Posts tagged ‘Financial Services’

25/08/2016

Indian Company Earnings are at Last Showing Some Signs of Recovery – India Real Time – WSJ

India Inc. is finally starting to report the kind of growth one would expect from companies in the world’s fastest-growing large economy.

India’s biggest companies have been stuck in a rut for the last two years even though the country surpassed even China in terms of gross domestic product growth and it voters picked a prime minister who pledged to boost business.

Last quarters’ earnings suggested things may at last be looking up.In the three months ended June, the net profit of companies in the benchmark index, the S&P BSE Sensex, rose 7% compared to a year earlier. While a few companies still haven’t announced results yet, so far it looks like the highest growth for Sensex companies in two years.

Take out the earnings at banks–which are being hurt as the Reserve Bank of India forced them to write off more soured loans–and the profit picture is even prettier. Profit at the non-financial Sensex companies jumped 15% during the quarter, according to data from broker Motilal Oswal Securities Ltd.

While the outlook on global demand is gloomy, hurting exporters and software companies, local demand is strong and getting stronger.

Workers at an IKEA carpet-making facility in Bhadohi, India, August 26, 2015. PHOTO: VIVEK SINGH FOR THE WALL STREET JOURNAL

“The earnings growth mostly came from companies focused on domestic demand rather than companies relying on global markets,” said Vivek Mahajan, head of research at Aditya Birla Money.

Companies selling products to people in India can expect even more demand later this year as above-average monsoon rains bolster farmers’ incomes and government employees receive a massive wage hike, he said.

Sectors such as cement, consumer goods, and auto makers are going to be big beneficiaries of the rising consumer demand.

Source: Indian Company Earnings are at Last Showing Some Signs of Recovery – India Real Time – WSJ

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13/08/2016

How Alibaba is Tapping India – The Numbers – WSJ

As its business matures at home, Chinese e-commerce giant Alibaba Group Holding Ltd. is looking to boost growth elsewhere in Asia — especially India, home to a nascent but fast-growing online shopping sector.

Here’s how — and why – it is targeting the world’s second-most-populous nation.

1.2 billion

The number of customers outside of China that Alibaba would like to reach, according to the company’s Chairman Jack Ma.

$127 billion

The projected value of India’s e-commerce market in 2025, up from $11.2 billion last year, according to Goldman Sachs Global Investment Research.

$500 million

The amount of money New Delhi, India-based e-commerce startup Snapdeal.com raised in a fundraising round led by Alibaba last year.

More than $500 million

The amount Alibaba and its affiliate Ant Financial Services Group last year paid for 40% of One97 Communications, the parent company of Noida, India-based online-payment and marketplace startup Paytm.

2 or more

Prominent executives Alibaba has hired in recent months who have experience in India’s e-commerce sector.

Source: How Alibaba is Tapping India – The Numbers – WSJ

12/08/2015

ChemChina, Camfin to launch tender offer for rest of Pirelli | Reuters

An investment vehicle controlled by China National Chemical Corp (ChemChina) said it will launch a mandatory tender offer for remaining shares in Pirelli (PECI.MI) after on Tuesday taking control of the Italian tyremaker through a deal struck in March.

A Pirelli's tyre is pictured at the headquater in Milan, March 26, 2015. REUTERS/Giorgio Perottino

ChemChina in March agreed to become the majority owner of the world’s fifth-largest tyre manufacturer as part of a 7.3 billion euro ($8 billion) deal.

On Tuesday, Marco Polo Industrial Holding, a company created to facilitate the Chinese takeover, concluded its acquisition of a stake in Pirelli from Italian holding company Camfin, triggering the mandatory takeover bid.

A Camfin spokeswoman said the tender offer was expected to be launched in September.

State-owned ChemChina holds a 65 percent stake in Marco Polo, with the remainder in the hands of Camfin investors, who include Pirelli boss Marco Tronchetti Provera, Italian banks UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI), and Russia’s Rosneft (ROSN.MM).

