1. Union Government launches Bharat 22 ETF to sell stakes in 22 firms.
The Union Finance Ministry has launched second exchange-traded fund (ETF), named Bharat 22. It will help to speed up Government’s disinvestment programme budgeted to raise a record Rs 72,500 crore in the FY 2018.
Bharat 22 comprise of 22 stocks including those of central public sector enterprises (CPSEs), public sector banks (PSBs) and its holdings under the Specified Undertaking of Unit Trust of India (SUUTI).
Exchange-traded funds (ETFs).
Exchange-traded funds (ETFs) are essentially index funds that are listed and traded on exchanges like stocks. They are basically basket of stocks with assigned weights that reflects the composition of an index. They are similar to mutual funds in a certain manner but are more liquid as they can be sold quickly on stock exchanges like shares.The ETFs trading value is based on the net asset value of the underlying stocks that it represents.
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Bharat 22 is a well-diversified ETF spanning six sectors — basic materials, energy, finance, industrials, FMCG and utilities. The sector wise weightage in the Bharat 22 Index is basic materials (4.4%), energy (17.5%), finance (20.3%), FMCG (15.2%), industrials (22.6%), and utilities (20%).
The banking segment includes stocks from State Bank of India (SBI), Axis Bank, Bank of Baroda (BoB), Indian Bank, Rural Electrification Corporation and Power Finance Corporation. The energy segment includes Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), Bharat Petroleum (BP), and Coal India.
The first CPSE ETF was launched in March 2014. The first CPSE ETF consisted of stocks of 10 public sector entities. It is currently managed by Reliance Capital Ltd. Government was able to raise Rs. 8,500 crore by selling it in three tranches.
2. Indian Railways earned Rs.540 crore through flexi fare scheme.
The Railways has earned an additional revenue of Rs 540 crore in less than a year through the flexi fare scheme and there is no plan to discontinue it, a senior ministry official said.
The scheme, launched on September 9 last year, is applicable in Rajdhani, Shatabdi and Duronto trains, allowing 10% of the seats to be sold at normal fare and thereafter increasing it by 10% with every 10% of berths sold with a ceiling of 50% .
“We have earned money from flexi fare and there is no reason why we should discontinue it. In fact, we have gained 85,000 additional passengers in these trains since we launched the scheme, showing that even passengers are not averse to the scheme,” said a senior official of the ministry.
The official told PTI that from September 2016-June 30, 2017, the railways earned an additional revenue of Rs 540 crore.
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The scheme, which officials say will be continuously reviewed, saw a revision last December after the Railways took note of vacant seats in such trains.
The Railways made changes in the flexi fare structure to attract last minute travellers and introduced a range of discounts.
The 30% tatkal charges have been waived for these premium trains, a 10% rebate on basic fare has been offered on vacant berths after preparation of first chart in
Rajdhani, Shatabdi and Duronto to lure last minute travellers, provision of tatkal quota has been reduced to 10% from 30% of the total berths available and there is also a provision for discounted fares for some trains.
“The scheme now comes with a lot of discounts for passengers and it is a success. However, there is always scope for more reviews,” the official added.
The numbers show a positive trend --- during September 2016-June 2017, Duronto trains earned Rs 140 crore more than the amount earned in the same period last year while Shatabdi trains earned Rs 120 crore more.
There are total 42 Rajdhani trains, 46 Shatabdi and 54 Duronto trains.
“Just to give an indication of how much the railways is expected to gain from the scheme - we have earned an additional revenue of Rs 240 crore from April-June this year, which is around Rs 80 crore additional revenue per month. This comes to around Rs 960 crore per annum. These are good signs,” the official said.
3. IDFC Bank partners with Zeta for digital payments solution.
Private sector lender IDFC Bank has partnered with digital payments company Zeta, to launch ‘IDFC Bank Benefits’ - a payment solution for corporates that digitises employee spends and claims, making the process simple, real-time and paperless.
The end-to-end digital solution comprises an IDFC Bank Benefits Card and Zeta app which integrates the full suite of allowances and reimbursements offered by an employer into one preloaded card. Employees can also access the Benefits Card via the Zeta app on mobile or web. This enables them to track spends, entitlement limits and submit claims, digitally, while on-the-move.
