In the first quarter of 2024, Abu Dhabi’s real estate market experienced significant activity, totaling AED15.9 billion in transactions with 5,127 sales and mortgage deals. Data from the DARI platform of the Department of Municipalities and Transport (DMT) highlighted 2,919 sales transactions, totaling over AED9.6 billion, with a mix of ready-made and off-plan units…reports Asian Lite News
During the first quarter of 2024, the Emirate of Abu Dhabi saw a robust real estate market, with transactions totaling AED15.9 billion. This figure encompasses 5,127 sales and mortgage transactions involving a variety of property types, indicating significant activity and investment within the sector.
According to data from the DARI platform of the Department of Municipalities and Transport (DMT) in Abu Dhabi, the emirate logged 2,919 sales and purchases transactions in Q1 2024 totalling over AED9.6 billion. This includes 1,167 ready-made real estate units and 1,752 off-plan units.
DARI data showed that the Emirate of Abu Dhabi recorded about 2,208 mortgage deals during Q1, with a total value of AED6.3 billion. Meanwhile, the top three real estate transactions logged in Abu Dhabi during the past week, with Al Saadiyat Island and Yas Island topping the list of the largest transactions for Aldar Properties projects. The total value of transactions on Yas Island amounted to AED23.5 million, while the one on Al Saadiyat Island totalled AED14.3 million.
The common theme was inclusive growth, a no-nonsense approach and good governance. On the economic front, there has been growth all around, a stable economy and policies and a control on inflation which has hit many western countries quite badly…reports Asian Lite News
Markets are on cloud 9 and all it took was the ruling party at the Centre to win the three state elections in the Hindi heartland. Rajasthan, Chhattisgarh and Madhya Pradesh were the three states and of them only MP was ruled by the BJP.
Opinion polls got the outcome completely wrong and the success saw markets rallying very strongly. They first rallied on the outcomes of the exit polls and then on the results itself.
NIFTY which was trading at 20K plus saw 21K being briefly touched before settling marginally lower at 20,969.40 points. BSESENSEX on the other hand which was trading at around 67K saw 68K, 69K taken out and almost touched 70K, all within six trading sessions to make a high of 69,893.80 points and close at 69,825.60 points.
The rally so far has been sharp and markets are enthused with not only the performance but more importantly, going forward that the ruling dispensation would win the general elections as well. It is this belief that is powering the markets.
What has enthused the markets is that they believe the ruling party will come back. What this means is continuity, focus on growth, infrastructure and by and large a period where development continues to happen across sectors.
The common theme was inclusive growth, a no-nonsense approach and good governance. On the economic front, there has been growth all around, a stable economy and policies and a control on inflation which has hit many western countries quite badly.
The other important factor which is hurting developed economies is rising interest rates which have made life difficult for the common man. Fortunately, India has weathered the storm and we are now in a situation where it appears that interest rates have peaked. They may not fall immediately but a further rise could be easily ruled out.
To add comfort is the fact that in the latest RBI bi-monthly meeting held on December 8, the central bank has raised the forecast for GDP and it is indeed heartening and promising.
Historically, markets in India have done well in the period leading into general elections. The best is six months prior to the elections and six months post the results. The latter depends on the outcome of the polls and could always be a variable or subject to conditions.
In the run-up to the polls, the incumbent would be odds-on favourite after the first round of state elections and would be expected to do well in the general elections as well.
Second, the opposition bloc INDIA which was created would have its issues under the leadership of the Congress after the state poll results. All of this points to the strong position that the incumbent is currently in.
Where can the markets go from here is a moot question. They have gained close to 4.5% and have room to gain another 10% +/- 2% from here on in the next six months up to mid-May when the general elections would be near completion.
The rally would be broad-based and would see participation across sectors. One salient feature of the rally would be that the retail investors who have made good money in the markets with midcap and smallcap stocks outperforming the large cap stocks on a ratio of 3.5x would be the leaders in investing.
Interesting data from the mutual fund industry show that the midcap and smallcap mutual funds have a market share of close to 25% in the total equity corpus as of October 31, 2023.
This is a big number and clearly demonstrates the power of the small or retail investor. He typically invests in smallcap and large cap stocks and is a risk taker. His risky bets, relatively speaking, have paid off significantly and he has made disproportionately large amounts of money.
Another case in point is the huge subscription witnessed in the recently completed mother of IPOs week when we had five IPOs open and close in the same week.
The number of applications received were at a new lifetime high and in a single week, subscription of over 2.6 lakh crore was received by five mainboard IPOs. They had planned to raise Rs 7,400 crore cumulatively. Further, FPIs have had a negative outlook on India and have now turned big buyers. They could fuel our markets in the short to medium term.
