Lannister Posted August 29, 2019 Posted August 29, 2019 This is what happens when you vote for a bunch of illiterates, in the name of nationalism. Stan AF 1
Stan AF Posted August 29, 2019 Posted August 29, 2019 Money & Banking Link between banks, NBFCs raises risk of contagion in a financial crisis: Bimal Jalan committee Our Bureau Mumbai | Updated on August 28, 2019 Published on August 28, 2019 RBI and govt must be aware of the sources of financial instability: Bimal Jalan panel report The government and the Reserve Bank of India (RBI) must be mindful that new potential sources of financial instability from systematically important financial institutions cannot be ruled out, according to the report of the Bimal Jalan committee to review the RBI’s extant economic capital framework. In this regard, the committee said the interconnectedness in Indian markets between banks and non-banking financial entities is enlarging rapidly, thus increasing the risk of contagion in a financial crisis. According to the June 2019 issue of the Financial Stability Report, the total outstanding bilateral exposures among the entities in the financial system increased to ₹36.3-lakh crore in March 2019 from ₹31.4-lakh crore in March 2018. Public sector banks have a net receivable position vis-à-vis the non-banking financial sector. In the event of stress in the non-banking financial sector, the committee observed that the banking sector, and particularly public sector banks, will likely come under stress. The current stress being experienced by the NBFC sector, for example, led to calls for appropriate Lender of Last Resort (LoLR) action by the RBI, it added. It may be pertinent to note here that defaults by non-banking entities, such as IL&FS and DHFL, have had a ripple impact on the financial system. Risk provisioning On the possibility of the RBI making emergency liquidity assistance (ELA) losses, even when a major part of the banking sector is in the public sector, the committee was of the view that prudence would necessitate risk-provisioning as the losses could materialise, including from ELA support, to private sector banks. According to the committee’s report, having a public sector-dominated banking sector does not make an economy immune to bank runs. The 2002 crisis in a Latin American economy largely involved PSBs. Further, the experience from the global financial crisis has shown that the ownership of the banking sector becomes more public sector-oriented during periods of crisis. NPA crisis While large public sector ownership has been seen as a positive in preventing bank runs in the past, the committee underscored that the NPA crisis has thrown light on the challenges that arise if a sizable majority of the banking sector looks at the government for recapitalisation. “Here lies the challenge of assessing the risk-provisioning requirements of the RBI. The central bank would theoretically not be exposed to ELA losses if the government recapitalises these banks. “However, the European debt crisis has demonstrated that private sector debt crises can transform into a sovereign debt crisis if the government overstretches itself in recapitalising distressed banks,” the committee said. In this regard, the committee felt that the position could be even more severe in India. It reasoned that given India’s sovereign rating is at the lowest investment grade – any downgrade, due to fiscal slippages caused by recapitalisation – could exacerbate the capital flight caused by the financial crisis. The committee further stated that the rupee not being a reserve currency will greatly limit India’s capability to manage financial crises. The committee, therefore, recognised that the RBI’s financial stability risk provisions need to be viewed for what they truly are – the country’s savings for a rainy day (a financial stability crisis), built up over decades and maintained with the RBI in view of its role as the LoLR. Its balance sheet, therefore, has to be demonstrably credible to discharge this function with the requisite financial strength. Published on August 28, 2019 https://www.thehindubusinessline.com/money-and-banking/link-between-banks-nbfcs-raises-risk-of-contagion-in-a-financial-crisis/article29281040.ece
Stan AF Posted August 29, 2019 Posted August 29, 2019 I fear that a recession may start by the end of 2020: Karvy Stock Broking CEO When a global recession arrives, the Indian economy would suffer as well, both due to the direct economic impact but more so on account of the indirect linkage via financial markets Gold is likely to continue to do well and we recommend investors should invest in Gold, Rajiv Singh, CEO, Karvy Stock Broking, said in an interview with Moneycontrol’s Kshitij Anand. Edited excerpts: Q: Do you think the global economy is heading for a recession? A: BoFA-ML fund manager survey revealed that 34 percent of them expect a recession in 12 months, the highest since 2011. This is not surprising, given that the US yield curve has inverted recently. Rajiv Ranjan Singh CEO|Karvy Stock Broking Worries about the global business cycle have been around for a while, given that this is now the longest expansion in history. Data from China, Europe, and Japan has been