Innholdsfortegnelse for 2-May-21 i Business Today

Growth in outstanding non-food credit given by scheduled commercial banks (SCBs) fell from 8.5 per cent in January 2020 to 6.6 per cent in February 2021. This despite the economy coming out of the contraction phase in the third quarter of FY21 OUTSTANDING CREDIT BY SCHEDULED COMMERCIAL BANKS CREDIT GROWTH HAD SLIPPED BELOW 7 PER CENT FOR THE FIRST TIME SINCE DEMONETISATION IN MARCH 2020. IT HAS NOT CROSSED THIS LEVEL IN ANY MONTH SINCE THEN Outstanding credit to industry fell 0.2 percent…

As India is going through the second wave of Covid-19 infections, so are fears of uncertainty and gloom. But the consistent improvement in gross domestic product (GDP) numbers over the past year is playing a key role in shaping up sentiments of corporate India, as highlighted in the latest Business Confidence Index (BCI) survey. On a scale of 100, BCI jumped to 45.5 in the January-March period compared to 43.8 in the previous quarter and 48.2 in the quarter before that. Market research agency C fore quizzed 500 CEOs and chief financial officers across 12 cities for the survey. Sujan Hajra, Chief Economist at Anand Rathi Securities, says the biggest reason for the boost in sentiment is GDP growth. “The economy has done well quarter after quarter,” he says. GDP…

More than a decade after the global financial crisis, the exit from an ultra-loose monetary policy — such as near-zero interest rates and helicopter money — in the US is still a work in progress. The US Federal Reserve’s balance sheet has expanded from under $1 trillion before 2008 to $4.5 trillion in the aftermath of the financial meltdown. The Covid outbreak has further pushed the unwinding as the Fed’s balance sheet is expected to jump to 50 per cent of the country’s GDP from the current 34 per cent. The eventual exit would mean liquidity tightening and higher interest rates in the US, which would have implications for emerging markets, including India, by way of dollar outflows from stock market and currency depreciation. The Reserve Bank of India (RBI),…

Turakhia’s Travel Diary Serial entrepreneur Bhavin Turakhia, who founded five-odd companies, including collaboration tool Flock, and saw successful exits such as Resellerclub and BigRock, takes his hike breaks seriously. “Unfortunately, in the last eight-nine months, I haven’t been on a hiking trip due to Covid,” he says. With travel restrictions on, Turakhia is maintaining his fitness by playing a bit of tennis. “I do water sports here in Dubai. I also do wakeboarding, wakesurfing and wing foiling. Those are some of the things that I have been indulging in.” A travel to Petra, Jordan, along with his family is on top of his wishlist once restrictions are lifted. “That’s actually been on my bucket list along with a trip to Iceland hopefully by the end on 2021.” His last holiday…

The new decade was barely a couple of hours old when India’s utility vehicle major Mahindra and Mahindra and US carmaker Ford decided to put off their joint-venture plans. The two companies had been trying to cobble together a wide-ranging partnership since October 2019 that would have seen Ford exit the Indian market, leaving its assets in the JV with Mahindra. For a variety of reasons it had looked like a win-win deal. Ford would have benefitted from Mahindra’s marketing pull and frugal vendor development strategy, while the latter would get access to the much-needed technology for the present (gasoline) and the future (electric). The two companies blamed the pandemic and the altered market dynamics for the parting of ways. “It was not an easy decision but both companies were…

If liquid and short-term debt funds gave negative returns in March 2020 when the Franklin Templeton fiasco was on in full swing, duration funds turned negative in March 2021. Most debt schemes with long-duration investments, which had delivered double-digit returns in 2020, are back at single digits now. Experts blame volatility in bond yields for such a high variation in returns in the short term. Debt funds are considered safe as they hold fixed-income securities. However, as the above examples show, this is not true. “Debt mutual funds are subject to mark-to-market valuation on a daily basis due to yield fluctuations which, many times, may lead to negative returns in the short term. However, this is a short-lived phenomenon as, over a longer period, you should generally earn what was…

Q. What was the problem you were grappling with? A. The major problem I faced in the beginning of my tenure in 2015 was low growth. We were witnessing diminishing returns after over a decade of high growth. So, my first agenda was to bring back the earlier growth rate and accelerate our profitability in coming years. It was imperative that to reset the growth clock we needed to scrap existing techniques and implement new strategies. Q. Who did you approach? A. After a lot of thought, I decided to approach the Chairman to seek his guidance and leverage his expertise to solve this critical issue. Q. What was the best advice you ever received? A. He said we need to find and focus on our strengths. We decided to…

Dearth of investment options drives people to hunt for newer opportunities. This is what opened the gate to US equities for Indian investors. Now, investors have found another route to take exposure to fresh global themes and new-age tech plays – SPACs, or special purpose acquisition companies, which have become quite a rage in developed markets. SPACs are basically ‘blank cheque companies’ that get listed on US stock exchanges with an objective of acquiring private companies. They are supposed to acquire their target within two years. If you hold SPAC shares until the merger, you get a proportional stake in the merged entity. This gives investors early access to new-age companies, which are finding this a convenient way to get listed on US exchanges, avoiding the time-consuming initial public offer…