World Bank's $1-bn loan a boost to solar space -:- Equity Research

A day after the World Bank committed USD 1 billion to support India's solar energy projects, the industry is upbeat about the future of the country's solar energy sector. The World Bank-supported projects include solar rooftop technology, infrastructure for solar parks, bringing innovative solar and hybrid technologies to market and transmission lines for solar-rich states. The cumulative investment in solar would be the World Bank’s largest financing in this sector for any country. For the first time, funds of this scale have been assigned to the solar sector in any country, said Anurag Mundra, Joint Managing Director and Chief Financial Officer of Ujaas Energy   — a solar power solutions provider. With plants producing a total of 8,000-12,000 MW coming up in the country, the World Bank's financing augurs well for the solar sector, he told CNBC-TV18. Some part of the financing will be soft loans and as part of this the World Bank will assign USD 625 million to State Bank of India   , he said, adding that though Ujaas doesn't borrow its partners will benefit from such loans.

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Kerala Government to ban e-cigarettes-:- Equity Research

Kerala government has decided to ban 'electronic cigarette' in view of studies claiming that its use can cause various health issues, including cancer and heart ailments. State Health Minister K K Shylaja on Thursday directed the additional chief secretary (health) to issue an order banning the production, sale and advertisement of 'electronic cigarette' alias 'e-cigarette'. E-cigarettes are handy devices that emit doses of vaporised nicotine. An official release here today said that there were media reports that the e-cigarette market was flourishing in Kerala targeting youth and children. The state drugs enforcement authorities had also found that the device is widely used for smoking ganja, hashish and other narcotic substance. It was also found that use of e-cigarettes among children would result in indiscriminate use of original cigarettes and other substances in the long run, it said. A series of studies conducted in the US and Japan has proved that the usage of e-cigarette would cause cancer and heart ailments. The e-cigarettes are being marketed in Kerala through unauthorised courier services and online sites, it said. An expert committee appointed by the Centre to study the ill effects of e-cigarette had recommended banning the device in the country in 2014 itself, the release said, adding that the Indian Medical Association was also in favour of banning it. 

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See earnings growth in double-digits in FY17-:- Equity Research

India's growth is largely being driven by global factors at the moment, said Suhas Harinarayanan of JM Financial Institutional Securities. Also, domestic factors like good monsoon and several government initiatives (like the GST Bill) are contributing to India's growth, he added.   He said: "The markets are now stable and some domestic factors are being priced in." He expects earnings growth to be in double-digits in FY17.

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China bank PSBC files for 2016's biggest IPO-:- Equity Research

One of China's biggest banks hopes to raise USD 8 billion by listing in Hong Kong, in what would be the world's biggest flotation this year, a report said today. Postal Savings Bank of China (PSBC), the country's sixth-biggest lender with 40,000 branches -- more than any other bank in the country -- aims to list in the city as soon as September, Bloomberg News said. The bank -- founded in 2007 in an effort to boost financial services in rural areas -- had as of last September total assets reaching 6.8 trillion yuan (now USD 1.0 trillion) and served nearly half a billion customers, according to its website. If successful the initial public offering (IPO) would be the world's biggest since Chinese Internet giant Alibaba's 2014 listing in New York, which raked in USD25 billion, according to Bloomberg. An analyst said the flotation could boost the bank's capital levels and improve management, but warned that reform would be difficult. "PSBC has heavy baggage and its bank 'gene' is weak," Dong Ximiao, senior economist at China's Renmin University, told AFP. "The task is heavy and the road is long for its reforms. "The more than 40,000 branches is its advantage, but at the same time, these big inefficient networks are also a big burden," Dong said. The Hong Kong exchange was closed for a public holiday today. Ahead of the flotation, the Beijing-based lender has sold a one-sixth stake for more than 45 billion yuan to strategic investors including Tencent, UBS Group, Singapore's Temasek Holdings, and Ant Financial, which is linked to Alibaba.

