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EXCLUSIVE >> FAQs of STOCK MARKET by Ripples Financial Advisory

 Q.What are value dates?

A. A value date is a day on which the transaction takes place. For foreign currency transaction, it takes T+2 days to settle the transaction. We have Four type of rates available with banks : Spot rate, Cash, Tom and Forward rate: Cash/Spot rate: Value today Tom/Spot rate: Value Tomorrow Spot rate: Value at T+2 Forward rate: Value beyond T+2 days

Q.What are Nostro and Vostro accounts?

A. A Nostro account is an account held in a foreign country by a domestic bank, denominated in the currency of that country. A Vostro account is a local currency account maintained by a local bank for foreign bank. Nostro and Vostro accounts are used to facilitate settlement of foreign exchange and trade transactions.

Q.What is an EEFC A/c?

A. Exchange Earners’ Foreign Currency Account (EEFC) is an account maintained in foreign currency with a bank. It is a facility provided to exporters, to credit 100 percent of their foreign exchange earnings to the account, so that the account holders do not have to convert foreign exchange into Rupees and vice versa, thereby minimizing the transaction costs. No interest is payable on EEFC accounts.

Q.What are the permissible Credits and Debit into this account?

A. Permissible Credits • Inward remittance through normal banking channels • Advance remittance received by an exporter • Payment received for export of goods and services from India • Professional earnings like consultancy fees, etc Permissible Debits • Payment outside India towards a permissible current account transaction • Payment of customs duty etc.

Q.How are forward premiums/discounts determined?

A. Forward premiums and discounts is an interest rate differential between two currency. If the difference between forward exchange rate and spot exchange rate of one currency is a positive value, it is known as forward premium and if it is a negative value it is known as forward discount. In other words, if the spot ‘futures exchange rate’ is higher than the spot exchange rate then it is known as forward premium and if it is lower than spot exchange rate then it is known as a forward discount.

Q.What determines forward premiums for the dollar against the rupee?

A. In USD/INR market forward premiums determined by two factors a. Interest rate differential and Demand and supply of currencies due to partial convertibility of rupee and immature money market in India.

Q.What is a foreign exchange contract?

A. An agreement made to convert one currency into another currency at a specific rate on a specific date. Forward contracts are used to lock in exchange rates (a forward rate) for a specific future date, or for a range of dates. Forward contracts are often used as a tool to eliminate the impact of adverse currency moments. A forward rate is calculated by taking the spot rate and adding or subtracting forward points. Forward rates are determined by the interest rate differential between the countries of the two currencies which are being exchanged.

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Sugar prices at futures counter closed lower on Wednesday

Sugar prices at futures counter closed lower on Wednesday on profit booking by the market participants expecting government interventions. The government has asked sugar mills to ensure adequate supplies to consumers. There are reports of 15% drop in sugar output till February 15’ 2017 compared to last year production.

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Turmeric prices are trading steady on speculative

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Turmeric prices are trading steady on speculative buying by the market participants. Supplies have improved in the spot market. The demand for exports has also improved. On the export front, country has exported about 74,524 tonnes, up by 32% during April-Nov period compared to last year exports of 56,471 tonnes, as per government data.

Oil slips nearly 1 percent on concerns over rising U.S. output

Oil prices fell about 1 % on Friday as worries about rising U.S. supplies outweighed OPEC pledges to boost compliance with output curbs.

But crude prices were on track for a weekly rise as traders have begun to pull out barrels from pricey storage, with physical markets showing signs of tightening.U.S. drillers added oil rigs for a sixth consecutive week, extending a nine-month recovery, energy services firm Baker Hughes Inc said.

 

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Brent crude oil settled down 59 cents, or 1.04 %, at $55.99 a barrel, while U.S. West Texas Intermediate ended the session 46 cents lower at $53.99 a barrel.

