Emerging market FX pickup exposed to reversal after new virus surge: Report

The real, the rouble and the rupee are on the spot as infections of Covid-19, the illness caused by the virus, pile up in Brazil, Russia and India.

Emerging market currencies will likely give back recent gains if a resurgence of the coronavirus pandemic continues in the second half of the year, driving foreign exchange flows to the safer US dollar, a Reuters poll of market strategists showed.
The real, the rouble and the rupee are on the spot as infections of Covid-19, the illness caused by the virus, pile up in Brazil, Russia and India, the nations with the highest case counts in the world after the United States.

The outlook for these emerging economies keeps worsening due to the unrelenting health crisis, with Brasilia engulfed in political rows, the Kremlin tightening its grip and Indian cities suffering from a lack of adequate infrastructure.

Over 90%, 63 of 68 respondents in the June 25-July 1 Reuters poll said a second shock from the pandemic would boost the dollar, as in March, when anxious investors dashing for the greenback dealt EM FX its steepest loss since May 2012, according to an MSCI index.

"A second wave of the Covid-19 pandemic represents the major risk," said Roberto Mialich, FX strategist at UniCredit. "If so, we can expect investors to stay in the greenback or even increase their long exposure."

He added emerging market currencies would bear most of the brunt in the event that investors and traders became defensive once again. But he said global conditions would gradually improve, meaning less exposure to the dollar.

All banking services to resume from evening; ATMs have cash: YES Bank

On March 5, the RBI had imposed a moratorium on YES Bank, restricting withdrawals to Rs 50,000 per depositor till April 3 in view of its poor financial health due to bad loans.

YES Bank, on which the Reserve Bank of India (RBI) had imposed a moratorium, will resume normal operations from 6 pm on Wednesday.

On Tuesday, administrator of the troubled private sector lender, Prashant Kumar, said that YES Bank will resume normal operations from 6 pm on March 18 and it has no liquidity problem.

"Our customers will be able to enjoy all the services available before the moratorium. There is absolutely no issue on the liquidity side from YES Bank. All our ATMs are full of cash," he had said at a press conference.

Kumar had also said there is no need to worry about deposits. "Complete normalcy will be restored. All branches and employees are ready. If there is too much rush of depositors, the bank branches will remain open on weekends as well," he had added.

On March 5, the RBI had imposed a moratorium on YES Bank, restricting withdrawals to Rs 50,000 per depositor till April 3 in view of its poor financial health due to bad loans.

"Only one-third of our customers have withdrawn Rs 50,000 during the moratorium. The customer feedback is that they do not feel the need to withdraw money from the bank. We have had higher inflows than outflows in the last few days," Kumar had stated.

At the same press meet, State Bank of India (SBI) chairman Rajnish Kumar said that the lender is free to sell shares but assured that not one share will be sold in the next three years.

"We are not against retail shareholders. We are all here to protect them," he had said.

The SBI has announced an investment of Rs 7,250 crore in YES Bank through the acquisition of 725 crore shares at Rs 10 each. SBI's shareholding in YES Bank after reconstruction will be within the 49 per cent limit.

On March 13, the Union Cabinet approved a reconstruction scheme for YES Bank as proposed by the RBI.

On March 16, YES Bank approved the reconstitution plan, appointing Kumar as the Chief Executive Officer and Managing Director.

PM Narendra Modi starts pre-Budget meets to brainstorm on economy

The focal point of the interaction was drawing a road map for reforms across departments leading up to the ease of doing business and economic growth.

In the run-up to the Union Budget, Prime Minister Narendra Modi has lined up a string of meetings spread across days. He began the exercise on Tuesday with a meeting of top bureaucrats in finance and other key ministries to finalise the government's priorities. The focus is clearly on reviving the economy and creating jobs, officials in the know said.

Next, the PM will interact with economists, bankers and sectoral experts through the week to brainstorm on pressing issues such as agriculture, reforms and effective implementation of signature schemes and projects.

Tuesday’s meeting at the PM’s residence, attended by all the five secretaries in the finance ministry besides top officials of other economic ministries and NITI Aayog, cleared a five-year vision plan for the government to make India a $5-trillion economy by 2024, it is learnt. Also, the future course of PM’s pet projects like doubling farmers' income, PM-Kisan, Pradhan Mantri Awas Yojana, piped water for all, and electricity for all came up for discussion.

The focal point of the interaction was drawing a road map for reforms across departments leading up to the ease of doing business and economic growth. GDP growth, which has been a controversial issue recently due to doubts raised over government data, was discussed too. Stepping up government revenues while carrying out reform to push GDP growth, which slipped to a five-year low of 6.8 per cent in 2018-19, also figured in the meeting, sources said.

With the farm sector facing headwinds, Modi had last week stressed upon the need for structural reforms in agriculture to boost private investment, strengthen logistics, and provide ample market support to farmers.

The PM is expected to meet senior finance ministry bureaucrats on Thursday to discuss issues relevant to the Union Budget, to be presented on July 5.

Apart from reform announcements to be made in the Budget, the government’s fiscal consolidation roadmap, revenue position and expenditure commitments will be taken up at the meeting.

