MIT Sloan School of Management professor Yasheng Huang warns of the dangers of India’s reliance on the IT sector for economic growth, calling for regulatory reforms and greater investment in basic services
The dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore believes the success of Indians internationally highlights the gap between the country’s potential and its actual performance. more
On Nov. 7, 2013, Standard & Poor’s Ratings Services affirmed the ‘BBB-‘ long-term and ‘A-3’ short-term unsolicited sovereign credit ratings on India. The outlook on the long-term rating remains negative. India’s institutional strengths and high international reserves support our investment-grade rating on India. However, we note a marked slowdown in real growth, which complicates the government’s debt dynamics and ability to implement reforms
Standard & Poor’s affirmed the sovereign rating of India at BBB- with a negative outlook on November 7, 2013. In this CreditMatters TV segment, Standard & Poor’s Director of Sovereign Ratings Takahira Ogawa discusses the reasons behind the affirmation and the outlook for the sovereign.
The past decade has been a watershed for India in three different ways. First, the period before the global financial crisis of 2008-2009 demonstrated that India could grow like the Asian tiger economies at close to 9%. Second, after the crisis, the country proved its resilience, as it bounced back quickly and regained 9% growth by fiscal 2011 (ended March 31, 2011). Third, the current slowdown has exposed India’s vulnerability to slower economic growth and to a fall in foreign inflows if the country fails to improve infrastructure and address governance issues and slackening reforms. Despite its moments of triumph, India’s economic growth in the fiscal 2014 (ending March 2014) will most likely continue to be lackluster. The three most critical challenges facing the country are anemic growth, particularly in the industrial sector, persistent inflation, and high current account and fiscal deficits.
SEBI has been holding discussions with issuers and various other market participants
regarding the issues concerning development of Corporate Bond Market. Based on the
suggestions received in the aforesaid meetings, it has been decided to implement few changes which can be found here
HONG KONG, CHINA – The Indian economy has been under pressure with the recent depreciation of the rupee and capital outflows adding to structural constraints which are weighing heavily on its prospects for returning to a high growth path, says a new Asian Development Bank (ADB) report.
Asset quality deterioration, shortage of capital, and slowing credit growth could undermine the BRICMT (Brazil, Russia, India, China, Mexico, and Turkey) banks’ credit quality, especially amid economic slowdown following years of strong credit growth. In addition, there remain concerns about the rising household debt burden, given still low, although increasing, GDP per capita and cyclicality of these major emerging market economies. Furthermore, the following country-specific factors are pressuring the banks’ asset quality: increasing economic imbalances in Brazil due to a recently accelerating credit expansion by government-owned banks; rapid increase of high–risk unsecured lending in Russia; a highly leveraged corporate sector in India; lackluster export growth, debt-laden local governments, and many manufacturers suffering from oversupply in China; large homebuilders’ woes and deteriorating consumer lending in Mexico; and rapid credit card debt and consumer lending in Turkey.
In the Report :
We think that the acute phase of the EM sell-off may be over. We see value in those
countries with strong fundamentals that have seen sharp sell-offs over the past two
months, including Mexico, Malaysia, and Russia.
” EM currencies, stocks and bonds have struggled since the Fed signalled its intent to change course in late May. This has seemingly triggered an exodus of speculative capital from emerging markets but, as is always the case, there is more to the story than that. EM countries (ex. China) no longer run a current account surplus with the rest of the world, and this hurts global liquidity. It is not yet a re-run of the 1997-98 Asian crisis, but it has the potential to become one with all sorts of consequences for bond yields in developed markets, currency wars, etc.”
Read full report at http://www.arpinvestments.com/The_Absolute_Return_Letter_0913.pdf
S&P Dow Jones Indices invites you to this half-day complimentary seminar which has become Europe’s annual meeting point for commodity aficionados in less than a decade.
Join us and other leading industry professionals for an afternoon of education and networking opportunities. Take a front row seat to walk away with valuable insights into current trends and issues under the umbrella of who’s complaining, who’s hedging, who’s speculating, who’s to blame and finally, where do I go?
Our speakers will examine:
– What causes spikes in commodity prices and how regulation is impacting commodity investment in modern market times.
– Perspectives on what the speculators are doing versus who are the hedgers, and why the lines might not be so clear.
– What incidental factors are tipping the market and the limitations for producers and consumers?
– What’s driving the world’s demand economy today and where it might be heading.
– The latest techniques in managing commodity index exposures in potentially uncertain times.
The Top 10 Questions You Should ASk in Every Investment Grade Bond Offering
2013 Asia-Pacific Bank Outlook
Read more at Fitch: Rupee Impact Highest for Indian Downstream National Oil Companies
29 August 2013
Fitch Ratings has said that the depreciation of the Indian rupee has varying levels of implications for rated energy & utilities companies in India, but their ratings are not immediately affected. The risks to standalone financial profiles are highest for state-controlled petroleum marketing companies among the Indian energy sector issuers currently rated by Fitch.
Read more Fitch: Currency Slide Will Add to Indian Banks’ Woes
29 August 2013 : The sharp depreciation of the Indian rupee will add to credit pressures on Indian banks, says Fitch Ratings. The current economic slowdown is also likely to be deeper and longer than our baseline expectations, adding to the pressures already faced by the local banking sector.