Indian Economy : News,Discussions & Updates

RISING SUN

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Dec 3, 2017
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I don't have the legal, privacy rights and data storage know-how to exactly make a sound opinion about the withdrawn bill. However I do understand that many within the central government itself were having the view that this bill will give sweeping powers to those at the helm without any control over how that data could be utilised, hence high probability of misuse. There were issued identified that may have been relevant but beyond the scope of a well regulated and modern data privacy bill.

However I don't feel that all contents of withdrawn bill will be ignored, rather some of them may find place in yet to be presented revised bill.
Data Protection Bill to see the light of the day soon:

Very soon, the government will be uploading the revised draft, which will meet everyone's expectations, says the minister. "From the entire country, there is an expectation that the bill should be very neatly drafted, it should be easy to understand, it should be relevant with the times, it should create that online environment where trust and safety of the users get the primacy."

He further explained that the data protection bill has been in the works for a long. But if we were to look at the journey of this bill, when the joint parliamentary committee suggested a series of amendments in the bill of 99 sections, there were 81 amendments suggested. Then there were about 17 major recommendations on top of it. So, the government had no choice but to redraft the bill, which is practically completed. "Prime Minister Narendra Modi has said that, even though there is a very long series of consultations, which have gone, still we must thoroughly consult with the people with all the stakeholders."
 

RISING SUN

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Dec 3, 2017
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India tipped to join pivotal JPMorgan bond index​

Morgan is sounding out big investors on adding India to its widely tracked emerging-market bond index, setting the stage for tens of billions of dollars of inflows as the country’s domestic market opens up to foreign capital. The Wall Street bank is seeking investor views on whether to make a large chunk of India’s $1tn rupee-dominated bond market eligible for inclusion in the GBI-EM Global Diversified index of local currency debt, according to two people familiar with the matter. It opened the consultation this summer with fund managers accounting for 85 per cent of the $240bn in assets under management tracking the benchmark.

The Wall Street bank is seeking investor views on whether to make a large chunk of India’s $1tn rupee-dominated bond market eligible for inclusion in the GBI-EM Global Diversified index of local currency debt, according to two people familiar with the matter. It opened the consultation this summer with fund managers accounting for 85 per cent of the $240bn in assets under management tracking the benchmark.

A decision to add Indian debt to one of the bank’s flagship indices would mark an inflection point for global investor exposure to the world’s fifth-largest economy and the fruition of years of discussions between India’s government, index providers and investors.

The consultation with asset managers comes as a growing chorus of investors and analysts are tipping India’s sovereign bonds for inclusion in the influential benchmark, a move that would drive an estimated $30bn in passive investor inflows, according to Goldman Sachs.

"We think there is now a momentum from the investor side for inclusion,” said Jayesh Mehta, India country treasurer at Bank of America. The Indian government’s wariness of hot money flows — which can quickly move into and out of markets — has also been allayed, Mehta added. “The government has been convinced that funds coming in through indexes are more sticky.”

Suwanapruti forecast that about $270bn of so-called fully accessible route sovereign bonds traded in India’s local market would become eligible for the GBI-EM index by 2023, and the country to represent about a tenth of the overall benchmark upon its inclusion. “That would prompt around $30bn of passive inflows . . . helping India to finance its fiscal and current account deficit,” he said.

Indian government bonds rallied on Friday after the Financial Times reported the consultation, with the yield on the country’s 10-year debt falling 0.07 percentage points to 7.22 per cent.

The JPMorgan consultation should be complete by next month, with the announcement of an official proposal expected in October, according to people familiar with the matter. The bank declined to comment on the potential inclusion, as did India’s finance ministry.

India is not included in most other major bond indices, such as Bloomberg’s Global Aggregate index or the FTSE Emerging Markets Bond index.

FTSE Russell placed Indian government bonds on a watchlist for possible inclusion in early 2021 but said in March that that status remained unchanged — although it is scheduled for another assessment next month.

FTSE Russell declined to comment on India’s assessment status.

The Reserve Bank of India introduced fully accessible route (FAR) bonds in March 2020, allowing foreign financial institutions to invest in rupee-denominated bonds without restrictions for the first time. It is this subset of FAR bonds from the Indian government on which the JPMorgan consultation is focused.