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NBFCs, oil & gas & corp banks are big on Birla Sun Life's list -:- Equity Research

Despite global events like Brexit, Indian markets will not see any big headwinds as monsoons have picked up and GST Bill stands a big chance of getting passed and liquidity in the system is much higher, said Mahesh Patil, Co-CIO at Birla Sun Life AMC. Even with the oil and gas space having lesser stock value, he maintained these companies have delivered and have shown improvement in refining margins and volume growth has spiked, too. "The valuations in oil and gas sector remain attractive in high single-digits," he said. With huge scope of opportunities in NBFCs, Patil added that this lending space is growing at 40 percent and expects earnings growth in NBFCs to be good. He is also positive on corporate banks. He said: "They have gone under recovery and the clean-up process and  we shall not see a further deterioration in their asset quality, but the earnings growth will take time to bounce back." Below is the verbatim transcript of Mahesh Patil's interview to Anuj Singhal and Sonia Shenoy on CNBC-TV18. Sonia: Great time to be buying into the market now but do you get a sense that there are more upsides in store? A: One, the big events are behind us, Brexit is behind us. On the global front while one would still be a cautious because the full impact of Brexit and what the repercussion would be is something which is still unknown. To that extent there could still be some shocks from the global side. However, there is enough liquidity around globally and central banks willing to pump in more money, so given that the market should remain pretty steady. On the domestic things we don’t see any big headwinds at least in the near-term and we have seen earning season, which was good, some mild recovery, monsoons have picked up, goods and service tax (GST) looks like it will go through in this parliament session, at least there is a good chance of that happening. So given all these factors while the markets valuations are slightly on the higher side, the liquidity which is around our view has been that you should see markets scaling newer highs. However, one should not rule out any kind of mild corrections along the way on the back of global factors. 

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India's share in global pharma pie to go up in 20 yrs -:- Equity Research

Baring Private Equity Partners is bullish on Indian markets and says that India's value accretion potential remains good. After two years, the monsoon is looking good which can spur demand and consumption, said Rahul Bhasin, Managing Partner at Baring Private Equity Partners. Indian pharma companies contribute 6 percent to global pharma sales and Indian pharma companies will gain significant market share in the next 20 years. He said that global debt has gone up since 2008 and that ensures that money stays easy and opportunities for business to grow will be very good.

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CBDT notifies foreign tax credit rules, corporates to gain -:- Equity Research

To provide relief to corporates with income abroad, the tax department has notified 'Foreign Tax Credit' rules allowing companies to claim credit for taxes, surcharge and cess paid overseas. The rules, which come into effect from April 1, 2017, allow taxpayers to claim credit of foreign tax under dispute once it is finally settled. Foreign tax credit (FTC) will be available against tax, surcharge and cess payable under the Act, including minimum alternate tax (MAT) but not in respect of interest, fee or penalty. The rules also provide that disputed foreign tax will be allowed as credit for the year in which the income is taxed in India, subject to certain conditions.

To avail of the credit, the taxpayer will have to furnish evidence of settlement of the dispute and evidence of payment of the foreign tax. The taxpayer is also required to provide an undertaking that no refund, directly or indirectly, will be claimed for this foreign tax. "The rules are progressive and provide much-needed clarity as well as certainty in claiming FTC," said Rakesh Nangia, Managing Partner, Nangia & Co. Taxpayers claiming FTC shall now be required to file a Statement of Income from a foreign country with details of tax paid in the prescribed Form 67. "Rules also provide for situations of carry backward of loss of the current year resulting in refund of foreign tax," said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP.

The Central Board of Direct Taxes (CBDT) has also allowed tax payers to give self-certified statement, giving the nature of income and the amount of foreign tax deducted or paid accompanied with the counterfoil or acknowledgment of taxes paid and/or proof of taxes having been deducted at source, for claiming FTC. "This process is much simpler than the complex and difficult procedure involving obtaining a certificate from a foreign tax authority," Nangia said. The tax credit, the rule said, "shall be the aggregate of the amounts of credit computed separately for each source of income arising from a particular country or specified territory outside India".

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