Tax Storm Around Cloud Computing

Published on Fri, Jul 04,2014 | 22:14, Updated at Fri, Jul 04 at 22:14Source : Moneycontrol.com 

By: Pallavi Singhal, ED - Tax &  Regulatory Services, PwC India

The emerging trend of information technology has led to new concepts that not only allow companies greater access to global markets, but also offers innovative ways of doing business. One such concept gaining ground and changing the way business is conducted is 'cloud computing'.  

Cloud computing is a 'disruptive innovation' that is gaining utmost popularity and is expected to grow globally at a rate of CAGR of 30% reaching $270 billion in 2020*. It offers businesses a flexible and scalable way to outsource IT functions to third party providers.  Typically, clouds are on a 'pay-as-you-go', or 'as needed' basis, with any unused resources scaled down and shifted back into the pool for others to use. Cloud computing has brought a sea change in traditional business models by making applications more mobile and collaborative. Cloud creates the possibility for an organisation to conduct seamless business without any physical presence.

Cloud computing offers its services through three fundamental models namely 'Infrastructure as a Service' (IaaS), 'Software as a Service' (SaaS) and 'Platform as a Service' (PaaS) that deals with diverse technology needs of businesses. Cloud services can be implemented through private, community, public or hybrid cloud. Cloud models do away with the need of setting up its own network infrastructure and other resources and thereby considerably reducing both capital and operational costs. On the downside, cloud computing throws up challenges on privacy, security, data integrity and other issues attributable to electronic transactions.

Do contemporary tax rules address the taxability of the virtual business models? With cloud computing, physical presence is not a prerequisite and service offerings may be fragmented across multiple jurisdictions which creates difficulty in ascertaining the situs of the transaction. This raises issues relating to residency, source and whether or not there is taxable presence in a particular country to grant a taxing right. Traditional taxation rules based on territorial nexus does not address such complexities and may allow a business to penetrate a country's market without creating a physical presence, and therefore avoid being subject to income tax there. To plug the loopholes, it is believed that the international tax rules as a whole require change in order to cope with modern business practices. With increase in digital transactions and the pressure from countries for a solution to tax conflicts over jurisdiction, OECD has formulated Base Erosion Profit Shifting Report (BEPS) wherein one of the agenda is solving digital tax issues. The idea behind is to largely curb the benefit of current rules that are still grounded in a bricks and mortar economic environment rather than today's digital environment.

Closer home in India, there are no specific rules in relation to taxation of virtual models. In absence of rules, there are a number of direct and indirect tax challenges that arise on account of such models. The taxability of cloud service providers would depend on characterization of the underlying transaction i.e. whether the income is 'royalty' or 'fees for technical services' or whether the service provider has a taxable presence in India. Also, the service recipients need to consider the withholding tax implications given the adverse consequences in case of non-compliances. Old rules don't seem to address the complexities of the virtual world. Framework for determining the tax treatment of income from online transactions requires to be reviewed to address the complexities of the evolving models.

From an Indian indirect tax perspective as well, the cloud 'service' should be, on a base case, leviable only to service tax. However, given the involvement of goods in the model, the taxability is dependent on whether the transaction results in "transfer of right to use" the underlying goods, i.e. transfer of possession and effective control of the underlying goods to the customer.  This issue has been given a twist by the Courts recently, wherein the test of possession is being diluted and the Courts have accepted transactions involving 'implied possession' as sufficient for VAT to be applicable.  

The cloud model clearly does not involve physical possession of the computer hardware or software but the allocation of such assets for use by customers is being viewed to result in an 'implied possession' of them.  In order to determine this, the contractual documents shall play an evidential role and be a key to the determining process.  Aspects like intention of the parties, level of control of the underlying assets by the customer, service level objectives, responsibilities for maintenance of assets and software support/upgrades, software licensing terms, etc are some areas which could be reviewed to begin with.  Another important fact to be determined for the levy of VAT shall be the situs of the transaction.  In light of this, it would be prudent for companies in India to examine these aspects closely.

The levy of service tax on such transactions shall be applicable only when the transaction does not involve "transfer of right to use" the underlying goods and therefore this aspect shall require primary focus.  Cross border cloud service shall also require addressing the applicability of reverse charge service tax for Indian cloud users under the regulations for place of provision of services.   

Internationally, cloud models are treated as a 'service' and the regulations for place of supply determine their territorial jurisdiction for this levy. The onset of a Goods and Services Tax (GST) in India should be used as an opportunity to bring certainty to these transactions, similar to those involving software licenses in India which are also reeling under dual levies of VAT and service tax.