 

RISING SUN

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Dec 3, 2017
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Forex Reserves Slump To Over 2-Year Low As RBI Defends Rupee To Below 80​

India's forex reserves slumped to the lowest in over two years, marking the third straight week of decline as the Reserve Bank of India, true to its word, intervened to keep the rupee from weakening past 80 per dollar during a week when the dollar surged to over two-decade highs.

The RBI's weekly statistical data showed the country's foreign exchange reserves fell by $6.687 billion to $564.053 billion in the week ending August 19, marking its lowest in over two years and the third week of decline in a row. The quantum of fall in the latest week, $6.687 billion, was the largest since mid-July.

In the week prior, during the week ending August 12, the country's import cover had declined by $2.238 to $570.74 billion. Barring the increase in the last week of July, which seems like a statistical blip, India's forex war chest has declined every single week since early July. It has fallen for 20 of the 26 weeks since Russia invaded Ukraine in late February.

That slump in forex reserves by a touch over $67 billion since the Ukraine crisis and nearly $80 billion from its all-time highs last year echoes the slide in the rupee from about 74 per dollar to near 80, a level which analysts say the RBI has defended ferociously.


The fate of the Indian currency has been driven by the rampant dollar in international markets, driven by an exodus of capital into dollar-denominated assets and at the cost of almost every other major currency in the world.

On Friday, the Indian rupee marked easing against the greenback for the third week running, as pressures from firmer oil prices and the dollar blunted some of the optimism from a report about adding the Asian nation to a coveted emerging-market bond index.

The Financial Times reported that JPMorgan is seeking investor views on whether to make a large chunk of the Indian government bond market eligible for inclusion in its widely tracked GBI-EM Global Diversified index of a local currency debt.

However, Kunal Sodhani, vice president of the global trading centre at Shinhan Bank, told Reuters that these inflows were insufficient to help the rupee.

"I don't think the report has anything to do with today's session. The rupee is weakening because the dollar index is inching closer to 109 and...there are barely any inflows," Mr Sodhani said.

"Oil has bounced back to $102, and that pressure is there because the underlying reality of India has not changed. The trade deficit number is still a great concern."

Due to rising crude imports, which the country relies on for over 80 per cent of its oil needs, India's trade imbalance increased to an all-time high of $31 billion last month, raising concerns about the country's ability to maintain its current account.

"The bid for dollars remains strong from the oil marketing companies, while exporters too are jumping in to lock in (higher forward) rates," Arnob Biswas, head of research at SMC Global Securities, told Reuters.

The technical picture for the rupee "looks tired", with the Reserve Bank of India possibly seeking to defend the 80 levels on the one hand and strong dollar demand from importers on the other, Mr Biswas added.

To blunt a geo-political event's impact on the wider economy, the RBI has intervened and has openly said it would do whatever it takes to defend the rupee from wild volatility.

While the rupee briefly hit its all-time weak level of 80 against the dollar, the RBI has helped keep the Indian currency below that level by selling dollars in the spot and futures markets.

In doing so, the central bank has drawn down the country's import cover.

Still, India's forex reserves are the fourth largest globally, according to RBI governor Shaktikanta Das after the latest rate-setting meeting when the central bank hiked rates for the third consecutive time.

A report showed that India has built up buffers against cyclical difficulties and has ample foreign exchange reserves to withstand pressure on credit worthiness, S&P Global Ratings said on Thursday.

Speaking at the India Credit Spotlight 2022 webinar, S&P Sovereign & International Public Finance Ratings Director Andrew Wood said the country has a strong external balance sheet and limited external debt, making debt servicing not so expensive.

"The country has built up buffers against cyclical difficulties like those, which we are experiencing right now," Mr Wood said.

He added that the rating agency does not expect the near-term pressures to impact India's credit worthiness seriously.

The RBI has a stated policy of intervening in the forex markets if it sees volatilities, but the central bank never lets out a targeted level. In the current episode, it has successfully defended the rupee depreciating above the 80-per-dollar-mark.

A separate Reuters report quoting government and industry sources showed that India might offer incentives to exporters settling deals in rupees to promote the currency's attractiveness and raise the sales of commodities to Russia, which have decreased due to western sanctions.

