Limited upside left for Indian rupee against dollar

The Indian equity market party is showing no signs of losing steam with the benchmark indices closing at an all time high yet again Monday. However, the Indian rupee will not be a guest at this party for long. This column believes that there is very limited upside left for the rupee to appreciate against the US dollar.

It would be safe to assume that the USD/INR pair will not breach the crucial 58-level over the medium term. This is also the level the Reserve Bank of India (RBI) would be comfortable buying dollars to recoup its foreign exchange reserves.

Strong foreign funds flows have been a major pillar supporting the recent bullish attitude towards the rupee. Falling crude prices on the back of more stable geopolitical news flow and the continuation of gold import curbs has allowed the rupee to inch towards the all psychological 60-mark to the greenback.

Currency Corner has argued over the past several months that the implications of the US monetary policy normalisation have not yet played out in the financial markets. But they will sooner or later as the divergent paths of major central banks are increasingly becoming clear.

Last week, the European Central Bank slashed its deposit and refinancing rate by 10 basis points and announced the launch of a stimulus program which would involve purchases of Asset Backed Securities (ABS) and covered bonds. One of the primary purposes of these programs is to weaken the Euro to boost the ailing exports. Further, the sales tax hike has had a much more severe impact on the Japanese economy than many had expected.

The Bank of Japan’s October monetary policy meet will look to address these issues and possibly even hint at additional quantitative easing. Thus, on the back of these two events, the Euro has broken the major support of 1.3 against the US dollar and the USD/JPY pair is trading above 105.5. The net long positioning in the US dollar Index according to US-based Commodity Futures Trading Commission (CFTC) data is at a multi month high.

The value of the dollar’s net long position surged to $35.88 billion in the week ended September 2, from $32.92 billion previously. Last week’s net long contracts in the US dollar were the biggest since the week of June 4, 2013. On the back of these moves, the rupee has hugely outperformed other DM (Developed Market) and EM (Emerging Market) currencies.

However, going forward, if the US dollar continues to strengthen and US 10 year yields head higher, we can expect the rupee to hover around the 63-64 levels. As Bank of America Merrill Lynch point out in their research note, one should not expect the RBI to fight a rising US dollar, although USD-INR accounts for 85 per cent of India’s trade. It is not possible for it to offset cross-currency pressures from the US dollar given limited FX reserves.

On the other side, every dip will be used to recoup FX reserves. Bank of America Merrill Lynch estimates that the RBI will buy $35-40 billion by March, 2016 to maintain an eight month import cover. Thus, they are expecting the USD/INR to trade between the range of 58-62.

Further, if this range is broken it would likely be to the upside. If the US economy recovers faster than expected (although the latest jobs data was soft), we could see the US dollar Index heading towards 86-87 and the US 10 year yields around 2.9 per cent by early next year. In such a scenario, we can expect the rupee to trade around 64-65 to the greenback.

The current up-move of the rupee is coming to an end and the risk reward for rupee bulls is stacked against them for the near term.

(Vatsal Srivastava is consulting editor for currencies and commodities with IANS. The views expressed are personal)

Why iPhone 6 outperforms Google Nexus 4

What is it with an Apple announcement and a full moon that brings out the crazies in the people? I am sure by now most of you must have seen the Apple iPhone 6 comparison with the Google Nexus 4 on the Internet. But it is more like comparing a Mercedes SLS AMG with a Toyota Camry.

You could list the similarities in the two cars – they both have a steering wheel, they both have four wheels that the car runs on and a spare one in the boot, they both have air-conditioning and they both have a horn, too. But a Toyota Camry would never be a match for the Mercedes SLS AMG. The same is true when comparing the iPhone 6 to the Nexus 4. Here is a list of features that the online posts fail to mention:

Processor

The new A8 chipset with the second-generation 64-bit architecture is zipping fast. Be it graphic games or any other heavy app, the chances of slowing down the phone is next to nil. Apple claims that the phone won’t heat up even at high performance. The Nexus 4, when launched in 2012, had a 1.5GHz quad core processor based on Qualcomm Snapdragon 8064 chipset. Even today’s Android smartphones with the latest chipsets heat up. And don’t ask about lags and freezing, which is often.

Camera

The Nexus 4 had an 8MP camera and so does the iPhone 6. But the imaging quality and sensor on the iPhone 6 are far superior than most cameras in smartphones today. The new Focus Pixel technology provides the sensor with more information about the image, giving a better and faster autofocus that one can see in preview.

