Modi to Visit USA to Meet President Trump Soon

United States National Security Advisor H. R. McMaster met Prime Minister Narendra Modi in New Delhi in the third week of April setting the stage for a bilateral visit by India’s Prime Minister in the next few months, possibly as early as June.

US and India Flags

Trump and Modi will meet anyway in early July during the G-20 summit in Hamburg, Germany. However, both Indian and American government sources confirmed the possibility that Modi may travel to the U.S. for a stand-alone bilateral visit in June or July, reports the Indian Express.

April 20, 2017   No Comments

KKR likes India’s new Bankruptcy Code

New York City-based Kohlberg Kravis Roberts, a multinational private equity firm, specializing in leveraged buyouts, proactively engaged with India’s Federal government on the new bankruptcy code. The Code seeks to consolidate and amend laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner.

KKR produced a white paper on the subject after co-chairman Henry Kravis told Narendra Modi that India lacked proper bankruptcy laws during the latter’s first visit to the U.S. in 2014, soon after becoming prime minister.

I have never seen a government move so fast,” Kravis said. “He (Modi) was back in New York six-nine months later and he told me ‘we’re doing it’. And now what I hear from the lawyers is that it is a pretty darn good code.” The bankruptcy code was approved by India’s Parliament in May last year.

Signboard on Bankruptcy
The Economic Times says: Kravis’ prescription is this: Quantify bad loans as per their fair-market value and not by oft-used matrices like replacement costs, and sell them to asset reconstruction companies with a haircut. That will affect the net worth of the banks and that’s where the government needs to step in to recapitalize balance sheets by selling shares to lower state ownership to below 51%.

“You just place a threshold and say across every industry if the loan is substandard by a certain value or percentage then it goes into the pool and the government tells the banks that we bridge your equity. Banks have to go back to lending once again. In India, they are still the main source of capital.”

April 16, 2017   No Comments

FDI Surges in India

Overseas investors’ holdings of Indian stocks and bonds have picked up, rising more than $8 billion in 2017. “India’s current account deficit is being financed in large part by foreign direct investment inflows,” said Shilan Shah, Singapore-based economist at Capital Economics. “This is a positive reflection of Prime Minister Modi’s policies to encourage direct investment, and should make India less vulnerable to shifts in global risk appetite.”

“We expect reforms in the FDI space to continue which, along with the focus on improving ease of doing business conditions and GST implementation should help to sustain the positive momentum in the period ahead,” said Kaushik Das, Mumbai-based senior economist at Deutsche Bank.

Investors are attracted to India’s growth potential and the rupee, which is forecast to earn investors 2.6% by March 2018—including interest—the second-best in Asia after Indonesia’s rupiah, reports Livemint.

Indian Rupees

“We believe this is testament to India’s high growth rate, large potential and ongoing economic reforms,” said Sonal Varma, Singapore-based chief India economist at Nomura Holdings Inc.,

“We expect this trend to continue.” Bloomberg

 

 

April 5, 2017   No Comments

India Best Country for Wall Street Says Forbes

New York-based Wisdom Tree, that pioneered the concept of fundamentally weighted Exchange Traded Funds (ETFs) and active ETFs, says  that its India Earnings (EPI) Fund is up 12.8% year-to-date and is ahead of China, Indonesia, Thailand, Vietnam, South Korea and Japan.

Gaurav Sinha, strategist for Wisdom Tree said, “If you look across the countries the IMF tracks worldwide, how many can you name that are growing over 7%? Iraq, Myanmar and India, and India is the only large economy that has those numbers and that you can buy in the equity markets.”

Indian Currency

Forbes reports: “Prime Minister Modi continues his plans to cut red tape, root out corruption, upgrade infrastructure, improve the fiscal position. No trade drama. No political crisis. No wars and rumors of wars. Reliable central bank. Stable government. A little expensive, but these days, who cares?”

India’s recent demonetization caused a temporary economic slowdown; however, recent company visits confirm that the economy is beginning to normalize.  Gerardo Zamorano, director of the investment group for Brandes in San Diego says, “From my perspective, that policy [demonitization] did not change the long term outlook on India that much. If you’re the owner of a car dealer or a restaurant business, this might affect you next week or so, but not for a decade. That’s how we think of India. It’s a long term investment for Brandes.”

Robin Parbrook, head of Asia ex-Japan equities at Schroders, says India remains the best domestic story in Asia at the moment. “The base is low in India, so the building of roads, provision of mobile telecom networks, formal banking to the masses, and rooting out of middlemen and corruption can all make a big difference, ” he feels.

 

 

 

March 5, 2017   No Comments

India And Japan Review Final Steps of Nuclear Energy Agreement

India and Japan hope to sign a nuclear energy agreement when Prime Minister Modi visits Japan this week. The agreement, the first by Japan with a country that has not ratified the Nuclear Non-proliferation Treaty, will enable Japan to export its nuclear energy technology for private-sector use in India, reports Defense World.

Prime Ministers Abe and Modi

Prime Minister Shinzo Abe had told Prime Minister Modi at a meeting in New Delhi in December 2015, “We will discontinue cooperation should India conduct a nuclear test,” newspaper Asahi Shimbun reported. Japan has long pushed for nuclear disarmament and non-proliferation.

Bloomberg reports that India’s nuclear power market is estimated at $150 billion and the country aims to boost energy generated from atomic plants to a quarter of its the total by 2050 from about 3.5 percent now, according to the U.S. Department of Commerce. Westinghouse Electric, a Pennsylvania-based company owned by Toshiba, is building six reactors in India; however, this project isn’t contingent on the bilateral treaty between Japan and India, a Toshiba spokesperson said.

 

November 7, 2016   No Comments