The tender offer will be launched at 15 euros per share with the goal to acquire all of Pirelli’s share capital and de-list the tyremaker from Milan’s stock exchange. Marco Polo also decided to launch a voluntary tender offer on Pirelli’s savings shares.

In a separate statement, Tronchetti Provera, who will remain Pirelli’s chief executive, said Camfin would invest more than 1 billion euros in the tender offer and will keep a central role in the tyremaker’s future shareholder structure, along with ChemChina.

He reiterated the Chinese investment would boost the company’s international growth, particularly in the industrial tyre sector.

“In this segment, the integration with ChemChina will allow immediate growth in volumes and market share that Pirelli alone would have taken years to achieve,” he said.

via ChemChina, Camfin to launch tender offer for rest of Pirelli | Reuters.

30/09/2014

China’s Rapidly Aging Population Drives $652 Billion ‘Silver Hair’ Market – Businessweek

The increase in China’s elderly people to more than 200 million has created a host of challenges, from a shrinking labor force to soaring pension needs. But there’s a silver-haired lining.

China's Rapidly Aging Population Drives $652 Billion 'Silver Hair' Market

The market of goods and services for China’s rapidly aging population will reach 4 trillion yuan ($652 billion) this year, or eight percent of GDP, according to the “China Report on the Development of the Silver Hair Industry” issued Tuesday in Beijing.

The industry is expected to rise to 106 trillion yuan ($17 trillion) by 2050, amounting to a third of the Chinese economy. That would make it the world’s largest market for the aged. That year China will have 480 million people over 60—one quarter of the world’s elderly—says the report, which was published Sept. 23 by the China National Committee on Aging.

“The silver hair industry has started the rapid booming phase, making it a new promising industry in China,” said Wu Yushao, deputy director of the committee, reports the China Dailytoday. “The major reason for the boom is based on the growing number of aging people.”

Future opportunities to serve the elderly will be clustered in four main fields, the report explains. Those include appliances (to serve the less-mobile elderly, for example), services (such as home care and special transportation), real estate (assisted living centers), and financial services. The latter—insurance and money management for the elderly, for example—will make up the biggest portion of the market and still has lots of room to grow.

While 6.21 million people work in the U.S. financial industry and more than half focus on retirees, China has only 5.27 million, estimates Dang Junwu, deputy head of the Beijing’s Chinese Research Center on Aging. “There has been a huge gap in the financing industry for senior residents between China and the developed countries,” Dang told the English-language paper.

via China’s Rapidly Aging Population Drives $652 Billion ‘Silver Hair’ Market – Businessweek.

04/12/2013

Connecting borrowers and lenders: Indians try peer-to-peer model | India Insight

Srinivas Porika tried for months to get a loan of 250,000 rupees ($4,000) to pay for his sister’s wedding, but every bank he tried turned him down. The problem: Porika’s employer, a tech start-up company, was not on the banks’ lists of pre-approved companies.

“They were ready to give me a credit card, but were not ready to give me a loan,” said the 28-year-old from Hyderabad, who met several bank managers and officials to plead his case.

The wedding went ahead in 2012, but only after Porika dipped into his savings and borrowed from friends. With an insufficient bonus at work and pressure mounting to pay off his debts this year, Porika turned to a peer-to-peer (P2P) lending website.

Entrepreneurs in India are now experimenting with the P2P business model, helping people like Porika, with websites such as i-lend.in and faircent.com providing a meeting ground for borrowers and lenders.

Such portals charge an upfront fee from both groups and get the borrower’s documents and employment details verified by a third party. A contract with terms and conditions is signed within a week, with a recovery process in place for those who default on payments.

Lenders can choose from a list of verified borrowers on the website. They are also advised to spread their investment among borrowers to lessen the risk of default.

via Connecting borrowers and lenders: Indians try peer-to-peer model | India Insight.

15/05/2013

* After ATM heist, India’s IT sector again in unwelcome spotlight

Reuters: “A breach of security at two payment card processing companies in India that led to heists at cash machines around the world has reopened questions on the risks of outsourcing sensitive financial services to the Asian nation.

