Category: Economy

Investors and other market stakeholders from US have asked India’s capital market regulator SEBI to bring in reforms in the regulations for initial public offering (IPO), a statement said on Wednesday.

SEBI Chairman Ajay Tyagi, along with other SEBI officials, had an e-interaction on Tuesday with various stakeholders including industry and investor associations from the US. The interaction was organised by US India Strategic Partnership Forum (USISPF).

In the statement, the SEBI said that the participants also emphasised the need for early finalisation of direct listing proposal, development of the corporate bond market, digitisation of processes, and showed interest in participating in innovative ideas under SEBI’s regulatory sandbox framework.

Various queries raised during the meetings on multiple issues were clarified by the SEBI team, it said.

Tyagi said: “We interacted with various stakeholders including the investors in the Indian capital markets from the US. We briefed them about the key developments of the Indian economy as well as the recent trends in the securities market, especially in this Covid era. The achievements of Indian primary markets, secondary markets and specific products such REITs and InvITs were brought out in the interactions.”

The attractiveness of the Indian markets despite the Covid impact and the recent surge in foreign investment into India through the Foreign Portfolio Investment (FPI) route was also emphasised, he said.

Tyagi was of the view that the increasing number of registrations of FPIs every year and increasing inflows of FPI investment in the Indian equity market signify the sustained interest of the foreign investors in the Indian capital markets.

“Considering that the largest number of FPIs and about one third of the total assets under custody of FPIs are from USA, the importance of US investments into India was emphasized especially taking into account the growing partnership between the two countries,” the SEBI Chairman said.

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Oil cartel OPEC may decide on extending the existing level of production cuts beyond December to keep the crude price stable next year. The chances are high as the extended run of Covid-19 pandemic threatens to keep demand under check over a longer period, though the global economy looks to reach closer normalcy next year.

Oil sector experts privy to the development said that an Ordinary Meeting of OPEC is scheduled in Vienna on November 30. This meeting, they said, may also discuss extension of production cuts beyond December and is likely to seal a deal in this regard after having few more parleys over next one month.

“Demand recovery reversal due to rising infections and/or Iran’s supply rise are risks to oil price but to counter these risks, OPEC+ can delay pruning of production cuts from 7.7 million barrels of oil per day (mbpd) to 5.8 mbpd to a later date or deepen cuts,” a research report by ICICI Securities has said.

Though oil is out of the woods with demand recovering from April 2020 lows and demand exceeding supply from June 2020, the fresh wave of the pandemic in Europe and increasing cases in US has thrown fresh concerns over normalcy returning to the market anytime soon.

Global crude oil price has moved between $40-42 per barrel range for last couple of months even through rising demand in recent months has created minor supply shortage of oil in the market.

According to US Energy Information Administration (EIA), global oil demand has exceeded supply since June 2020 with global supply deficit at 1.7-3.6 mbpd in June-September 2020 vs supply surplus of 19.5 mbpd in April 2020.

But concerns remain over continuation of demand rise into 2021 over the pandemic.

The International Energy Agency (IEA) has estimated global oil demand to rise by 5.5 mbpd YoY but supply rise is estimated at only 2 mbpd YoY in CY21E, assuming OPEC+ prunes cuts to 5.8 mbpd from January 2021 and Libyan output ramps up; thus, supply deficit of 1.2 mbpd is estimated in CY21E vs surplus of 2.2 mbpd in CY20E.

But according to ICICI Securities, these numbers may come under pressure if the pandemic run is extended. Therefore, experts said that OPEC decision will be closely watched as continuation production cuts would support oil prices if demand remains subdued.

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The newly appointed President of the PHD Chamber of Commerce and Industry, Sanjay Aggarwal has called for the Indian government to step in and spend more on infrastructure projects. He also said that this is not the time to think of limits set by the FRBM Act.

Describing the Indian economy as “resilient”, President of the premier industry body said that the damage caused by the coronavirus pandemic and the eventual nationwide lockdown was huge.

He said that there is massive requirement of public expenditure, that too from the Centre, as states are not in a good shape in terms of their finances.

Aggarwal was of the view that the government’s policies in terms of lockdown and unlock were very much required.

He observed that the 23.9 per cent contraction in the Indian economy in the April-June quarter was a huge loss, but improved indicators in September, including GST collections, auto sales and export numbers gave an optimistic outlook.

Citing the increase in digital payments and automobile sales along with reports of decrease in job losses by September-end, Aggarwal told IANS that there is resilience in the Indian economy.

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“The point is that the resilience is there, but the damage has been huge. The gap that has been caused, the hole that has been dug, is going to need a lot of filling,” Aggarwal said.

Appreciating the National Infrastructure Pipeline (NIP) announced last year by the government, he said that now is the time for investments to be made through the pipeline.

The industry body chief said that it is not the time now to spend keeping in mind the limits under the FRBM Act.

“This (NIP) is something that now needs to be taken up in all seriousness and the expenditure has to be frontloaded rather than backloaded,” Aggarwal said, observing that the Centre should on an urgent basis make investments, as private investments are unlikely at this juncture and states also are not in a good shape financially.

Aggarwal noted that there might be an impact on fiscal deficit but this is not the time to think of limits set by the Fiscal Responsibility and Budget Management Act.

“There may be an impact on the deficit, but if you look at the world economy, people have gone up to 20 per cent of the economy for the Covid relief measures. Our budgetary support to the Covid relief measures is not more than 1.5 per cent,” he said.

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Gold imports by India declined 57.12 per cent in the first half of the current financial year (2020-21) to $6.77 billion as demand has been largely hit by the pandemic.

During April-September FY20, the value of gold imports stood at $15.80 billion.

As per the Commerce Ministry data, import of the yellow metal last month stood at $601.43 million, 52.85 per cent lower on a year-on-year basis.

Silver imports too have slumped during over the past six months. During April-September, silver worth $733.57 million was imported, 63.41 per cent lower than imports worth $2 billion recorded a year ago.

In September FY21, India imported silver worth just $9.40 million, nearly 94 per cent lower than $154.54 million recorded during the same period last fiscal.

India’s total imports in September fell 19.60 per cent to $30.31 billion from $37.69 billion reported a year ago.

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