Given the above, it is pertinent for both cloud service providers and users to closely monitor the tax related implications. If not addressed, organisations striving for efficiency may be subject to complex tax issues.

*Source: Convergenceindia.org

With inputs from Vikash Dhariwal, senior manager, Tax and Regulatory Services, PwC India

08.10 | 0 komentar | Read More

Issue Of Shares By Unlisted Cos: Valuation Tangles

Published on Fri, Jul 04,2014 | 22:15, Updated at Fri, Jul 04 at 22:15Source : Moneycontrol.com 

By: Girish Vanvari,  Co-Head, Tax - KPMG

(with inputs from Rohit Jain, Chartered Accountant)

As is widely anticipated, a stable Central Government and positive policy initiatives may revive investor outlook towards India.  One can expect that many Indian companies would be gearing up for expansion, and look to tap funds through equity infusion.  However, pricing the shares for raising funds has become a tricky affair under the current Indian tax and regulatory environment.  Some of the relevant valuation requirements for an unlisted Indian company have been discussed hereafter.

Requirement Under Foreign Direct Investment Policy
Under the Foreign Direct Investment Policy, issue price of shares by an unlisted Indian company to a non-resident should not be less than the value of shares determined by using the Discounted Cash Flow Method (DCF Method).  The DCF Method takes into account the future cash flows of the company for arriving at the value of the shares being issued.  

Further, the policy also provides that in case there is a transfer of shares from a non-resident to a resident, the price should not be more than the fair value determined as per the same DCF method.    

Requirement Under The Companies Act, 2013[Companies Act]

Under the Companies Act, a company may, inter alia, raise share capital through preferential allotment.  In such a situation, the issue price of shares shall not be less than the price determined by a valuer.  However, for this purpose, no specific valuation methodology has been prescribed yet.

Requirements Under The Transfer Pricing Provisions Of The Income-Tax Act, 1961['The IT Act']

Broadly speaking, section 92 of the IT Act provides that 'income' from transactions with associated enterprises shall be computed having regard to the arm's length price. For this purpose, 'arm's length price' is defined to mean the price which is applied or proposed to be applied in a transaction between persons other than associated enterprises in uncontrolled conditions. The Finance Act, 2012, has retrospectively amended the scope of transfer pricing provisions to, inter alia, include capital financing transactions.

The essence of application of transfer pricing provisions is to ensure that income is computed having regard to arm's length price. In a transaction involving issues of shares, which is a capital transaction, the application of transfer pricing provisions, in absence of any income element, is itself a debatable issue.

In the context of the subject, two recent high-profile cases involving issue of shares to non-residents immediately resonate:

• The Vodafone case: In this case, Vodafone India entity had issued shares at a premium based on valuation done in accordance with the guidelines issued under the erstwhile Capital Issues (Control) Act, 1947.  This valuation was in line with the requirement under the then prevailing exchange control regulations.  The Indian tax authorities did not agree with the valuation and determined a higher value of the shares based on the Net Asset Value methodology (NAV Method).  Consequently, the tax authorities sought to levy additional tax in hands of the Vodafone India entity.
• The Shell case: In this case, again, the tax authorities did not agree to the valuation of shares done for further issue of shares by the Shell India entity to its overseas parent company.  The tax authorities determined a higher value by changing certain underlying assumptions in the DCF valuation made by the Company.

Both, the Vodafone and Shell cases, are currently pending at different appellate forums for adjudication.      

Requirements Under Section 56 Of The IT Act

Section 56(2)(viib) of IT Act provides that any amount received by a privately/ closely held company  from an Indian tax resident for issue of shares in excess of  fair market value of the shares is chargeable to tax in the hands of the issuing company.

The fair market value ('FMV') for this purpose is to be determined as per the prescribed NAV Method or DCF Method at the option of the taxpayer, or at such value as may be substantiated by the company to the satisfaction of the Tax Officer.  

Incidentally, section 56(2)(vii)/(viia) of the IT Act contains specific provisions for levy of income tax in the hands of the recipient of shares in a privately held/closely held company, if such shares have been received for a consideration less than the FMV of such shares.  The Income-tax Rules provides a specific methodology for computing FMV for section 56(2)(vii)/(viia), which is an NAV based approach.

The intent of introduction of provisions of section 56(2)(vii)/(viia) was to act as an anti-abuse provision to prevent transfer of existing assets below FMV, and it appears that this provision may not be applicable for issue of fresh shares.  However, this does not take away the fact that even a transfer of shares requires a separate valuation for Indian income-tax purposes.  