“The oil market remains focussed on the global rebalancing act, with attention centred on OPEC compliance and U.S. production growth,” said Michael Tran, director of energy strategy at RBC Capital Markets in New York. “The push-pull situation between stock draws relative to price-elastic U.S. shale remains paramount to the rebalance.”

Copper Sharply Down 3.6% On Thursday

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Copper diluted in a single day and settled at Rs 389.10 per kg, down 3.6%. The decline in Copper brings the metal towards a low of 2 Feb 2017. This is also a critical level which if broken can take prices close to Rs 379 per kg.

In a seperate news, U.S. central bank gave no firm signal on the timing of its next rate move, with policymakers noting uncertainty over economic policy under the Donald Trump administration. Meanwhile, markets were also in a wait-and-see mode in anticipation of President Donald Trump’s address of a joint session of Congress on Tuesday next week, at which he is expected to announce tax policies.

Chile´s Escondida copper mine, the world´s largest, said on Tuesday it would not begin replacing striking workers for at least 30 days into a work stoppage to show its commitment to dialogue.

Canadian pulse crop sales to India dry up over pest-control plan

Canadian exporters are slowing sales of peas and lentils to India, threatening C$1.1 billion ($762.95 million) in annual trade of the food staples, over risk that New Delhi may reject shipments under its tougher approach to pest control.fore more update www.ripplesadvisory.com

 India requires shippers to fumigate crops with methyl bromide, an insect-killing gas, in the country of origin, but has historically made an exception for Canada, the world’s biggest pulse exporter. Methyl bromide, an ozone-depleting substance, is not made in Canada, but is allowed for use in limited situations.

Canada’s exemption, allowing crops to be fumigated on arrival in India, is set to expire on March 31, overlapping with the 30-40 days it takes for shipments to reach India from Canada. “It’s just a completely dead market right now for us,” said Tamara Khoma, trader at Providence Grain. The company rerouted a pea shipment to China that had been headed for India.

IGC Raises Global Grain Forecast For 2016-17

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As per the International Grains Council (IGC), the forecast for global total grains production to 2.102 billion tonnes, up from 2.094 billion tonnes in January, and up from 2.006 billion in 2015-16. If realized, it would be the first time output has exceeded 2.1 billion tonnes. Total consumption was raised to 2.069 billion tonnes from 2.062 billion tonnes.

The IGC forecast world wheat production in 2016-17 at 752 million tonnes, unchanged from January and compared with the record outturn of 737 million tonnes in 2015-16. World wheat ending stocks were forecast at a record 236 million tonnes, up from 235 million tonnes in January and up 15 million tonnes from 221 million tonnes in 2015-16.

The IGC forecast 2016-17 maize production at 1.049 billion tonnes, up from 1.045 billion tonnes in January and compared with 973 million tonnes in 2015-16. The consumption projection was raised to 1.035 billion tonnes from 1.028 billion tonnes in January.Improved weather in South America led the IGC to raise its forecast for world soybean production, to 336 million tonnes, from 334 million in January. The consumption projection, meanwhile, was raised to 334 million tonnes from 333 million. The IGC said global trade is expected to increase to 139 million tonnes.

Gold steady as investors look for rate hike clues from Fed

 Gold held firm on Wednesday after falling as much as 1 percent the session before, with investors waiting for minutes from the Federal Reserve’s latest meeting for clues on the timing of interest rate hikes.

 Spot gold was steady at $1,236 per ounce at 0336 GMT, while U.S. gold futures eased 0.2 percent to $1,237. Spot gold looks neutral in a range of $1,233-$1,240 per ounce, and an escape could suggest direction, according to Reuters technical analyst Wang Tao.

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Gold has only risen since the beginning of this year, the market has some hesitation in moving up further but still (prices) have some way to go up.””Gold held up rather impressively on Tuesday despite a rising dollar (particularly against the euro) and soaring U.S. equity markets,” said INTL FCStone analyst Edward Meir.

Gold is highly-sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion, while also boosting the dollar.