The recent high is likely to pose short-term resistance to the pair and consolidation within support at Rs 70.80-71.30 and resistance at Rs 72.50-72.90 zone could be expected for the next 1-2 week, says Navneet Damani of Motilal Oswal Financial Services. The Indian currency continued to be volatile with the currency trading around 72.40 per US dollar mark. It had recovered during the day from its low points of 72.69 per US dollar. The currency saw a lower opening at 72.52 per dollar, down 67 paise. The government on Friday announced an array of steps, including removal of withholding tax on Masala bonds, relaxation for foreign portfolio investors and curbs on non-essential imports to contain the widening current account deficit (CAD), which has widened to 2.4 percent of GDP in April-June, and checks the rupee’s fall against the dollar. Navneet Damani of Motilal Oswal Financial Services said, "The recent high is likely to pose short-term resistance to the pair and consolidation within support at Rs 70.80-71.30 and resistance at Rs 72.50-72.90 zone could be expected for the next 1-2 weeks." "Meanwhile, lower support is at Rs 70.50 and medium-term bias (for next 1-2 months) remains bullish above the same with test of the ‘Cup & Handle’ target of 74.20 looking likely. Only sustained break of Rs 70.50 would point towards a bigger correction in which case the pair could decline towards major support at Rs 68.50," he added further. Rupee in the last couple of sessions rose against the US dollar on back of report that the PM is going to hold an economic review meeting during the weekend. In the economic review meeting the finance minister announced some steps to curb the volatility of the currency. The government plans to take measures to cut down “non-necessary” imports, ease overseas borrowing norms for the manufacturing sector and relax rules around banks raising masala bonds, or rupee-denominated overseas bonds, according to Motilal Oswal report. Ajay Bodke, CEO PMS at Prabhudas Lilladher said, "The measures signal government's intent to stem the panic that had gripped the currency market. However, impact of most of these measures would be felt not immediately but over the next few months. What the government needs to focus on is how to address the structural deficiencies that have plagued export competitiveness of various sectors and what has hampered indigenous development of sectors such as electronics and capital goods that has led to surge in their imports adversely impacting trade & current account deficit." "Lastly, rather than focusing primarily on how to fund the growing CAD policy makers need to think on how to contain it. Many countries with growing twin deficits are experiencing meltdown in their currencies, rising bond yields and swooning equity markets in these times of heightened risk aversion. Government must strictly adhere to fiscal prudence & its budgeted deficit target as well as resist the urge to embrace populism in an election year or else the typhoon of tumult is bound to batter the Indian shores again, he said further.
Source: Moneycontrol.com
New Delhi: As the rupee weakened against the US dollar and markets closed deep in the red on Monday despite a series of measures announced by the government over the weekend, Finance Minister Arun Jaitley said it was due to global phenomena occurring owing to squeeze on oil production and the US-China trade war. "These are impacts of a very significant ongoing global phenomena. You have at least three, if not more, indications of the nature of things which are happening globally," he told reporters here. "One is the squeeze which has been put on oil production, upsetting the demand-supply ratio which is increasing the crude oil prices." "The second is the trade war and we don't know when we are going to see the end of it. It, of course, impacts a major currency in our region - China (sic)," Mr Jaitley said. He said the two factors coupled with the internal economic decisions in the US were leading to further strengthening of the dollar. "...the dollar significantly strengthened this morning and that has significant impact on currencies in the region," the finance ninister said. Sensex lost 505 points and the NSE Nifty50 slipped by 137 points on Monday. The rupee also weakened against the US dollar and ended at 72.51 a dollar. The government had on Friday announced a series of steps to support the rupee and curb the widening current account deficit including relaxing overseas borrowing restrictions and limiting non-essential imports.
Source: Financial Express
It was a volatile week for the Indian rupee. The currency tumbled to a new record low of 72.91 on Wednesday, and recovered sharply from those lows to make a high of 71.52 on Friday. Reports on the government planning measures to curb the free-fall in the rupee helped the currency gain ground in the past week. However, the positive momentum was short-lived, as the rupee fell again below 72 on Monday, giving back most of the gains and closed at 72.50.