In conclusion, we have an economy which is firing, political stability being witnessed over the last 9 and a half years and looks likely for another five-year term. The economy is in a decent shape with interest rates which have peaked, GDP showing strength and registering rising growth.
Stock markets are well placed and retail investors have made money. In such a scenario, expect good times to continue and markets to cross many more milestones over the next six months.
The second issue to open and close for subscription was Honasa Consumer Limited which was subscribed 7.61 times overall with QIB portion subscribed 11.50 times, HNI portion subscribed 4.02 times, and Retail portion subscribed 1.34 times. There were 1.19 lakh forms in all…reports Arun Kejriwal
Markets were choppy and volatile in the week gone by. They did recover from the previous week’s lows and staged some sort of a rally, but are yet to get out of the woods completely. The super sharp rally in the US was not enough to change the sentiment completely in our markets.
BSE SESENSEX gained 580.98 points or 0.91 per cent to close at 64,363.78 points while NIFTY gained 183.35 points or 0.96 per cent to close at 19,230.60 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.27 per cent, 1.33 per cent and 1.39 per cent respectively. BSE MIDCAP was up 2.00 per cent while BSE SMALLCAP was up 1.90 per cent. Markets gained on three of the five sessions and lost on two.
The Indian Rupee lost 4 paisa or 0.05 per cent to close at Rs 83.28 to the US Dollar. Dow Jones had a stellar week and gained on all five sessions of the week. Dow Jones gained 1,643.73 points or 5.07 per cent to close at 34,061.32 points. The Fed in its meeting during the last week decided to keep interest rates unchanged. The possibility of there being another rate hike during the remaining part of the calendar year still remains, and could yet happen.
In the Israel-Hamas conflict, Israeli forces are encircling Gaza and the conflict is showing no signs of abating or slowing down. Hostages have not been released and therefore the possibility of a slowdown in the war is virtually ruled out. The world is watching very carefully the situation and one hopes the escalation does not become a widespread event encompassing neighbouring countries as well.
The primary markets saw a lot of action in the week gone by. We saw two issues open for subscription and close while yet another has opened for subscription. There was also one issue which listed during the week gone by. In the week ahead we have two issues opening for subscription. One other issue has opened for subscription and would be closing in the coming week. Two issues which had closed in the previous week would be listing as well.
The first issue to open and close was from Cello World Limited. The issue was subscribed 38.90 times overall with QIB portion subscribed 108.57 times, HNI portion subscribed 24.42 times and Retail subscribed 3.06 times. This is the most subscribed issue on the main board in recent times and has created new records of subscription and amount garnered. The issue was for Rs 1,900 crore
The second issue to open and close for subscription was Honasa Consumer Limited which was subscribed 7.61 times overall with QIB portion subscribed 11.50 times, HNI portion subscribed 4.02 times, and Retail portion subscribed 1.34 times. There were 1.19 lakh forms in all.
The issue from Blue Jet Healthcare Limited listed on Wednesday the 1st of November. The company had allotted shares at Rs 346. The share debuted at Rs 359.80 on BSE on the opening day and closed at Rs 395.45, a gain of Rs 49.45 or 14.29 per cent. At the end of the week, the share lost some ground and closed at Rs 390.70, a gain of Rs 44.70 or 12.92 per cent.
The issue from ESAF Small Finance Bank Limited which is tapping the capital markets with its fresh issue of Rs 390.70 crore and an offer for sale of 72.30 crore in a price band of Rs 57-60. The issue opened on Friday the 3rd of November and would close on Tuesday the 7th of November.
The company as the name suggests is a small finance bank and reported an EPS of Rs 6.71 on a fully diluted basis for the year ended March 23. The PE band for the share is 8.49-8.94. The share is reasonably valued and offers scope for appreciation in the short to medium term as well. The issue is oversubscribed 1.95 times on the very first day itself.
The second issue is from Protean EGOV Technologies Limited, who is the pioneer and market leader in universal, citizen-centric and population scale e-governance solutions. It has 25 years’ experience in creating digital public infrastructure. The company is tapping the capital markets with its offer for sale of 61.91 lakh shares in a price band of Rs 752-792. The issue would open on Monday the 6th of November and closes on Wednesday the 8th of November.
The company had earned an EPS of Rs 26.48 on a fully diluted basis for the year ended March 23. The PE ratio for the issue is 28.40-29.91. One of the selling shareholders is IIFL Special Opportunities Fund who had invested at a price of Rs 950.10 some 6-7 years ago. The fact that this fund has not made money and is partly exiting the company at this price making a loss is comforting for investors, as it gives the signal that the company has been revalued based on its present business and performance. Looking at the pace of digitisation in India and the widespread use of the same, there is scope for appreciation.