The EnStage Inc. office is seen in the southern Indian city of Bangalore in this May 12, 2013 file photo. REUTERS/Stringer/Files

Global banks that ship work to be processed in India, either in-house or to big IT services vendors, were already under pressure to step up oversight of back-office functions after a series of scandals last year.

Last week, U.S. prosecutors said a global criminal gang stole $45 million from two Middle Eastern banks by breaking into the two card processing companies based in India and raising the balances and withdrawal limits.

“India is exposed in two ways: The threat that the same theft could happen in India and the fact that the outsourcing industry will also get affected,” said Arpinder Singh, partner and national director for fraud investigation and dispute services at consultancy Ernst & Young.

The episode is reopening debate on banks sending work requiring a high degree of confidentiality to offshore locations.

“It is the weakest link,” said Shane Shook, an expert with U.S. cyber-security firm Cylance Inc who has helped financial firms conduct investigations into some major cyber crimes.

“I think the lesson is they need to pull back on what they’ve outsourced. When you’re giving a third party, the outsourced entity, the ability to access credit limits or cash limits of the consumers you’re managing the finances for, you’re giving up control that is your fundamental responsibility.”

India’s $108 billion IT services industry is the world’s favored destination for outsourcing. Over 40 percent of exports by the industry are support services for the global financial sector, ranging from investment bank back-office functions to research, risk-management and processing of insurance claims.”

via After ATM heist, India’s IT sector again in unwelcome spotlight | Reuters.

04/04/2012

* Premier Wen Appeals to Shake Up Bank System

Wall Street Journal: “Chinese Premier Wen Jiabao told a national audience on Tuesday that Chinas state-controlled banks are a “monopoly” that must be broken up, in a blunt appeal for a shake-up of the creaky financial system of the worlds No. 2 economy.

温家宝

温家宝 (Photo credit: Wikipedia)

In an evening broadcast on state-run China National Radio, Mr. Wen told an audience of business leaders that Chinas tightly controlled banking system needs to change. “Let me be frank. Our banks earn profit too easily. Why? Because a small number of large banks have a monopoly,” said Mr. Wen, according to the transcript of the program on the broadcasters website. “To break the monopoly, we must allow private capital to flow into the finance sector.

Mr. Wen’s comments tap into a rich vein of popular anger against Chinas biggest banks that has been building in recent months online and in the media. The backlash was initially prompted by frustration at what has been perceived as banks’ payments of low interest rates on deposits and indiscriminate levying of fees. It has worsened in recent weeks as lenders posted record profits, even as the economy slows and some companies struggle to access credit.”

via Wen Appeals to Shake Up Bank System – WSJ.com.

So it’s not only Western, capitalist banks that are in people’s bad books!

06/03/2012

* China’s debt-to-GDP ratio hits 43%

China Daily: “China‘s government debt amounts to about 17.5 trillion yuan ($2.78 trillion), about 43 percent of the country’s gross domestic product, Yang Kaisheng, president of the Industrial and Commercial Bank of China, said Tuesday.

The debt is composed of 10.7 trillion yuan ($1.7 trillion) of local government debt and 6.8 trillion yuan ($1.07 trillion) of central government debt, Yang said at a press conference on the sidelines of China’s annual parliamentary session.”.

via China’s debt-to-GDP ratio hits 43%|Economy|chinadaily.com.cn.

This is shocking news as a year ago (2010) the ratio was only 17.5%! Of course, earlier we blogged about the parlous state of local government debt rising astronomically. This is the result.  ;-(

See: http://www.economicshelp.org/blog/774/economics/list-of-national-debt-by-country/

Some of us are so riveted by China’s trade surplus of some $3 trillion, that we forget about its debt ratio. In other words, China is behaving only slightly more frugally than many Western nations. The only difference *and it is an important one) uis that the trade surplus does (just about) cover the debt.  😉

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