It may have been a slip of the keyboard, but Marc Andreessen’s pro-colonialism Tweet on Wednesday (later retracted) arguably told us more about the mindset of Silicon Valley insiders than anything ever uttered at a TechCrunch disruptor conference.
Nor should it strike any of us as surprising. The parallels between unicorn imperialist ambition and the British Empire run deep. (And no, we won’t dwell on the shared fondness for unicorn insignia.)
The co-founding Zoman* — Deepinder Goyal, that is — took time for a chat with us last week about the change going on in India’s start-up world, a change that has involved hyperbole by many and an utterance of mea culpa by a few. Online food portal Zomato is included in the latter category. Read more
This is more art than science but we’re going to mark it anyway.
That’s India’s benchmark Sensex index closing below 24,ooo points – at 23,962.21 to be exact — its lowest close since May 15, 2014 according to Reuters.
Funnily enough, May 16 was when one Narendra Modi got his first official nod to go sit on India’s most ministerial seat. The Sensex closed that day at 24,121.74. Read more
We previously wrote about Facebook’s battle with Indian regulators over its “Free Basics” product, which is a stripped down version of the internet designed to
ensure Facebook’s global dominance help bring the world’s poor online.
Trai, the Indian telecoms regulator, had launched a consultation in December about differential pricing for data services: effectively whether or not it’s ok to let telecoms companies charge different amounts for different parts of the internet. Readers in the US and Europe may know this debate by the term “net neutrality”. Read more
There’s an old notion that companies exist for one purpose above all else: to make money for their shareholders. It seems to be an uncool idea in Silicon Valley, where startups like to style themselves as charitably-minded enterprises that are simply trying to make everyone’s lives better and more “connected” or some other buzzword.
Which one is Facebook?
Look no further than this opinion piece Mark Zuckerberg wrote for the Times of India just after Christmas. He accuses his Indian critics of lying about “Free Basics”, the emaciated version of the internet that Zuckerberg has been pushing since 2013 to ensure that his social network is the first thing people in emerging markets see when they come online: Read more
India is a large place. It is made up of many states. Moving goods between those states is a freaking nightmare.
That’s where the loooong awaited GST — India’s promised goods and services tax, which has been debated for ten years — comes in. The idea is to unify all indirect taxes in India, simplifying the system and lubricating domestic trade. Estimates of the boost to GDP a GST could bring differ (more on that at the bottom) but there is little doubt it would be of benefit, even if you restrain yourself to just discussing its impact on the blood pressure of lawyers and anyone moving goods across state borders.
But it just keeps on not getting introduced.
Here’s Cap Econ’s Shilan Shah on why: Read more
Want to know a big difference between Chinese and Indian GDP stats?
Well, we don’t think many Indian officials would say things like this, via China Daily:
Several local officials in China’s Northeast region sought to explain dramatic economic drops in their areas by admitting they had faked economic data in the past few years to show highgrowth when the real numbers were much lower, Xinhua News Agency reported on Friday.
“If the past data had not been inflated, the current growth figures would not show such a precipitous fall,” one official was quoted as saying.
The report cited several officials in the region who acknowledged they had significantlyoverstated data ranging from fiscal revenue and household income to GDP.
Irony thy name is fudged Chinese data.
And it’s not, we hasten to add, that Indian GDP stats don’t have their own problems — they do — it’s just that the lack of really strong centre out (and back in) incentives make us think the problem isn’t systemic so much as statistical. Read more
INDIA CLOCKS IN AT 7.4 PER CENT REAL GDP GROWTH AND IS NOW THE WORLD’S FASTEST GROWING BRIC ECONOMY!
Sorry. Got carried away by charts like this one from BofAML:
Compare, contrast and then draw your own conclusions about India’s newly born Gold Deposit scheme, its plan to lure gold out of temples, vaults and jewellery boxes with the promise of (hopefully but not apparently yet) lovely enough interest rates.