The third company to tap the markets is ASK Automotive Limited which is tapping the markets with its offer for sale of 295.71 lakh shares in a price band of Rs 268-282. The issue opens on Tuesday the 7th of November and closes on Thursday the 9th of November.
The company is into the business of making auto components which consist of advanced braking systems and aluminium die casting engineered products for 2 and three wheelers, passenger and commercial vehicles and non-automotive sector. The company reported revenues of Rs 2,555.16 crore for the year ended March 23 and a profit after tax of Rs 122.95 crore.
The company’s performance is comparable with its peers like Endurance Technologies, Uno Minda, Suprajit Engineering and Bharat Forge Limited. The EPS on a fully diluted basis for March 23 was Rs 6.18. The PE band at these earnings is 43.37-45.63. The company is expanding its facilities as capacity utilisation is quite high even though this issue is entirely an offer for sale. Investment in the company is warranted for the medium to long term.
Shares of Cello World Limited would list on Monday the 6th of November while those of Honasa Consumer Limited would list on Tuesday the 7th of November. While Cello World is expected to deliver strong gains and have a good listing, the market is divided on how Honasa would fare.
Coming to the markets in the week ahead, expect volatile and two-sided sharp movements. While the strong showing of Dow Jones which registered over 5 per cent gains in the previous week would hopefully have some bearing, it has not done so. The high that NIFTY has made in the present up move is 19,276 points. For the uptrend to become meaningful and sharp, we need to cross the previous low of 19,333 points made a month ago and sustain that. The situation in the Israel-Hamas conflict is just not conducive at the moment to see such an event happening. It therefore makes sense to take things one step at a time. At current levels the markets have support at levels of 18,900-18,950 and they have some resistance at 19,333. If the above level is violated and sustained, we could see levels of 19,600-19,650 as well.
The week ahead sees ‘Muhurat’ trading for Vikram Samvat year 2080 taking place on Sunday the 12th of November. Markets would have a special session between 6 p.m. and 7.15 p.m. on Sunday.
Wishing all my readers a Happy Diwali and a prosperous Samvat 2080.
The Indian Rupee was under some pressure and lost 22 paisa or 0.27 per cent to close at Rs 82.94 to the US Dollar. Dow Jones gained on two of the four trading sessions, losing on the remaining two. It lost 261.12 points or 0.75 per cent to close at 34,837.71 points…reports Arjun Kejriwal
Markets were in a very aggressive mood last week and gained on all five trading sessions. Something like this has not happened in a long time and they now seem set to make a new lifetime high and cross Mount 20K on NIFTY.
BSESENSEX gained 1,211.75 points or 1.85 per cent to close at 66,548.91 points while NIFTY gained 384.65 points or 1.985 to close at 19,819.95 points. The broader market saw BSE100, BSE200 and BSE500 gain 2.11 per cent, 2.37 per cent and 2.36 per cent respectively. BSEMIDCAP gained 3.93 per cent while BSESMALLCAP was up 2.26 per cent. The top performing sectoral index was the BSEPSU index which gained a massive 5.52 per cent. With less than 180 points to go for NIFTY to touch the magical mark of 20K its now or never.
The Indian Rupee was under some pressure and lost 22 paisa or 0.27 per cent to close at Rs 82.94 to the US Dollar. Dow Jones gained on two of the four trading sessions, losing on the remaining two. It lost 261.12 points or 0.75 per cent to close at 34,837.71 points.
In the markets, momentum is being built to cross the obstacle of 20K on NIFTY. We had strong sustained gains during the week and on expected lines, the rally saw HDFC Bank finally participating. It gained Rs 49 or 3.11 per cent to close at Rs 1,649. This helped the BSEBANKEX chip in with decent gains of 1.32 per cent. This leaves just Reliance as the non-participating heavyweight stock in the benchmark indices. Though it did gain 1.49 per cent or Rs 36 during the week, one expects much more from the heaviest of stocks. It may be expected that in the coming week markets have their best chance of making a new high with HDFC participating, Reliance close to a momentum setup and markets less than 1 per cent away from a new life-time high. Conversely God willing, if the move fails, we could see a sell-off. FPIs are sellers and the market is driven by Domestic institutions buying and individual investors participating in the Smallcap and midcap space.
In primary markets we saw the shares of Vishnu Prakash R Punglia Limited listed on the bourses. The company has issued shares at Rs 99 and was very well received. The share debuted at Rs 164.45 and closed under selling pressure at Rs 145.93, a gain of Rs 46.93 or 47.40 per cent. By the end of the week, the share recovered lost ground and closed at Rs 172.75, a gain of Rs 73.75 or 74.49 per cent.
