9 May 2012. They sold shares worth Rs 369.30 crore on Tuesday, 8 May 2012, and Rs 592.90 crore on Monday, 7 May 2012, as per data from Securities & Exchange Board of India. Investors are closely watching India Inc's Q4 March 2012 and year ending March 2012 (FY 2012) earnings. Focus is on the guidance provided by the management for the year ending March 2013 (FY 2013) to gauge the earnings outlook. Dr Reddy's Laboratories announces FY 2012 results tomorrow, 11 May 2012. L&T announces FY 2012 results on 14 May 2012. Bajaj Auto announces FY 2012 results on 17 May 2012. Tata Steel and Coal India unveil FY 2012 results on 18 May 2012. Tata Power Company announces FY 2012 results on 22 May 2012. Bharat Heavy Electricals (Bhel) unveils Q4 results on 23 May 2012. BPCL unveils FY 2012 results on 25 May 2012. Tata Motors announces FY 2012 results on 29 May 2012. Mahindra & Mahindra (M&M) unveils FY 2012 results on 30 May 2012. A report indicated that India attracted foreign direct investment (FDI) of $8.1 billion in March 2012, the highest ever monthly inflows, an eight-fold increase over previous year. Cumulative FDI inflows for the fiscal year ended March 2012 amounted to $36.50 billion. The sectors which received large foreign FDI inflows during 2011-12 include services, pharmaceuticals, telecom, construction, power and metallurgical industries, the report added. The inflows had aggregated to $ 19.42 billion in 2010-11, down from $ 25.83 billion in 2009-10. Finance Minister Pranab Mukherjee reiterated on Tuesday, 8 May 2012, the government's right to tax overseas transactions of companies that realize capital gains from the sale of their Indian assets. There cannot be a situation where somebody will make huge capital gains on the assets located in India and will not pay tax to either India or the country of its origin by making some arrangements through certain tax haven locations through a complicated setting up of series of subsidiaries, Mukherjee said in his closing remarks during the debate on the Finance Bill. India will not be treated as a tax haven, Mukherjee said. The Finance Bill 2012 was passed by Lok Sabha on Tuesday, 8 May 2012. The government has proposed retrospective changes that will empower the government to tax transactions that have taken place outside the country, but involve underlying assets located in India. The proposal will have the power to tax retroactively. Mukherjee had clarified early this week that the retrospective amendments do not override the provisions of double taxation avoidance agreements (DTAAs). The finance minister had also clarified that the retrospective amendments would not be used to reopen cases where assessments have been completed. Critics have slammed the proposal for a retroactive capital-gains tax as contrary to international taxation practices, and a legislative reversal of a Supreme Court decision earlier this year that said such tax on such deals wasn't allowed. Mukherjee said in parliament on Monday, 7 May 2012 that the application of General Anti-Avoidance Rules (GAAR) has been deferred by one year until 1 April 2013. The finance minister in reply to debate on Finance Bill 2012 in parliament on also said that the onus will be on the government to prove tax avoidance under GAAR. Earlier, the government had said that the onus of proof that a transaction was not undertaken to avoid tax will be on the company or investor concerned. GAAR is aimed at curbing tax avoidance by structuring a business or effecting a transaction with the objective of avoiding the tax liability instead of rational commercial considerations. This rule had created angst particularly among foreign institutional investors, who invest into India through units registered in tax-favorable countries like Mauritius, which they feared could be construed as tax avoidance. Mukherjee said that a committee has been formed to look at various provisions of the anti-avoidance rule, and the committee would ensure that the "provisions are not applied indiscriminately." He said the committee will submit a report by the end of May 2012. The Indian government is considering a review of its tax avoidance treaty with Mauritius as it looks to boost revenue, junior Finance Minister S.S. Palanimanickam said Friday, 4 May 2012. There has been unwillingness on the part of Mauritius to cooperate in addressing this problem, he said. Palanimanickam said that consistent efforts are being made by the Indian government to find mutually acceptable solutions for addressing India's concerns. The Finance Minister has reduced long term capital gains on sale of unlisted securities to 10% from 20% for non-resident investors, including private equity investors. The FM has also proposed extending the benefit of tax exemption on long term capital gains to the sale of unlisted securities in an initial public offer. Simultaneously, the FM has decided to levy Securities Transaction Tax (STT) at the rate of 0.2% cent on such sale of unlisted securities. The Reserve Bank of India (RBI) on Friday raised the limits on interest rates that banks can offer on certain foreign-currency deposits of Indians living abroad, as it stepped up efforts to support the rupee, which is trading close to its all-time low against the dollar. The central bank also deregulated the interest rates that banks charge for foreign-currency credit to exporters. The measures are "aimed at augmenting foreign-currency inflows to banks which in turn would facilitate their foreign-currency loans to exporters," the central bank said. Most Asian markets gained on Thursday on news that Greece will receive its latest debt bailout payment. Key benchmark indices in China, Japan, Indonesia, Singapore, and Taiwan were up by 0.03% to 0.35%. Hong Kong and South Korea fell 0.14% and 0.13%. US stocks fell on Wednesday as turmoil in Europe weighed on sentiment, but news that Greece will receive its latest debt bailout payment helped cut losses late in the session. The Dow Jones Industrial Average fell 97.03 points, or 0.75%, at 12,835.06. The Standard & Poor's 500 Index was down 9.14 points, or 0.67%, at 1,354.58. The Nasdaq Composite index fell 11.56 points, or 0.39%, at 2,934.71. A report indicated that Greece appeared to have averted an imminent funding crisis, however, after the board of the European Financial Stability Facility agreed to a scheduled 5.2 billion euro ($6.72 billion) payment