First… from Reuters last last week on its rather stuttering start:
A gold deposit scheme launched amid fanfare by Indian Prime Minister Narendra Modi two weeks ago has so far attracted only 400 grammes, an industry official said on Thursday, out of a national hoard estimated at 20,000 tonnes…
The scene, as we went to pixel, outside the Reserve Bank of India in Mumbai — from where Rajan stares across the city — on the day 17,000 of its staff decided to up sticks in protest about interference from India’s government in its workings and, one suspects more pressingly, pensions:
Observe the… absolutely nothing unusual happening. Read more
While reading up on Indian FDI we stumbled across this little fact from Capital Econ’s Shilan Shah as he attempted to downplay seemingly impressive India-Africa FDI stats…
With our emphasis
Prime Minister Modi stated that “India has emerged as a major investor from the developing world in Africa… surpassing even China”. In a strict sense this is true. According to UNCTAD, India’s total stock of FDI in Africa stood at US$50bn in 2014, compared to China’s stock of US$26bn.
But digging a little deeper, this claim quickly unravels. Nearly 95% of Indian FDI to Africa flows into just one economy – Mauritius. Admittedly, Mauritius does have a significant Indian diaspora and once had a large textiles industry. But in reality, the nature of the FDI inflows has more to do with the favourable tax terms that investors receive through the two countries’ Double Taxation Avoidance Agreement.
UBS looks at the fundamentals of India’s new gold monetisation schemes on Thursday and in the process comes up with one of the best summations we’ve ever seen on why gold investing in and of itself is stoopid — especially when done en masse by a relatively poor economy.
Indians directly or indirectly hold an estimated 22,000 tonnes of gold worth USD 800bn or 39% of Indian GDP (banking system credit is c50% of GDP). Gold thus held is problematic to some because unlike most capital goods it derives its expected value not from its ability to produce (directly or indirectly) goods or services that will meet the material demands of consumers. Instead it derives its value from investors’ collective perception of what it is worth.
Indeed. Read more
At pixel the wannabe Netflix of India, Eros International, is getting no love in Mumbai, off 20 per cent:
Of course, it’s the NY open (where it’s also listed and suffered on Friday) to watch now but the trigger for the fresh fall appears to be a Wells Fargo note (and attendant gossiping) out on Friday which cast doubt on the company’s receivables and user numbers. Or, at least, professed a lack of understanding which appears to have resonated considering there were already questions about a recent spike in revenue booked in the UAE weighing on the stock. Read more
I don’t know what you want to call me. Santa Claus is what, eh, [journalist x] called me earlier. You want to call me a hawk.. I don’t know. I don’t go by these things. My name is Raghuram Rajan and I do what I do.
- The RBI governor, 29 September
And yes, that’s certainly A reason for why he cut the policy rate 50bps to 6.75 per cent on Tuesday, twice what had been expected.
Here’s another one, via Credit Suisse’s Neelkanth Mishra: Read more
We don’t mean to keep banging on about it. But the bad loans in India’s banking system are both a significant barrier to a new, and badly needed, investment cycle getting properly underway — and a source of some hilarious numbers.
From Credit Suisse’s Ashish Gupta on the Reserve Bank of India (the regulator here): Read more
Have a hypothetical on this joyous Ganesh Chaturthi…
Let’s pretend you’re an Indian public sector banker. You and your ilk control about three-quarters of the country’s lending.
You know that stressed loans are an issue: Read more
Here’s a paper from Dan Bogart at the University of Irvine about the East Indian Monopoly and why it was deemed justifiable to the British sovereign to grant all this power to a private company.
As the following extracts from the paper note, the rationale was largely as follows (emphasis ours): Read more
Yes, as you can probably tell this is the news that India’s government wants to get the masses of idle gold lying dormant in vaults and households throughout the country out into the open.
To put that in Zerohedge-ese it’s the The Start Of India’s Gold Confiscation.
Or, to put it more simply… it’s a reasonable (if poorly executed) attempt to cut India’s crazy large (CA hurting) gold import bill by tapping into the estimated 22,000 MT of gold knocking around its temples etc. Read more
Is this unique?
We rather doubt it.
From JP Morgan on India’s private sector start-up darlings and their publicly listed, markedly less-loved, counterparts (emphasis, theirs, ours and yours if you ask nicely): Read more
There are lots of people in India. Nobody argues about that.
What’s also true is not many of them care about equities.