SEBI has introduced new norms for listing in T+3 days which would be mandatory from December 1, 2023. Two recent issues would be doing the same voluntarily and would list on Monday the 11th of September. The first is the main board issue from Ratnaveer Precision Engineering Limited, which had tapped the markets and was open for subscription between Monday (September 4) and Wednesday (September 6). The price band was Rs 93-98. The issue was subscribed 93.94 times overall with the QIB portion subscribed 133.05 times, HNI portion subscribed 135.19 times and Retail portion subscribed 53.92 times. There were 20.77 lakh applications in all. The other issue is from the SME platform, Basilic Fly Studio Limited. This issue has garnered over Rs 15,000 crore subscription and would also list on Monday.
The issue from Jupiter Lifeline Hospital Limited was subscribed 65.42 times overall with the QIB portion subscribed 187.96 times, HNI portion subscribed 36 times and Retail portion subscribed 8.00 times. The issue was open from Wednesday (September 6) through September 8 and the price band was Rs 695-735. There were 14.6 lakh applications.
The issue from EMS Limited has opened on Friday (September 8). The price band is Rs 200-211 and the issue would close on Tuesday the 12th of September. The issue at the end of the first day was subscribed 3.71 times overall with QIB portion subscribed 0.09 times, HNI portion subscribed 5.97 times and Retail portion subscribed 4.72 times. There are 2.90 lakh applications so far.
In primary market news we have an issue opening on Wednesday (September 13) and closing on Friday (September 15). The issue is from R R Kabel Limited which is into the business of making cables and wires and a small but emerging ‘FMEG’ business which contributes around 9 per cent of the revenues currently. The price band is Rs 983-1,035 and consists of a fresh issue of Rs 180 crore and an offer for sale of 172.36 lakh shares. The issue size would be around Rs 1,950 crore.
There is plenty of action in the primary markets currently and until and unless we have a substantial correction in markets or a debacle in the primary markets, this action would continue.
Coming to the markets, it’s a week where history is likely to be made with markets getting into a mood which borders euphoria or is already there. Expect the inevitable to happen with a rider, that if it fails there would be a short-term disaster in the form of a correction or they would cross the new high. Once they do so, the next target would become 3 per cent higher or another 600 points on NIFTY and about 1,800 points on BSESENSEX. These levels would be after gaining or mounting 20K.
The strategy would be to ride the wave and bet on the heavyweight stocks in the benchmark indices to perform. Continue to book profits and sell those stocks from the midcap and Smallcap space which have outperformed. Keep your back covered and both eyes on the markets as corrections would also come without notice. Trade cautiously.
L-G said that the growth potential of handloom and handicraft sector and the increasing demand for local products in global market…reports Asian Lite News
Jammu and Kashmir Lieutenant Governor Manoj Sinha on Monday inaugurated the international buyer-seller meet at University of Kashmir.
As many 24 International and many domestic buyers are participating in the two-day buyer-seller meet.
L-G appreciated the J&K Trade Promotion Organization (JKTPO) and Handloom Export Promotion Council (HEPC) for their endeavor to promote the export of handloom and handicraft products of J&K.
“The handloom and handicraft sector of J&K is ageless cultural asset of India, carrying a strong influence of our rich cultural diversity and spiritual traditions. It is the source of socio-economic growth to a large section of society and creating a rich pool of artisans,” he said.
L-G said that the growth potential of handloom and handicraft sector and the increasing demand for local products in global market.
“I see Jammu Kashmir as the principal handicraft, handloom market of the future. The creativity of our craftspeople, weavers, artisans and the indigenous skills is being recognized and admired by the world,” the L-G said.
He said that export is biggest source of revenue for handloom, handicraft and both Global North and Global South are major destinations to our handmade products.
“Our aim is to create a strong edifice of trade relationship to give a much-needed boost to our handloom and handicraft sector,” he said.
Smartwatches create a connected lifestyle(IANSLIFE)
The report by GlobalData, a leading data and analytics company, focused on wearable medical devices for kidney disease and dialysis…reports Asian Lite News
The market for wearable technology is set to grow at a compound annual growth rate (CAGR) of 24.6 per cent to reach $156 billion in 2024 from $59 billion in 2020, according to a report on Monday.
The market for wearables has been growing significantly in the medical device industry over the past several years. Wearables have the potential to address spiralling healthcare costs, ageing populations, and the burden of chronic disease.
The report by GlobalData, a leading data and analytics company, focused on wearable medical devices for kidney disease and dialysis.