Sell the fact
The movement in the rupee last week is a clear example of the famous market saying, “Buy the rumour, sell the fact”. After recovering sharply from the all-time low of 72.91, the rupee lost ground as the actual measures announced by the government failed to please the market. The government, on Friday, announced a few measures to enhance capital flows and reduce current account deficit. The measures include exemption of withholding tax on masala bonds, permitting external commercial borrowings in the manufacturing sector up to $50 million with a maturity of one year instead of three years, relaxing the exposure limits of foreign portfolio investors in corporate bonds, and curbs on non-essential imports (the list of commodities is yet to be finalised). Experts feel that these measures may not have a large impact. As a result, the rupee opened with a wide gap-down below 72 on Monday and was back under pressure. Crude oil price movement will need a close watch in the coming days. The WTI-Crude Oil ($69 per barrel) prices have been hovering between $67 and $71 per barrel over the last few days. The outlook for oil is bullish. As long as the WTI-Crude Oil prices remain above $64, there is a strong likelihood of it surging to $76 or even $78 in the coming weeks. This, in turn, will see India’s trade deficit as well as current account deficit widening further. Such a rally in oil prices will continue to keep the rupee under pressure, and may drag the currency to new lows, going forward. The broader bearish outlook remains intact for the rupee. The region between 72.1 and 72 will be a strong near-term resistance for the currency. Support is in the 72.9-73 regions. A range-bound move between 72 and 73 is possible in the near term. An eventual break below 73 can drag the rupee lower to 73.7 over the short term. A further break below 73.7 will increase the likelihood of the rupee tumbling to 74.5 over the medium term. The currency is likely to get a breather only if it breaks above 72. In such a scenario, an upmove to 71.5 can be seen again.
Source: Financial Express
The Gujarat High Court has struck down a provision of the goods and services tax (GST) Act which prohibited 'first stage dealers from transitioning excise duty credit on goods procured more than a year before the rollout of the new indirect tax regime on July 1, 2017. The court termed the sub-section concerned as unconstitutional as it violated the vested right of the petitioner. The Gujarat High Court has struck down a provision of the goods and services tax (GST) Act which prohibited ‘first stage dealers from transitioning excise duty credit on goods procured more than a year before the rollout of the new indirect tax regime on July 1, 2017. The court termed the sub-section concerned as unconstitutional as it violated the vested right of the petitioner. Under the GST, businesses are allowed to claim credit of taxes paid on goods bought within 12 months of the appointed date for GST or after July 1, 2016. However, the court said under the Central Excise Act and the CENVAT credit rules, there was no such restriction on availing of credit for goods purchased prior to the one-year period. A ‘first stage dealer’ refers to a dealer who purchases goods directly from either a manufacturer or an importer. While the judgment is limited to these dealers, it could be cited as precedent for other classes of businesses to seek credit of goods bought before July 1, 2016, experts said. Rajat Mohan, partner at AMRG & Associates, said the ruling has come as a relief to many genuine ‘first stage dealers’, but it would be a cumbersome task for the government to verify if credit claimed for goods bought years ago had not become unusable or remained sold for commercial reasons. “As the GST Act restricts the input tax credit if underlying goods are not used for supply of output goods or services, the government might verify that the credit has not been claimed in respect of taxes paid on the dead, obsolete stock or which is otherwise not useable in output supply,” Shubham Mittal, DGM-GST of Taxmann, said. The government had argued in the court that the provision to restrict the scope of availing of credit was to ensure that first stage dealers do not take any undue advantage of such benefit and also to accommodate administrative convenience. The order, however, said these reasons existed even in the earlier regime, and hence wasn’t a sufficient reason for the restriction in the GST.
