Raghuram Rajan

British equities and recession in the sceptered isle

|By Matein Khalid| David Cameron, Wall Street’s elite, Mutti Merkel, Obama, the Eurocrats of Brussels, the great and the good of the City and the IMF’s Lady Christine all got it so horribly wrong. I slept Thursday night with sterling at 1.50 on New York and awoke to see it trade at 1.34 on Friday, a 30 year low before the Plaza Accords. Britain has voted to […]

A central banker and the end of banking alchemy

|By Matein Khalid|Dr. Mervyn King broke with tradition by publishing his book “The End of Alchemy: money, banking and the future of the global economy”. After all, retired governors of the Bank of England do not, as a rule, do not write/publish books, let alone write books that lambast the City of London’s culture of greed and hubris. It is no coincidence that Dr. King quotes T.S. […]

CHINA SLOWDOWN OFFERS OPPORTUNITY

INDIA IN SWEET SPOT TO BALANCE THE ACT

By K R Sudhaman

India is in a sweet spot as global economy is not looking good in the face of market turmoil in China. A global recession triggered by poor showing of European economy had hit badly the export led growth model of China, whose economy grew by 6.9 per cent in 2015, the slowest in two decades. Following this slowdown, high commodity prices had started correcting exerting more pressure on China down turn. The massive over investment in China in steel, cement, shipbuilding, petrochemicals, real estate and other infrastructure sectors began to burst. This volatility in equity and commodity markets did not augur well for the global and Chinese economies. Global economy may not be in a crisis as in 2008 during the financial meltdown but it is certainly not out of the woods and outlook for global economy is certainly bearish in 2016.

King dollar trend is down, but not out

|By Matein Khalid| The plunge in crude oil after OPEC’s Vienna conclave, Dr. Draghi’s failure to resist Bundesbank pressure not to fire another ECB easy money bazooka, Wall Street’s junk bond debacle and an imminent rise in the Fed Funds rate for the first time since 2006 will all shape the next big trades in Planet Forex. The Euro has risen to 1.10 on Draghi’s failure to […]

Indian dollar-loan market rebounds

Janet Yellen may have unwittingly helped the Indian dollar-loan market rebound from a three-year low. Less than a week after the Federal Reserve Chair delayed raising U.S. interest rates, billionaire Mukesh Ambani’s Reliance Industries Ltd. hired 16 banks for a $1.5 billion loan and Rural Electrification Corp. also approached lenders. That takes the pipeline of local dollar-denominated loans planned, mandated or in syndication to more than $5 […]

Aesthetics of art investing

|By Matein Khalid| As a student of investing and the son of a painter/art historian, I cherish art as a visceral, spiritual value but am also intrigued by its historical linkage to banking and the financial markets. The happiest moments of my life have been spent in the Prado, Tate, Hermitage, Rijksmuseum, Ufizi, MOMA, Met, the National Gallery on Trafalgar Square, the Louvre, Musee d’Orsay and so […]

US short-term real interest rates to remain near zero for foreseeable future, reveals industry poll

UAE. Short-term real interest rates (US) will remain near zero for more than three years, according to the majority of institutional investors, academics and policy makers polled at the AQR Asset Management Institute’s inaugural Perspectives event, at London Business School. At the start, delegates were asked how much longer they expected short-term real interest rates (US) to remain near zero, with 38% answering more than three years. […]

SEBI BOARD CLEARS BIG TICKET MARKET REFORMS

Mumbai: The board of Securities and Exchange Board of India (Sebi) on Wednesday cleared big-bang market reforms, including a move to replace the two-decade-old insider-trading rules with the new prohibition of insider trading (PIT) regulations, and amending the existing delisting regulations. Additionally, Sebi approved new reforms in consent mechanism under which it will give entities found violating securities laws the option of settling the matter before the […]

JAITLEY THROWS WEIGHT BEHIND SEEKERS OF A RBI RATE CUT

NEW DELHI: A few weeks before the Reserve Bank of India announces the monetary policy, Finance Minister Arun Jaitley has made his preferences clear in the raging debate over whether governor Raghuram Rajan should cut interest rates on December 2.   “Reduction in the cost of capital will give a good fillip to the Indian economy,” Jaitley said at the Citi Investor Forum, but added that the […]