Faster Wireless

The iPhone 6 has faster LTE connectivity and supports higher download speeds. LTE is short for Long-Term Evolution, commonly known as fourth-generation or 4G technology. Apple claims it supports more LTE bands than any other smartphone. Even for WiFi, it will work three times faster than the predecessor and most other smartphones.

Apps installed from browser

Do you actually care about these apps? Apple is particular about the apps listed on the iPhone. On Android devices, half the apps are useless or collect private information and can pose threat to your phone.

Premium smartphone

Since the first iPhone launch, all the iPhones had a premium feel. But holding the Nexus 4 wasn’t any match. And most Android smartphones look alike. The recent Panasonic Eluga U has a similar back as the Nexus 4.

Wireless Charging

The online posts also boast the Nexus 4′s wireless charging capabilities. But, typically, a Qi wireless charger doesn’t accompany the handset and it needs to be purchased separately. Of the number of people who purchased the Nexus 4 back then, I don’t really know anyone who invested in one.

Fingerprint scanner

That’s one thing Apple has and Nexus doesn’t. And this isn’t only for show-off as, until now, it was used to unlock phones or authorise purchases on the App Store. Now with the Apple Pay service, it will be used for authenticating payments too.

Customer support

The biggest advantage of owning an Apple device is the service. The whole network is so systematically planned that in case you have any issue with your device, just walk into any service centre. If the problem is beyond repair, in most cases the unit is swapped. It might be a refurbished unit, but you still get the warranty from the date of the purchase. Also, you are saved from the hassle of calling and visiting the customer care like in the case of most other brands. In India, with Nexus 4, people had a tough time to get the handset repaired.

You might call me an Apple fan but these are some genuine differences between using an iPhone and the Nexus 4. There are not many iPhone users I know who switch to Android. However, there are many Android users falling for Apple.

Chinese President likely to announce infrastructure investments on India visit

The government on Wednesday said the forthcoming visit of Chinese President Xi Jinping is expected to bring about a “directional change” in the relationship between the countries in addition to boosting trade and investments.

Commerce and Industry Minister Nirmala Sitharaman said that some announcements are expected during the visit with regard to setting up of industrial parks by China.

“This visit will bring a directional change to the relations between India and China in the last 60 years. The directional change will also help further strengthen the ties between the two nations,” she said.

“We think during this visit some announcement will be made pursuant to which China will move forward in setting up industrial parks in India,” she added.

The Chinese President is scheduled to visit India from September 17. He will start his three-day official tour from Ahmedabad.

China is expected to announce investments worth US $5 billion in setting up two industrial parks in Gujarat and Maharashtra.

The commerce minister said the widening trade deficit with China was “worrying” and in order to reduce this the government had asked the neighbouring country to give more market access to Indian products and set up manufacturing units in the country.

“Manufacturing in China and selling in India is not looking favourable to India. We believe this visit will present a good scope for increasing China’s investment and trade with India,” Sitharaman said.

The bilateral trade between the countries stood at US $65.85 billion in 2013-14. The trade deficit was about US $35 billion. China has invested only US $410 million between April 2000 and June 2014.

Further the Minister informed that both the sides had discussed issues related to investments in the country’s railways sector during her recent visit to China.

iPhone 6, Apple Watch launch sees mixed reactions on Twitter

Technology major Apple launched its much anticipated products, the iPhone 6 and the Apple watch on Tuesday which raised mixed reactions on Twitter.

Some users expressed that they are desperately waiting for the watch, some cracked some jokes about the products, while there were some people who criticised the products.

One of the users posted on Twitter, “I just want to buy the iPhone 6. Where is it why is it not here yet. I can’t wait another hour” while another wrote, “Oh iPhone 6… I can’t wait to meet you!”

There were other users who were focused on the smartwatch. One user said, “This apple watch is the coolest thing I’ve ever seen.” Another tweeted “I’m so gonna get the apple watch.”

There were others who were disappointed with the fact that Apple Watch is not a standalonw watch and needs the iPhone to function. A disappointed user wrote, “Was interested in the apple watch till i needed an iphone to use it. The device is now POINTLESS”.

Steve Jobs would be elated with Apple’s achievement, says Tim Cook

Apple CEO Tim Cook remembers Steve Jobs on the launch of the iPhone 6, and he believes that Jobs would be smiling for Apple’s achievement.

Tim Cook said that the company had launched the biggest advancement in the history of iPhones.

