FIIs scale $20bn peak for first time

MUMBAI: Net FII inflows for the current year crossed the magic figure of $20 billion on Tuesday even as the country’s central bank sounded caution about these unabated flows. Sebi data showed that this year’s flows are already at record levels, beating the $17.7 billion net inflows recorded in 2007, just before the US subprime-led financial troubles spread across the globe. 

The data showed that while the bulk of the inflows — $15.3 billion — came through the secondary market route, $5 billion was infused into the country through IPOs , QIPs, rights offers and other equity issuances by Indian companies to foreigners. 

In the debt segment too net FII inflows crossed the $10 billion mark on Tuesday , Sebi data showed. This is also a new yearly high figure . While global investors are lapping up India’s growth story, some institutional dealers are worried about the fact that money from a number of smaller countries are also flowing into India through the FII channel. As a result of this, the Indian rupee is also gaining in strength against the US dollar.

Source:6 OCT, 2010, 06.28AM IST,TNN 

US sues American Express, Master, Visa cards

Source:Toi:6th oct 2010




WASHINGTON: The US Justice Department has filed a law suit against three major credit card companies -- American Express, Masters and Visa -- challenging their rules that prevent merchants from offering consumers discounts, rewards and information about card costs, ultimately leading to consumers paying more for purchases. 

At the same time, the department announced that it has filed a proposed settlement with Visa and MasterCard that, if approved by the court, would require the two companies to allow merchants to offer discounts, incentives, and information to consumers to encourage the use of payment methods that are less costly. 

The complaint accuses American Express, MasterCard and Visa of maintaining rules that prohibit merchants from encouraging consumers to use lower-cost payment methods when making purchases. 

For example, the rules prohibit merchants from offering discounts or other incentives to consumers in order to encourage them to pay with credit cards that cost the merchant less to accept, it said. 

"With today's lawsuit we are sending a clear message: We will not tolerate anticompetitive practices," said Attorney General Eric Holder. 

"We want to put more money in consumers' pockets, and by eliminating credit card companies' anticompetitive rules, we will accomplish that," he said. 

The Department of Justice said, credit card acceptance costs US merchants approximately USD 35 billion each year. 

Those costs are collected in the form of a "swipe fee" they pay every time a credit card is used. 

American Express has the highest merchant fees of any credit card network. 

Merchants pass on these billions of dollars in fees to all their consumers in the form of higher retail prices. 

"By preventing merchants from rewarding consumers when they use less expensive credit cards to make a purchase, American Express, MasterCard and Visa have inhibited merchants' ability to reduce card acceptance costs, and therefore their retail prices to consumers," the Justice Department said in its statement. 

The proposed settlement requires MasterCard and Visa to allow their merchants to offer consumers an immediate discount or rebate or a free or discounted product or service for using a particular credit card network, low-cost card within that network or other form of payment

BoJ cuts rate to near zero

Source : TOI:mumbai:5th oct 2010

TOKYO: Japan's central bank has reduced key interest rate to virtually zero in a surprise move on Tuesday and is looking to set up a $60 billion fund to buy government bonds and other assets as it tries to inject life into a faltering economy.

The Bank of Japan's ninemember policy board voted unanimously to set its overnight call rate target to a range of zero to 0.1%, returning to zero rates for the first time in more than four years.

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