After the RBI established a framework for international trade settlements using the rupee last month, the measure is intended to increase Russian commerce. Indian businesses are already exchanging dollars and euros for Asian currencies to settle transactions to dodge the sanctions the West has imposed on Russia due to its invasion of Ukraine.

According to those Reuters sources, bankers and dealers have not yet increased their usage of the rupee for settlements since they are still waiting on further information about the government's and central bank's incentives to use the rupee.

A separate study by Saurabh Nath, Vikram Rajput and Gopalakrishnan S from the RBI's financial markets operations department, which does not represent the central bank's views, said the reserves were depleted by 22 per cent during the 2008-09 global financial crisis as compared to only 6 per cent in the current episode following Russian invasion on Ukraine.

On an absolute basis, the 2008-09 global financial crisis led to a drawdown of $70 billion in the reserves, which came down to $17 billion during the COVID-19 period and stood at $56 billion as of July 29 this year due to the Ukraine invasion-related impact.

But for now, the current crisis is far from over and may mean a further erosion in the country's forex war chest.
 

RISING SUN

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Chris Wood says India best structural story in Asia; surprised by market resilience​

Christopher Wood, global head of equities at Jefferies, said India is by far the best structural story in Asia and the resilience shown by the country's market this year has taken him by surprise.

Wood has been bullish on India for a while now. He has given the largest 40 percent weightage to the country in his Asia (excluding Japan) long-only portfolio. Wood had said in May that he would add more if the Nifty slipped to 14,500, but that did not happen as the index rebounded from around 15,000 level.


In his weekly newsletter GREED & fear published late on August 25, he expected the Indian market to consolidate in 2022 after the strong gains recorded last year and the commencement of a monetary tightening cycle.

The RBI has raised interest rates by 140 basis points since May. Inflation has also softened though it still remains above tolerance level.

“The reality is that the Indian market has so far surprised everyone, including GREED & fear, by its resilience in the face of bearish sentiment triggered by the wave of foreign selling, prevailing high valuations and monetary tightening,” said Wood.
https://www.moneycontrol.com/news/b...-to-come-says-kristal-ai-founder-9097101.html
The Nifty Index has rebounded by 16.5 percent since mid-June, while the MSCI India Index has outperformed the MSCI AC Asia Pacific ex-Japan Index by 16.5 percent since late June, noted Wood.

Foreigners have also returned as net buyers of equities in the past six weeks, buying a net $7.64 billion since mid-July after having sold a net $29.7 billion worth of Indian equities in the first six and a half months of the year.

“This resilience should be viewed as reflecting the strength of the structural story. Meanwhile, China Covid suppression and the Ukraine conflict have also helped at the margin by keeping the price of oil lower than it otherwise would be while allowing India to buy Russian oil at a discounted price,” said Wood.

Russian Urals crude oil is now selling at $18 below international benchmark Brent, though the discount is now much lower than the $35 discount in June. This has also lifted outlook for many energy companies.

Though the case remains that the Nifty is now trading at 19.3x earnings on a 12-month forward basis, which makes some analysts including Jefferies head of India research Mahesh Nandurkar “tactically cautious”.

But, Wood is not tweaking the weight of Indian stocks in his portfolio, and he is “going to stick with the structural story in terms of the Indian portfolio exposures since these are long-term portfolios not tactical benchmark tracking exercises".

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
 

RISING SUN

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Centre implements 'One Nation One Fertiliser' plan under 'Bharat' brand​

To bring about uniformity in fertiliser brands across the country, the government today issued an order directing all companies to sell their products under a single brand name of ‘Bharat’.

Following the order, all fertiliser bags, whether containing urea or di-ammonium phosphate (DAP) or muriate of ootash (MOP) or NPK will sport the brand name as ‘Bharat Urea’, ‘Bharat DAP’, ‘Bharat MOP’ and ‘Bharat NPK’ irrespective of the company that manufacturers it, whether in the public or the private sector.