Conclusion - The Need To Simplify Requirements

As can be seen from the above, the valuation requirements and approach varies under different situations and lack uniformity.  Compliance under one law may not be sufficient as different parameters have been prescribed under different legislation.  The multiplicity of requirements and lack of certainty would in particular impact issue of shares by start-up entrepreneurs, privately held companies or where shares are issued to residents and non-residents, either simultaneously around the same time.

In times where taxpayers and investors are looking for certainty and clarity, it would be important to balance the different requirements to the extent possible, bearing in mind that each of the requirements have a purpose.  While on this point, it may be relevant to note that the Reserve Bank of India in its Bi-Monthly Monetary Policy statement issued in April 2014 relating to FY 2014-15 had indicated doing away with the valuation requirement for issue of shares to non-residents and allowing issue of shares on the basis of acceptable market practices. However, no operating guidelines have been issued thus far.

One hopes that the Government takes note of the practical issues associated with the different set of compliances, and takes appropriate simplification measures for a matter as basic as infusing share capital into an Indian business.

08.10 | 0 komentar | Read More

Dollar gains on upbeat U.S. jobs report

Investing.com - Investing.com - The dollar traded largely higher against most major currencies on Thursday after official data revealed a more robust uptick in U.S. hiring in June than markets were expecting.

In U.S. trading on Thursday, EUR/USD was down 0.37% at 1.3608.

The dollar firmed after the U.S. Department of Labor reported that non-farm payrolls rose by 288,000 in June, easily surpassing expectations for an increase of 212,000. May's figure was revised up to a gain of 224,000 from 217,000.

The unemployment rate ticked down to 6.1% from 6.3% in May. Analysts had expected the jobless rate to hold steady at 6.3% last month.

A day earlier payroll processor ADP reported in its nonfarm payrolls report that the U.S private sector added 281,000 jobs last month, beating expectations for an increase of 200,000.

The numbers firmed the dollar by keeping expectations on track for the Federal Reserve to continue tapering stimulus programs this year and raise interest rates the next.

Fed stimulus programs such as monthly bond purchases aim to spur recovery by suppressing long-term interest rates, weakening the dollar as a side effect.

Also on Thursday, the Institute of Supply Management said its non-manufacturing purchasing managers' index fell to 56.0 in June from 56.3 in May. Analysts had expected the index to hold steady at 56.3 in June.

Meanwhile in Europe, ECB President Mario Draghi reiterated the bank's forward guidance that rates will remain on hold at present or lower levels for an extended period.

He emphasized that "the governing council is also unanimous in its commitment to use unconventional instruments, if necessary, to address the risk of too-prolonged period of low inflation.'

The ECB left all rates on hold earlier Thursday, in a widely anticipated decision, after cutting rates to record lows in June.

Draghi said unemployment rate in the euro zone is still too high and warned that risks to the economy remain to the downside.

The ECB president also announced that it will shift to a six-week meeting cycle from January 2015 and that it will start publishing meeting minutes.

The dollar was up against the yen, with USD/JPY up 0.43% at 102.21, and up against the Swiss franc, with USD/CHF up 0.53% at 0.8936.

The greenback was up against the pound, with GBP/USD down 0.10% at 1.7150.

Markit Economics reported that its U.K. services PMI slowed to 57.7 in June from 58.6 in May, and below forecasts of 58.3. It was the lowest reading in three months, but remained well above the 50 level separating growth from contraction.

New business volumes rose at their fastest rate in six months, while the sector created jobs at a record pace.

The report added to indications that the economy was continuing to grow strongly in the second quarter after the economy expanded at the fastest annual rate since 2007 in the first three months of 2014.

Sterling has strengthened broadly since the start of this year, gaining more the 13% against the dollar amid expectations that the deepening U.K. recovery will prompt the Bank of England to raise rates before the end of the year.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.28% at 1.0634, AUD/USD down 1.01% at 0.9349 and NZD/USD down 0.26% at 0.8750.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.36% at 80.26.

On Friday, markets in the U.S. are to remain closed for the Independence Day holiday.

Investing.com offers an extensive set of professional tools for the financial markets.
Read more News on Investing.com and download the new Investing.com Stocks & Forex App for Android!

08.10 | 0 komentar | Read More

U.S. stocks gain on upbeat U.S. payroll report; Dow rises 0.54%

Investing.com - Investing.com - An upbeat June jobs report sent U.S. stocks climbing on Thursday, a day after private-sector employment data beat market expectations as well.

