The Navhind Times I Monday February 22, 2016

Magazine for
Business &
Consumers

navhindtimes.com

vox populi
By Tensing Rodrigues*

andhya Mantri, Bambolim

resident, recently approached the Goa State
Consumer Disputes Redressal Commission, assailing a
final order passed by District Forum North by which her consumer
complaint against Prince Dry
Cleaners for deficiency of service
was dismissed.
Mantri said that she had handed over about 19 curtains for dry
cleaning on the assurance that the
Dry Cleaners shall provide excellent and quality service.
It was further averred
by her that for such service of the Dry Cleaner
she paid some consideration too. However, on
delivery of the curtains
she realized that the liners were damaged and
she attributed the damage to the poor quality
job done by the Dry Cleaners. It
was further alleged taking cognizance of the same the Dry Cleaners agreed that job undertaken
by them was not up to the mark
and therefore they collected seven
curtains for replacing liners at first
instance and promising that the
remaining shall be taken at later
point in time.
According to Mantri despite
its promises Prince Dry Cleaners
did not delivery the said curtains
till date. And subsequently she
claimed multiple reliefs against the
dry cleaners. However, the District
Forum, North Goa, on the ground
that Mantri was not a consumer
as the bill of purchase of the said
curtains was not in her name but
in the name of a Company and that
there was absolutely no deficiency
in service on the part of the Prince
Dry Cleaners, dismissed the complaint.
Upon hearing the arguments
of the respective counsels appearing for Ms. Mantri and the Dry
Cleaners, the State Commission
through its President Justice UV
Bakre held that Mantri was indeed
a consumer. In his judgement the
retired High Court Judge observed
that the complainant has no griev-

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The current dip in the industrial commodity prices is fairly

pronounced. The Bloomberg Commodity Index is down

Skinny dipping in receding tide

Case of dirty linen

By Adv. Jatin Ramaiya

@navhindtimes

ance against the seller of the said

curtains for deficiency in service.
The complaint is against the opposing party who are dry cleaners.
Admittedly, it is the complainant
who availed of the services of the
dry cleaners. The bill towards dry
cleaning charges have been issued
in her name. The complainant
therefore comes within the four
corners of Section 2(1)(d)(ii) of the
Act. In our considered view, therefore, the finding of the Forum that
the complainant does not come
under the Act is not correct and is
liable to set aside and is accordingly quashed. We hold that the
complainant is a consumer under
the Act.
Furthermore, on
the point of deficiency of the service on
the part of the dry
cleaners, the Commission observed
that the complainant
has not produced
any cogent evidence
to establish even remotely that the liners of all the curtains or of any of
them were damaged. She alleged
that the opposing party collected
seven damaged curtains for replacing the liners from her residence.
This only means that the complainant had collected all the nineteen
curtains from the premises of the
opposing party.
There is no explanation as to
why the complainant did not verify
the condition of the curtains, at
the premises and at the time of
taking delivery, and also why she
did not refuse to take delivery on
the ground that the liners were
damaged. The correspondence and
the affidavits on record reveal that
there is assertion on one side and
denial on the other side. Nothing
had prevented the complainant
from producing the said curtains
before the Forum for perusal or at
least producing photographs of the
curtains with damaged liners.

Latest
BSE Sensex

23,709.15

Nifty

7,210.75

Re/ US $

68.72

Rs/ UK Pound

99.00

oon after
9/11,Warren
Buffettmade a
comment about
businesses he
thought were not run
very well and that suffered when the economy
tanked.When the tide
goes out you can tell
whos been skinny dipping, said
Buffet. Perhaps there could not be
a better allegory than that to describe the situation in which some
of the global players find themselves. I am saying this particularly in the context of the cliff-diving
commodity prices.
The current dip in the industrial commodity prices is fairly
pronounced. The Bloomberg Commodity Index is down almost by
one third over the past 12 months
and by more than half since 2011.
Not even during the worst moments of the last recession did it
ever get so low.
Well it is thereperhaps that we
have missed the point.
Most of the commentators are
inevitably comparing the current
fall to the one in 2008. But not
all agree that the current crash of
commodity prices is similar to the
last one, or that this crash is even
a part of a business cycle. David
Stockman calls it a fracturing
monetary supernova that was
created by the 1990s boom, and
the lunatic monetary expansion
that followed the 2008 crisis.
Stockman was the director
of the Office of Management and
Budget under President Ronald
Reagan. He should be knowing.
Even bereft of the bombastic language that Stockman uses, there
seems to be much sense in what
he says. To put it more simply, the
current fall in commodity prices is
a correction of a monetary aberra-

arliamentary proceedings coupled

with announcements on the upcoming union budget and global cues, are
expected to guide the Indian rupees
trajectory during the coming week
according to experts.
They pointed out that
the currency market participants will keenly follow parliaments budget
session which commences on Tuesday. Any signs
of a washout in the initial
few days will dampen
sentiments and dent the
rupee, said, Anindya Banerjee, associate vice president
for currency derivatives with
Kotak Securities. He elaborated that an over-valued
rupee will come under pressure
from February 22 onwards as a string
of US macro-economic data points released
till date are expected to keep the dollar well

