Saturday, 30 August 2014

India’s Growth Quickens Most in Two Years in Boost for Modi

By Unni Krishnan

Photographer: Raveendran/AFP via Getty Images

India’s economic growth accelerated to the fastest pace in more than two years, beating estimates, after the central bank refrained from raising interest rates.
Gross domestic product rose 5.7 percent in the three months ended June from a year earlier, the biggest gain since the quarter through March 2012 and compared with the 4.6 percent in the previous quarter, the Central Statistical Office said in a statement in New Delhi yesterday. The median of 48 estimates in a Bloomberg News survey was for a 5.5 percent gain.
Stronger growth is crucial for Prime Minister Narendra Modi to honor a pledge of narrowing the budget deficit to a seven-year low, after keeping subsidies largely unchanged in his spending plan. He faces the challenge of rejuvenating Asia’s third-largest economy amid the risk that a weak monsoon will hurt crops and stoke the region’s fastest inflation.
“There’s no doubt that this is the start of a recovery,” said Prasanna Ananthasubramanian, chief economist at Mumbai-based ICICI Securities Primary Dealership. “A closer look reveals it is propped up by government spending. For sustained growth, it is crucial to get right the mix of industrial growth and its lagged impact on services.”
The S&P BSE Sensex index gained 0.3 percent in Mumbai on Aug. 28, the rupee weakened 0.1 percent to 60.5150 per dollar and the yield on the 10-year sovereign bond was little changed at 8.56 percent. Indian markets were shut yesterday for a holiday.
“In the first quarter of this year, a 5.7 percent growth rate is encouraging,” Finance Minister Arun Jaitley said at a news conference in New Delhi today. “With the long-term impact of all the new initiatives setting in, I’m sure the impact in the coming quarters will be much larger.”
He said most economic sectors are looking up and the investors’ mood has undergone “a sea change.”

Asset Creation

Output from the finance and insurance industries jumped 10.4 percent in the quarter, while electricity and gas output increased 10.2 percent, according to the statement from the CSO. Manufacturing rose 3.5 percent while farm output climbed 3.8 percent. Mining grew 2.1 percent.
Gross fixed capital formation, a gauge of asset creation and investment, rose 7 percent. Government spending increased 8.8 percent.
“The increase in fixed capital shows a boost in investment on the back of a stable government,” said Rupa Rege Nitsure, Mumbai-based chief economist at state-owned Bank of Baroda. “This seems to be the start of a gradual recovery and augurs well for the future.”
The currency has pared this year’s gains after Finance Minister Arun Jaitley refrained from cutting subsidies and expenditure in his first budget. He’s instead banking on a boost in tax revenues to bridge the fiscal shortfall.

Modi Setbacks

Since taking office with the strongest electoral mandate in 30 years, Modi has blocked a breakthrough deal at the World Trade Organization, refrained from allowing foreign companies to take majority stakes in the defense sector and retained a retroactive tax law that has entangled Vodafone Group Plc in a $2.4 billion dispute.
During a parliamentary session that ended this month, opposition lawmakers scuppered Modi’s attempt to revive a bill proposing more foreign investment in insurance. The setback robbed Modi of an opportunity to lure investors during a visit to the U.S. in September.
The government will need to take steps to mobilize tax revenues and impose strict fiscal discipline to achieve its goal of narrowing the budget deficit to 4.1 percent of GDP from 4.5 percent a year earlier, the Reserve Bank of India said on Aug. 21. Risks to a growth forecast of 5.5 percent in the year through March 2015 are broadly balanced now after being to the downside at the start of the period, it said.

Monsoon Impact

Governor Raghuram Rajan left the benchmark repurchase rate at 8 percent for a third straight meeting and on Aug. 5 flagged upside risks to the RBI’s target of lowering inflation to 6 percent by January 2016, citing the government’s price support for crops, deficient rainfall and oil prices amid global conflicts.
Consumer prices rose 7.96 percent in July from a year earlier, the fastest pace since May, government data show. India’s monsoon rainfall has been 18 percent below normal since June 1, the weather department said on Aug. 27, heading for the driest year since 2009.
Any upswing in inflation due to erratic rains will be temporary and price pressures are likely to ease, according to Arvind Virmani, an RBI adviser. The economy will expand as much as 5.9 percent this fiscal year, faster than the previous period’s 4.7 percent that was near the slowest in a decade, the finance ministry projected this month.
“We aren’t saying this is a broad based pickup, but things do seem to be bottoming out,” said Devika Mehndiratta, an economist with Australia & New Zealand Banking Group Ltd. in Singapore. “Overall, things seem to be turning and things are in place for growth to move up to over 6.5 percent in 2016.”

Alibaba Said to Push Back Start of IPO Investor Meetings

By Leslie Picker and Jonathan Browning

Alibaba Group Holding Ltd. is postponing the start of investor meetings for its initial public offering by about a week to answer questions posed by the U.S. Securities and Exchange Commission, according to a person with knowledge of the matter.
The Chinese e-commerce giant, which was weighing a plan to market its IPO early next week, now expects the meetings to begin in the week of Sept. 8, with tentative pricing on Sept. 18 and trading to start the following day, said the person, who asked not to be identified discussing private information.
Alibaba, based in Hangzhou, China, has been in

Two Lawyers Offer Situation-focused Solutions For Investors In Africa

August 27, 2014 Niyi Aderibigbe Advisor Network, Investing

VENTURES AFRICA – Steven De Backer and Olivier Binyingo, founders of Afriwise, a new consulting firm in Johannesburg, South Africa are ready to employ their vast experience across the continent in offering situation and local environment-focused solutions for willing investors.
“Sub Saharan Africa is now perceived to be one of the world’s greatest opportunities for corporate expansion. At the same time not all the countries are moving at the same pace and Africa remains a diverse and complex continent, with different countries presenting different challenges and obstacles,” the investment advisory firm noted.
De Backer explained that the founders worked for years to develop a system of adopting a collaborative consulting model for Africa.

