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Saturday, June 25, 2022

The Expresso Business Update

Your Business Expresso is served! The Indian Express brings to you the latest updates from the world of Indian and international business. Your one stop shop for all finance and business stories.

Episode 401 May 24, 2022

Business News at 9:30 am on 24th May 2022

Here is the latest Business news from the Indian Express at 9:30 am on the 24th of May, 2022

“You are listening to the Expresso Business Update. Here is the latest news from the world of Indian and International business brought to you by The Indian Express and The Financial Express.

While the world economy faces headwinds, current growth forecasts offer a buffer against a potential global recession, the International Monetary Fund’s No. 2 official has said. Among the major threats to economic growth, IMF First Deputy Managing Director Gita Gopinath said that the conflict in Ukraine could escalate, adding: “You could have sanctions and counter sanctions”. Gopinath said in an interview on the sidelines of the World Economic Forum in the Swiss resort of Davos that the other challenges included inflation, a tightening of interest rates by central banks and a slowdown in Chinese growth. “So all of these provide downside risks to our forecast,” Gopinath said, with reference to the IMF’s 2022 growth forecast issued last month of 3.6%, a downgrade from a 4.4% estimate in January. “I would say at 3.6% there is a buffer,” she said, conceding, however, that risks are uneven around the world. Gopinath said inflation “will remain significantly above central bank targets for a while”, adding: “It is very important for central bankers around the world to deal with inflation as a clear and present danger, that is something they need to deal with in a very forceful manner”.
Moving on to news from India’s battle against runaway inflation. The government’s cut in the fuel tax and measures to cool prices of iron, steel, coal, plastics and cement may drive down retail inflation in the short term, analysts said. They, however, added that given the stickiness of price pressure, it has to do more to ease supply constraints and curb inflation substantially during the course of the current fiscal. Retail inflation in May will likely drop to 6.5-7.3%, they forecast. In the near term (after June), inflation may drop by up to 40 basis points. The consumer price index-based inflation hit a 95-month high of 7.79% in April. Over the next 9-12 months, however, food inflation may remain relatively elevated unless prices of the mostly-imported edible oils and vegetable ease substantially. Moreover, any rise in fiscal deficit from the budgeted level of 6.4% of GDP (some analysts now expect it to be as high as 6.8%) due to elevated subsidy bill, and potential pass-through of entire under-recoveries by oil-marketing companies in the coming months could potentially exert upward pressure on inflation, some of the analysts said. Of course, the outlook will improve dramatically if the Russia-Ukraine crisis abates within the first quarter.
In other news, India and the US on Monday signed an investment incentive agreement, which will supersede an earlier agreement and enable the US International Development Finance Corporation (DFC) to continue with its investments in this country. The DFC, a development finance agency of the US government, is currently considering investment proposals worth $4 billion for India, according to a finance ministry statement. The DFC or their predecessor agencies are active in India since 1974 and have so far provided investment support worth $5.8 billion, of which $2.9 billion is still outstanding.

Now, latest on the upcoming 5G auction. Reliance Jio and Bharti Airtel are in a position to buy pan-India 5G spectrum but uncertainty remains around Vodafone Idea’s bids for the radiowaves, according to a BofA Securities report released on Monday. The report noted that it would be difficult for any telecom company which has not bid for 5G spectrum in a particular circle to roll out 5G on the existing 4G bands because the existing networks are running at a capacity, and hence there is limited free spectrum which could be carved out. “Higher reserve price is likely to disincentive any new telcos to bid in the auction and only telcos with strong balance sheets like RIL, Bharti are in a position to buy pan India 5G spectrum. It remains unclear how VIL would fund its 5G bids,” the report said.
In other development, state-owned Oil and Natural Gas Corporation on Monday said it has become the first gas producer to trade domestic gas on the Indian Gas Exchange, trading unspecified volumes from its eastern offshore KG-DWN-98/2 block. In a statement, ONGC said it will increase volumes slowly. “ONGC has become the first exploration and production company in India to trade domestic gas on Indian Gas Exchange. The first online trade was made on May 23, 2022 by ONGC Director (Onshore) & In-charge Marketing Anurag Sharma on India’s first automated national level Gas Exchange, IGX,” it said.
And at last, how the Indian indices would respond to the morning cues today. The Nifty futures on the Singapore Exchange traded 53 points higher at 16,228.50, signaling that stock market was headed for a positive start today. Meawnhile, Asian shares got off to a sluggish start today. Maruti Suzuki, Zomato, Adani Ports and ONGC are stocks in focus today.

