India in depth: Calm rupee could spur rate cuts 27 May 2015 The Indian currency is surprisingly more stable than the Brazilian real or Turkish lira. That gives the RBI room to cut interest rates and revive growth without having to fret about capital flight. A squeamish central bank could be a bigger risk to the economy than a bold one.
SoftBank lives up to its name with Indian startup 19 May 2015 Housing.com CEO Rahul Yadav is a venture capital nightmare. The 26 year-old has slammed investors including the Japanese group as intellectually incapable and pledged to give away his shares. SoftBank may value a reputation for being founder-friendly, but being weak is worse.
Indian stock market resigned to Modi moderation 15 May 2015 A year after the prime minister’s landslide election, his government has not met high expectations for a revival. Stocks are down 8 pct from their March peak as tax disputes and weak earnings temper enthusiasm. As investors take a wait-and-see approach, any pick-up looks distant.
India online retail hierarchy looks far from fixed 14 May 2015 Investors are pouring money into the country searching for the next Alibaba or Amazon. Though India’s e-commerce opportunity is huge, low barriers to entry mean it is easy for anyone with deep pockets to spoil the party.
India’s sales tax could be another botched reform 12 May 2015 The country has spent more than a decade debating a goods and services levy that would unify 29 states into a single, billion-person market. But the bill that’s about to become law falls far short of the ideal. Fixing a flawed tax regime might cost the economy another 10 years.
Indian retail union is marriage of convenience 5 May 2015 After parting ways with Wal-Mart, Sunil Mittal is folding Bharti’s retail operations into larger rival Future Retail. The former gets a big partner and the latter reduces its debt load. The enlarged group also gains a stronger footing amid India’s shifting shopping habits.
India’s aborted central bank plan has few mourners 4 May 2015 The government has withdrawn a proposal to curb the Reserve Bank of India’s sway over the bond market. It’s a welcome retreat. Retrospective taxes on foreign investors have already dented confidence. Clipping the wings of a well-functioning regulator would have caused more alarm.
India retirees’ stocks push lacks Japan’s zeal 27 Apr 2015 The $125 billion Employees’ Provident Fund is making its maiden foray into equity. The planned 5 percent allocation to stocks doesn’t pack the punch of Japanese pension funds’ recent portfolio shift. But a bolder switch will require overcoming unions’ mistrust of markets.
India’s poor state banks will test investor limits 22 Apr 2015 State Bank of India is leading the rush to raise capital with a $2.4 bln share sale. A stronger economy makes bad debts look less bad. Investors will also have to believe a government pledge to meddle less in lending decisions. Even so, few banks look tempting.
India in depth: A race to write cheques 22 Apr 2015 Not all state governments will know what to do with an unanticipated $30 billion jump in their share of tax revenue this fiscal year. But that’s a short-term problem. Eventually, shifting spending from New Delhi to sub-national governments should boost India’s growth potential.
Daiichi Sankyo scrubs out Indian M&A nightmare 21 Apr 2015 Last year the Japanese firm folded its stake in troubled Indian drugmaker Ranbaxy into local rival Sun Pharma for 40 pct less than it paid in 2008. A share rally means Daiichi has recovered its losses on the seven-year misadventure. It shows the power of appropriate ownership.
Tax shockers ramp up India investor risk premium 17 Apr 2015 The country wants $6.4 billion in what it says are unpaid taxes from foreign funds. Private equity firms could be the next target. The frequent adjustments to tax policy raise a red flag. Investors will have to demand higher returns to insure against future fickleness.
Guest view: The RBI does need its wings clipped 2 Apr 2015 The Reserve Bank of India’s repressive influence is stunting the growth of finance. Governor Raghuram Rajan is fighting attempts to shrink the RBI’s role because of pushback from his officers, says Percy Mistry, author of a 2007 report on making Mumbai a global financial centre.
Tata Motors’ $1.2 bln share issue is well timed 1 Apr 2015 The carmaker wants to raise cash to reduce debt and fund growth. Its struggling domestic unit, propped up by Jaguar Land Rover, is benefiting from a recent change in strategy. A full turnaround will depend on a pickup of economic activity in India.
New IPO rules won’t keep India’s Alibabas at home 31 Mar 2015 The regulator wants to ease standards to discourage start-ups from listing abroad. The catch is that the rules only apply to a junior market. Though that’s unlikely to tempt the likes of Flipkart and Snapdeal, it stops India joining the race to the bottom on governance.
Clipping Indian central bank’s wings is bad idea 30 Mar 2015 The Reserve Bank of India is facing a campaign to undermine it. Subjecting its regulatory decisions to judicial review will erode its authority. Removing the bond market from its control serves little purpose. Investors can live with a bossy RBI, but not a weak one.
India’s boardroom diversity drive has weird result 27 Mar 2015 Companies have met demands they dilute male dominance by installing wives and stepmothers as directors. Some women now sit on as many seven boards. Indian corporate governance needs improving and gender diversity can boost financial returns. But mandating change isn’t the answer.
DoCoMo woes challenge India reform rhetoric 26 Mar 2015 The authorities won’t allow Tata to pay the Japanese telco $1.1 bln to exit a joint venture. The deal will now go to arbitration. It is another example of India’s struggle to attract foreign investment. The government would prefer someone else make the difficult decisions.
India in depth: Fear of Fed gives way to rate cuts 25 Mar 2015 A revolt by investors during the 2013 taper scare forced authorities to sacrifice output to preserve financial stability. But the risk of the U.S. Federal Reserve playing spoiler is retreating. The quest for growth is back. The economy can afford more monetary stimulus.
Finding double-digit growth in India’s GDP fog 17 Mar 2015 New statistics are deceptively rosy. If the economy can grow 7.4 pct when local interest rates are high and world demand low, how tough would 10 pct be? But complacency may lead to bad policies. Efficiency trends peg potential GDP growth at just 7 pct. Only reforms can lift it.