Business News

FTSE keeps India, Korea on hold in indexes, adds Portugal

Business News - 10 hours 34 min ago
FTSE Russell said Portugal would be added to a key government bond index and held off on a decision on South Korea and India for at least six more months. The index provider will add Portugal to the FTSE World Government Bond Index effective November and remove Switzerland from the upgrade watch list, according to a statement released Wednesday after markets closed in New York. South Korea, meanwhile, continues to stay on the watch list for inclusion to the FTSE global bond index — and India for the emerging-market equivalent — once more delaying the countries’ addition to the key gauges.FTSE Russell “will continue to monitor the positive developments in the South Korean government bond market towards the successful fulfillment” of the criteria, FTSE said in the statement.It also acknowledged progress in “the accessibility of the Indian government bond market,” but said the Indian market still doesn’t satisfy certain criteria.South Korea has been keen to get the index upgrade since FTSE added the country to its watch list for potential inclusion in September 2022. The move is expected to draw as much as 90 trillion won ($66.7 billion), according to the Korean government, citing estimates from investment banks.Korean authorities have been intensifying efforts to improve the country’s market systems to court more foreign investors, most recently letting some global investors participate in the local interbank currency market. The government is also testing out extended trading hours of the local won market, ahead of its official extension due in July.Meanwhile, India still doesn’t meet criteria including increased regulatory reporting and the tax clearance process, FTSE said. Both countries were not included on the indexes when they were last reviewed in September, 2023.FTSE Russell’s decision highlights the hurdles some investors continue to face in accessing India’s bond market, even as the nation’s debt is set to get added to JPMorgan’s flagship emerging markets gauge starting in June. Others have been piling in though, with inflows to the nation’s bonds helping make it one of the top performers in local currency emerging market debt this year.Vietnam, PakistanOn the equities side, FTSE Russell said it will keep Vietnam’s status as a frontier market unchanged. While it highlighted the country’s “resolute” drive, the index provider said it needs to see more improvements in access to the local equity market and issues around settlement of trades. The country was added to the watch list in September 2018 for possible reclassification to secondary emerging markets, but the index compiler had said its progress has been slower than anticipated, in part due to Covid. A pre-funding requirement is the key hurdle to an upgrade, investors say.The index compiler also retained Pakistan on the watch list for potential demotion to frontier market status from secondary emerging market amid a steady decline in its index weight over the past few years.
Categories: Business News

Piramal Capital set to add gold, micro business loans to portfolio next fiscal

Business News - 10 hours 41 min ago
Mumbai: Piramal Capital and Housing Finance will add gold loans, micro business loans and unsecured microfinance loans to its portfolio next fiscal to broaden its consumer finance focus as it continues to move away from its original avatar as a real estate lender, a top official said.Though the new businesses have a higher risk profile, the company has the underwriting capabilities to originate them, said Jairam Sridharan, managing director of Piramal Capital and Housing Finance."We are looking at the traditional gold loan business," he said. "Operationally, it's a complex business... There are lots of things that can actually go wrong with it. Building the right controls is very important. But it's a business we like, and we would love to do more of."Sridharan said unsecured microfinance loans and low-ticket loans against property will be also introduced mostly in the first half of the next fiscal. "These loans will be small-ticket... may be less than ₹10 lakh, with a small shop or a property as collateral," he said. "This business has become big in terms of revenue over the last five to six years as many new players have emerged who have done interesting work. We think that there is a market there for us to explore as well and try and build some of that business for ourselves."The company has been slowly building its microfinance business for the last one-and-a-half years, but at about ₹1,000 crore, it is still a very small part of the company's ₹70,823 crore of assets under management (AUM).The company's credit cost increased to 162 basis points of total loans in the quarter ended December 2023 from 121 basis points in September 2023, but Sridharan said the credit environment is still benign and the new loans, though at higher risk, will have little impact on costs. One basis point is 0.01 percentage point."There is never a perfect time to start a new business, but we are better off not trying to time the market," Sridharan said.Retail loans constituted 64% of Piramal Capital and Housing Finance's AUM at the end of December.The company aspires to have 70% of its loans from retail with the rest of the 30% in wholesale loans to real estate and mid-market companies."We have reduced our average ticket size from real estate loans to about ₹180 crore from ₹500 crore earlier with loans now spread more geographically outside the big metros," Sridharan said. "We are also giving non-real estate loans of average ticket size of ₹50 crore to companies rated at investment grade and may also look at small developer finance as part of our new wholesale loans."The company has halved its wholesale book, which it got as part of the acquisition of the erstwhile DHFL, to ₹18,693 crore at the end of December 2023.In a post-result note, JM Financial said it expects Piramal Capital and Housing Finance to gradually navigate through its changing product mix, leading to reduced uncertainty on cashflows supported by strengthening of the risk standards, which will improve profitability over the medium term.The company is in the final stages of fully exiting its partnership with Shriram Group and announced that it will sell its stake in Shriram Investment Holdings by March 31 in what is probably the final leg of ending a failed venture that started in May 2013.
Categories: Business News

