#1. Markets poised to rise before Diwali as overseas investors trim short positions
Cooling yields of US treasury bonds and a declining dollar have spurred foreign portfolio investors to pare their near-record bearish bets on Nifty and Bank Nifty futures contracts over the past two sessions, raising hopes that the Nifty gauge may gain another 1.5 percent before Diwali, touching 19,700 points. They have also turned net buyers, coinciding with their pruning of short positions.
Why it’s important: India’s equities have been wilting under a bearish environment in the past week or so. The trend might reverse as foreign investors wield considerable influence on market movements.
#2. India among top three in fresh foreign investment destinations, says UN trade body
Although foreign direct investment into India have fallen in recent times, there are reasons to be optimistic as the country is seeing interest in greenfield investments. The United Nations Conference on Trade and Development last week presented its recent findings that India is among the top three in fresh FDI announcements. These would potentially translate into higher investment flows by 2024.
Why it’s important: FDI flows into China have turned negative for the first time in decades. India is set to benefit as multinational firms find it increasingly attractive for new global capacity expansion as part of their initiatives to diversify supply chains.
#3. FMCG value grows at annualized 9 percent as rural demand puts out green shoots
Sales of packaged consumer goods rose 9 percent in value in the September quarter led by higher demand for snacks and biscuits and stronger demand for personal care products in rural markets, market researcher NielsenIQ said. Sales gained 8.6 percent in volume in the three months after falling 0.6 percent a year earlier. Rural markets reported a 6.4 percent rise in quarterly volumes.
Why it’s important: India’s rural market hold the key to a sustained growth in the FMCG sector. A demand revival seen ahead of the festive season would bring cheer to the industry.
#4. Faster regulatory approvals shorten queue for license applications by mutual fund houses
The waiting line for mutual fund licenses has thinned due to quick clearances by the Securities and Exchange Board of India amid applications being withdrawn due to regulatory changes. at the end of September, there were only two pending mutual fund applications by AngelOne and Unifi Capital, compared with 11 at the start of 2023 calendar year.
Why it’s important: There has been a deepening of the mutual fund industry, with more people are parking their savings with them rather than bank deposits. Faster clearances by the regulator will help the process.
#5. Banks slow down lending to customers without high credit scores
Commercial banks are tightening risk frameworks and chasing prime customers instead, with those lacking credit scores lagging behind as lenders do not have a way to assess their repayment capacity. While 29 percent of new-to-credit applicants received loans in the June quarter of 2022 and 2021, only 23 percent did so in the comparable period in 2023, according to TransUnion Cibil data.
Why it’s important: There has been increased delinquency on small-ticket personal loans. The recent credit tightening could be a fallout of the lending binge seen after the pandemic.
#6. Business schools offer courses to start-up investors to better oversee new enterprises
The Indian Institutes of Management and the Indian School of Business have prepared courses to meet requirements of professionals appointed by private capital funds to oversee early to growth stage companies. The programs offered by the top Indian business schools focus on training fund managers and board members on the nuances of effective startup governance.
Why it’s important: The complexity of business models at start-ups is rising, as are the associated risks. Recent lapses in corporate governance at large startups have also underlined the need to boost measures to safeguard capital and b-school training can provide tools to better manage them.
#7. Government may press brakes on new capital spending to contain fiscal deficit
The finance ministry has started talks on decelerating the pace of increase in capital expenditure in the interim budget for 2024-25 to sync expenditure with the fiscal consolidation glide path. The government has set a target of lowering the fiscal deficit over the next two years to 4.5 percent of GDP by 2025-26.
Why it’s important: The past few years has seen the government allocate heavily in capex in a bid to spur a similar trend in private sector investment. It could now be time for it to focus on fiscal prudence.
#8. Walmart looks to India to source global inventory at mega sellers’ summit
Global retail giant Walmart is looking at an India-first opportunity on sourcing for the world as it prepares to host a mega sellers’ summit in New Delhi on February 14 and 15, which would be the second time in its history that its flagship meeting is being held outside of the US. The two-day event will bring together Indian companies and around 50-60 Walmart merchants from the US.
Why it’s important: The summit will enable global buyers to evaluate products showcased by Indian sellers for export, presenting an opportunity for local entrepreneurs to make the country a sourcing hub.
#9. Government to introduce policy to transform airports into international transit hubs
The central government is framing a policy to transform the country’s airports into global hubs that would offer single-point international connectivity to Asia. The policy aims to frame laws to ease security and immigration bottlenecks, allocate international flying rights and build infrastructure so that airports like New Delhi can become transit hubs and compete with the likes of Dubai and Singapore’s Changi airport.
Why it’s important: India’s aviation ecosystem is unable to benefit from the growth in long-haul international traffic. The policy could help prevent the revenue leakage for carriers and airports alike.
#10. Snapchat finds India still has space to grow after doubling users to 200 million
Evan Spiegel, chief executive of Snap that owns messaging platform snapchat, said his company will expand its community and tap advertisers as it looks to leverage artificial intelligence to enhance its augmented reality playbook. Snapchat made news for doubling its user base in India to 200 million within the space of a year, buoyed by new products like spotlight short videos that is taking on Instagram Reels and YouTube Shorts.
Why it’s important: The banning of TikTok in India left a massive void that other social media platforms have rushed to fill. Snapchat sees an opportunity in a market where its has traditionally been a laggard.
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