Of course, there are exceptions. In absolute terms, rather large exceptions. The Bombay Stock Exchange (founded in 1875 as the “The Native Share & Stock Brokers Association”) is Asia’s oldest and ever since Reliance founder Dhirubhai Ambani — the ‘guru of the equity cult’ as Hamish McDonald put it — tapped into India’s small investor to fund his company, they have been in the mix. Read more
One really has to begin any talk of India’s stumbling stock market with a bucketload of context. After all, the Sensex is well up from Modi’s election almost exactly a year ago and the recent fall is from a record peak of just under 30,000 points in January.
As to why Indian markets are struggling this year, down 7 per cent from that peak… Read more
Evidence of a potentially large change in India’s banking system from Credit Suisse and Neelkanth Mishra’s India markets team:
Even within bank loans, which are losing share to bonds in corporate borrowing, [public sector, or PSU, banks] are losing share to private banks, being short of capital. In this environment, by allocating just Rs80 bn for PSU bank recapitalisation in the FY16E budget (half that of the previous year, and the lowest after FY10), the government has shown willingness to let PSU banks fall in relevance, and not perpetuate moral hazard by bailing out weak banks. This is a remarkable and unexpected change in stance, given the potential advantages in micro-managing three-fourths of the bank lending space in India.
And lo did the wails of certain politicians rent the sky. Read more
Have a chart Credit Suisse’s Neelkanth Mishra put out back in 2013, the same Neelkanth Mishra who has been arguing persuasively that if “activity in informal industries and rural areas were properly measured, India’s GDP would look bigger and more stable”:
Standard deviation of reported quarterly GDP growth of India is second lowest only to China, you say? Read more
Fair question, evidently.
And to answer it, no we’re not sure. But the fact it’s even close is the point. From Nomura:
After recording a deficit every quarter for more than seven years, we expect India’s current account balance to swing into a surplus of ~1.5% of GDP in Q1 2015 compared with our current account deficit estimate of 1.6% of GDP in 2014.
Switzerland’s “anyone can initiate a referendum if they’ve got enough signatures” society gets to vote on the “Save our Swiss gold” proposal this Sunday, which aims to make it compulsory for the Swiss Central Bank to hold at least 20 per cent of its assets in gold bullion and repatriate all Swiss gold that’s held abroad.
The proposal also plans to make it illegal for the SNB to sell any of the gold it accumulates. Ever.
What’s worth noting ahead of the poll, though, is how the naturally occurring phenomenon of “too many non-productive gold assets in our economy” has struck economies in the past. Read more
The Coalgate cancellation verdict is in.
India’s Supreme Court has decided to go ahead and annul all of the 218 coal licences handed out to businesses over the last two decades, bar a few belonging to state-backed companies.
Sucks for the private players on the receiving end (Jindal is off some 11 per cent at pixel) but apparently a win for Coal India:
It couldn’t have happened to a nicer behemoth. Read more
For those who don’t know, India is a big, extremely uneven, place. From HSBC (with our emphasis):
India is a federation, with the central and state governments having both separate and shared responsibilities. While central government policies and transfers shape state policy agendas, states still have a relatively high degree of autonomy. As a result, state policies vary greatly.
The rise of India can be seen in each state, but in some more than others. Between the 1990s and 2000s a handful saw average growth rates jump significantly – Uttarakhand in the north (8.5ppts) and Bihar (5.1ppts), Sikkim (8.4ppts) and Nagaland (4.7ppts) in the east.
And if you don’t believe United Bank of India about the first bit, just browse through F1-owning drink mogul Vijay Mallya’s Twitter feed. Then remember he’s the pioneer of the in-no-way tasteless Kingfisher calendar.
(Do make your own here, if you must.)
Of course, being declared a wilful defaulter due to a failure to pay back loans associated with the grounded Kingfisher Airlines might crimp Mr Mallya’s style somewhat.
Of course, everyone’s a winner when judgements start off with prose like this:
Coal is king and paramount Lord of industry is an old saying in the industrial world. Industrial greatness has been built up on coal by many countries. In India, coal is the most important indigenous energy resource and remains the dominant fuel for power generation and many industrial applications.