It showed that wearable medical devices play a crucial role in enhancing the convenience and effectiveness of peritoneal dialysis (PD) — a treatment for kidney failure that uses the lining of abdomen, or belly, to filter blood inside the body.
By offering increased mobility, convenience, and continuous treatment, these devices empower patients to take control of their dialysis regimen, leading to better adherence, improved outcomes, and a greater sense of independence and normalcy in their daily lives.
“Having a wearable peritoneal dialysis device could be a great option for many patients. The market for wearable devices is growing quickly, largely because of the convenience they provide to patients,” said Alexandra Murdoch, Medical Analyst at GlobalData, in a statement.
“Wearable devices often pair with other remote patient monitoring devices, allowing patients to receive care remotely as opposed to going into a hospital or doctor’s office,” Murdoch added.
The report noted that Singapore-based AWAK Technologies and Singapore General Hospital (SGH) have recently begun a pre-pivotal clinical study of a wearable peritoneal dialysis device.
“Wearable devices, that will help kidney disease patients, live a normal life have huge potential. The convenience will allow patients more free time outside of the hospital, and ultimately improve quality of life,” Murdoch said.
He further said that the Congress stood with the poor and “we fought on their issue”…reports Asian Lite News
Former Congress chief Rahul Gandhi on Saturday thanked the people of Karnataka on party’s expected victory and said that “market of hate has been shut and shops of love have opened”.
He also said that the power of crony capitalism has been defeated by the power of poor people. Speaking to the media at the party headquarters here, Gandhi said, “Want to thank the people of Karnataka, our party leaders and all party workers who have worked hard.”
He said, “In the Karnataka elections, there was crony capitalism on one side and on the other side there was the power of poor people who defeated the powerful.”
He further said that the Congress stood with the poor and “we fought on their issue”.
“We didn’t fight on hate and we fought on issues of love. We fought with people, and the state has shown that love can win,” he said, adding that this will be repeated in other states too.
“In Karnataka shops of hatred have closed and shops of love have opened. It is a victory of the people of Karnataka. We made five promises and we will fulfill those promises in our first cabinet meeting,” he added. The Congress is set to form the government in the southern state.
The party headquarters here witnessed a festive mood with workers bursting crackers, dancing on bhangra tunes and also distributing sweets.
Bharat Jodo Yatra delivers desired effect
Former Congress chief Rahul Gandhi-led Bharat Jodo Yatra (BJY) passed through Karnataka’s 20 assembly seats last year and the party is leading on 15 of those seats, party leaders said on Saturday.
The grand old party is set for a historic win in Karnataka with 136 seats.
The Bharat Jodo Yatra, which started on September 7 last year from Tamil Nadu’s Kanyakumari after passing through the state of Kerala, had entered Karnataka on September 30. The yatra stayed in the southern state in two phases – from September 30 to October 19 – covering a distance of 511 km in seven districts of the state.
Rahul Gandhi along with several party leaders covered over 500 km in Karnataka after entering through Gundlupet and finally, he was sent off by the people of Raichur district, which is the last district in the state to be covered by the padayatra.
In Karnataka, former party chief Sonia Gandhi had also particpated in the yatra on October 6.
Speaking about the impact of yatra in the state, a senior party leader said, “The yatra led by Rahul Gandhi passed through 20 assembly seats in the state and the Congress is leading on 15 out of those seats.”
Meanwhile, Congress general secretary Jairam Ramesh, who is also party’s communication in-charge, said while this is the direct impact of the Bharat Jodo Yatra in Karnataka, the intangible impact was uniting the party, reviving the cadre and shaping the narrative for the Karnataka elections.
“It was during the Bharat Jodo Yatra, from the many conversations Rahul Gandhi had with the people of Karnataka, that the guarantees and the promises in our manifesto were discussed and finalised,” Ramesh said.
The yatra passed through the assembly seats of Ballary (ST), Bellary City, Gundlupet, Challakere (ST), Hiriyur, Molakpuru (ST), Melukote, Nagamangala, Srirangapatna, Chamundeshwari, Krishnaraja, Nanjangud (SC), Narsimhraja, Varuna, Raichur, Raichur Rural(ST), Chikkanayakkanahalli, Gubbi, Sira and Turuvekere.
According to party leaders, the party had won on five seats in the 2018 assembly polls while this year the party was leading on 15 seats. The JD-S had won six seats from these 20 assembly seats in Karnataka in 2018 while the BJP had won on nine seats.
In this year assembly polls, the JD-S was leading on three seats while the BJP was leading on only two seats.
During the 3,570 km pad yatra, Rahul Gandhi had the opportunity to engage with locals and listen to their concerns.