Source: Financial Express
The company has blossomed from Rs 25 billion net debt in the past to a Rs 10 billion cash surplus, weathering varied extremes. A strong balance sheet and an asset-light business model are just some of the findings in the whole wonder that is Welspun Enterprises. The company has blossomed from Rs 25 billion net debt in the past to a Rs 10 billion cash surplus, weathering varied extremes. At present, its Rs 7 billion cash pile, speak volumes about the potential and promise this road hybrid annuity player holds. The company sees projects from NHAI and state authorities, well within its scope, to further boost its present Rs 56 billion OB. It also sees promise in water projects that are up for bidding soon and expects to bag Rs 40 billion of them in coming years. It also regards acquisitions as a potential source of fuelling growth (it has already acquired two HAMs from MBL Infra and one HAM from Vishvaraj group, already part of the OB). The company has maintained its intent to monetise the assets it holds. Having already achieved PCOD status on the Delhi-Meerut, and balance hybrid’s execution ahead of schedule, when these monetisations come through they would add to its cash pile. The company at the time of bidding ensures economic viability such that even O&M expenses are actually accounted for. It sees 1.25-1.3x as the bid price (of authority) for NHAI projects and 1.5- 1.7x for state projects as essential to ensure safe returns to the developer and future holder of such projects. At the ruling price the stock trades at 1.5x PBV, as on 30th June 2018 standalone book-value of ~Rs 101 per share. We do not have a rating on the stock. Strong balance sheet, rising order backlog and bare-minimum debt work in the company’s favour. Risk. Delays in execution.The company is a project management consultant, which bids for projects, then sub-contracts them to regional operators well-versed in executing projects. It tags itself as a focused HAM player and operates certain legacy BOT projects. It also has interests in oil & gas (a non-core investment since inception). Management takes on a project ensuring not only that it is economically viable but also the advantages to be gained from its monetising.
Source: Financial Express
Surat: The powerloom weaving sector has unanimously decided not to file the GST return with the central government still adamant on not allowing the refund of the accumulated input tax credit credit (ITC). The decision has been taken by the Federation of Gujarat Weavers Association (FOGWA) at a meeting held on Monday. For example, a powerloom weaver manufacturing man-made fabrics with turnover of Rs 5 crore for the period from July 2017 to July 2018. The GST payable thereon is Rs 25 lakh (5%). Assuming that the net input tax credit (ITC) availed on inputs i.e yarn during this period was Rs 30 lakh, the inverted duty structure comes to Rs 5 lakh. In other words, the manufacturer has accumulated Rs 5 lakh on inputs because of inverted duty structure during the same period. If the ITC balance lying untilised with the manufacturer is more than this amount, say Rs 10 lakh, the ITC equal to Rs 5 lakh will lapse. President of FOGWA, Ashok Jirawala told TOI, “There is no section under the GST law to block the ITC credit. The central government and the GST Council have blocked Rs 400 crore worth of accumulated ITC credit of the powerloom sector from July 31, 2017 to July 31, 2018. If the textile processors are getting the ITC credit, the powerloom weavers are also eligible for the same.”
Source: The Times of India
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1652.45 |
USD/Ton |
-0.61% |
9/17/2018 |
|
VSF |
2198.41 |
USD/Ton |
0% |
9/17/2018 |
|
ASF |
3028.27 |
USD/Ton |
0% |
9/17/2018 |
|
Polyester POY |
1725.24 |
USD/Ton |
-1.66% |
9/17/2018 |
|
Nylon FDY |
3494.16 |
USD/Ton |
0.42% |
9/17/2018 |
|
40D Spandex |
4979.18 |
USD/Ton |
0% |
9/17/2018 |
|
Nylon POY |
5500.39 |
USD/Ton |
0% |
9/17/2018 |
|
Acrylic Top 3D |
1907.23 |
USD/Ton |
-2.60% |
9/17/2018 |
|
Polyester FDY |
3210.26 |
USD/Ton |
0.46% |
9/17/2018 |
|
Nylon DTY |
3202.98 |
USD/Ton |
0% |
9/17/2018 |
|
Viscose Long Filament |
1907.23 |
USD/Ton |
-2.24% |
9/17/2018 |
|
Polyester DTY |
3639.75 |
USD/Ton |
0.40% |
9/17/2018 |
|
30S Spun Rayon Yarn |
2911.80 |
USD/Ton |
0% |
9/17/2018 |
|
32S Polyester Yarn |
2336.72 |
USD/Ton |
-0.62% |
9/17/2018 |
|
45S T/C Yarn |
3013.71 |
USD/Ton |
-0.48% |
9/17/2018 |
|
40S Rayon Yarn |
3202.98 |
USD/Ton |
0% |
9/17/2018 |
|
T/R Yarn 65/35 32S |
2722.53 |
USD/Ton |
0% |
9/17/2018 |
|
45S Polyester Yarn |
2504.15 |
USD/Ton |
-1.71% |
9/17/2018 |
|
T/C Yarn 65/35 32S |
2562.38 |
USD/Ton |
-0.56% |
9/17/2018 |
|
10S Denim Fabric |
1.36 |
USD/Meter |
0% |
9/17/2018 |
|
32S Twill Fabric |
0.84 |
USD/Meter |
0% |
9/17/2018 |
|
