India budget hinges on restart, repair, reform 7 Jul 2014 Restarting the stalled investment cycle, repairing fiscal health and reforming the supply side of the economy are the main challenges. Addressing all three will be a daunting task, but new Finance Minister Arun Jaitley can pull it off with a mix of honesty and creativity.
India in depth: Global slack will test Modi’s zeal 17 Jun 2014 The new prime minister wants to end the country’s investment drought. But world growth is too weak to support an ambitious revival, and a binge funded by still-cheap money could be short-lived. The better bet is to act as a patient reformer, and let the rewards follow.
Guest view: U.S. needs "reset moment" with India 16 Jun 2014 Bill Richardson, co-chair of the American Competitiveness Alliance and former U.S. presidential candidate, says Washington needs to do better than the current Senate immigration bill in its efforts to work with the government of newly elected Indian Prime Minister Narendra Modi.
BRICS bank: a good idea that can do grave harm 6 Jun 2014 Brazil, Russia, India, China and South Africa are sponsoring a World Bank clone. The new lender could ease the infrastructure deficit in emerging markets, but could also end up backing social and environmental disasters. The bank’s governance will decide if it’s a boon or a bane.
Indian bank recap is painful but necessary 30 May 2014 India’s wobbly state lenders are short about $45 bln of capital. That’s a bill the new government can ill afford. But acting fast would help ease future headaches. And with post-election euphoria buoying markets, now is a good time to raise equity and debt from outside investors.
Modi’s slimmed-down team can speed Indian reforms 27 May 2014 The prime minister’s newly inaugurated ministerial team is a third smaller than the previous government. Merging ministries like coal and power will enable Narendra Modi to quicken notoriously slow decision-making. That’s key to sustaining investors’ revived confidence.
India in depth: Voters junked a model, not party 20 May 2014 The root of Congress Party’s worst-ever electoral defeat goes beyond popular angst with stagflation or corruption. Indian voters are fed up of an unviable economic ideology that talks of “inclusive growth” but puts welfare ahead of work and stresses consumption over investment.
A to-do list for India’s new government 19 May 2014 The landslide victory for Narendra Modi’s BJP enables the pro-business leader to pursue wide-ranging reform. Some quick wins would help sustain momentum. The key will be reviving investment and thus growth. Fixing infrastructure, tax, and banking will be crucial.
Modi’s big win gives India way out of policy limbo 16 May 2014 Voters have handed the opposition leader their most decisive mandate since 1984. With his government’s stability assured, Narendra Modi need not put up with allies’ whims. But passing bills like tax reforms through parliament’s upper house will still be a challenge.
Indian market’s election rally has further to go 15 May 2014 The country’s stock market has hit record highs. But if Narendra Modi’s BJP seals a decisive victory, shares could keep rising. Investors may be wary of reading too much into dodgy exit polls. Valuations are full but not crazy. And foreign funds probably have more cash to deploy.
India’s wobbly economy needs a factory revival 6 May 2014 The economy perches unsteadily on software exports, hot money flows and fiscal grants to villages. All three stymie manufacturing, which is necessary to create the millions of jobs India needs. A Narendra Modi government could change this with Japanese-backed industrial zones.
Dry spell may soon be over for Indian IPOs 5 May 2014 Proceeds from new listings were at the lowest level in more than a decade last year. Yet the stock market is up 22 pct since September on hopes of an election win by opposition leader Narendra Modi. If expectations become reality, India could see a shower of new offerings.
Review: India’s Singh wasn’t king, Modi could be 25 Apr 2014 Sanjaya Baru’s “The Accidental Prime Minister” is an insider’s account of how Sonia Gandhi defanged the reformist Manmohan Singh. The ensuing gloom, though, could spell glory for Narendra Modi, who will want to vest more power in India’s top job. That’s also what investors want.
Missing inflation could make Asian bonds frothier 21 Apr 2014 Prices of goods in the region are rising more slowly than expected. Inflation drives bond yields up; a lack of it could send them downward, even though the U.S. Fed is threatening to edge up rates around the world. Asian debt is already pricey – it may get yet more expensive.
Diageo throws money at Indian empire-building 15 Apr 2014 The UK distiller is again trying to tighten its grip on India’s United Spirits. It’s offering $1.9 bln to nearly double its stake to 54.8 pct. A sky-high multiple of 38 times EBITDA gives this offer better odds than the last. And there’s industrial logic to offset the huge price.
India in depth: Modi may as well let states spend 15 Apr 2014 Empty coffers await the opposition leader who is widely tipped to be the country’s next prime minister. Instead of pursing self-defeating austerity, Narendra Modi could pass on more federal spending budget to India’s states. Their expenditure produces three times more output.
U.S. stalls IMF reforms at risk of own ambitions 14 Apr 2014 Finance ministers meeting in DC blasted Congress’ refusal to back more lending power for the fund and a bigger voice for the likes of China and Brazil. Harsh words alone won’t do much. But votes against Ukraine loans and other plans would inflict a high price on foot-dragging.
Modi win is blow for Tesco, good for investors 8 Apr 2014 The Indian opposition leader’s party has vowed to ban foreign retailers. With that exception, its manifesto strikes the right notes on the economy. If Narendra Modi does become prime minister, shareholders will expect a major improvement in the country’s investment climate.
Ranbaxy sale shows risk in Japanese M&A adventures 7 Apr 2014 Daiichi Sankyo is handing control of the troubled Indian drugmaker to local rival Sun Pharma in a $3.2 billion all-share deal. The investment has lost almost 40 percent of its value in six years. It’s a reminder of all that can go wrong when Japanese companies venture overseas.
Indian government seeks to cash in on Modi rally 20 Mar 2014 The state hopes to partially offload stakes in 10 listed companies through an exchange-traded fund. If the offer succeeds, it will boost privatization proceeds. It would also allow the current government to benefit from market hopes that rival Narendra Modi will win the election.