Stock markets closed early ahead of Friday's Independence Day holiday in the U.S.

At the close of U.S. trading, the Dow 30 rose 0.54%, the S&P 500 index rose 0.55%, while theNASDAQ Composite index rose 0.63%.

The Volatility S&P 500 index, which measures the outlook for market volatility, was down 4.62% at 10.32.

Stocks rose after the U.S. Department of Labor reported that non-farm payrolls rose by 288,000 in June, easily surpassing expectations for an increase of 212,000. May's figure was revised up to a gain of 224,000 from 217,000.

The unemployment rate ticked down to 6.1% from 6.3% in May. Analysts had expected the jobless rate to hold steady at 6.3% last month.

A day earlier payroll processor ADP reported in its nonfarm payrolls report that the U.S private sector added 281,000 jobs last month, beating expectations for an increase of 200,000.

The numbers gave stock prices a shot in the arm by fueling hopes that the U.S. economy continues to recover, which will reflect in corporate earnings going forward.

Also on Thursday, the Institute of Supply Management said its non-manufacturing purchasing managers' index fell to 56.0 in June from 56.3 in May. Analysts had expected the index to hold steady at 56.3 in June, though investors shrugged off the data.

Leading Dow Jones Industrial Average performers included Goldman Sachs Group Inc (NYSE:GS), up 1.47%, Exxon Mobil Corporation (NYSE:XOM), up 1.29%, and Caterpillar Inc (NYSE:CAT), up 1.28%.

The Dow Jones Industrial Average's worst performers included Microsoft Corporation (NASDAQ:MSFT), down 0.32%, Coca-Cola Enterprises Inc (NYSE:CCE), down 0.19%, and Home Depot Inc (NYSE:HD), down 0.02%.

European indices, meanwhile, ended the day higher.

After the close of European trade, the DJ Euro Stoxx 50 rose 1.12%, France's CAC 40 rose 1.02%, while Germany's DAX rose 1.19%. Meanwhile, in the U.K. the FTSE 100 rose 0.72%.

On Friday, markets in the U.S. are to remain closed for the Independence Day holiday.

Investing.com offers an extensive set of professional tools for the financial markets.
Read more News on Investing.com and download the new Investing.com Stocks & Forex App for Android!

08.10 | 0 komentar | Read More

Gold gains as Yellen says policy stays loose

Investing.com - Investing.com - Gold futures rose on Wednesday after Federal Reserve Chair Janet Yellen said earlier that policy will remain accommodative despite an increase in appetite for risk in financial markets.

Still, upbeat private-sector jobs numbers out of the U.S. capped gold's gains by giving the dollar support.

Gold and the greenback tend to trade inversely with one another.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at 1,329.70 a troy ounce during U.S. trading, up 0.23%, up from a session low of $1,322.20 and off a high of $1,332.70.

The August contract settled up 0.35% at $1,326.60 on Tuesday.

Futures were likely to find support at $1,311.00 a troy ounce, Monday's low, and resistance at $1,334.90, Tuesday's high.

Federal Reserve Chair Janet Yellen said earlier that an appetite for risk is on the rise, though the country's top economist sees no need to immediately alter today's accommodative U.S. monetary policy.

Corporate bond spreads have been falling as have volatility indicators such as the VIX, which may indicate that investors are taking on risks despite the possibility of facing losses for which they might not be fully prepared, Yellen said in a speech at the International Monetary Fund.

Still, policy will remain accommodative, as Fed policies aren't a panacea to deal with financial risks such as asset bubbles.

Her words sent gold prices rising, as loose monetary policy bolsters the precious metal's appeal as a safe-haven hedge.

Still, better-than-expected jobs numbers capped gains by reminding investors that the Fed will tighten policy one day, likely within a year after it winds down its monthly bond-buying stimulus program.

Payroll processor ADP reported earlier in its nonfarm payrolls report showed that the U.S private sector added 281,000 jobs last month, beating expectations for an increase of 200,000 and the highest since

Meanwhile, silver for September delivery was up 0.62% at $21.248 a troy ounce, while copper futures for September delivery were up 1.79% at $3.261 a pound.

Investing.com offers an extensive set of professional tools for the financial markets.
Read more News on Investing.com and download the new Investing.com Stocks & Forex App for Android!

