Emerging economies need to make sure their exchange rates are flexible enough to deal with volatile capital flows, a senior International Monetary Fund official said.Billions of dollars have left emerging markets since May, when the US Federal Reserve first said it may need to begin reducing its $85 billion monthly bond-buying programme, which would deal a blow to emerging economies saddled with large current account deficits.But capital flows switched direction again in November as the Fed delayed its exit plan, IMF deputy managing director Min Zhu told Reuters, giving emerging economies breathing space to prepare defences for when the Fed decides to act."Exchange rate flexibility is really the first front line to go against this capital flow volatility," Zhu said on the sidelines of a financial conference in the Saudi capital."That's the most important line against the cross-border shocks. So make sure that exchange rates are flexible," he said without giving details.The IMF has urged China in the past to adopt a more market-based currency exchange rate with less intervention. Last month, China's central bank governor dangled the prospect of speeding up currency reform and giving markets more room to set the yuan's exchange rate.Developing countries called on the IMF in October to help them deal with heightened market volatility caused by the Fed's taper plan.According to the IMF, emerging economies have been working hard since the Fed's May warning signal to improve fundamentals through tightening fiscal policies and tackling inflation, which is a key issue in India, he said.Some emerging economies have also embarked on policies to encourage trade in order to slash their large current account deficits and raised interest rates to counter depreciation of their currencies, Zhu said without giving specifics.Last month, Indonesia's central bank raised its policy rate by 25 basis points to help reduce its large current account deficit and bolster the rupiah, Asia's weakest currency this year.Zhu also said that China may need several years to switch its economy from investment to consumption-driven growth."China is moving in the right direction but it is not an easy job. Investments account for 47 per cent of GDP (gross domestic product), which is way high, and consumption is way low," he said.The world's second-largest economy will need time to implement reforms such as opening up the services sector to help reduce investment as a proportion of GDP, he said."It will be a medium-term adjustment process. The government set a goal by 2020 that they want to double per capita income, change the growth model. We think it is reasonable," he said in the Fund's first comments on China's reform plans.Beijing's leadership last month unveiled its boldest set of economic and social reforms in nearly three decades to unleash fresh drivers of growth over the next decade.On Tuesday, China's leaders pledged to quicken economic reforms in 2014 while keeping policy stability and continuity at a meeting of the decision-making Politburo.According to the World Bank, China's per capita GDP was just $6,188 last year, compared with $22,590 in South Korea, $36,796 in Hong Kong and $51,709 in Singapore - Asian peers that have succeeded in making such a transition.A Reuters poll showed annual economic growth this year could slow to 7.6 per cent - the weakest in 14 years - but ahead of the government's target of 7.5 per cent.(Reuters)
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Business activity in emerging markets grew at the fastest rate in eight months in November, supported by momentum in Chinese manufacturing activity, a survey showed.The composite HSBC emerging markets index ticked up to 52.1 from 51.7 in October, moving further above the 50 line that divides expansions in activity from contractions even though growth in the services sector stalled at October's seven-month high.Manufacturers picked up the slack, led by China, where stronger domestic demand drove manufacturing growth to its sharpest increase since March, and also helped by India."In India, manufacturing business conditions are turning to positive after a few months of contraction," said Murat Ulgen, an emerging markets economist at HSBC."China is a huge weight, India is a huge country and has returned to (manufacturing) growth."Other emerging markets also saw faster growth in manufacturing, with Central and Eastern Europe and Turkey benefiting from the euro zone's ongoing recovery.But the manufacturers' index was dragged down by slowing growth in Brazil, Russia and South Korea and by a contraction in Indonesia.Overall, the HSBC index showed only modest growth in the services and manufacturing composite, and November's figure remains below the long-term trend level of 54.0.Despite returning to manufacturing growth, India's large but challenged economy weighed on the index, with a fifth month of overall contraction.Its private sector output also contracted for the fifth straight month, but at a slower rate than in previous months."For India, the whole picture including services is still contracting," Ulgen said.Despite a potentially challenging year ahead, manufacturing sentiment strengthened in most of the countries, with business outlooks in Brazil, Indonesia and the Czech Republic reaching record highs.The HSBC survey collects data from purchasing managers at about 8,000 firms in 17 countries. The index is calculated using data produced by Markit.(Reuters)
