Goldman Sachs said it expects India’s technology industry to witness a slowdown going ahead due to cloud computing, rising protectionism and weak exposure to high-end businesses. The revenue of top five Indian IT services companies is likely to grow at a compounded annual growth rate (CAGR) of 8% against the 11% they saw during the FY11-FY16 period.
According to data released by the Reserve Bank of India on electronic payments for February, card payments on point of sale devices fell 28.2% over January. Unified Payments Interface (UPI) declined 9.5% while that of Immediate Payment Service (IMPS) hosted by National Payments Corporation of India slid 12.5%. However the data is for 28 days of February against 31 days of January.
With GDP growth rate at 7%, the impact of demonetisation is showing to be transient, Naushad Forbes, president, Confederation of Indian Industry, CII, said. “The impact of demonetisation is showing to be transient and we are likely to reach higher growth levels in the coming quarters. Most large businesses have made efforts to integrate their supply chains into cashless payment systems and this will soon yield benefits in terms of higher efficiency and productivity of the economy,” Forbes said.
Even as the centre has managed to contain its fiscal deficit, state governments still remain profligate. A report by ratings firm India Ratings and Research (Ind-Ra) estimates that aggregate fiscal deficit of Indian states will increase marginally to 3.3% of gross domestic product (GDP) in FY’18 from its forecast of 3.2% for FY;17. It expects states’ debt/GDP ratio may increase marginally to 24.3% in FY’18 from 24% forecasted for FY’17.
India should bring down corporate tax rate to 25 per cent, introduce inheritance tax and provide certainty in rules, global think-tank OECD said today, taking the line that demonetisation will benefit the economy in the long run. In its Economic Survey of India, the OECD said comprehensive tax reforms, especially the goods and services tax, “would lift all boats” and raise revenue helping the government effectively deal with high poverty rate.
India’s services activity bounced back into expansion mode for the first time in four months in February, a private business survey showed on Friday, providing further evidence that the effects of demonetisation may be fading. The Nikkei/IHS Markit Services Purchasing Managers’ Index rose to 50.3 in February from 48.7 in January, marginally above the 50-mark that separates growth from contraction. The PMI manufacturing survey had showed a similar recovery.
India seems to have braved the effects of demonetisation with the economy growing at an unexpectedly robust 7% in what was deemed to be the worst hit October-December quarter. It’s now forecast to achieve 7.1% growth in the year to March. Going by these projections, India will retain its tag of being the fastest-growing major global economy that it was at risk of surrendering to China going by some estimates.
The government-owned IDBI Bank has decided to freeze lending and branch expansion plans after it posted a historic loss of Rs 2,255 crore in the third quarter in an effort to conserve capital, a buffer that banks keep as a cushion against loan defaults. Instead, it has decided to focus on bad loan recoveries which are almost a fifth of its loan book.
State-owned Oil and Natural Gas Corporation (ONGC) may acquire India’s third-biggest fuel retailer HPCL in an about Rs 44,000 crore (USD 6.6 billion) deal as part of the government’s plan to create an integrated oil giant. Following up on Finance Minister Arun Jaitley’s Budget announcement of creating an integrated oil company, India’s biggest oil and gas producer ONGC may buy all of the government’s 51.11 per cent stake in HPCL.
Finance ministry official Ajay Tyagi takes over as Securities and Exchange Board of India (SEBI) Chairman with two likely priorities – developing the country’s commodity and corporate bond markets and shoring up corporate governance. Tyagi will also inherit from outgoing SEBI Chairman UK Sinha critical regulatory decisions, including whether to penalise National Stock Exchange, over potential trading violations and whether to adopt tougher rules against high frequency traders.
Private sector banks such as Axis Bank and ICICI Bank restored their charges on cash transactions to discourage use or hard currency for business, which were suspended after the government demonetised high-value currency notes of Rs 500 and Rs 1,000 last November. While Axis Bank and ICICI Bank returned to their pre-demonetisation charges, HDFC Bank has increased some fees.