08.10 | 0 komentar | Read More

Dollar gains on upbeat private-sector U.S. jobs report

Investing.com - Investing.com - The dollar traded largely higher against most major currencies on Wednesday after a private-sector jobs report came in much stronger than anticipated, boosting hopes official data will do likewise on Thursday.

In U.S. trading on Wednesday, EUR/USD was down 0.18% at 1.3655.

Payroll processor ADP reported earlier in its nonfarm payrolls report showed that the U.S private sector added 281,000 jobs last month, beating expectations for an increase of 200,000 and the highest since November 2012.

The upbeat data eased concerns that headwinds may be slowing U.S. recovery.

A separate report showed that U.S. factory orders fell by a larger than forecast 0.5% in May.

Elsewhere, Federal Reserve Chair Janet Yellen said earlier that the appetite for risk appears to be on the rise though the country's top economist sees no need to immediately alter today's accommodative U.S. monetary policy.

Corporate bond spreads have been falling as have volatility indicators such as the Volatility S&P 500, which may indicate investors are taking on risks despite the possibility of facing losses for which they might not be fully prepared, Yellen said in a speech at the International Monetary Fund.

Still, policy will remain accommodative, as Fed policies aren't a panacea to deal with financial risks.

The dollar, however, firmed anyway on sentiments that rates are set to rise next year regardless.

The dollar was up against the yen, with USD/JPY up 0.30% at 101.82, and up against the Swiss franc, with USD/CHF up 0.17% at 0.8892.

The greenback was down against the pound, with GBP/USD up 0.08% at 1.7164.

Demand for sterling continued to be underpinned after data on Wednesday showed that the U.K. construction sector expanded at the fastest rate in four months in June.

The data added to indications that the economy continued to grow at a strong pace in the second quarter, fuelling expectations that the deepening recovery will prompt the Bank of England to raise interest rates before the end of 2014.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.34% at 1.0669, AUD/USD down 0.61% at 0.9438 and NZD/USD down 0.03% at 0.8771.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.17% at 79.98.

On Thursday, the Institute for Supply Management will publish its report on U.S. service-sector activity on top of the widely-watched U.S. jobs report.

Investing.com offers an extensive set of professional tools for the financial markets.
Read more News on Investing.com and download the new Investing.com Stocks & Forex App for Android!

08.10 | 0 komentar | Read More

Crude falls on U.S. factory data

Crude falls on U.S. factory data

Investing.com - Investing.com - Crude futures slipped on Tuesday after a widely-watched U.S. factory gauge missed expectations, which stoked demand concerns in the world's largest consumer of oil.

In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in August traded at $104.83 a barrel during U.S. trading, down 0.52%. New York-traded oil futures hit a session low of $104.79 a barrel and a high of $106.08 a barrel.

The August contract settled down 0.35% at $105.37 a barrel on Monday.

Nymex oil futures were likely to find support at $104.66 a barrel, Monday's low, and resistance at $107.50 a barrel, the high from June 25.

The Institute for Supply Management reported earlier that its purchasing managers' index fell to 55.3 in June from 55.4 in May. Analysts had expected the manufacturing PMI to increase to 55.8 in June.

Any reading over 50 marks expansion, which suggests the U.S. economy continues to recover, though concerns that the U.S. is awash in crude while recovery still faces headwinds gave oil prices room to fall on Tuesday.

Separately, the Commerce Department said construction spending rose 0.1% in May, below an expected 0.5% increase.

Meanwhile in China, the country's official purchasing managers' index came in a 51.0 in June, in line with expectations and up from 50.8 in May, which also painted a picture of an improving global economy that cushioned oil's losses.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for August delivery were down 0.26% and trading at US$112.07 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$7.24 a barrel.

Investing.com offers an extensive set of professional tools for the financial markets.
Read more News on Investing.com and download the new Investing.com Stocks & Forex App for Android!

08.10 | 0 komentar | Read More

Dollar gains as market gives U.S. factory report applause

Investing.com - Investing.com - The dollar traded mixed to higher than most major currencies on Tuesday even after a key manufacturing gauge missed expectations, as markets viewed the index as strong enough to suggest the U.S. economy continues to move ahead down its road to recovery.

In U.S. trading on Tuesday, EUR/USD was down 0.11% at 1.3678.

The Institute for Supply Management reported earlier that its purchasing managers' index fell to 55.3 in June from 55.4 in May. Analysts had expected the manufacturing PMI to increase to 55.8 in June, though the dollar posted gains, as any reading over 50 marks expansion.

Gains were cautious, as the report came in wake of U.S. data released last week showing a 2.9% economic contraction in the first quarter, which fueled expectations that the Federal Reserve will keep rates on hold for an extended period.