RATE CUT BY RBI WILL GIVE ‘GOOD FILLIP’ TO ECONOMY: ARUN JAITLEY

NEW DELHI: A few weeks before the Reserve Bank of India announces the monetary policy, Finance Minister Arun Jaitley has made his preferences clear in the raging debate over whether governor Raghuram Rajan should cut interest rates on December 2. “Reduction in the cost of capital will give a good fillip to the Indian economy,” Jaitley said at the Citi Investor Forum, but added that the decision […]

INDIA GETS ITS WAY ON BLACK MONEY AT G-20 MEET

Brisbane: DRIVEN by a strong domestic political agenda of getting black money back home, Prime Minister Narendra Modi on Sunday managed to get the Group of 20 include a certain clause in the final Leaders’ Communique that will make it difficult for tax havens to give complete tax exemption to companies. This, along with the G-20’s endorsement of a global Common Reporting Standard for automatic exchange of […]

SURESH PRABHU TO PLAY A KEY ROLE IN MODI GOVT

NEW DELHI: Suresh Prabhu is set to play a key role in drafting policy on natural resources and infrastructure in the Narendra Modi government. The Shiv Sena member has been given an office in South Block, where the Prime Minister’s Office is located, and is expected to be given cabinet rank.   Prabhu is also expected to look after the organisation that will succeed the Planning Commission […]

INDIA INC BATS FOR RATE CUT BY RBI

New Delhi: India Inc on Wednesday pitched for a rate cut by the Reserve Bank of India (RBI), saying the central bank should be “more courageous”, since inflation had come down drastically and growth is not picking up. RBI is slated to come out with its policy review on December 2. “RBI has to be more courageous,” said Anand Mahindra, chairman and managing director of  Mahindra & […]

OIL PSUs LEARN TO SWIM IN ROUGH WATERS

Mumbai: It’s exactly 125 years since the first oil deposits were discovered in India. The big push to India’s oil and gas sector came after the early 1990s, when it was opened up to private players. Yet, the sector is still dominated by public sector undertakings (PSUs) such as Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) in oil and gas exploration and production; […]

FINMIN ASKS RBI TO EASE INFRA FUNDING NORMS

NEW DELHI: The Finance Ministry has asked Reserve Bank of India (RBI) Governor Raghuram Rajan to provide greater flexibility to banks funding stalled infrastructure projects, after concerns were raised by senior bankers that some lending requirements were too ‘stringent’.   A department of financial services communication to Rajan sought to de-link the extent of cost overruns as a condition for classifying any project as a restructured asset. […]

PSB DEPOSIT RATES CUT BY UP TO 100 BPS

MUMBAI: Leading public sector banks have lowered some of their term deposit rates by up to 100 basis points as credit growth remains sluggish and liquidity in money markets has improved (100 basis points = 1 percentage point). The lenders who reduced deposit rates recently include the Bank of Baroda, Bank of India and Andhra Bank. The State Bank of India, ICICI Bank and Central Bank of […]

NOW, PM TO MEET PSU BANK CHIEFS

New Delhi: Prime Minister Narendra Modi, who prefers to cut hierarchy and have direct interaction – be it bureaucrats or students – will next meet chiefs of public-sector banks. The proposed meeting comes amid rising bad loans and reports of various irregularities in state-owned banks. The prime minister is likely to take stock of the banks’ performance – an exercise usually undertaken by the finance minister. “Credit […]

CORE SECTOR GROWTH FALLS TO 8-MONTH LOW

New Delhi: Output of core industries grew at an eight-month low of 1.9 per cent in September, down from 5.8 per cent in August, indicating overall industrial production will be subdued. This could have repercussions on the gross domestic product for the second quarter.   Official data showed on Friday infrastructure industries had slowed down the most since January when production grew 1.6 per cent. Output had […]

ONLY 5 LIFE PRODUCTS CAN BE FILED IN A YEAR: IRDA

Mumbai: The Insurance Regulatory Development Authority (Irda) has come out with a new product planner rule, by which an insurance company can file only five products for approval in a year. However, Life Insurance Corporation of India (LIC), the country’s largest insurer, might be given a special dispensation by the regulator. In order to reduce the time taken for product approvals, Irda has asked life insurers for […]

BANK CREDIT DROPPED IN 1ST HALF OF OCTOBER

Mumbai: Credit in the banking system slipped marginally despite the festive season. Data from the Reserve Bank of India suggests that in the period between October 3 and 17, bank credit slipped 0.7 per cent. However, in the past one year, credit growth was up 11 per cent. In the period ended October 17, it was Rs 62,20,004 crore, up from Rs 55,97,985 crore a year before. […]