The yatra had concluded in Srinagar on January 31 this year after passing through the states of Tamil Nadu, Kerala, Telangana, Karnataka, Maharashtra, Madhya Pradesh, Rajasthan, Haryana, Delhi, Punjab, Himachal Pradesh and Jammu and Kashmir.
The Congress had already won 118 seats in Karnataka and is leading on 18 seats while the ruling BJP has won 53 and is leading on 11 seats. The JD-S on the other hand has won 18 seats and is leading on two seats in the southern state.
The polling for the 224-member Karnataka assembly took place on May 10. The Congress ran an aggressive campaign in the state and had highlighted the corruption issues. The party also promised five guarantees for the people of the state.
The central bank said the meltdown was at risk of rippling through the UK financial system, which could have then caused “excessive and sudden tightening of financing conditions for the real economy”…reports Asian Lite News
Pension funds managing vast sums on behalf of retirees across Britain came close to collapse amid an “unprecedented” meltdown in UK government bond markets after Kwasi Kwarteng’s mini-budget, the Bank of England has said, the media reported.
Explaining its emergency intervention to calm turmoil in financial markets last week, the central bank said pension funds with more than 1 trillion pounds invested in them came under severe strain with a “large number” in danger of going bust, The Guardian reported.
The Bank said a dramatic rise for interest rates on long-dated UK government bonds in the days immediately after the chancellor’s mini-budget had triggered a “self-reinforcing” spiral in debt markets, putting the stability of Britain’s financial system at risk.
Had the Bank not intervened with a promise to buy up to 65 billion pounds of government debt, funds managing money on behalf of pensioners across the country “would have been left with negative net asset value” and cash demands they could not have met.
“As a result, it was likely that these funds would have to begin the process of winding up the following morning,” the Bank said, The Guardian reported.
The central bank said the meltdown was at risk of rippling through the UK financial system, which could have then caused “excessive and sudden tightening of financing conditions for the real economy”.
Threadneedle Street stepped in last week after a collapse in the pound to the lowest level against the dollar in history and as interest rates on UK government bonds rose to the highest level since the 2008 financial crisis.
In a letter to the Commons Treasury committee explaining the intervention, the Bank’s deputy governor for financial stability, Jon Cunliffe, suggested the largest market movements came after the chancellor’s mini-budget.
Cunliffe said sterling collapsed by about 4 per cent against the dollar and 2 per cent against the euro, while long-term bond yields rose 30 basis points amid “very poor” conditions for the number of buyers and sellers prepared to trade on that day.
A top US credit rating agency has lowered its outlook for British government debt from ‘stable’ to ‘negative’ amid the fallout from Prime Minister Liz Truss’s mini-budget fiasco, Daily Mail reported.
The firm Fitch announced that Chancellor Kwasi Kwarteng’s ‘unfunded fiscal package’ could lead to ‘significant increase in fiscal deficits over the medium term’.
It followed a similar move by rival Standard & Poor’s (S&P’s) a few days ago, however Fitch maintained its ‘AA-‘ credit rating for the UK, which is one level lower than S&P’s, citing the government’s ‘weakened political capital’.
It comes after Kwarteng’s mini-budget announcement on September 23 promised 45 billion pounds in tax cuts, which spooked markets, and sent the pound plummeting against the dollar.
The unexpected ban by India, which accounts for about 5 per cent of world wheat exports, stoked prices further. In Chicago, futures rose 5.9 per cent to $12.47 a bushel on Monday, the highest in two months…reports Asian Lite News
India’s ban on wheat exports Saturday fuelled international prices by almost 6 per cent a bushel (60 pounds or one million kernels or 27.21 kg) when global markets opened Monday. Locally, prices dropped sharply by 4-8 per cent in different states — Rs 200-250 a quintal in Rajasthan, Rs 100-150 a quintal in Punjab, and about Rs 100 a quintal in Uttar Pradesh.
With the February 24 invasion of Ukraine by Russia and the supply disruption that followed, global wheat prices jumped over 60 per cent in 2022; just Russia and Ukraine together account for almost a third of world wheat exports.
The unexpected ban by India, which accounts for about 5 per cent of world wheat exports, stoked prices further. In Chicago, futures rose 5.9 per cent to $12.47 a bushel on Monday, the highest in two months. The closing price in the previous trading session on May 13 — the day India imposed the ban — was $11.77 a bushel.
According to the Indian government’s Department of Commerce portal, the country exported 66.41 lakh tonnes of wheat in the first 11 months (April 2021 to February 2022) of financial year 2021-22 (1 tonne is 1,000 kgs or 2,204.6 pounds). This data conforms with the latest US Department of Agriculture’s May 2022 report, which estimates wheat exports from India in the 12 months from July 2021 to June 2022 at 10 million metric tons (1 ton is 2,000 pounds). The total world wheat exports during the period are estimated at 201.5 million metric tons.