40S Combed Poplin |
1.17 |
USD/Meter |
0% |
9/17/2018 |
|
30S Rayon Fabric |
0.67 |
USD/Meter |
0% |
9/17/2018 |
|
45S T/C Fabric |
0.70 |
USD/Meter |
0% |
9/17/2018 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14559 USD dtd. 17/9/2018). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
VITAS Chairman Vu Duc Giang said although the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam FTA (EVFTA) have yet to come into effect, they have significantly helped attract foreign investors in Vietnam’s garment-textile sector. – Free trade agreements (FTAs) in which Vietnam has joined are great momentum for the domestic garment-textile industry to attract investment, said an official of the Vietnam Textile and Apparel Association (VITAS). Importers of Canada, Australia and New Zealand have no longer focused only on China but turned towards Vietnam, he said. The increasing number of orders from foreign firms has wooed investment in the production of materials in service of the industry. Apart from Ho Chi Minh City, other localities like Hung Yen have lured the attention of FDI firms, he noted. However, most Vietnamese garment-textile enterprises are small- and medium-sized with low competitiveness due to limited investment, according to Giang. Few of them such as the Vietnam National Textile and Garment Group (Vinatex) and Corporation 28 (Agtex) have the capacity to compete with FDI rivals, he said, adding the content of Vinatex’s locally-made materials exceeds 50 percent and many of its yarn and dyeing projects have been put into operation. According to VITAS, garment-textile production lines and orders have been moved from China to Vietnam as China has lost its advantages in terms of labour costs. Besides, Vietnam’s joining many FTAs has not only created opportunities for local businesses to diversify its export markets but also attracted material suppliers. Once the CPTPP becomes effective, it is expected to increase Vietnam’s exports to CPTPP member countries whose accumulated annual import turnover amounts to 40 billion USD, said Giang. Le Tien Truong, Vinatex General Director, said one of Vietnam’s attractive factors to foreign investors is low-cost labour. Statistics show that by the end of 2017, Vietnam had attracted 2,079 projects in the garment-textile sector with total capital of 15.75 billion USD, up 10 percent year-on-year. The investors come from 57 countries and territories nationwide, with major ones from Taiwan and Hong Kong (China) and the Republic of Korea (RoK). In the first six months of this year, up to 2.8 billion USD in FDI was injected into Vietnam’s garment-textile industry, Truong said, citing some large-scale projects like 80 million USD Nam Dinh Ramatex Textile and Garment Factory of Singapore’s Herberton Ltd and Ha Nam YKK Factory specialised in producing zippers and other materials for the garment industry with an annual capacity of 420 million products. According to Giang, Vietnam’s garment-textile export revenue is projected to reach 200 billion USD by 2035. Given this, he suggested the Government and the Ministry of Industry and Trade outline a strategy for the sector by 2040 and a planning schedule for garment-textile industry parks that meet international standards of waste treatment. Domestic garment-textile businesses should fully understand regulations of the CPTPP and EVFTA to utilise the benefits of the agreements, he said.-VNA
Source: Vietnam Plus
Bangladesh parliament recently passed the Textile Bill 2018 that aims at maintaining the quality of the country’s textile products. State minister for textiles and jute Mirza Azam tabled the bill, which was passed by voice vote on September 12. As per the draft law, a directorate will be formed with a director general, who will also work as its registrar. The directorate will be responsible for inspecting the quality and standard of various ingredients used in textile products, according to Bangladesh media reports. A laboratory will be set up to carry out the inspections and tests. (DS)
Source: Fibre2Fashion
Asia's biggest international trade exhibition, Textile Asia-2018, concluded in Lahore recently with agreements for joint ventures (JVs) worth $175 million signed. Jointly organised by Pakistan-China Joint Chamber of Commerce and Industry (PCJCCI) and E-commerce Gateway, the exhibition attracted 55,000 visitors from different sectors of textile industry. Chinese companies at the show from places like Shanghai, Guangzhou, Jiangsu, Fujian and Shandong showed interest to relocate their textile, garment and accessories production units to Punjab, with investments of at least $25 million for each unit, Pakistani media reports quoted PCJCCI president SM Naveed as saying. The companies also agreed to transfer technology and buying back Pakistani products after value-addition, he added.