The order has drawn adverse reactions from fertiliser companies, claiming it will ‘kill their brand value and market differentiation’

The order also stated that the single brand name and the logo of Pradhan Mantri Bhartiya Janurvarak Pariyojana (PMBJP), the scheme under which the Central government grants subsidy annually to the fertiliser, companies will have to be displayed on the bags.

“The company name can be mentioned in a very small portion of the total packaging,” a senior industry official said.

He said the move could harm the fertiliser companies as brands apart from being product differentiator also helps in building an image of the firm while going into the farmers’ fields.

“Fertiliser companies do a lot of extension activities such as field-level demonstrations, crop surveys etc, where their brands are displayed prominently and it also helps in reaching out to the farmers. All this will now stop,” the official said.

The order, meanwhile, said that fertiliser companies will not be allowed to procure old designed bags from September 15 and the new system will come into place from October 2, 2022. The companies have been given time till December 12 to exhaust all their old designed bags from the market.
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jetray

Senior member
Mar 15, 2018
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India

Centre implements 'One Nation One Fertiliser' plan under 'Bharat' brand​

To bring about uniformity in fertiliser brands across the country, the government today issued an order directing all companies to sell their products under a single brand name of ‘Bharat’.

Following the order, all fertiliser bags, whether containing urea or di-ammonium phosphate (DAP) or muriate of ootash (MOP) or NPK will sport the brand name as ‘Bharat Urea’, ‘Bharat DAP’, ‘Bharat MOP’ and ‘Bharat NPK’ irrespective of the company that manufacturers it, whether in the public or the private sector.

The order has drawn adverse reactions from fertiliser companies, claiming it will ‘kill their brand value and market differentiation’

The order also stated that the single brand name and the logo of Pradhan Mantri Bhartiya Janurvarak Pariyojana (PMBJP), the scheme under which the Central government grants subsidy annually to the fertiliser, companies will have to be displayed on the bags.

“The company name can be mentioned in a very small portion of the total packaging,” a senior industry official said.

He said the move could harm the fertiliser companies as brands apart from being product differentiator also helps in building an image of the firm while going into the farmers’ fields.

“Fertiliser companies do a lot of extension activities such as field-level demonstrations, crop surveys etc, where their brands are displayed prominently and it also helps in reaching out to the farmers. All this will now stop,” the official said.

The order, meanwhile, said that fertiliser companies will not be allowed to procure old designed bags from September 15 and the new system will come into place from October 2, 2022. The companies have been given time till December 12 to exhaust all their old designed bags from the market.

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y? whats the benefit?
 

RISING SUN

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Dec 3, 2017
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Manufacturing PMI edges down to 56.2 in August, but inflation concerns ease​

India's manufacturing activity improved again in August, although S&P Global's Purchasing Managers' Index (PMI) edged down to 56.2 from the eight-month high of 56.4 recorded in July.

A reading above 50 indicates expansion in activity, while a sub-50 print is a sign of contraction.


This is the 14th consecutive 50-plus print for the manufacturing PMI.

"A sustained improvement in demand conditions boosted new order intakes at Indian manufacturers during August, which in turn pushed output growth to a nine-month high," S&P Global said.

"Production volumes were also supported by a pick-up in exports and upbeat projections for the year-ahead outlook. Firms were at their most optimistic for six years."

A bright outlook for international demand is curious considering economists expect global growth to deteriorate rapidly, with several developed economies seen falling into a recession.

Surveyed firms also expressed optimisim on the prices front.

"Firms welcomed the weaker increase in input costs with and upward revision to output forecasts amid renewed hopes that contained price pressures will help boost demand," noted Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.

"Inflation concerns, which had dampened sentiment around mid-year, appear to have completely dissipated in August," De Lima added.

S&P Global's survey found cost inflation declined to a one-year low in August, thanks to the fall in commodity prices, particularly those of aluminium and steel. Consequently, selling prices only rose moderately.

The easing of price concerns will be music to the Reserve Bank of India's (RBI) ears, with elevated inflation having already forced the Monetary Policy Committee (MPC) to raise the policy repo rate by 140 basis points to 5.4 percent in just four months.


While India's key inflation rate, measured by the Consumer Price Index (CPI), eased to a five-month low of 6.71 percent in July, it has been above the medium-term target of 4 percent for 34 consecutive months while also spending seven straight months above the 6 percent upper-bound of the central bank's 2-6 percent tolerance range.