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It is called the game of survival, that which makes species like “In-Car Navigation Systems” reinvent themselves against the assault by alternate devices. In the mid 2000s, it was the advent of PNDs (Personal Navigation Devices) - which were available for less than $100,clung on to the wind shield and seemed to offer everything that a $500-$2000 in-car navi could offer. There were predictions of the entire infotainment systems market getting wiped out, but what looked like an explosive new product saturated and now shows significant decline. The in-car navi survived. In the recent past, it is the invasion of the all pervasive smart phones. With the smart phone market growing by 50 per cent and 2 billion devices expected to be sold to end consumers this year, it is obvious that the trend cannot be ignored. The threat of a new device disrupting many individual markets looms around all the time. But people do not seem to prefer a single ubiquitous device that could be your computer, mobile phone, audio player, video viewer and in-car navi system. The famous question of ‘convergence of devices’ pops up often, but coexistence of multiple devices appears to be the way. In the near term, smart phones will not outsmart in-car navihead-units. Rather, the trend is clearly towards strong integration, giving rise to a new symbiotic technology trend.Automotive Apps are leading at the forefront of this innovation wave due to integration. Broadly, two types of apps are emerging. There are apps that enable locking the car and switching on the heater/cooler remotely, which provide car functions on a smart phone. There are Apps like in-car version of Facebook or internet radio Pandora that runs on the infotainment platform and makes smart phone features available in the car. This makes the smart phone and the car infotainment system an inseparable pair, rather than a competition to each other. There are a wide range of utility apps available for users. The simple app called GasBuddy gives cheap gas prices nearby, helping users to save on fuel costs. Technology savvy users could use apps like “Dynolicious Fusion” which gives vehicle performance measurements – real time horsepower, 0-60 miles acceleration time, lateral G-forces etc.Diagnostic codes can be read and issues fixed faster by knowledgeable users. In the context of electro-mobility, Apps are indispensable. Apps help monitor charge levels, plan routes with charging schedule and act as a guide to charging stations.The ecosystem to support automotive apps is evolving rapidly. GM calls it Mylink, Ford calls it AppLink, Nissan offers Carwings for Leaf, almost all OEMs are creating platforms to explore the possibilities of automotive and smart phone integration. In every autoshow and Consumer Electronics event, new solutions with smart phone integration are showcased. Emerging open platforms allow independently developed apps to be launched. What remained as a closed space between OEMs and suppliers is opening up.The Apple model is getting replicated with business models and strong user communities. OEMs are seeing clear business benefits and brand value in establishing their own platforms to deploy Apps.Like any other emerging technology trend, there are challenges to battle. The idea of automotive apps is not to grant the pleasure of playing Angry Birds while driving. There is a definite risk of business models pushing pop-up ads which load the display. Till automatic driving becomes an everyday reality, driver distraction will remain a fundamental topic not to be ignored. Already there are concepts to disable certain distracting functions depending on driving conditions, these will get further strengthened.Looking in to the future, just replicating the screen from a mobile device on the in-car display would not be enough value. More and more automotive functions would get tightly coupled to smart devices. Enough has been done to bring the internet in to the car and now the effort is on to take the car on to the internet, on to the cloud. Automotive apps could continue to lead the innovation wave, connecting cars and its users.(The author is Sri Krishnan, Vice President, Robert Bosch Engineering and Business Solutions Limited)
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State-run gas utility GAIL India is in talks to buy a stake in the Tanzanian assets of British oil explorer Ophir Energy Plc, the Indian company's marketing head said.Ophir had offered to sell a 40 per cent stake in the Tanzania gas field, half of which has already been sold, said Prabhat Singh."There are various options. We are negotiating with them," Singh told reporters, without elaborating how much stake GAIL plans to buy.(Reuters)