In the current financial year – April 2022 to March 2023, the Indian government estimates about 45 lakh metric tonnes of wheat to have been contracted for exports. Of this, 14.63 lakh metric tonnes have been exported in April 2022 alone, substantially higher than 2.43 lakh metric tonnes in the same month last year. Besides, 95,167 metric tonnes atta have been exported in April this year, almost four times more than 25,566 MT in April 2021.
The Group of Seven (G-7) countries too expressed disappointment on India’s decision. After a meeting of G-7 agriculture ministers in Germany, German Agriculture Minister Cem Ozdemir said the export restriction would “worsen the crisis”. “If everyone starts to impose export restrictions or to close markets, that would worsen the crisis,” Ozdemir said at a press conference in Stuttgart on Saturday.
India defended the decision. The ban was “essentially in view of the price rise”, Union Food Secretary Sudhanshu Pandey said Saturday during a media briefing. Retail inflation has been ruling over 6 per cent for four straight months in calendar year 2022, with the print for April soaring to 7.79 per cent, much higher than the upper band of RBI inflation target of 6 per cent. In the Consumer Price Index, wheat/ atta from PDS has a weight of 0.17 and wheat/ atta from other sources has a weight of 2.56.
Research analysts said the impact of India’s export ban would be felt disproportionately by low income developing countries. In a note after the ban, Nomura Global Markets Research pointed out that except India and Australia, most Asian economies depend on imported wheat for domestic consumption and are at risk from higher wheat prices globally, even if they do not directly import from India.
US hopes India will drop restrictions
Washington hopes that India will drop its restrictions on wheat exports after hearing at the United Nations (UN) Security Council from other countries about the looming food crisis, according to Linda Thomas-Greenfield, the US Permanent Representative to the UN.
“India will be one of the countries participating in our meeting at the Security Council, and we hope that they can, as they hear the concerns being raised by other countries, that they would reconsider that position,” the Cabinet official said on Monday previewing the US initiatives on food security in the wake of the Russian invasion of Ukraine.
Answering a reporter’s question about India restricting some wheat exports, she added, “We’re encouraging countries not to restrict exports because we think any restrictions on exports will exacerbate the food shortages.”
Russia and Ukraine accounted for nearly 30 per cent of the global wheat exports and the war has disrupted the supplies putting many countries at risk.
India, which is the world’s second-largest wheat grower and has a big stockpile, ordered an end to most purely commercial wheat transactions while leaving room for some exports to neighbouring countries and governments of countries in need.
The government notification of the revised policy on Friday said the exports were banned “in order to manage the overall food security of the country and support the needs of the neighbouring and other vulnerable countries”.
India’s Commerce Secretary, B.V.R. Subrahmanyam on Sunday said private companies would be allowed to meet previous commitments they have made for exports.
Explaining the restrictions, he added that New Delhi did not want an unregulated export of wheat that could lead to it getting “hoarded and is not used for the purpose which we are hoping it will be used for — which is serving the food requirements of vulnerable nations and vulnerable people”.
The main factor behind the reversal of Indian policy on wheat exports is the extreme heatwave that swept through some of the wheat-producing areas creating fears that the output could fall by as much as 5 per cent.
The US, which is the Security Council’s President for May, has urged for ‘Days of Action for Food Security’.
The regulator also allowed EGRs interoperable between vault managers to enable ease of withdrawal of gold from the vaults…reports Sameer Patil
Gold has always been an essential part of the socio-economic-cultural ethos of every Indian. As an investment, it has always carried with it the tendency of invoking a sense of sentimental attachment. Despite its tremendous significance, gold investments did not keep pace in terms of ease of buying, storing, and safety. These factors motivated BSE to create a transparent and efficient investment mechanism for gold.
BSE’s role in developing India’s gold market:
BSE has been in the forefront pursuing the case for EGRs. It has made several presentations to the government and regulator on the process workflow. This included interface with Shri Shaktikanta Das ji, the then secretary in Ministry of Finance, and seeking participation of banks, vaults, wholesalers, retailers, importers, and exporters, etc. that forms the ecosystem.
BSE’s first commitment fructified on October 1, 2018, when it became India’s first universal exchange by adding gold derivatives to its product portfolio. With a view to further widen and deepen the Bullion markets, on the suggestion of BSE, framework to introduce ‘options on spot’ prices of commodities instead of futures prices was permitted. BSE launched the first ‘options in goods’ contracts on gold mini and silver kg based on spot prices from June 1, 2020.