RIL surges over 4% as Goldman raises target

Business News - 11 hours 18 min ago
Mumbai: Shares of Reliance Industries, which have the second-highest weighting in the Nifty 50, surged more than 4% intra-day to touch a near three-week high after Goldman Sachs raised its target price citing higher returns on cash invested, and a change in the mix of capital expenditure.Reliance Industries is currently the largest company in India by market capitalisation, which is a little over ₹20 lakh crore.The brokerage now has a target price of ₹3,400 for the shares of Reliance - up 16% from earlier- and this implies an upside of 14% from Wednesday's closing price of ₹2,983.65.108834174"RIL's consolidated returns are at an inflection point in FY24 and we estimate CROCI (cash return on cash invested) will expand by ~270 bps to 12% in FY27 (highest since 2011)," analysts at Goldman Sachs said in a note to clients.The brokerage also expects the company's operating profit to expand 17% on a compounded annual basis until FY27, majorly driven by the energy business.The last decade saw Reliance investing more than $125 billion in its hydrocarbons and telecom business, both of which have a gestation period of more than five years. The capital expenditure cycle for the 5G technology telecom is also set to be completed this year."We believe the businesses RIL is investing more in the next three years (retail and upstream new energy) are relatively less capex heavy, higher in returns and have a shorter gestation period," the analysts said.Shares of Reliance Industries have already gained more than 15% so far in 2024, hitting its lifetime high of ₹3,024.90 earlier this year.The end to the massive capex cycle will also help Reliance Industries turn free cash flow positive in FY25, while the operating profit is seen expanding 20% on year, driven by a telecom tariff hike, higher retail same-store sales growth and a recovery in margins in the chemicals business.Goldman Sachs has reiterated its 'buy' rating for shares of Reliance. Of the 35 ratings available for the company on Bloomberg, 29 had a 'buy' or equivalent rating, 4 analysts suggested a 'hold' rating for the stock, while 2 recommended a 'sell'. Shares of RIL could rise to ₹3,200-3,300 in the near term, said Atul Chaturvedi, analyst at Antique Stock Broking. He recommends that investors looking to buy the stock should maintain a stop loss of ₹2,850.
Categories: Business News

I don't have money to fight polls: FM

Business News - 18 hours 6 min ago
NEW DELHI: FM Nirmala Sitharaman on Wednesday asserted that investigative agencies are free to chase those who contravene law irrespective of their political affiliation, rejecting any perception that the NDA government is seeking to coerce opposition parties into submission by setting the enforcement agencies after them.Speaking at the Times Now Summit, themed 'India Unstoppable', Sitharaman also said that she was given the option by BJP president JP Nadda to contest in the upcoming Lok Sabha polls. However, she expressed inability on the grounds that "I don't have the kind of money" required to fight polls, among others. The minister is a Rajya Sabha member from Karnataka."After thinking over a week or ten days, I just went back to say... maybe not. I do not have that kind of money to contest. I also have a problem whether it is Andhra Pradesh or Tamil Nadu. It's also going to be a question of various other winnability criteria that they use... Are you from this community or are you from that religion? Are you from this? I said no, I do not think I am going to be able to do it," she said.As for probe agencies, she said: "Law pursues those who disobey it." Just because an offender belongs to an opposition party doesn't give them immunity from being accountable for illegal acts, she stressed. She added that the probe agencies' inaction against the UPA's scandals had then earned them the moniker 'caged parrot'. "The caged parrot is now let to do its job," she said.Addressing the gathering, Times Group MD Vineet Jain said India is unstoppable and its vibrant democracy has long stood as a "beacon of hope and inspiration". "From the political arena to the global economic stage, from the diplomatic corridors to military frontiers, India is making its mark and shaping the future of the world," he said."With each election cycle, the citizens of India have exercised their democratic rights, ensuring their voices are heard and choices respected. This democratic spirit not only strengthens the fabric of our nation, but also serves as a model for emerging democracies," he added.
Categories: Business News

A new intel agency for mfg, Made-in-India?

Business News - 18 hours 41 min ago
The Centre will soon assess India's manufacturing prowess through a centralised intelligence unit or a knowledge storehouse and develop key performance indicators on metrics such as value-added, export performance, technological prowess, supply chain effectiveness, labour productivity and access to global market.The exercise is aimed at significantly ramping up the manufacturing sector and making it globally competitive."The idea is to conduct a comprehensive analysis of the domestic market to identify products with high demand and growth potential and a value chain analysis to understand products which can add value," an official said.The proposed intelligence unit would study the impact of schemes launched by the government aimed at lifting the share of manufacturing in GDP to 25% by 2047 from about 17% currently.In addition to Production Linked Incentive (PLI) schemes worth ₹1.97 lakh crore, the government started the Make in India initiative and the Phased Manufacturing Programme (PMP) to boost local production and encourage export substitution. 108829512Unit to study top 10 nationsAs part of the exercise, the Department for Promotion of Industry and Internal Trade (DPIIT) will identify champion sectors, develop a risk register with anticipated risks and responses, and assess and monitor the impact assessment of PLI Schemes. A central information repository for PLI schemes through periodic consultations and information gathering exercises with stakeholders would be developed.The intelligence unit will study the top ten countries to understand their strategies and contribution to global manufacturing output. It would support the Steering Committee for Advancing Local Value-Add and Exports Research Analysis, Programme Implementation, and Data Intelligence Unit (SCALE RAPiD) which comprises representatives from various industry bodies and officials from commerce and industry, and other ministries.The exercise also entails evaluating India’s export potential by identifying products with global demand and giving inputs during foreign trade negotiations with the aim of reducing trade barriers.The intelligence unit will compare global best practices to assess feasibility of implementation and impact of recommendations provided by the SCALE committee. The department will hire a consultancy agency for the exercise.The official cited above said the plan also includes evaluating the impact of policies and schemes aimed at enhancing manufacturing competitiveness, and identifying areas where reforms can be undertaken to lower regulatory burden for promoting ease of doing business. Assessment of incentive schemes such as tax breaks and access to credit to attract investments in the chosen sectors are also likely to be considered.
Categories: Business News

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