weak for a while. The US economic data remains strong but does point to a deceleration. The inversion of the yield curve, if persists, can be regarded as an indicator of a recession. When a global recession arrives, the Indian economy would suffer as well, both due to the direct economic impact but more so on account of the indirect linkage via financial markets. I fear that a recession may start by the end of 2020 or early 2021, and for now, investors should remain invested in equities, but at the same time remain vigilant. Q: With global recession looming large, gold is all set to clock Mount 40K on MCX. Do you think it is the right time to invest in gold or gold ETF? A: Due to fear of a global recession, uncertainty on account of trade wars and expectations of weak monetary policy, gold is likely to do well and we recommend investors should invest in gold. https://www.moneycontrol.com/news/business/markets/i-fear-that-a-recession-may-start-by-the-end-of-2020-karvy-stock-broking-ceo-4371781.html
Stan AF Posted August 30, 2019 Posted August 30, 2019 Gold crosses record ₹40,000-mark as recession fears seep in New Delhi, August 29, 2019 16:40 IST Updated: August 29, 2019 16:40 IST Closing in on the ₹50,000-mark, silver rose by ₹200 to ₹49,050 per kg on robust demand from industrial units and coin makers amid strong overseas trend. Gold prices on Thursday jumped ₹250 to breach the record ₹40,000 per 10 gram level for the first time at the bullion market here on strong demand from investors amid growing fears of a global economic slowdown. Maintaining its record-breaking run for the second day, gold spurted by ₹250 to a fresh life-time high ₹40,220 per 10 grams, according to the All India Sarafa Association. The precious metal had soared by ₹300 to close at ₹39,970 per 10 grams on Wednesday. Closing in on the ₹50,000-mark, silver rose by ₹200 to ₹49,050 per kg on robust demand from industrial units and coin makers amid strong overseas trend. Lingering worries over a possible global recession and uncertainty over the U.S.-China trade talks boosted the demand for a safe haven bet, traders said. Fresh buying by jewellers ahead of the festive season also aided the rally in the precious metal. HDFC Securities senior analyst (Commodities) Tapan Patel said gold prices have kept the firm trading so far on mixed global cues as inverse bond yields from the U.S. and Germany have raised economic slowdown fears. “The development on Brexit will be the next thing for the markets to watch out while progress in U.S.-China trade talks and U.S. Federal Reserve’s stance [on rate cuts] are constant factors to determine the price trend for gold,” Mr. Patel added. Gold was firm in global markets on possible recession fears. Gold was trading at $1,539 an ounce in New York after hitting a high of $1,550 an ounce. Silver was up 1.15% at $18.63 an ounce. Besides, a weaker rupee also helped in upward movement of the gold price, they added. In early trade, the rupee depreciated by 17 paise to 71.95 against the U.S. dollar on Thursday. In the national capital, gold of 99.9% and 99.5% purity jumped ₹250 each to ₹40,220 and ₹40,050 per 10 gram, respectively. Sovereign gold soared ₹400 to ₹30,200 per eight grams. Silver ready rose ₹200 to ₹49,050 per kg, while weekly-based delivery climbed ₹814 to to ₹47,230 per kg. Silver coins were in good demand and traded higher by ₹3,000 at ₹1,01,000 for buying and ₹1,02,000 for selling of 100 coins. https://www.thehindu.com/business/markets/gold-crosses-record-40000-mark-as-recession-fears-seep-in/article29289021.ece
Stan AF Posted August 30, 2019 Posted August 30, 2019 New speed breaker on India's road to $ 5 trn economy; NHAI's mounting debt NHAI's debt has increased seven-fold in the past five years Dhwani Pandya | Bloomberg Last Updated at August 30, 2019 06:54 IST 1739 India’s path to economic recovery faces another obstacle, with Prime Minister Narendra Modi asking the state road builder to stop constructing highways after its debt ballooned almost seven-fold over the past five years. "National Highways Authority of India totally logjammed with unplanned and excessive expansion of roads," the prime minister’s office wrote to NHAI in a letter dated August 17. "NHAI mandated to pay several times the land cost; its construction costs also shooting up. Road infrastructure has become financially unviable." Modi’s office proposed that NHAI be transformed into a road-asset management company, according to the letter obtained by Bloomberg, and the prime minister’s office asked NHAI to reply within a week. The decision is a reversal from Modi’s first term, when his administration was praised for its breakneck speed of highway construction that helped make India one of the fastest-growing economies in the world. However this came with the burden of escalating costs, leaving NHAI increasingly dependent on the government for financial support at a time when Modi is looking to contain his budget deficit. Restricting road-building risks imperiling Modi’s target to make India a $5 trillion economy as roads are necessary for socio-economic development, said Vikash Kumar Sharda, a partner at Infranomics Consulting LLP, who previously consulted for PWC India. “Road