Vegetables Retail rates at GOA STATE

HORTICULTURE Corporation Ltd. (Rs per kg)*
hhCauliflower (piece)

16.70

hhCabbage

10.00

hhChilly 53.00

hhCluster Beans

34.00

hhOnion

hhFrench Beans

24.00

hhPotato 20.90

hhCarrot

22.00

hhTomato 11.60

and since 2005 not even by three

percent for a whole year. Since
2000, American household income
has shrunk by nearly 9 percent.
That is not really surprising.
Even at the prime of the boom,
keen observers found cause for
concern in various aspects of
economic performance. Personal
bankruptcies had climbed, the
personal saving rate had plummeted and the trade deficit expanded dramatically. All the three
were the early symptoms of the
crisis that came post 2000. Personal bankcruptcies were clear indicators of what Stockman would
call lunatic explosion in personal
indebtedness, abetted, nay encouraged by the US government.
Add to it the falling personal sav-

ing
rate. That is where the infamous
subprime mortgage crisis began.
Foreign trade deficit is what happens when a nation as a whole
practices living beyond means.
But the coming storm was covered
by the booming stock market till
it could not cover it any more. So
the tide receded the 2008 crash
revealing the naked swimmers.
Fortunately for US then, Chinas meteoric rise drew the curtain
on the unsightly scenario. In its
mad frenzy to rise to the top China primed the pump of US spend-

ing once again and creating a

mirage of prosperity. Commodity
prices soared to their never before
heights, as China swallowed iron,
copper, zink, oil, and whatever the
bowels of the world could yield,
wherever in the world. But, some
day China realised its megalomania, amidst losses in equities and
plunging yuan, and set out putting
its house in order. Not much later,
using Stockmans metaphor once
again, the monetary supernova
began to disintegrate in its final
Titanic glory.
Brent crude closed at $33.55
a barrel on the London-based
ICE Futures Europe exchange in
the first week of January 2016,
the lowest settlement since June
2004, just as the stockpiles at
Cushing, Oklahoma, nations biggest oil-storage hub, touched
63.9 million barrels by the end of
2015 not much below its working capacity of 73 million barrels;
the day may not be far when it
will be able to hold no more
and that willcall for an immediate halt to production.
Where do we go from
there ?
To a saner world, I
would say, the world we
knew as kids. The worldwide economic and industrial boom since the early
1990s was not indicative
of sublime human progress
or the break-out of a newly
energetic market capitalism
on a global basis. Instead,
the approximate $50 trillion gain
in the reported global GDP over
the past two decades was an
unhealthy and unsustainable economic deformation financed by a
vast outpouring of fiat credit and
false prices in the capitalmarkets,
says Stockman. After the binge,
the fall was invitable.

*The author is an investment

consultant. Readers can send
their comments and queries to
investment.ideas.shop@gmail.

Parliamentary proceedings will guide rupees trajectory

farm produce prices

hhLadyfinger 36.80

tion that goes far

beyond the smooth
curve of a business
cycle. That requires
us to sit up and
think. Because it
is not self correcting. It has not
been seen before
and we may not
have the benefit of
hindsight.
Where did
we go wrong? As
Stockman points
out it is the bust of two booms
in money supply, viz. the 1990s
boom and the post-2008. In fact,
the two are closely related;
or, should I say it was a
continuum. The 1990s
economic boom in
the United States
was an extended
period of economic
prosperity, during which GDP
increased
continuously
for almost ten
years, the longest recorded
expansion in
the history of
the United
States. It commenced after
the end of the
early 1990s
recession in
March 1991,
and ended in March 2001 with
the start of the early 2000s recession, following the bursting of the
dot com bubble.
The United States economy
grew by an average of four percent per year between 1992 and
1999. The unemployment rate
dropped from nearly 8 percent in
1992 to four percent at the end of
the decade. From 1990 to 1999,
the American household income
grew by 10 percent. But by 2000
that bull run came to an end. Since
2001 the economy has never
grown by as much as four percent,