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The rupee is weaker at 62.375/385 compared with previous close of 62.315/325 on global dollar strength after strong US ISM data.Dealer says sharp fall in the September-quarter current account deficit, though on expected lines, is positive for the rupee.The pair continuing to have strong technical support at 61.9.Power Grid Corp of India follow-on share sale opens for subscription, plans to raise Rs 7083 crore.Foreign funds were buyers of $127.05 million in Indian equities on 2 December, provisional data showed.Asian currencies are mostly trading weak.The yen remained on the backfoot early in Asia on 3 December, having succumbed to further selling pressure on prospects of more stimulus from the Bank of Japan.(Reuters)
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Belying hopes raised by a higher-than-expected GDP growth in the July-September period and expectations of manufacturing growth as PMI figures rose to the highest since March, output of eight core sector industries contracted by 0.6 per cent in October due to poor showing by coal, oil and gas sectors.The decline in output of eight core sector industries — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, electricity — was especially disappointing as it followed a robust 8 per cent growth in September.According to the data released by the government on Monday (2 December), the output of eight infrastructure industries in April-October was a mere 2.6 per cent against 6.8 per cent in the same period of the last fiscal.The eight core industries have a combined weight of about 38 per cent in the Index for Industrial Production (IIP).The October IIP numbers will be released in the second week of December. Commenting on the data, Crisil's Chief Economist D K Joshi said the performance of the core sector is likely to remain subdued in the coming months as well.Natural gas output contracted by 13.6 per cent in October year-on-year.Coal production declined by 3.9 per cent.Crude oil output was also poor with 0.8 per cent fall in the month under review.Petroleum refinery production declined by 4.8 per cent.Read Also: Manufacturing Returns To Growth In NovAmong those which put up good performance, fertiliser output registered a growth of 4.1 per cent and steel production grew at 3.5 per cent.Cement and power generation sectors posted marginal growth of over 1 per cent each in the month under review. PMI GrowsIndian manufacturing returned to growth last month as a strong rise in orders pushed factories to step up production, a business survey showed on Monday, suggesting a slow economic recovery is on its way.After sluggish growth of the first quarter, the economy had grown at a higher-than-expected 4.8 per cent in the three months through September, helped by an uptick in farm, manufacturing, construction and services sectors.An expansion in manufacturing can only boost optimism after data on Friday showed Asia's third-largest economy grew at a higher-than-expected rate in the three months through September.The HSBC Manufacturing PMI, compiled by Markit, rose to 51.3 in November from October's 49.6.The PMI index is the highest since March and marks its first time above the watershed level of 50 that divides growth from contraction in four months."Manufacturing activity picked up, led by a rise in new domestic orders, which helped pull up output growth," said Leif Eskesen, chief economist for India at survey sponsor HSBC.
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The rupee is trading higher at 62.31/33 from its previous close of 62.44/45 on marginally stronger-than-expected September quarter GDP numbers and stronger Asian FX.Asian currencies are mostly trading firmer.An expansion in farm output and some infrastructure helped India's economy recover slightly in the September quarter, but growth still hovered close to decade lows, tempering hopes of a sustained rebound ahead of elections due next year.RBI's special FX swap windows, which have garnered over $25 billion, closed on November 30, which will remove a key support for the rupee.Foreign funds were buyers of $119.22 million in Indian equities on 29 November, provisional data showed.(Reuters)