Speaking Monday, San Francisco Fed President John Williams underlined this view, saying the bank will probably need to hold interest rates near zero for at least another year to ensure recovery remains on track.

Still, the dollar found support on U.S. data and elsewhere.

China's official purchasing managers' index came in a 51.0 in June, in line with expectations and up from 50.8 in May, which also painted a picture of an improving global economy.

Elsewhere the final reading of the Markit Economic U.S. manufacturing PMI rose to 57.3 in June, the highest reading since May 2010. The report showed the fastest growth in output and new orders since April 2010.

Separately, the Commerce Department said construction spending rose 0.1% in May, below the expected 0.5% increase.

Meanwhile in Europe, revised data revealed that the euro zone's manufacturing PMI dipped to a seven-month low of 51.8 in June, missing consensus forecasts for a 52.9 reading.

Germany's PMI came in at 52.0, and eight-month low and shy of forecasts for a 52.4 reading.

A separate report showed that the region's unemployment rate ticked down to 11.6% in May, revised from the initial reading of 11.7%.

The dollar was up against the yen, with USD/JPY up 0.19% at 101.53, and up against the Swiss franc, with USD/CHF up 0.08% at 0.8876.

In Japan, the country's quarterly Tankan survey of big business sentiment came in at +12 in June, missing market calls for a +15 reading.

The greenback was down against the pound, with GBP/USD up 0.27% at 1.7152.

Earlier Tuesday, Markit Economics reported that its U.K. manufacturing purchasing managers' index rose to 57.5 last month, up from 57.0 in May. Analysts had expected the index to tick down to 56.8, which gave the pound support.

The report said new orders continued to increase on the back of stronger domestic and export demand. Meanwhile, jobs creation in the sector rose to its highest in 39 months, led by increases in small firms.

The report indicated that the U.K. economy continued to grow at a strong pace in the second quarter, fuelling expectations that the deepening recovery will prompt the Bank of England to raise interest rates before the end of this year.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.35% at 1.0634, AUD/USD up 0.70% at 0.9498 and NZD/USD up 0.22% at 0.8777.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.04% at 79.85.

Investing.com offers an extensive set of professional tools for the financial markets.
Read more News on Investing.com and download the new Investing.com Stocks & Forex App for Android!

08.10 | 0 komentar | Read More

Gold edges higher as dollar slips on mixed U.S. data

Investing.com - Investing.com - Gold futures traded to two-month highs on Monday after the dollar slipped on mixed U.S. economic indicators, which sent investors jumping to the sidelines to await the U.S. June jobs report due for release on Thursday.

Gold and the dollar tend to trade inversely with one another.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at 1,327.80 a troy ounce during U.S. trading, up 0.59%, up from a session low of $1,311.20 and off a high of $1,330.20.

The August contract settled up 0.23% at $1,320.00 on Friday.

Futures were likely to find support at $1,305.40 a troy ounce, Tuesday's low, and resistance at $1,331.40, the high from April 14.

Soft regional manufacturing data offset upbeat housing data and prompted investors to avoid the greenback, which boosted gold's appeal as a hedge.

The National Association of Realtors reported earlier that pending home sales jumped 6.1% in May from April, rising to its highest level since last September. May's figure marked the largest increase since August 2010 and far surpassed forecasts for a 1.5% reading.

Still, the dollar slipped and gold rose after industry data released earlier revealed that the Chicago purchasing managers' index declined to 62.6 this month from 65.5 in May, missing expectations for a 63.0 reading.

Investors were turning their attention to the U.S. June nonfarm payrolls report, which will release a day early on Thursday due to the Independence Day holiday on Friday, avoiding the dollar during the trading session ahead of time.

Markets were eager for the release of a key manufacturing gauge on Tuesday as well.

Meanwhile,silver for September delivery was up 0.02% at $21.138 a troy ounce, while copper futures for September delivery were down 1.13% at $3.204 a pound.

Investing.com offers an extensive set of professional tools for the financial markets.
Read more News on Investing.com and download the new Investing.com Stocks & Forex App for Android!

08.10 | 0 komentar | Read More

Dollar slides on soft regional manufacturing report

Investing.com - Investing.com - The dollar traded largely lower against most major currencies on Monday after a disappointing regional U.S. factory data sparked concerns that Thursday's widely-watched jobs report may come in sluggish and sway monetary authorities to leave interest rates low for longer than once thought.

