Indian Current Affairs: 28.05.2010

Politics & the Nation

Take a look at this news report which lists out some of the grounds on which Canada has reportedly rejected visas for some of the Indian serving and retired officials.
We are surprised as to how a country like Canada can resort to such blatant rejections. May be we will hear more about this issue in the coming weeks.

Finance & Economy

Capital market regulator — the Securities and Exchange Board of India, or Sebi, — is close to finalising rules that will pave the way for local stock exchanges to launch equity derivatives contracts on popular indices of foreign bourses. The equity derivatives contracts on the S&P 500 and the Dow Jones Industrial Average (DJIA) indices will be the first to be offered to Indian investors through the National Stock Exchange, or NSE.
The move will enable domestic investors to bet on the US markets with the help of futures without currency risks, as the product will be rupee-denominated. Brokers said local investors would be able to benefit from sharp moves in the US markets for over an hour, as futures contracts on the US bourses open for trading at about 2:00 pm IST.
A futures contract is an agreement that allows an investor to bet on the underlying asset — an index or stock — for a pre-determined price and period.

The famously secretive Swiss private banks are trying to persuade Indians to bring back the money they have pulled out from their numbered accounts in these banks.
In the last one year, more than a hundred Indians with secret accounts have shifted money from Switzerland to banks in Dubai Free Trade Zone and Singapore amid fears of regulatory and government action.
What is a numbered account and what convenience does it offer?
A numbered account with Swiss banks reportedly offers unparalleled transaction convenience. The client does not have to write a cheque for any transaction, but simply call up a dedicated relationship manager and share a code given by the bank to complete the transaction.
The manager uses a voice recorder to cross-check that the caller is indeed the holder of the numbered account. A client can call up from anywhere in the world to operate the account. Clients draw comfort from the belief that in case of enquiries the bank will do whatever it takes to protect the account holders’ identities. Till three years ago, these accounts offered an interest of 1-1.25%, but that has now stopped.

GDP numbers for the last quarter of 2009-10 and for the full year are set to be announced on May 31. Take a look at this graphic which discusses how the growth is going to be.
Look at this news story also in this context. Well worth a read. This time the GDP numbers are attracting lot of attention because for the first time ever time the manufacturing sector is expected to contribute more to the national income than the farm sector. This is a major shift that happens to the Indian economy.

Foreign investors will be required to give a commitment that they will not do anything detrimental to India’s interest as the government looks to tighten scrutiny of foreign direct investment, but experts say the regulation is not so innocuous.
India has attracted $131 billion in foreign investment since 1991, when it opened its economy to foreign investors. Over 40% of this has come from Mauritius, which means its actually a third country investment, the origin of which may be difficult to trace.
Since enacting a new legislation will take time, the department of industrial policy and promotion (DIPP) has proposed making a security declaration mandatory for all foreign investors irrespective of the sector they plan to invest in. The rule will apply to all sectors including those on the automatic route and not requiring Foreign Investment Promotion Board’s approval.

International

As of Wednesday, Wall Street valued Apple at $222.12 billion and Microsoft at $219.18 billion. The only American company valued higher is Exxon Mobil, with a market capitalisation of $278.64 billion. The revenue of the two companies are comparable, with Microsoft at $58.4 billion and Apple at $42.9 billion. Microsoft is sitting on more cash and short-term investments, $39.7 billion, to Apple’s $23.1 billion, which makes the value assigned by the market to Apple – essentially a bet on its future prospects – all the more remarkable.
Google, with a market cap of $151.43 billion, also appeared to leap ahead of Apple in a new potentially important area, Internet-connected televisions. And Google is steering consumers toward yet a new model of computing in which Internet applications, rather than iPhone or desktop applications, rule.
Apple and Microsoft initiated the personal computing revolution in the late 1970s, but Microsoft quickly outflanked Apple and grew to be one of the most profitable businesses ever created. A little more than a decade ago, Apple, which had pushed out Jobs in 1985, was widely believed to be on the path to extinction. Michael S Dell, the founder and chief executive of Dell computer, went so far as to suggest that Apple should shut down and return any money to shareholders. (The computer maker is now worth about a tenth of Apple.)

Gross domestic product expanded at a 3% annual rate, the Commerce Department said on Thursday, below its initial estimate of 3.2%. That surprised analysts who had expected growth to be revised up to 3.4% after monthly data pointed to stronger consumption and capital spending.
New applications for state jobless benefits dropped 14,000 to 460,000 last week, above market expectations for a fall to 455,000.

Indian Current Affairs