Two lawyers offer innovative solution-focused solutions for African investors

“Africa is not a country but a continent, home to 54 very different countries,” stated De Backer, who noted that clients are beginning to

August 26, 2014 Niyi Aderibigbe Intelligent Investing, International, Investing, Investors

VENTURES AFRICA – Ten sub-Saharan African countries have been identified by international professional services firm, PwC, as the go-to cities for international investors looking to expand to the sub-region.
The world is turning focus to sub-Saharan Africa (SSA), with its potentials now recognized by several international conglomerates holding a deeper presence on the continent. But the key to succeeding in this region is identifying the right cities for investments, according to the August 2014 edition of PwC’s Global Economy Watch.
Half the projected 2.2 billion rise in the world population in 2015-2050 is expected to emerge from Africa, UN says. But the good news is that Africa will have the largest youth population in Africa by 2030. The continent’s fledging youth workforce is also

State-owned Energy Firm Sinks $250m Into Mozambique’s Power Sector

August 29, 2014 Editor Business, Energy

VENTURES AFRICA – State-owned power company Electricidade de Moçambique (EdM) says it will invest $250 million to upgrade its power generation plants in Mozambique adding that most its equipment are now very old.
“The grid is severely deteriorated and is over 40 years old in the south of the country and over 50 years old in the central region and so we have to spend money on a new one,” said EdM chairman Augusto Fernando.
“In terms of figures I would say the city of

Ferguson Cops Accused of Using Excess Force on Protest

By Andrew Harris

Missouri residents sued the city of Ferguson and St. Louis County claiming police violated their civil rights by using excessive force in response to protests over an officer’s killing of an unarmed black teenager.
The Aug. 9 shooting of Michael Brown, 18, by Ferguson policeman Darren Wilson touched off days of protests punctuated by outbursts of violence and looting. Police responded with armored vehicles and tear gas.
“Defendants used wanton and excessive force, under color of law,” the residents said in a complaint filed yesterday in St. Louis federal court.
The six plaintiffs, including a woman and her

Mori Trust Buys Tokyo Wedding Venue Said Worth $1.25 Billion

By Kathleen Chu and Katsuyo Kuwako

Mori Trust Co., Japan’s second-biggest closely held developer by sales, acquired Meguro Gajoen, an office and banquet hall complex in Tokyo that was put up for sale by Lone Star Funds.
Mori Trust’s acquisition includes five buildings on land of 37,000 square meters (398,265 square feet), the Tokyo-based company said in a statement, without naming Lone Star. Mori paid about 130 billion yen ($1.25 billion) to buy the property, known for its gardens and as a favored wedding location, from Lone Star, people familiar with the deal said, asking

Nigeria Activist Who Escaped the Gallows Probes Oil Accounts

By Dulue Mbachu

Photographer: Pius Utomi Ekpei/AFP via Getty Images

Two decades ago Ledum Mitee escaped being hanged while campaigning against corruption in Nigeria’s oil industry. Today, as head of a government transparency initiative, he says little has changed.
Mitee was the only one of 10 ethnic Ogoni activists including Ken Saro-Wiwa acquitted by a military tribunal on charges of organizing the murder of four rivals. At the time he was deputy president of an organization demanding that Royal Dutch Shell Plc (RDSA) and the government compensate the Ogonis for despoiling their land through oil spills.
Now, as chairman of the Nigeria Extractive Industries Transparency Initiative, he says the government has largely ignored his reports and hasn’t given his

Bellis Loses at U.S. Open Tennis as Djokovic, Williams Advance

By Mason Levinson and Erik Matuszewski

Photographer: Streeter Lecka/Getty Images

American teen Catherine Bellis lost to Zarina Diyas in the second round of the U.S. Open tennis tournament after top seeds Serena Williams and Novak Djokovic both won in straight sets to cruise into the last 32.
Bellis, a 15-year-old amateur ranked 1,208th in the world, was beaten 6-3, 0-6, 6-2 last night by Diyas, a Kazakhstani ranked 48th in the world, at the National Tennis Center in New York.
“In the beginning of the match I was nervous and a little tight,” Bellis said. “The second set I became freer. Third set, she just played better than me. I wasn’t

Malaysia Airlines to Eliminate 6,000 Jobs Amid Overhaul

By Chong Pooi Koon, Choong En Han and Elffie Chew

Malaysian Airline System Bhd. (MAS), which lost two jetliners in air disasters this year, will eliminate 6,000 jobs as the national carrier restructures.
Chief Executive Officer Ahmad Jauhari Yahya, whose contract was supposed to end next month, will continue to lead the carrier until July 1, Azman Mokhtar, managing director of majority owner Khazanah Nasional Bhd., said at a briefing in Kuala Lumpur today. Malaysia Airlines yesterday posted a sixth quarterly loss and said the full financial impact from the disasters will only be seen in the second half.
Sovereign wealth fund Khazanah, which made a 1.38-billion ringgit ($438 million) buyout offer this month to take Malaysia Airlines (MAS) private, said it will i