Cook made the big unveiling announcement from the Flint Center stage in Cupertino, the same stage where the company’s late co-founder Steve Jobs unveiled the Mac computer 30 years ago.

Cook, whom Steve Jobs handpicked as Apple’s successor, said that he thought about Jobs a lot. The CEO said that he loved Steve dearly and ther was not a day that went by when he did not think about him, and at the launch he especially thought about him.

Cook believes that Steve would be incredibly proud to see what the company is doing today, “I think he’s smiling right now.”

He also said that he thinks that one of his greatest gifts to mankind was the company itself.

Although Cook said his team started working on the Apple Watch after Jobs died in 2011, he felt his friend still left an impact on the new product.

Apple Watch went through million versions before final design, says John Ive

Jony Ive, the Senior Vice President of Design at Apple Inc and the man behind the tech major’s flagship smartwatch, revealed that the Apple Watch went through millions of versions before the final product came out.

Ive said that the Apple Watch comes in three collections and a range of faces, which can differentiate between a touch and a press.

Apple Watch offers three options to the users, the regular Watch, Watch Edition (made from 18k gold), and Watch Sport (made to be light and durable).

He said that the team tried to give users multiple choices, and the way that we treated this from a design point of view was that you had hardware and then software.

The watch is also customisable. Users can choose watch faces that include minute and second hands, digital time and more options for personalisation.

For people who don’t wish to wear a large device, Apple developed a smaller watch, 38 mm in height compared with the 42 mm option, with matching smaller straps, the Mashable reported.

He also said that they worked extremely hard to make it an object that would be desirable but at the same time be personal, as users don’t want to wear the same watch.

India has decided not to impose anti-dumping duty on imports of solar panels from countries like the US and China, Commerce Minister Nirmala Sitharaman said today.

“There was no notification. We allowed it (the proposal) to lapse,” Sitharaman, who is also Minister of State for Finance, said when asked about the government’s decision to impose anti-dumping duty on solar cells as recommended by the Directorate General of Anti-Dumping and Allied Duties (DGAD).

DGAD is under the administrative control of the commerce ministry.

Domestic power firms have been lobbying against the imposition of the duty as the move would have led to rise in equipment cost.

To protect the struggling domestic industry, the Ministry of Commerce in May had recommended imposing a restrictive duty in the range of USD 0.11-0.81 per watt on solar cells imported from the US, China, Malaysia and Chinese Taipei.

The recommendations were against the backdrop of US dragging India to the WTO (World Trade Organisation) with respect to domestic sourcing norms for the national solar mission.

India is of the view that its solar mission – which aims to have 20,000 MW solar capacity by 2022 – is compliant with WTO rules.

Power Minister Piyush Goyal had said domestic solar equipment manufacturing capacity of 700-800 MW is not sufficient to meet the government’s ambitious plans of adding more power generation capacity through renewable energy sources.

Ministry for Road Transport and Highways Nitin Gadkari had written to Commerce Minister Nirmala Sitharaman opposing plan to levy of anti-dumping duty, saying this would escalate the cost of solar power in the country.

The country’s current installed solar capacity exceeds 2,600 MW.

NSE asks investors to file claims against Unicon Securities

The National Stock Exchange (NSE) on Wednesday asked investors to file for their claims pending with brokerage firm Unicon Securities, within 3 months.

Unicon Securities had been expelled by NSE last week on charges of violating the exchange’s regulations.

“The constituents of… Expelled member (Unicon Securities) are hereby advised to lodge claims, if any (in prescribed claim form) against the trading member within 3 months from the date of this notification,” NSE said in a public notice on Wednesday.

Further, NSE said that “no such claims filed beyond 3 months will be entertained by the exchange against the trading member and it shall be deemed that no such claims exist against the trading member or such claims, if any, shall be deemed to have waived”.

According to the bourse, the maximum compensation limit per investor if found due and payable out of the Investor Protection Fund is Rs 15 lakh.

The exchange also informed the general public that as per relevant rules, sub-brokers/authorised persons registered through Unicon Securities “ceased to exist” and as a result not authorised to deal in that capacity.

On September 5, the stock exchange had expelled Unicon Securities in terms of Rules 1 and 2 of Chapter IV of the Rules of the exchange.

As per the exchange rule, Chapter IV relates to disciplinary proceedings, penalties, suspension and expulsion.

Under this Chapter, first rule pertains to ‘disciplinary jurisdiction’ while the second one deals with ‘penalties for misconduct, unbusinesslike conduct and unprofessional conduct’.