SHADOW ECONOMY
Indian financiers’ debt lures buyers on widest spread since 2020
Investors are wary of funding strains affecting the rapid economic growth in India, despite enticing opportunities in shadow lender bonds. The concern lies in the widening spreads and the potential hurdles that could impede the country's impressive growth trajectory.
Charting the global economy: Fed holds; BOJ leaves yen at risk
Federal Reserve officials expect only one interest-rate cut this year, while the Bank of Japan delays details on bond buying. Far-right parties in Europe influence elections and impact the euro's value.
Lok Sabha Results: Coalition govt is back. Will policy paralysis too strike again?
Over the past decade, Narendra Modi has propelled India's economy to become one of the fastest-growing globally, positioning it to soon rank as the world's third-largest. His emphasis on reforms and dynamic policies, exemplified by initiatives like Make in India, has bolstered manufacturing and infrastructure growth. However, the recent Lok Sabha election results, leading to a coalition government, raise concerns about potential challenges and policy paralysis ahead. Expert analyses suggest that while coalition governments have historically been effective in driving economic growth, they have struggled to control inflation.
BJP's '400 paar' dream lies shattered: What could have gone wrong?
BJP 2024 Election Results : Was the BJP's '400 paar' an over-confident pitch that flew far above the ground reality? Modi has certainly driven the economy ahead at a scorching pace, but the opposition was able to foreground the persisting challenges. What could have gone wrong for the BJP which has a gargantuan election machinery.
Not just a one-horse town: Empower Opposition to become active political participants
India aims to be a $5 tn economy. So, there's much talk about accelerating growth and enhancing economic competitiveness. But are we through talking about political competition?
Strong growth likely in FY25; pvt investment picking up, says Sanjay Nayar
In an interview to ET, Nayar called on the government to maintain its capital expenditure push for some more time to "crowd in" private investment. Rural consumption has started to see an uptick, on top of the already strong urban demand, he said. Capacity utilisation has gone up to 75% or so, which indicates companies would go for fresh capacity expansion.
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Short-term volatility? Yes, but operating landscape might be changing: 5 metal stocks with upside potential of up to 20%
After the IT sector companies, metal is another sector where the fortunes of Indian companies are more tied to what is happening globally rather than what is happening in India. The reason, global metal prices are decided by two things, first is the state of the Chinese economy and second is how the US dollar behaves in the global markets. On the first, there are initial indications that after close to more than two years, things are turning better. The most reliable indication came last month with better than expected GDP numbers. On the second front, there is still lots of uncertainty thanks to flip-flops by the US Fed on interest rate cuts. Now if one looks at the metal stocks, they have sort of out performed volatile Indian markets. But given the fact that these days, too much money flows into stocks where there is even a slight bit of positive development, the possibility that these stocks may turn volatile if there was more pressure on the broader market. However, when the tide turns, because the operating matrix of the companies would be better if the China recovery continues, there is a high probability of them turning into relative outperformers.
Asian junk bond sales are hottest in five years on India boom
Regional sales of such corporate notes, outside of Japan, touched $5.9 billion so far this year, already surpassing $4.4 billion in all of 2023, according to Bloomberg-compiled data. Indian borrowers have topped the share of sales so far this year, with nearly 44% share.
World economy looks to dodge stagflation rut as outlook perks up
The brighter outlook indicates the world economy looks to avoid entering a stagflationary rut — a period of sluggish growth and rising unemployment mixed with elevated inflation
Wealth distribution: Five critical things to know
In a country where the majority is not rich, redistribution is a potent tool for political rhetoric and action. In a country that's not rich, it is a destructive tool for action because the only thing that gets redistributed is poverty.
KKR joins global cos betting billions of dollars in fastest-growing India
KKR & Co. is optimistic about investment opportunities in India's consumer sector and expanding its private credit portfolio. Despite high valuations, the firm believes in India's long-term consumption growth. With global firms like Blackstone and Goldman Sachs also investing in India, KKR plans to deploy $10 billion at a faster pace. The firm is eyeing opportunities in manufacturing and may venture into real estate in the future. Despite challenges faced in the past, KKR remains committed to investing in India through various strategies, including its Asia credit fund and infrastructure projects.