In U.S. trading on Monday, EUR/USD was up 0.32% at 1.3694.

Soft regional manufacturing data offset upbeat housing data and prompted investors to avoid the greenback on Monday.

The National Association of Realtors reported earlier that pending home sales jumped 6.1% in May from April, far surpassing market calls for a 1.5% reading.

Still, the dollar slipped after industry data released earlier revealed that the Chicago purchasing managers' index declined to 62.6 this month from 65.5 in May, missing expectations for a 63.0 reading.

Investors were turning their attention to the U.S. June nonfarm payrolls report, which will release a day early on Thursday due to the Independence Day holiday on Friday, avoiding the dollar during the trading session ahead of time.

Markets were eager for the release of a key manufacturing gauge on Tuesday as well.

Meanwhile in Europe, the euro saw support after preliminary data revealed that the euro zone's annual inflation rate remained unchanged at 0.5% in June, easing pressure on the European Central Bank to announce fresh monetary easing measures.

It was the ninth consecutive month in which the inflation rate was below 1%. The ECB targets an inflation rate of close to but just under 2.0%.

The core inflation rate ticked up to 0.8% from 0.7% in May.

The ECB announced a package of measure aimed at staving off the threat of deflation on June 5, including cutting rates to record lows and imposing negative rates on lenders to encourage lending to consumers.

The dollar was down against the yen, with USD/JPY down 0.10% at 101.32, and down against the Swiss franc, with USD/CHF down 0.44% at 0.8868.

The greenback was down against the pound, with GBP/USD up 0.45% at 1.7113.

The pound, meanwhile, continued to see support after Friday data confirmed that the U.K. economy expanded by 0.8% in the first three months of 2014. The economy grew at an annual rate of 3.0% in the first quarter, the fastest since 2007.

Bank of England Governor Mark Carney has indicated that rates were unlikely to return to their pre-crisis levels of 5%, but instead could be expected to rise to around 2.5% by the first quarter of 2017.

The BoE announced a new affordability test on banks and a cap on home loans on Thursday, in a bid to prevent the housing market from destabilizing the U.K. economy.

Demand for sterling continued to be underpinned as the new measures did little to alter expectations that the BoE will raise interest rates ahead of other central banks.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.02% at 1.0665, AUD/USD up 0.06% at 0.9429 and NZD/USD down 0.26% at 0.8755.

In Canada, data released earlier earlier Monday revealed that the Canadian economy expanded by 0.1% in April, missing forecasts for a 0.2% increase.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.32% at 79.82.

On Tuesday, the dollar should move on the Institute of Supply Management's report on U.S. U.S. manufacturing activity.

Investing.com offers an extensive set of professional tools for the financial markets.
Read more News on Investing.com and download the new Investing.com Stocks & Forex App for Android!

08.10 | 0 komentar | Read More

Sewage at the beaches, piles of garbage mar Gaza summer

By Nidal al-Mughrabi

GAZA (Reuters) - When Palestinians in the Gaza Strip seek some relief from the grind of life in an enclave plagued by conflict and hardship, they usually need to look no further than their sandy beaches.

But this summer, access to the cooling waters of the Mediterranean is gradually being closed off to Gaza's 1.8 million residents, due to pollution stemming from fuel shortages that have halted work at sewage treatment facilities.

Baha al-Agha of the Gaza Environment Quality Authority said about 100,000 cubic metres of untreated waste water are being pumped into the Gaza shore daily.

"Swimming is prohibited" signs have gone up at several beaches. But at one of Gaza's most popular beaches, dozens of people, including children, splashed in the water over the weekend despite the posted warning.

"Things are getting worse day by day in the absence of real and quick solutions," Agha told Reuters. He called on the Palestinian unity government formed earlier this month to act immediately "before Gaza beaches are declared a disaster area".

Egypt's closure of most of the estimated 1,200 cross-border smuggling tunnels run by Islamist group Hamas has virtually stopped cheap Egyptian fuel coming into Gaza.

Egypt's military-backed government fear the tunnels are used to take weapons into the Sinai Peninsula, and accuses Hamas of backing the Egyptian Muslim Brotherhood. Hamas denies it helps militants in Egypt.

Israel has its own blockade on Gaza, allowing in fuel and restricted imports since Hamas took control in 2007. But the Israeli fuel costs twice as much as Egyptian imports.

GARBAGE PILING UP

Gaza residents said they had little to celebrate at the start on Sunday of the Muslim month of Ramadan - traditionally a time for worship but also for family feasts in the evening at the end of a daily daytime fast.