BSE became India’s first exchange to comply by India Good Delivery Standard on its commodity platform by adopting Bureau of Indian standard (BIS) notified standards – IS 17278: 2019, for delivery of gold and silver. This was in line with Prime Minister’s vision of ‘Make in India’ and ‘Aatmanirbhar Bharat’ of a self-reliant nation.
With this step, BSE wished to highlight its commitment and priority towards own good delivery standard and emerge as the price-setter instead of a price-taker in bullion trade. BSE has also consistently executed seamless delivery gold across all contracts in both LBMA and IGDS standards at its designated vault in Ahmedabad.
BSE has also played a pivotal role in the success of India International Bullion Exchange (IIBX), where BSE’s wholly-owned subsidiary – BSE Technologies, is the technology provider. BSE’s subsidiary India INX and India ICC hold 20 per cent stake in the IIBX. Spot Trading in Gold:
BSE has made several presentations to government and regulators on how the spot trading process in gold can work, and how the participants of various types including banks, vaults, wholesaler, retailer, importers, exporters etc. will participate in this ecosystem. BSE was also part of Niti Aayog committee on transforming India’s gold sector, after which the Government of India, in the budget of 2018-19, had announced its intent to establish a system of regulated gold exchanges in the country. Further, in the Union Budget 2021-22, Hon’ble Finance Minister Nirmala Sitharaman ji announced the setting up of a gold spot exchange, and that Securities and Exchange Board of India (SEBI) will be the designated regulator for the proposed gold exchange.
Subsequently in its board meeting held on September 28, 2021, SEBI has introduced two new investing instruments – electronic gold receipts (EGR) and silver ETFs. The instrument representing gold i.e., EGR, and will be having trading, clearing and settlement features akin to other securities that are currently available in India. It is to the testament of SEBI that several new and innovative products including EGRs have been launched in a short time frame. What are EGR’s:
Currently, India allows trading only in gold derivatives and gold ETFs, unlike several other countries which have spot exchanges for physical trade in gold. Post approval from the SEBI board, Indian investors will soon see a new class of security known as EGR that will be available for trading on the stock exchanges like BSE. Like shares, these EGRs will be held in demat form and can be converted into physical gold when needed. This is part of SEBI’s plan to allow trading of spot gold on the exchange platforms.
To enable trading in physical gold, it is proposed that gold in the form of a depository receipt (backed by physical gold) shall be traded and settled on stock exchanges. The entire trading will be done in three tranches that include conversion from physical gold to EGRs, trading of EGRs and again conversion of EGR back to physical gold. BSE will plan to launch EGRsof different variants and denominations ranging from 1 KG to 1 gram to attract investors and participation of all classes in a phased manner.
The source of supply of the physical gold to be converted into EGR will be the fresh deposit of gold, coming into the vaults, either through imports or through stock exchange(s) accredited domestic refineries. A client can also convert physical gold to EGR by depositing physical gold at the designated delivery centre. Exchanges shall empanel Vault Service Providers (VSPs) based on guidelines prescribed by SEBI. Similarly, clients can redeem EGRs back to physical gold, and the process is complete. An interface will be developed between the vault managers (of physical gold), depositories (that hold EGRs in demat) and stock exchanges and clearing corporations that clear the trade. Benefits:
Such a product will cater to all market participants which means that buyers and sellers on the exchange shall include individual investors, as well as commercial participants along the value chain like the importers, banks, refiners, bullion traders, jewellery manufacturers and retailers. This can play transformative role in developing India’s gold market encompassing the entire ecosystem and create a vibrant gold ecosystem in India by enabling actual fungibility of gold, which is the need of the hour. The regulator also allowed EGRs interoperable between vault managers to enable ease of withdrawal of gold from the vaults.
The idea of spot trade via EGR will lead to one nation one price of gold. The standard gold that will be traded under EGR will help in creating uniform price structure of gold across the country. At present there is no gold price in the country. This can reduce the existing market inefficiencies that exist in bullion trade and may act as a bridge in integrating spot gold trade with derivatives markets and create a transparent platform for bullion trading.
A single point trading for both spot and derivatives would provide scale, liquidity, and better pricing for all market participants by bringing down cost and cycle time significantly. Trading in EGRs will also greatly contribute to the existing programmes for gold monetisation such as Gold Monetization Scheme (GMS), Gold Bonds and Gold Deposits. Next Steps:
BSE is also well known for its technological prowess and has always been the fastest-to-go, in a seamless manner, for all new products including commodities. BSE has the technology for such trading of EGRs and has received in-principle approval from SEBI. Mock trading and testing of systems are currently underway, and BSE is ready to launch EGR as a separate segment.