14.70

*Rate as on Feb 20 2016

supported.
The rupee had crashed to an all time low
at 68.89 to the dollar in the overseas currency markets on Friday and ended the days
trade at 68.72. Domestically, the rupee had
closed unchanged from its previous close of
68.47 to a greenback on
Thursday. The domestic
currency markets were
closed on Friday.
There might be
some pressure on
the rupee on Monday. We can expect
the Reserve Bank
of India (RBI) to
intervene heavily
to stem any wild
moves in the rupees value, Banerjee
predicted. Over the
next week, we can see
some
volatility as the market
grapples with uncertainty surrounding the
budget and the global market developments.
In addition, investors will look out for any

positive budgetary announcements and news

on expected banking sector reforms, he said.
Market participants are hopeful that the
central government may increase expenditure, announce tax concessions and pave the
way to reduce the NPAs (non-performing assets) levels of the banking sector.
Sentiments are currently down and any
positive announcement is surely going to
trigger a relief rally in the equity markets.
This rally might spill-over to the currency
markets, Banerjee added. Even the interest
of foreign investors in the countrys equity
and bond markets will set the tone for the
Indian rupee.
The weakness in the India rupees value
indicates a massive outflow of foreign
funds from the equity and debt markets.
The National Securities Depository Limited
(NSDL) figures showed that the FPIs (Foreign
Portfolio Investors) sold Rs.3,307.47 crore or
$484.42 million in the equity and debt markets from February 15-18. Data with stock
exchanges disclosed that the FPIs divested
stocks worth Rs 2,608.87 crore during the
week under review. IANS

investors guide

Railway Budget will

influence sentiments

utures and options (F&O)

expiry and Budget will
dominate market sentiments
during the week. Volatility is
expected to be high as traders
roll-over positions in the derivative segment from the near
month February 2016 series to
March 2016 series. The February 2016 derivatives contracts are set to
expirein Thursday.
The next major
trigger for the stock
market is the Railway
Budget and Union
Budget 2016-17 as investors seek clarity on
the governments plan
to lower the corporate
tax rate and phase out
tax exemptions.
We expect a lot of
action in stocks of companies in the steel, cement, coal, iron ore and
fertiliser sector after the railway minister Suresh Prabhu presents the
Railway Budget for 2016-17 in the Lok Sabha onFebruary 25. Investors
want to see if the government is able to keep spending on areas such as
building rural roads, houses and other infrastructure, without letting its
fiscal deficit targets slip.
Key global data expected next week includes, Eurozone Markit PMI
Composite index for February 2016 and US Q4 GDP data.
On the technical front, Nifty index is weak till it rules below 7300
mark. Having said that expect sector/stock specific action. At current
juncture, some of the index majors are looking attractive and they can
surprise the traders.

weekly
market
outlook

Vijay Singhania, Trade Smart Online

scrip tip

Steering well amid volatile scenario

ike many other public sector banks who were hit on asset quality front, Canara Bank too followed suit. It was
also not spared by higher slippages due to ongoing asset quality review (AQR) by RBI. Fresh slippages soared to
Rs 54 billion during the latest quarter v/s Rs 22 billion in the second quarter. Consequently the bank reported a
provision of Rs 14.3 billion. However despite elevated stress formation, the bank was able to deliver fairly better
operating performance as compared to its peers due to healthy growth in core fee income along with comparatively
healthier growth in balance sheet. Canara Bank is relatively better placed compared to its peer PSUs in handling the
clean-up of current loan book. Approx 62 per cent of Canara Banks fresh slippages in the third quarter amounted to
stressed accounts reviewed by RBI. Majority of NPA came from steel, infra and textile. The bank has total exposure
of Rs180 billion towards SEBs restructured loan out of which Rs120 billion is covered under UDAY scheme. The bank
will convert Rs60bn in state government bonds during 4QFY16E. Hence, NIM will be marginally impacted due to
lower yield on these state government securities. Expect fresh slippages and credit cost to remain at elevated level
in the fourth quarter as the bank has partially recognised loan impairment according to ongoing RBIs asset quality
review. Reliance Securities

Recovery ahead

BUY
Target Price

` 210

Current Price

` 171.05

Canara Bank

buy
Target Price

NR Constructions performance has been impacted by heavy rain and floods in its key project areas such as
Tamil Nadu which accounts for 50 per cent of the order backlog. Consequently sales decreased five per cent.
However operating margins were good and the companys balance sheet remains strong. Order book outlook
is healthy. The company is shown immense potential by bagging Rs 26 billion worth of orders in the first nine
months of 2015-16. We revenue booking will improve in coming quarters due to income flow from new projects.
Reliance Securities

Positives vibes from Budget

sset impairment hit ONGCs profits in the third quarter. The company could receive positive boosts in the
forthcoming Budget. Anticipated reduction in cess rates and reintroduction of five per cent customs duty in
the budget, which will support ONGCs earnings. Asset impairment is expected to be reversed next quarter. In
2016-17 ONGCs crude volumes are estimated at 22.76 million tons while gas volumes at 24.65 bcm.

Axis Securities

` 690

Current Price

` 458

KNR Constructions

HOLD
Target Price

220

211

Current Price

ONGC