Garbage has been piling up on the streets, with some 75 percent of sanitation trucks idled by the Gaza municipality's inability to pay high fuel prices.

"Tunnels are closed, crossings are closed, there is no sea port ... and now they are telling us the beaches are closed? Wouldn't it be easier if they just let us die in peace?" asked Ali Abu Hassan, a 46-year-old taxi driver.

Driving along Gaza's coastal road, the smell of sewage is sharp and waves hitting the beach are yellowish and brown.

Many in the Gaza Strip are also feeling the pinch of a salary dispute that could test the resilience of the new unity government formed under Hamas's reconciliation pact with Western-backed President Mahmoud Abbas.

Some 40,000 public servants hired by Hamas since it seized the Gaza Strip seven years ago from forces loyal to Abbas have not been paid in full for months due to a cash crunch caused by Egypt's tunnel crackdown.

Hopes of receiving wages quickly under the unity government were dashed when the new administration said it must first vet the employees before paying them - a process that could take months.

Hamas-hired workers, who held a one-day strike on Thursday, are particularly resentful that Abbas's Palestinian Authority has been paying its Gaza-based staff regularly, even though they have not reported to work since 2007.

(Editing by Jeffrey Heller and Raissa Kasolowsky)

08.10 | 0 komentar | Read More

Dutch stun Mexico with last-gasp 2-1 win

FORTALEZA Brazil (Reuters) - A remarkable last-gasp turnaround by the Netherlands earned them a 2-1 comeback victory over Mexico on Sunday and a place in the World Cup quarter-finals as they equalised in the 88th minute and won it with a stoppage-time penalty.

Mexico made the breakthrough three minutes after halftime when Giovani Dos Santos held off two challenges before firing a powerful low shot into the corner.

Keeper Guillermo Ochoa, Mexico's hero in their group stage draw with Brazil, then produced an astounding reaction save to divert Stefan de Vrij's point-blank effort on to a post but he could do nothing to keep out Wesley Sneijder's fierce equaliser.

The Dutch won it when Arjen Robben was brought down by Rafael Marquez in stoppage time, with substitute Klaas-Jan Huntelaar slamming in the penalty.

The Dutch advance to a meeting with Costa Rica or Greece, who play later on Sunday.

(Writing by Mitch Phillips, editing by Ken Ferris)

08.10 | 0 komentar | Read More

Gas leak, blast at ship breaking yard in Bhavnagar, 5 dead

The incident comes a day after a similar blast in a GAIL gas pipeline in the East Godavari district of Andhra Pradesh. The blast in the GAIL pipeline left 14 people dead and many others injured on Friday.

Five persons were killed and ten others injured after an explosion occurred at the Alang ship breaking yard in Bhavnagar district in Gujarat.

The blast was triggered by a gas leak at plot no 140, where ship breaking working was in progress.

The injured labourers have been shifted to a hospital.

The incident comes a day after a similar blast in a  GAIL gas pipeline in the East Godavari district of Andhra Pradesh. The blast in the GAIL pipeline left 14 people dead and many others injured on Friday .

The fire in the incident had also hit nearby houses, shops and coconut plantations.

GAIL stock price

On June 16, 2014, GAIL India closed at Rs 433.25, up Rs 16.45, or 3.95 percent. The 52-week high of the share was Rs 439.00 and the 52-week low was Rs 273.00.

The company's trailing 12-month (TTM) EPS was at Rs 34.49 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 12.56. The latest book value of the company is Rs 225.49 per share. At current value, the price-to-book value of the company is 1.92.

08.10 | 0 komentar | Read More

TOP TEN RAINIEST CITIES IN INDIA ON FRIDAY

The cyclonic circulation near the coastal parts of Odisha and Andhra Pradesh will continue to bring good Monsoon rain over Odisha and Andhra Pradesh. Due the influence of the system, no dry spell is in the offing for East and Northeast India. According to latest weather update by Skymet Meteorology, here's a list of top ten rainiest cities in India on Friday, 27th of June.

Cities State Rainfall (in millimetres) Malda West Bengal 189 Pasighat Arunachal Pradesh 132 Jagdalpur Chhattisgarh 72 Cherrapunji Meghalaya 39 Balurghat West Bengal 38 North Lakhimpur Assam 32 Dibrugarh Assam 26 Ambikapur Chhattisgarh 24 Jalpaiguri West Bengal 23 Nellore Andhra Pradesh 22  

By: Skymetweather.com

08.10 | 0 komentar | Read More