SLOWDOWN IN EUROPE GIVES JITTERS TO MANY INDIAN COMPANIES

Shares of Indian companies with key markets in Europe such as Tata Steel, Tata Motors, Bharat Forge, Motherson Sumi and Crompton Greaves have crashed by as much as 19% since mid-September on concerns their earnings may get adversely affected by the slowdown in the region.   However, analysts say investors should buy some of these stocks. “We are positive on companies such as Tata Motors, Bharat Forge […]

CENTRE CANCELS SELECTION OF 6 GOVT BANK CHIEFS BY UPA

New Delhi: The National Democratic Alliance (NDA) government on Monday scrapped the selection of six chiefs of public sector banks, recommended under the United Progressive Alliance (UPA) regime, following a high-level panel finding irregularities in the process followed. The probe into selections for banks such as Bank of Baroda and Canara Bank followed the arrest of tainted Syndicate Bank Chairman and Managing Director (CMD) S K Jain […]

25 EUROPEAN BANKS FAIL STRESS TEST, 12 HAVE FIXED HOLES ALREADY

FRANKFURT: Twenty-five banks including Italy’s Banca Monte dei Paschi di Siena SpA failed a stress test led by the European Central Bank, which said almost half of them must act to raise more capital. The central bank in Frankfurt identified a 25 billion-euro shortfall ($32 billion) for the region’s lenders, and said 12 of them have now raised enough funds. Eleven banks need more capital, including Monte […]

DOING BUSINESS IN INDIA TO GET EASY, REGISTRATION IN JUST A DAY

NEW DELHI: In order to make India a better place to do business, the government is working to cut down the time for registering a business from 27 days to a single day. Towards this end, it has readied a raft of measures, such as, single registration for all labour laws, overhaul of tax systems, reduction in the number of permits required, easing up property registration, quick […]

FOREIGN INVESTORS ARE BUYING INDIAN CORPORATE BONDS AS YIELDS ARE ATTRACTIVE

MUMBAI: Foreign funds are buying more Indian corporate bonds as there is no sign that the $25-billion limit on government securities — close to being exhausted — is going to be raised. Overseas portfolio investors have used up nearly half the overall investment limit in corporate bonds compared with 37 per cent four months ago. But foreign portfolio investors, or FPIs, can invest another Rs 1,23,580 crore […]

MODI GOVT WON’T REVEAL NAMES OF TAX EVADERS

NEW DELHI: The Narendra Modi government made a volte face of sorts on Friday when it cited the same reasons that the previous Congress-led regime had given to keep secret the names of people who have allegedly stashed black money in overseas accounts.   In an application to the Supreme Court, which had directed the government to reveal those names, the government said such a step would […]

RBI MAY LOOK TO COMPANIES TO SLASH PRICES BEFORE LOWERING RATES

MUMBAI: At one of the customary premonetary policy meetings with industry, former Reserve Bank of India governor Duvvuri Subbarao wanted to know how many of those present would benefit from an interest rate cut. Almost all hands went up. The next question was how many would pass on the lower cost to customers. Almost no one raised their hands. Subbarao kept interest rates unchanged. The voice of […]

KEY POLICY DECISIONS BY MONTH-END

NEW DELHI: Having proved himself as a ‘rock star’ abroad and a vote-getting machine at home, Prime Minister Narendra Modi is now going to do what people are telling him to do: Take policy decisions that cannot be put off any longer.   The first of these is a Cabinet reshuffle likely by the end of this month – after Diwali. A brace of decisions on economic […]

RBI IN TALKS WITH GOVT OVER A FINANCIAL RESOLUTION AUTHORITY

Hyderabad: Reserve Bank of India (RBI) Governor Raghuram Rajan has said the central bank is in talks with the Centre to set up a financial resolution authority (FRA). “We really need a financial resolution authority so that we can close financial institutions in trouble, without necessarily merging those and taking the losses. We need to clean institutions…while resurrecting those functioning well. FRA will be the entity that […]

GLOBAL ECONOMY STILL STRUGGLING FOR GROWTH

By S. Sethuraman   A global economy, wobbling six years after the financial market crash of 2008, cannot need anything better than a firm commitment of the world’s financiers to build a more robust, sustainable, balanced, job-rich economic order. Global unemployment is at its all-time peak, especially in Europe and large parts of developing world.   Finance Ministers of 188 nations met at the 2014 Annual Meetings […]