Halister News

(Bloomberg) -- India’s states are likely to present higher fiscal deficit estimates in their budgets for next fiscal year, particularly those committed to participate in UDAY scheme, economists Taimur Baig and Kaushik Das write in note today.

• Cites recent budgets outlined by states of Rajasthan and Uttar Pradesh that estimated their fiscal deficits to rise to 5.6% and 4.0% of GDP, respectively, in FY17 after incorporating impact of UDAY bonds, from revised estimates of 3.5% and 2.9% in FY16; NOTE: UDAY bonds are special bonds related to power sector restructuring
• Expects cumulative fiscal deficit of all states to be at least 3% of GDP in FY17, which would be deterioration of about 0.5% of GDP from FY16 levels
• Sees two risks: if power distribution cos. continue to suffer losses, those losses would have to be incorporated as part of fiscal deficit calculation, which would affect overall outlook of state finances; second risk is from a potential rise in state govt wage bill
• Says increased market borrowings of state govts would likely continue to be a drag on federal bond yields

(Bloomberg) -- A roundup of debt rating changes of Indian cos. To get this story sent to your inbox in real-time, run NI INRATINGS , click on Display & Edit, then Set Alert Delivery. DOWNGRADES:

• Ashruly Engineering
  • Long-term loan facilities cut to D from B+ at Crisil
  • Cites overdrawn cash credit limit for more than 30 consecutive days

• GVK Projects and Technical Services
  • LT bank facilities cut to BB+ from BBB- at Care
  • Cites significant decline in scale of operation during FY15 and April-Sept. period

• Mittapalli Audinarayana Enterprises
  • LT loan facilities cut to B from B+ at Crisil
  • Cites substantial deterioration in capital structure

• Parenteral Surgicals
  • LT bank facilities cut to D from B at Care
  • Cites delays in debt servicing

• Sumohan Engineers
  • LT loan facilities cut to D from BB at Crisil
  • Cites instances of cash credit account remaining overdrawn for more than 30 days

• Super Construction
  • LT loan facilities cut to D from B+ at Crisil
  • Cites delays in debt servicing

• Vijayasri Organics
  • LT loan facilities cut to D from B+ at Crisil
  • Cites instances of delay in servicing debt

UPGRADES:

• Nexo Industries
  • LT loan facilities revised to BBB+ from BBB at Crisil
  • Cites growing mkt presence in the fasteners industry

• Nova Publications
  • LT loan facilities revised to BBB from BBB- at Crisil
  • Cites group’s improving mkt position

• Orchid Laminates
  • LT loan facilities raised to BBB- from BB+ at Crisil
  • Cites considerable improvement in financial risk profile, liquidity

(Bloomberg) -- Shrs -4% at noon break in Manila, poised for biggest decline since Nov. 27; vol. ~77% of 3-mo. daily avg.

• “It could be reduced investor confidence in the stock because RCBC is being investigated by the central bank for alleged money laundering,” says Nisha Alicer, chief equity strategist at DA Market Securities
• “There are no fundamental issues, so most likely it’s because of the headlines and that’s the only news going around,” Maybank analyst Katherine Tan says by phone
• NOTE: Philippine businessman William Go denied involvement in alleged laundering scam; RCBC bank account in his name frozen NSN O3UUZY6KLVRL
• NOTE: $1b plot to rob Client Fed accounts leads to Manila casinos NSN O3TACP6K50Y1

(Bloomberg) -- Cathay Life Insurance says it will monitor the development of an investigation into Philippines bank RCBC’s alleged involvement in money laundering, according to an emailed statement.

• Taiwanese life insurer owns 21.93% of RCBC as of end-2015: statement
• Cathay Life says RCBC proactively reported to the Philippine central bank regarding the incident
• Insurer will comply with regulations and report to authorities as required: statement

(Bloomberg) -- “I did not know of, consent to, or participate in the opening of these bank accounts and all the illegal transsactions conducted thereon,” William So Go says in statement provided by his lawyer Ramon Esguerra to media at briefing in Makati City.

• NOTE: Philippine Daily Inquirer reported Go as among 6 people whose bank accounts are linked to an alleged money laundering scheme involving $81m supposedly stolen from Bangladesh central bank’s account {http://tinyurl.com/hclld8h}
• Go, in statement, says he has requested National Bureau of Investigation to probe
• NOTE: $1 Billion Plot to Rob Fed Accounts Leads to Manila Casinos Link
• Go filed before Court of Appeals today motion for partial reconsideration to lift freeze order again William Go and his co. Centurytex Trading’s accounts in East West Bank and BDO, and other accounts; not questioning freeze order on alleged RCBC account, Esguerra says at briefing
• Legal counsel wrote to RCBC on March 2 to ask an explanation why Go’s name was linked to an account at the RCBC

(Bloomberg) -- Won gains for second day; South Korea is considering easing limits on banks’ currency forwards: Vice Finance Minister Choi; North Korea’s Kim Jong Un orders more nuclear tests, KCNA says.

• Yuan rises to three-and-a-half week high against dollar after China raises reference rate most since November 2; central bank adviser Bai Chongen says high leverage at local governments is a potential risk that could grow if central government bailout and guarantee is expected
• Yen steady against dollar; view that Japan needs large-scale economic measures is gaining support, with some bureaucrats and figures close to PM Abe calling for a 10t yen ($88b) stimulus package: Reuters
• U.S. Treasuries little changed, with yield on 10-year bonds at 1.927% in Asian trading; U.S. budget deficit widened to $192.6b in February, biggest in two years; jobless claims drop to lowest in five months
• Ringgit falls; Malaysian industrial production growth likely slowed to 2.1% on-year in January from 2.7% in December, according to median estimate in Bloomberg survey; data due today; preview here
• Peso snaps two-day gain; Philippines unemployment rate rose to 5.8% in January from 5.6% in December
• Rupee one-month forwards snap two-day gain; data today should show India’s industrial production in January was down 0.5% from year earlier: Bloomberg survey