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Italians are known for their good looks, their charming manner, their sing-song accent and their love for food. Executive chef Francesco Apreda from Imago, the renowned Michelin star restaurant located on the sixth floor of Rome’s legendary Hassler Hotel, is no exception.As I meet him for a chat at Travertino, the Italian restaurant at The Oberoi, New Delhi, where he is currently doing a white truffle festival, he tells me about his love for food, his tryst with India and the various influences in his cooking. “My food can be described as having a traditional Italian base but with influences of the Orient. It is fusion cooking,” says Apreda who worked in Japan for a few years at the Italian restaurant Cicerone at Tokyo’s Imperial Hotel. He also travelled extensively over South East Asia and those influences can also be found in his cooking.But what about India? Do Indian spices, styles and aromas influence his cooking? “Yes absolutely. I love India. I’ve been coming here for several years now as I’m a consultant with Travertino in New Delhi and at Oberoi’s Italian restaurant, Vetro, in Mumbai.” At least three dishes at the Imago have an Indian influence. “My potato pasta served with curry and king crab is very popular as is the duck cooked in tandoori style,” says Apreda. He admits he doesn’t have a tandoor so he marinates the duck overnight in yoghurt and then cooks it in a clay tureen with tandoori spices. “It’s my style of cooking and is well appreciated.” Another dish which has an Indian influence is the foie gras terrine with a hint of beetle nut powder. “Beetle nut is very acidic and so goes well with foie gras terrine,” explains Apreda. Michelin Star Chef Francesco ApredaThe first time Apreda came to India, he found the food too strong and the spices overpowering. But over the years, he admits, his palate has developed and he can now understand and distinguish between the different spices and herbs. “I appreciate Indian food a lot more now.”And what is his take on Italian food cooked by Indian chefs? “I’ve tasted Italian food cooked by Indian chefs and though it is nice, it is often an interpretation of Italian food, not authentic Italian. That’s because Indian chefs need to be close to the Indian palate so they put in a lot of spices.” At Travertino, he says, they try to keep the food authentic. All ingredients including tomatoes are imported from Italy to try and keep the flavour as authentic as possible. “When it first started eight years ago, people were not that knowledgeable. They would order a pasta and then ask the chef to add more spices to it. Of course, we did it because at the end of the day you need to satisfy the guest but we also tried to educate them.” Now, he says, things are different. Most guests are well travelled and are looking for the same flavour that they experienced in Italy. “They realise Italian food is more than pasta and pizza.” For instance, when he was doing the white truffle festival at the Vetro in Mumbai last year, they finished 2 kg of white truffle over five days. “I was surprised because white truffle is a very expensive ingredient and I wasn’t sure if Indians would take to it.” But people came in with families and showed him pictures of how they had gone searching for white truffles with dogs on their holiday in Italy. White truffles which are unique to Italy sell for over $3000 a pound and are found primarily in Northern Italy in the months of October and November. Such is the demand for this delicacy that a black market has cropped up, even while truffles are often sold at auctions.The white truffle festival at the Travertino is on till December 1, 2013, in case you would like to taste this delicacy or try one of Apreda’s special dishes.
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The rupee is higher at 62.30/31 versus Thursday's (28 November) close of 62.41/42 on weakness in the global dollar. India to release September-quarter GDP data with the economy expected to show marginal pick-up in growth.Pair headed for a second week of losses, down 0.9 per cent; however, on a monthly basis, it is up 1.3 per cent. Month-end oil-related dollar demand will keep the pair bid.The central bank's special FX swap windows, which have garnered over $25 billion, will close in end-November, leading to some jitters on flows.The pair may be in a 62-62.50 range during the session. Foreign funds were buyers of $16.5 million in Indian equities on 28 November, provisional data showed.Asian currencies are mostly trading firmer.The euro rose to a five-year high against the yen on 29 November, as the Japanese currency faced heavy pressure on expectations it will be used as the funding currency of choice for carry trades given Japan's commitment to easy monetary policy.(Reuters)
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Government bonds higher on 29 November tracking early gains in the rupee. However, dealers expect some selling ahead of the Rs 14,000 crore bond sale.The yield on the new 10-year bond is flat at 8.72 per cent, after falling to 8.70 per cent. The existing 10-year benchmark bond yield is 2 bps lower at 8.99 per cent.Bond sentiment took a minor hit after Economic Affairs Secretary Arvind Mayaram said the government is in no rush to have India included in global bond indexes.India to release September-quarter GDP data at 1200 GMT. Economic growth probably picked up slightly in the quarter, but weak investment levels have tempered hopes that strong rural demand and a rebound in exports will drive a sustained recovery ahead of elections due early next year.(Reuters)
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