You were listening to the Expresso Business Update by The Indian Express and The Financial Express. Ask your digital assistant device to play the latest business news from the Indian Express and stay up to date with the happenings in the finance and business stories.

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Business News at 9:30 am on 24th May 2022Here is the latest Business news from the Indian Express at 9:30 am on the 24th of May, 2022 "You are listening to the Expresso Business Update. Here is the latest news from the world of Indian and International business brought to you by The Indian Express and The Financial Express. " While the world economy faces headwinds, current growth forecasts offer a buffer against a potential global recession, the International Monetary Fund's No. 2 official has said. Among the major threats to economic growth, IMF First Deputy Managing Director Gita Gopinath said that the conflict in Ukraine could escalate, adding: "You could have sanctions and counter sanctions". Gopinath said in an interview on the sidelines of the World Economic Forum in the Swiss resort of Davos that the other challenges included inflation, a tightening of interest rates by central banks and a slowdown in Chinese growth. "So all of these provide downside risks to our forecast," Gopinath said, with reference to the IMF's 2022 growth forecast issued last month of 3.6%, a downgrade from a 4.4% estimate in January. "I would say at 3.6% there is a buffer," she said, conceding, however, that risks are uneven around the world. Gopinath said inflation "will remain significantly above central bank targets for a while", adding: "It is very important for central bankers around the world to deal with inflation as a clear and present danger, that is something they need to deal with in a very forceful manner". Moving on to news from India's battle against runaway inflation. The government’s cut in the fuel tax and measures to cool prices of iron, steel, coal, plastics and cement may drive down retail inflation in the short term, analysts said. They, however, added that given the stickiness of price pressure, it has to do more to ease supply constraints and curb inflation substantially during the course of the current fiscal. Retail inflation in May will likely drop to 6.5-7.3%, they forecast. In the near term (after June), inflation may drop by up to 40 basis points. The consumer price index-based inflation hit a 95-month high of 7.79% in April. Over the next 9-12 months, however, food inflation may remain relatively elevated unless prices of the mostly-imported edible oils and vegetable ease substantially. Moreover, any rise in fiscal deficit from the budgeted level of 6.4% of GDP (some analysts now expect it to be as high as 6.8%) due to elevated subsidy bill, and potential pass-through of entire under-recoveries by oil-marketing companies in the coming months could potentially exert upward pressure on inflation, some of the analysts said. Of course, the outlook will improve dramatically if the Russia-Ukraine crisis abates within the first quarter. In other news, India and the US on Monday signed an investment incentive agreement, which will supersede an earlier agreement and enable the US International Development Finance Corporation (DFC) to continue with its investments in this country. The DFC, a development finance agency of the US government, is currently considering investment proposals worth $4 billion for India, according to a finance ministry statement. The DFC or their predecessor agencies are active in India since 1974 and have so far provided investment support worth $5.8 billion, of which $2.9 billion is still outstanding. Now, latest on the upcoming 5G auction. Reliance Jio and Bharti Airtel are in a position to buy pan-India 5G spectrum but uncertainty remains around Vodafone Idea's bids for the radiowaves, according to a BofA Securities report released on Monday. The report noted that it would be difficult for any telecom company which has not bid for 5G spectrum in a particular circle to roll out 5G on the existing 4G bands because the existing networks are running at a capacity, and hence there is limited free spectrum which could be carved out. "Higher reserve price is likely to disincentive any new telcos to bid in the auction and only telcos with strong balance sheets like RIL, Bharti are in a position to buy pan India 5G spectrum. It remains unclear how VIL would fund its 5G bids," the report said. In other development, state-owned Oil and Natural Gas Corporation on Monday said it has become the first gas producer to trade domestic gas on the Indian Gas Exchange, trading unspecified volumes from its eastern offshore KG-DWN-98/2 block. In a statement, ONGC said it will increase volumes slowly. "ONGC has become the first exploration and production company in India to trade domestic gas on Indian Gas Exchange. The first online trade was made on May 23, 2022 by ONGC Director (Onshore) & In-charge Marketing Anurag Sharma on India's first automated national level Gas Exchange, IGX," it said. And at last, how the Indian indices would respond to the morning cues today. The Nifty futures on the Singapore Exchange traded 53 points higher at 16,228.50, signaling that stock market was headed for a positive start today. Meawnhile, Asian shares got off to a sluggish start today. Maruti Suzuki, Zomato, Adani Ports and ONGC are stocks in focus today. You were listening to the Expresso Business Update by The Indian Express and The Financial Express. Ask your digital assistant device to play the latest business news from the Indian Express and stay up to date with the happenings in the finance and business stories.
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