If average CPI inflation is outside the 2-6 percent range again in July-September - as the RBI has forecast - it will mean the central bank would have failed to meet its inflation mandate.

The MPC, scheduled to next meet September 28-30, is widely expected to announce a couple of more rate hikes to take the repo rate to around 6 percent by the end of 2022.
 

RISING SUN

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Dec 3, 2017
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India’s $3 trillion equity market cap justifies TINA tag for now: SBI Research​

Being an investor in the more than $3 trillion Indian equity market might make one detached from the chaos of the global markets.

While investors in the US, Europe, and China fret over the deep economic pain expected in the coming months, triggered by multi-decade high inflation and a brewing energy crisis, the Indian economy is proving to be more resilient than most believed it was a few months ago.

The K-curve recovery of 2021 from the depths of the pandemic has been shunned to the back pages and the front page is dominated by notions of macroeconomic resilience, resurgent domestic demand, and an inflation dynamic that on the surface appears under the leash.

The benchmark Nifty 50 and BSE Sensex indices posted their biggest one-day gains of about 2.5 percent each on August 30, a day after crashing 1.5 percent in reaction to US Federal Reserve Chief Jerome Powell’s hawkish speech on August 26.

India is the best-performing large emerging market in 2022, enjoying a premium of more than 100 percent to its peers. That premium may be for the level of certainty in growth that the domestic economy provides investors.

Grown and inflation

“Clearly, India seems to be enjoying the TINA (There Is No Alternative) factor as globally, all countries are facing the churn and India seems to the best placed jurisdiction in terms of growth and inflation outlook in FY23,” State Bank of India’s research wing said in a note on August 30.

The Reserve Bank of India believes inflation in the country peaked in April, as evidenced by the moderation in retail price rises in the two following months. Foreign portfolio flows have returned, with net buying worth more than $7 billion in domestic stocks.

Corporate earnings, even after enduring the harshest raw material inflation in recent times, have barely seen any downgrades and fund managers are buoyant that earnings of Nifty 50 companies can grow upwards of 15 percent in FY23.

“Today’s rebound indicates the domestic economy’s resilience in comparison to its global peers,” said Vinod Nair, head of research at Geojit Financial Services.

In times of chaos such as the one currently unfolding in the global economy, India’s relative calm could also prove to be illusionary. For all the bullish momentum that the stock market enjoys, it is unlikely that volatility will leave investors’ side anytime soon.

The Fed and the RBI will still be increasing interest rates when investors ring in the New Year, and global liquidity will continue to contract as the Fed and the European Central Bank shrink their bloated balance sheets.

The west is preparing for a long winter, when energy prices are likely to reach stratospheric levels as the global stock of natural gas dwindles. After falling more than 25 percent earlier this month, global crude oil prices are making a resurgence towards $105 per barrel on hopes that the oil cartel led by Saudi Arabia will pare back supplies.

“India has kept retail automobile fuel prices at well below market-parity levels. However, likely higher global crude oil prices in winter in the northern hemisphere may result in higher domestic fuel prices and inflation both,” Sanjeev Prasad, Anindya Bhowmik and Sunita Baldawa of Kotak Institutional Equities said in a recent note.

Valuations, a major driver of the FPI exodus earlier this year, are back in the ‘rich’ territory, with the one-year forward price-to-earnings ratio of the Nifty 50 nearing 21 times, an 18 percent premium to its long-term average.

Further, the health of the rural economy remains a question mark as a normal but erratic monsoon has seen sowing in crucial crops such as paddy drop sharply on a year-on-year basis, triggering concerns over demand in the festive period.

“We do not like the combination of expensive market valuations and uncertain outlook on energy prices even though the Indian economy and Indian market earnings both appear to be on solid footing,” Prasad of Kotak Equities said.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions.
 

lcafanboy

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Dec 22, 2017
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Bangalore

One more Kick on Chinese Balls...
India develops super conducting magnets used in MRI scanning machines and develops MRI scanning machines. No more Chinese MRI scanning machines import and in fact we can eat into their export market by exporting these machines at cheaper rates.... 😊
#AtamnirbharBharat