Snapchat owner Snap Inc rode a wave of euphoria in its Wall Street debut Thursday as investors sent shares of the popular messaging app soaring. Snap jumped 44 per cent to close at $24.48 in its inaugural trading day, after raising $3.4 billion in the richest US tech company listing since Facebook in 2012.
Saudi Arabia is going to break a Chinese record. Alibaba Group Holding Ltd, a Chinese Internet retailer, raised $25 billion in 2014, which made it the biggest IPO of the world. Saudi Aramco, the state-owned oil company of Saudi Arabia, is preparing for an IPO next year that would beat Alibaba’s record. he share sale would be worth $100 billion, four times the world’s biggest IPO of Alibaba. The share sale will value the company at $2 trillion.
Most emerging Asian currencies fell against the dollar on Friday and were also on track for weekly losses, pressured by growing expectations for a US Federal Reserve interest rate hike this month. Leading the losses were the South Korean won and the Taiwan dollar, the two emerging Asian currencies that have seen the biggest gains against the greenback so far in 2017.
Tata Sons and NTT Docomo proposed aresolution to the Delhi High Court on settling a dispute over the $1.17 billion due to the Japanese telco for exiting their joint venture, Tata Teleservices, ending two years of public acrimony. The two sides, which filed a joint petition in the court on Tuesday, said they will not oppose RBI’s intervention in the matter, leaving the resolution in the hands of the court.
Tata Global Beverages and Keurig Green Mountain, Inc announced a multi-year expansion of their successful partnership for the manufacturing, sales, licensing and distribution of the Eight O’Clock coffee and Tetley tea brands in K-Cup pods for use in Keurig brewers. The renewed long-term agreement allows for the continued success for the brands through in-home and away-from-home channels, as well as on Keurig’s consumer direct websites, throughout the US and Canada.
Nestle and The Coca-Cola Company have agreed to dissolve their tea joint venture Beverage Partners Worldwide (BPW) as of the start of 2018, Nestle announced. Created in 2001, BPW offers ready-to drink tea, in particular Nestea, in Canada and Europe. “The ready-to-drink tea market has evolved, and Nestle believes the time is right to develop Nestea independently,” it said in a statement.
Hershey Co. says it expects to cut its global workforce by about 15 per cent, with the layoffs coming mostly from hourly employees outside the United States. The Pennsylvania-based chocolate company also lowered its forecast for long-term sales growth to between 2 and 4 per cent, down from the previous 3 to 5 percent.
China will allow more companies to list on its stock market to boost support for its economy, the nation’s top securities regulator said, dismissing concerns that more supplies of shares can depress the market. The capital market’s recovery from a 2015 rout has been stronger than expected and is now ready for “appropriately” larger supplies of initial public offerings, China Securities Regulatory Commission Chairman Liu Shiyu said.
Fast-growing Pakistan will conduct its first census in 19 years in March, the statistics bureau said, hoping to end years of wrangling by politicians concerned about how a survey would affect the makeup of their local electorates. Changes could be significant in a country where 60 per cent of the population is under the age of 30. In 2015, the World Bank estimated Pakistan’s population at 188.9 million but the country still uses the official 1998 figure of 134.7 million.
President Donald Trump is spotlighting violence committed by immigrants, announcing the creation of a national office that can assist American victims of such crimes. He said during his address that the Homeland Security Department’s Victims Of Immigration Crime Engagement office will provide a voice for people ignored by the media and “silenced by special interests.”
The Federal Reserve is set to raise interest rates this month and is on track to lift them further later this year, Fed Chair Janet Yellen signalled, evidence the fears that forced the Fed to keep borrowing costs near zero for so many years are firmly on the wane. Yellen’s strongly worded message barely budged markets, which had reset earlier this week to price in a March rate hike after several of Yellen’s colleagues in recent days also put a rise at the next rate-setting meeting firmly in view.
China will not resort to heavy stimulus package to halt slowdown of its economy, a planning body official said, dismissing concerns over reports of $6.54 billion fixed-asset investments plans for this year. “Instead, China will focus on supply-side reform for a modest expansion of aggregate demand,” Li Pumin, secretary general of the National Development and Reform Commission, told media answering a question on whether China would roll out a major stimulus plan like in 2008.