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“The IDFC Bank Benefits solution developed jointly with Zeta allows for bank-like payment features outside the traditional banking relationship. It offers a strong value proposition to both employers as well as employees. The Benefits Card and Zeta app enhance user experience as it places convenience and flexibility in the hands of the employee, while enabling employers to digitally review and manage reimbursements,” said Avtar Monga executive director IDFC Bank.
While the solution is being initially launched as an integrated Benefits Card for medical, meal, LTA and fuel reimbursements, it can be extended to other categories of allowances as well. Employees can avail the benefits of the IDFC Benefits card also via the Zeta app on the mobile or on the web and Zeta Super Tag (Zeta’s NFC payment solution).
The Zeta app offers employees a real time view of spends, reimbursement limits and claims. It also allows for selecting the dependents for whom the purchase is being made and tagging it to the corresponding expense; and finally, submitting the claim for review without any paperwork. Integrated in-app shops allow for easy online purchases. The Zeta Super Tag can be attached to any device to turn it into a payment device.
4. SEBI allows MCX to launch Gold Options.
Capital and commodity market regulator SEBI has allowed MCX, the country’s largest commodity exchange, to launch options trading in gold.
It will allow investors and hedgers to minimise their price risk at a fraction of cost compared to currently available futures trading.
Murgank Paranjape, Managing Director of MCX, confirmed the approval and told BusinessLine that the exchange is yet to decide on a firm date (on the launch of gold options) as the mock trading is still going on.
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“We would like to conduct few more awareness events since it is a new instrument for commodity investors. We will fix a date for the launch only after we are fully satisfied that members and bullion traders are ready,” he said.
MCX has been conducting mock trading since the last week of June.
Market sources said the exchange is also upgrading its technology to handle increased participation one year after options launch and would be ready to launch gold options by October.
With participation of 60-70 per cent of the members, mock trading in options has been smooth sailing so far but the exchange will take a call only after 95 per cent of the members test the system, said sources.
Commodity futures
Options trading will deepen the market by attracting new set of investors and encourage corporate participation. SEBI recently allowed Category III Alternate Investment Funds to invest in the commodity futures market.
It allowed and issued norms for the launch of commodity options in June. The regulator has allowed only one commodity option per exchange on a pilot basis.
5. IIP output contracts 0.1% in June 2017.
India’s factory output, measured by the Index of Industrial Production (IIP) has registered negative 0.1% growth in June 2017. It was mainly due to a fall in output of the manufacturing and capital goods sectors.
According to data released by the Central Statistics Office (CSO) it is the first negative fall since June 2013. In June 2016, it had grown 8%.
Highlights :
- Manufacturing sector: It contracted by 0.4% in June 2017.
- Mining output: It rose by 0.4%.
- Electricity generation: It increased by 2.1%.
- Capital goods output: is a barometer of investment. It shrank by 6.8% in June 2017.
- Consumer durables output: It contracted by 2.1%.
- Consumer non-durables production: It rose by 4.9%.
About Index of Industrial Production (IIP)
The IIP is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to chosen base period. It is compiled and published monthly by the Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation.
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Base year: The CSO had revised the base year of the IIP from 2004-05 to 2011-12 in May 2017 to capture structural changes in the economy and improves the quality and representativeness of the indices. The revised IIP (2011-12) reflects the changes in the industrial sector and also aligns it with the base year of other macroeconomic indicators like the Wholesale Price Index (WPI) and Gross Domestic Product (GDP).
Sector wise items and weightages: It covers 407 item groups. Sector wise, the items included falls into 3 categories viz. Manufacturing (405 items), Mining (1 items) & Electricity (1 item). The weights of the three sectors are 77.63%, 14.37%, 7.9% respectively. The revised eight core Industries have a combined weightage of 40.27% in the IIP. Decreasing order of weightage of core industries is Electricity> Steel> Refinery Products> Crude> Coal> Coal> Cement> Natural Gas> Fertilizers.