Source: Fibre2Fashion
MUMBAI: Global markets can be expected to bleed further as US President Donald Trump is likely to announce fresh tariffs on about $200 billion worth of Chinese imports on Monday, media reports in the US over the weekend claimed. The Wall Street Journal reported that the tariffs could be set lower at around 10% as against 25% indicated earlier by the Trump administration. The fresh tariffs are aimed at putting pressure on Beijing ahead of tough negotiations on its demand for technology transfer from US companies. China can be expected to retaliate in equal measure. Global markets have been anticipating the punitive tariffs with trepidation since July when they were first proposed. Commodity prices are the ones to watch out for. Any fall in crude oil prices could help India. It can also be an opportunity for India to improve its exports to the US in textiles, garments, gems and jewellery. Over 1,000 products could be impacted in the latest round of levies - from car seats for babies to seafood, bicycles, electronic goods, printed circuit boards, consumer goods like furniture, tyres, and commodities, including chemicals and plastics. US media reported that the final details of the new tariff plan are still being worked out. White House spokesperson Lindsay Walters was quoted as having said, “the president has been clear that he and his administration will continue to take action to address China’s unfair trade practices.” “China’s government has sent no signals that it intends to de-escalate trade tensions; it could respond just as it has thus far by applying more tariffs on US exports. Like the higher prices for imported goods, punishing US exporters will damage the innocent bystanders in Trump’s poorly justified trade war,” Peterson Institute for International Economics had said in a paper.
Krugman’s posers
“Will this help US workers? Almost surely not. It will, instead, disrupt existing business arrangements, imposing a second China shock rather than fixing the first one. And will it bring China to the negotiating table? My problem here is that the U.S. doesn’t seem to have any coherent demands,” says Nobel Laureate Paul Krugman.
Source: The New Indian Express
The Brazil apparel market is projected to reach USD 42.80 billion by 2025, expanding at a substantial CAGR over the forecast period. Rising disposable income of people and growing consciousness for international fashion trends are the key factors contributing to the growth of the market. Factors such as increasing shift towards international fashion along with spiraling number of retail outlets in the market are anticipated to encourage Brazilian people to adopt fashionable apparel. Diversified manufacturing activities, digitalization, and proliferation of smartphones are likely to have a positive impact on the sales of apparel in Brazil owing to time saving and convenience factors. Brazil is one of the largest exporters of apparel and fashionable goods. Arab countries are some of the largest importers of apparels and textiles from Brazil. The United Arab Emirates accounted for the highest imports from Brazil, followed by Egypt, Algeria, and Morocco. Advanced techniques used in manufacturing industry items would probably help manufacturers to meet the global demand from various countries. The country has experienced sluggish growth in the apparel and textile industry owing to its economic downfall. Economic downturn recorded during the year 2015-16 left the apparel industry highly affected. Nevertheless, with the recovering economy, the apparel industry is expected to rebound over the coming years. Heightened interest of the government and private players in country’s apparel and textile industry has contributed in making the country one among the top textile producing countries. Brazil is also marked as one of the leading countries in consumption of hygiene textiles. On that front, it is estimated to record double-digit growth in the coming years. Rising disposable income coupled with improved fashion trends among young generation is projected to drive the apparel industry. Additionally, widening base of young population and changing trends associated with fashionable goods is playing an imperative role in the development of the market. The Brazilian government is supporting small vendors by providing subsides and large companies by minimizing trade barriers to develop favorable business environment in the country. The Brazil apparel industry has been reviewed on the basis of type and distribution channel. Based on type, the market is divided into women, men, and children’s apparel. Furthermore, the market is bifurcated into online and offline distribution channels, on the basis of distribution channels. Offline distribution channel includes sales through hypermarkets, supermarkets, retails outlets, and departmental stores. The market is marked with presence of many small and large companies operating in online and offline business. Some of the key players in the market are Nike; Adidas; Puma; WinCraft; and Tee Spring, Inc. Additionally, local and small retailer dealing in the market contribute more than half of the total revenue generated by the overall manufacturers and sellers in the country, making it a highly fragmented domestic retail apparel industry. Small manufacturers are merging their companies with large players to increase company profits as this strategy will help them in selling their products under popular brand names. Mergers and acquisitions help companies to expand their product offerings. Wholesalers and manufacturers are focusing on innovative ways of selling their products directly to consumers, which will cut down the middlemen cost and subsequently decreasing the cost of products. Online platforms and channels assist in establishing a strong and direct relationship between wholesalers and consumers. Hexa Research is a market research and consulting organization, offering industry reports, custom research and consulting services to a host of key industries across the globe. We offer comprehensive business intelligence in the form of industry reports which help our clients obtain clarity about their business environment and enable them to undertake strategic growth initiatives.