Twin tailwinds: Banning of Russian metal and Chinese revival, 5 metal stocks with an upside potential of up to 23%
It is not easy to quantify how much impact it will have in the short term, but the fact that the two of the world largest commodity exchanges, London Metal Exchange (LME) and Chicago Mercantile Exchange (CME) have banned any metal of Russian origin produced after 13th April, have a higher probability of pushing up the metal prices higher after some time. Now this comes on the back of Chinese GDP numbers which were better than expected. If one looks at the trend in metal prices, they are incher higher. If the revival of the Chinese economy gets further momentum than probably two years old, the bearish phase of metal prices might be over. What does this mean for the Indian metal companies, probably another round of higher profits given the fact that their balance sheets are in much better shape as compared to 5 years back.
India's textile exports face second consecutive year of decline amid geopolitical strains
In the fiscal year 2023-24, exports amounted to $34.4 billion, marking a decline of over $1 billion (3%) compared to the previous fiscal year. Additionally, exports saw a significant drop of 16.3% compared to the fiscal year 2021-22, when the country reported exports worth $41 billion, the TOI report stated.
Analysis: Iran upends decades of shadow warfare in direct attack on Israel as tensions mount at home
Supreme Leader Ayatollah Ali Khamenei will mark his 85th birthday Friday, with no clear successor in sight and still serving as the final arbiter of every decision Iran makes. Coming to power in the wake of Iran's devastating eight-year war with Iraq in the 1980s, Khamenei preached for years about "strategic patience" in confronting his government's main rivals, Israel and the United States, to avoid open combat.
NATO turns 75 in shadow of Ukraine war -- and Trump
NATO chief Jens Stoltenberg emphasized the importance of solidarity between the United States and Europe as NATO celebrated its 75th anniversary. The alliance faces challenges from an aggressive Russia and the potential return of Donald Trump to power, who previously questioned NATO's collective defense guarantee. The invasion of Ukraine by Russia in 2022 has reinvigorated NATO, leading to increased defense spending by European allies. NATO has also supported Ukraine in its fight against Russia, but crucial US support remains blocked.
Are select metals prices indicating China’s economic revival? 5 metal stocks with upside potential of up to 23%
Few days back, there was a sudden spurt in oil prices, though they might have cooled down a bit. The question is why this sudden spurt when there has not been any rise in tension in the Middle east and it is not even the peak season where demand for heating oil could have led to sudden rise. Now combine this with price trends in some non ferrous metals like copper which have inched upward to form a one year high. While to some it might appear far-fetched at this point of time as there have been many false starts, are the commodity markets giving an indication that finally there are some green shoots in the Chinese economy? The risk is the US election result. Will the election results help in resolving the trade issue or continuation of the issues ?
Wind and sun are free, but it's harder to get renewable energy projects built these days. Here's why
It's not easy when headwinds from the post-pandemic global economy - including high interest rates and inflation - are holding back often costly investment in wind, solar and other forms of clean power.
Private US spacecraft topples to its side during lunar landing, some antennas covered up, the company says
A private U.S. lunar lander, Odysseus, tipped over during touchdown near the moon's south pole, ending up on its side and hampering communications. Despite the mishap, the lander, sponsored by NASA, is thought to be within a few miles of its intended landing site. NASA's Lunar Reconnaissance Orbiter will attempt to locate it. This marks the first private moon landing, with NASA experiments onboard. The lander's mission is expected to last about a week on the moon.
Labour Party wants to see UK-India cooperation deepen: UK's shadow deputy PM Angela Rayner
Asked about Prime Minister Narendra Modi's emphasis on women-led development and how women can be promoted in leadership positions, Rayner said the challenge is that one not only has to look at society and encourage women to come forward but also what is important is legislation and making sure that people have laws that can protect them in being part of the workplace, society and in key positions of power.
