JPMorgan in awkward place in Essar Energy buyout 21 Feb 2014 The investment bank led the troubled Indian group’s London IPO, and remains a house broker. So it’s far from ideal that JPMorgan is now advising independent directors on a potential buyout by the majority owners. Board members urgently need a fresh outside perspective.
India in depth: Investors want realism, get magic 19 Feb 2014 Finance Minister P. Chidambaram missed the whole point of his last budget. It wasn’t to make ingrained fiscal problems vanish by conjuring up unbelievable deficit estimates. Investors would have preferred a gritty appraisal of the tough tradeoffs ahead. He let them down.
India graft baiter’s exit raises political risk 17 Feb 2014 Arvind Kejriwal quit as Delhi’s chief minister after just 49 days. Rather than show him up as inadequate, the move makes him a bigger threat to political stability. By splitting the national urban vote, the anti-business activist could make a closely contested poll chaotic.
Chinese M&A rings in new year with Auld Lang Syne 31 Jan 2014 The $2.5 bln sale of Cooper Tire was undermined by its joint-venture partner in Rongsheng. The two sides have now agreed a deal that helps them part ways. Given what transpired, other foreigners may also fancy singing “should old acquaintance be forgot” in the Year of the Horse.
Emerging vacuum a harbinger of global downdraught 31 Jan 2014 Brazil’s central bank president complains that rising developed country rates are like a “vacuum cleaner.” But tighter global money is needed. Emerging economies must adapt and improve their own fundamentals. Their woes are a harbinger of the developed market pain to come.
India deal leaves Diageo with a long hangover 23 Jan 2014 The UK drinks group is fighting to hang on to some of the United Spirits shares it bought from Indian tycoon Vijay Mallya. Defeat in court could see Diageo’s stake fall below 20 pct. Though it still has options to reach a majority, its Indian adventure is getting riskier.
India’s inflation goal needs tougher central bank 22 Jan 2014 The Reserve Bank is committing itself to a 4 percent inflation target to rein in galloping prices. But many are in the government’s control. Unless the monetary authority is free to punish inflationary fiscal policies with higher interest rates, its target won’t be credible.
India in depth: A reformist election manifesto 21 Jan 2014 The 120 million first-time voters who will decide the outcome of this year’s polls won’t be swayed by slogans. They want real opportunities and an end to pervasive economic gloom. What kind of policies will deliver the goods? Here are eight ideas all parties should embrace.
Infosys is out of rehab, looking lean and hungry 10 Jan 2014 Founder Narayana Murthy has lost eight top executives since returning to the outsourcing company. The departures have helped end leadership chaos, while a focus on costs has lifted margins. Without a productivity boost, though, the stock’s revival may start to look excessive.
India’s Common Man Party is investors’ frenemy 3 Jan 2014 After taking power in the state of Delhi, the new anti-corruption party is set to play spoiler in the 2014 general election. That makes seasoned politicians nervous, and investors wary. But voters’ willingness to put a premium on good governance is cause for optimism.
Swift bad loan clean-up will beef up Indian banks 18 Dec 2013 Lenders should be better at dealing with bad credit, if new rules stick. That should make state-run banks more resilient. They’re not quite investment-ready yet though – there’s still the matter of pouring in capital to deal with the 10 percent of loans that have already turned.
India in depth: Three quick fixes for Modi 17 Dec 2013 The opposition politician Narendra Modi is likely to win the mid-2014 election. The new prime minister will need time to set his agenda for economic reconstruction. In the interim, he should focus on repair jobs that do not require new laws and will pay quick dividends.
Microsoft lucky to avoid Nokia’s India tax bill 12 Dec 2013 An Indian court has allowed the Finnish company to include its Chennai factory in the sale of its devices business to Microsoft. While the $7.4 billion deal wasn’t at risk, the software giant dodges Nokia’s hard-to-assess tax liability. Vodafone wasn’t so fortunate.
Narendra Modi could be India’s Shinzo Abe 10 Dec 2013 The opposition politician is the favourite to become prime minister in next year’s polls. His victory would give Indian assets a big boost and signal revived growth, just like it did for his Japanese counterpart. Structural reforms, though, will remain difficult for both leaders.
Apollo-Cooper fight puts bankers in the spotlight 22 Nov 2013 Emails shown in court reveal that lenders pressured the Indian tyre maker to renegotiate the $2.3 bln takeover of its U.S. rival. Labour woes make the leveraged deal more risky. While banks want to avoid the blame for pulling the plug, they appear keen to limit their exposure.
Asia’s fear of Fed is now infecting more economies 21 Nov 2013 The fragilities revealed by last summer’s market wobble are spreading beyond India and Indonesia. Growth has stalled in Thailand. Malaysian public finances look shaky. Debt is piling up everywhere. Asian assets will feel a jolt as the Fed starts to turn off the tap of dollars.
India in depth: Stock market turns schizophrenic 19 Nov 2013 A few shares popular with foreign investors are surging; the rest of the market isn’t. Will the tide of hot money reverse, or lift all boats? Rising U.S. interest rates and a sagging economy suggest the former, but investors don’t want to miss a possible change of government.
Apollo and Cooper can still do a deal 12 Nov 2013 Despite a court battle over an agreed $35 per share takeover, the tyre makers insist they still want a deal. Adjusting Apollo’s offer to reflect the cost of resolving disputes at Cooper operations in China and the U.S. suggests a revised bid should be no less than $27 per share.
Surging India stocks a poor guide to the economy 6 Nov 2013 Foreign investors have pushed the benchmark index to a record high. But reading the exuberance as a signal of economic revival may be a folly. Although the currency is now stable, the risks of inflationary fiscal slippage and growth-crunching monetary tightening are still alive.
Infosys visa woes stress need for Outsourcing 2.0 5 Nov 2013 A $34 mln fine for “paperwork errors” in the Indian company’s U.S. visa applications will sting. But given the woeful state of America’s job market, the outsourcing industry needs to brace itself for tougher immigration rules. Reprogramming the business would be a good start.