Business Standard

Bengaluru, Gurugram among top 5 locations in APAC for tech firms: Report

The study has ranked 15 cities of Asia Pacific in three categories based on their performance with regard to business conditions, innovation environment, and cost and availability.

Bengaluru and Gurugram are among the top 5 preferred destinations in Asia Pacific to set up offices by technology companies because of better business conditions as well as availability of engineers and real estate for growth, according to a report.

The report by property consultant CBRE said technology companies continue to fuel office demand in the APAC region, despite absence of any principal city or cluster of the same status as Silicon Valley. Technology sector accounted for 23 per cent of total leasing activity in 2018.

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The study has ranked 15 cities of Asia Pacific in three categories based on their performance with regard to business conditions, innovation environment, and cost and availability.

Business conditions and innovation environment were each given a weightage of 40 per cent while cost, a relatively less important consideration for tech firms, was given 20 per cent weightage.

"Leading cities are Beijing, Bengaluru, Shanghai, Singapore and Gurugram. These cities score highly in terms of business conditions and innovation environment, as well as providing costs and availability that are supportive for business growth," the report said.

These cities are preferred destinations for a wide range of traditional and new tech companies seeking to establish a base of operations in Asia Pacific.

Hyderabad figures in the list of five competent cities along with Hangzhou, Shenzhen, Tokyo and Seoul. These cities already host tech industry sub-sectors and demonstrate solid performance across most categories.

Five 'supplement cities' are Hong Kong, Hsinchu, Sydney, Taipei and Auckland. These cities rate favourably on certain important aspects, but their most appropriate role is to serve as host for specific functions to complement larger hubs elsewhere in the region.

"India is home to an increasing number of tech unicorns and Asia Pacific is increasingly defined as the region leading in the rapid adoption of disruptive technology.

"However, there is still room for growth in terms of identifying locations where business conditions, innovation and talent come together to form a globally competitive digital hub," said Anshuman Magazine, Chairman and CEO, of CBRE India.

Magazine, who also heads South East Asia, Middle East and Africa business, said improved access to incubator and accelerator programmes and a vast pool of skilled IT talent based in Delhi-NCR and Bengaluru have supported the cultivation of new ideas.

India-US free trade agreement key to ending dispute, says advocacy group

Trump has repeatedly claimed that India is a 'tariff king' and imposes 'tremendously high' tariffs on American products.

Business Standard : A free trade agreement between India and the US is a key to resolving their trade disputes as it will cover biggest irritants in ties including tariffs and mobility of Indian professionals, a top American business advocacy group has said.

Observing that the relationship between India and the US in the last five years has progressed tremendously, the advocacy group said the interest of the two largest democracies of the world are much more aligned than ever.

"The challenge which we have is that we need to work out a trade deal. And when you look forward next five years, I believe India should sign an FTA with the US. Once you have FTA, all this issue of tariffs will go away," Mukesh Aghi, president and CEO of the US-India Strategic Partnership Forum (USISPF), told PTI

An India-US FTA, he observed, would be able to address the Indian concerns over import of Chinese goods.

"Because we are concerned about Chinese goods coming to India, that under WTO guidelines, everything with the FTA, India can put as much tariff, it has no impact on US tariffs itself, he said.

"The FTA once signed should have what I call mobility on H-1B. You give FTA partner more exception," he said adding that going forward the two countries need to be creative and bold and drive this relationship on a path where there's much more better understanding on the trade side.

The H-1B visa programme, popular among Indian technology professionals, allows foreign workers to obtain temporary authorisation to work and stay in the US.

While there has not been much talks between the two countries on this issue, Aghi said he believes that FTA is key to resolving the trade disputes.

"Within the FTA, you can have BIT (bilateral investment treaty) also. It covers a lot of stuff. It takes the biggest irritants in the relationship out, he said.

"It provides mobility to Indian professionals who could come into US and work. It provides almost zero tariff for US goods coming into India. I think this has to be a bold move on part of the new government whoever comes in," Aghi said.

With India into an election mode, where the government of the day cannot take any major policy decision due to the enforcement of the model code of conduct, Aghi said this would be the recommendation of the USISPF to the new government to "be bold about it, start discussion FTA with the US because for this president (Donald Trump) trade is the biggest thing."

PepsiCo's Vipul Prakash appointed as COO of MakeMyTrip and GoIbibo

In the role as COO, Prakash will be responsible for developing and executing strategic direction and priorities of the company.

Online travel firm MakeMyTrip Tuesday said it has appointed Vipul Prakash as chief operating officer(COO) for MakeMyTrip and Goibibo.

In his previous role, Prakash served as senior vice president - beverage category for PepsiCo-India, MakeMyTrip said in a statement.

In the role as COO, Prakash will be responsible for developing and executing strategic direction and priorities of the company, it added.

"We are confident that his proven track record and extensive experience will extend MakeMyTrip's upward trajectory," MakeMyTrip co-founder and CEO India Rajesh Magow said.

Vipul's rich experience of two decades at PepsiCo spanning geographies, deep understanding of consumer market and expertise in the industry, leading operational practices are truly invaluable, he added.

He was associated with PepsiCo for 20 years. He holds a post-graduate diploma in management from IIM Ahmedabad and a mechanical engineering degree from IIT Delhi, it added.

Business Standard