Asian IPO market seen brighter in 2024 but elections cast shadows
High interest rates, sticky inflation and geopolitical tensions have seen share sales by Asia Pacific (including Japanese) companies sink by a fifth in value so far this year to $229 billion, LSEG data shows. That's put this year on course to be the weakest since 2012.
China-Myanmar ties under shadow after rebels action along border
China's economic ties with Myanmar face a significant hurdle as rebel groups seize strategic border towns, hindering trade routes and disrupting over 40% of bilateral commerce. The Three Brotherhood Alliance's coordinated offensive, Operation 1027, captured key roads and military posts, impacting the cash-strapped junta's revenue and hindering troop movement. This bold move threatens the junta's control over crucial trade routes to China, challenging its perceived invincibility and potentially inspiring further rebel actions.
Chinese state firms' help to troubled shadow bank does little to address investor concerns
The involvement of Chinese state-owned financial firms, Citic Trust and CCB Trust, in Zhongrong International Trust Co's operations and management is seen as a measure to diffuse risk, but it does little to alleviate concerns about missed payments. Zhongrong, a troubled shadow bank with real estate exposure, has missed payments on trust products, causing market turmoil and raising fears
India growth may moderate in Q3 while China property slump casts shadow on global prospects: Fitch
Fitch Ratings predicts that India's economic growth will slow in the third quarter, despite the country's resilience in the face of tighter monetary policy and weak exports. Fitch has maintained India's growth target for fiscal year 2024 at 6.3%. However, it warns that the deepening slump in China's property market is casting a shadow over global growth prospects. Fitch has raised its forecast for global growth in 2023 by 0.1 percentage point to 2.5%, but has cut its 2024 world growth forecast by 0.2 percentage points to 1.9%.
How the 'perennial pessimist' economists cast shadows on any semblance of positive change in India
India’s growth numbers are backed by national data and endorsements by World Bank, IMF, RBI and other rating agencies. So, one should definitely take anything coming out of people who find that one cloud on a sunny day and declare it’s about to flood with a handful of salt.
Absent Putin and Ukraine war cast long shadow over G20
The absence of Russian President Vladimir Putin and Chinese President Xi Jinping at the G20 summit is expected to have a significant impact on the proceedings. While Xi's absence will stifle progress on global economic issues, it is Putin and the war in Ukraine that are likely to dominate and hamper progress. The G20 is facing challenges such as high global inflation, slowing growth, and debt struggles, in addition to long-term issues like climate change and sustainable development.
Why it's so hard for China to fix its real estate crisis
China's stock market was plunging and its currency was teetering. The head of the central bank, fielding questions at a rare news conference, said China would make it easier to get home mortgages. It was February 2016 and Zhou Xiaochuan, the central bank's longtime governor at the time, announced what proved to be the start of an extraordinary blitz of lending by China's immense banking system.
From stocks to bitcoin, soaring US yields cast shadow over risk asset rally
Goldman Sachs strategists on Monday said equity holdings by retail and institutional investors stand below their historic norms, suggesting there may be additional fuel left to power the bull market if the economy stays strong.
View: India sees a shadow-banking boom despite China’s funk
Shadow banks in India are experiencing a surge in growth as they diverge from their counterparts in China. Mukesh Ambani's Jio Financial Services made its stock-market debut with a $19 billion valuation, while Bajaj Finance is the market leader with 29-31% asset growth. In contrast, shadow banking in China is facing a liquidity crunch due to a real estate slump.
China is on edge as fallout from its real estate crisis spreads
China's dependence on real estate was lucrative during what seemed like a never-ending property boom, but it has become a liability after years of excessive borrowing and overbuilding. When China was growing faster, the excesses were papered over as developers borrowed more to pay off mounting debts. But now China is struggling to regain its footing after emerging from the paralyzing pandemic lockdowns its leaders imposed, and many of its economic problems are pointing back to real estate.
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