is critical infrastructure, and putting breaks on it will not only result in a slowdown of highway construction but also of other sectors that are dependent on it.” There’s a strong co-relation between economic growth and investments in infrastructure, with roads accounting for about 3.1% of gross value added, Modi’s economic advisers said in a report this year. Data due Friday will probably show India’s gross domestic product expanded 5.7% in the quarter through June, the slowest pace in five years. Modi’s office now wants NHAI to revert to a model used by his predecessor, where NHAI would auction projects to developers. They’d construct the roads, collect toll from users and then would transfer ownership back to NHAI after an agreed period. Weak private sector participation pushed Modi to scrap this practice and he permitted NHAI to bear as much as 100% of the costs in certain road projects that led to ballooning debt. NHAI’s outstanding debt of Rs 1.8 trillion would entail annual interest servicing of about Rs 14,000 crore, higher than the Rs 10,000 rorw NHAI collects as toll, according to analysts at SBICap Securities Ltd. Land acquisition costs have also risen to more than 25 million rupees per hectare from Rs 90 crore after fair-price laws were introduced in 2013, and this alone accounts for more than 30% of NHAI’s expenses, according to ICRA Ratings Ltd. The prime minister’s office didn’t reply to an email seeking comment and NHAI declined to comment. The letter contains only suggestions and top-rated NHAI is fully capable of raising enough debt to keep building roads, Nitin Gadkari, Modi’s minister for roads, was cited by the Mint newspaper as saying on Tuesday. Ratings company ICRA on Wednesday said the build up of debt means NHAI must either go slow on new projects -- a choice Modi can’t afford as he needs to spur economic growth -- or shift to a build-operate-transfer model involving equity-purchases by private players. Many developers can’t support huge equity investments that are part of BOT projects, the rating company said. Among the beneficiaries of this shift could be IRB Infrastructure Developers Ltd., which has traditionally focused on BOT projects where the operator collects a toll from road users. “The decision to switch back to BOT-toll is much needed given the fiscal constraints,” IRB Infrastructure Chairman Virendra Mhaiskar said. “In the present dispensation, given the land acquisition cost, restricting to BOT only for a year or two may be a wise idea.” https://www.business-standard.com/article/economy-policy/new-speed-breaker-on-india-s-road-to-5-trn-economy-nhai-s-mounting-debt-119083000098_1.html
Jimmy Cliff Posted August 31, 2019 Posted August 31, 2019 Thread. And this is coming from a so-called RW account.
R!TTER Posted August 31, 2019 Posted August 31, 2019 Well he's isn't wrong but then he went on to rant about China insurance, may be he should read about China's internal debt explosion after 2008 global meltdown China isn't doing OBOR for no reason & there is a very good reason why lots of planned & ongoing projects have Chinese workers, I'll let the bright ones figure that out.
Real McCoy Posted August 31, 2019 Posted August 31, 2019 @velu I know the economy is not doing well but why does @Stan AF keep repeating these doom and gloom stories throughout this page. Some guy who used to invest part time said to me that news of failing economy contributes heavily to economic downturn. I'm not saying this government is all roses but what would congress have done when faced with this situation. They have been in power from 2004 to 2014. What have they done that is so remarkable. Rather than posting stories about gloom and doom, stan can give solutions of how it should be done. Atleast others can get some perspective. velu 1
Stan AF Posted August 31, 2019 Posted August 31, 2019 Jeez, I'm just posting news dude. Maybe you should ask that question to the elected government.
Real McCoy Posted August 31, 2019 Posted August 31, 2019 16 minutes ago, Stan AF said: Jeez, I'm just posting news dude. Maybe you should ask that question to the elected government. Ok give me your opinion on how to fix this situation. Give it a try. Otherwise you are only contributing to the problem.
Stan AF Posted August 31, 2019 Posted August 31, 2019 Maybe you should ask why the problem came to exist in the first place and what the government is going to do rather harassing me not to post. I'll do what I think is correct.
velu Posted August 31, 2019 Posted August 31, 2019 33 minutes ago, Stan AF said: Jeez, I'm just posting news dude. Maybe you should ask that question to the elected government. You are posting only livemint articles Most are biased and few are stupid as well dial_100, Stan AF and Real McCoy 2 1
Stan AF Posted August 31, 2019 Posted August 31, 2019 Stop begging for attention in every thread @velu Conduct unbecoming of a man
velu Posted August 31, 2019 Posted August 31, 2019 9 minutes ago, Stan AF said: Maybe you should ask why the problem came to exist in the first place and what the government is going to do rather harassing me not to post. I'll do what I think is correct. Real McCoy 1
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