Source: Digital Journal
The government in Bangladesh raised the minimum wage by more than 50 percent last week, the first increase in wages since 2013, when the Rana Plaza factory collapse resulted in the deaths of 1,136 garments workers and prompted the nation’s State. Minister for Labor to raise the minimum wage for entry-level jobs in the garment industry from 3,000 taka ($36) per month to 5,300 taka ($64). While some, such as Sharon Waxman of the Fair Labor Association, say that the most recent boost in wages – up to 8,000 taka ($95.50) – “is an encouraging, though long overdue, step in the right direction,” garment workers and union organizers are outraged. Union leaders and garment factory workers, alike, are describing the new wage minimum as a “cruel joke” and a “slap on the face,” with hundreds of individuals protesting in the streets in Dhaka on Friday as a result. The new wage standard, which comes after a series of debates about the wage between factory owners and workers in the past few years, is still “not enough for workers to live a decent life,” Mohd. Raisul Islam Khan, field coordinator for the IndustriALL Global Union, told Reuters. MM Akash, a Professor of Economics of Dhaka University and one of the consultants on the Bangladeshi government’s wage board, said 8,000 taka is nowhere near the amount he suggested. He states that an garment worker that has a six-member family needs about 28,620 taka ($341) per month to lead a decent life with basic facilities. “Considering the economic condition of the whole country and the capacity of the owners, I had recommended 16,000 taka, which is the minimum.” Md Harunur Rashid, a data investigator for the French development agency AFD, noted that – for a point of comparison – the minimum salary for a government employee in Bangladesh 15,250 taka ($182). Bangladesh has emerged as a key hub for garment manufacturing, as prices in China have increased dramatically in recent years. As of now, Bangladesh – with its $30 million garment industry – is the world’s second largest exporter of garments following China, but it also holds the title of one of the lowest cost centers for manufacturing. Employing an estimated four million people, 80 percent of whom are women, Bangladesh’s apparel industry fall behind other centers not only in terms of wages but also of worker well-being. Of concern for union reps, aside from the still-dismal minimum wage, is the fallout that will lilely come with the increase. “After the last pay hike in 2013, we realized that many factories increased production target for workers and the work pressure built up tremendously,” said Nahidul Hasan Nayan, general secretary of the Sommilito Garments Sramik Federation, which supports the Bangladeshi garment workers unions. “Workers came to us and said their pay had gone up but they did not even have a minute to drink water or use the restroom during their shift,” Nayan noted. Factory owners say the new minimum salary of 8,000 taka ($96) risks putting them out of business. And according to Siddiqur Rahman, President of the Bangladesh Garment Manufacturers and Exporters Association, that risk is real, as in the past few years, alone, a number of garment manufacturers had to shut their factories as they could not cover their costs. One solution, according to Mohd. Raisul Islam Khan, instead of forcing garment factories to consistently maintain dirt-cheap prices in order to attract Western mainstream and fast fashion brands, the “brands have to step up and pay more for the clothes they are buying.”
Source: The Fashion Law
