Emerging Markets 05 Oct 2016 by Tojo Jose

‘Debt is everywhere’ - the IMF warns about soaring world debt

‘Debt is everywhere’ - the IMF warns about soaring world debt

World’s macroeconomic observer – the International Monetary Fund cautioned that international debt has scaled up to a historical high level. Debt of the global economy has reached $152 trillion which is nearly two times the GDP of the world economy. The debt report was published under the IMF’s October 2016 edition of the ‘Fiscal Monitor’ that evaluates government finances and expenditure. IMF has a strong research division that makes extensive study about individual economies and the world economy as a whole. The Fund’s surveillance function is one of the most sophisticated activity by the seventy-year-old entity. Nearly two third of the debt

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China & East Asia 21 Sep 2016 by Tojo Jose

Bank of Japan brings new policy to step up monetary easing

Bank of Japan brings new policy to step up monetary easing

Bank of Japan has reinforced its monetary easing programme by introducing another innovative tool. This time, the Japanese central bank has set a cap on the 10-year bond yields. Over the last eight years after the financial crisis, central banks were innovating new policy instruments under unconventional monetary policy tag. The main component of the new ceiling of ten year bonds is the "yield curve control" under which the bank will seek to control short-term and long-term interest rates. Japan is going through sharp fall in economic activities reflected by very low GDP growth rate. Accompanying the poor income growth Japan is reeling under deflationary pressure. Japan’s

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Emerging Markets 15 Sep 2016 by Tojo Jose

Government ratifies duty structure for APTA

Government ratifies duty structure for APTA

Government has approved the duty structure for Asia Pacific Trade Agreement (APTA)- a preferential trade agreement between six developing countries of Asia including China and Korea. As a preferential trade arrangement, the APTA gives a low level of trade liberalization. Tariff concession will not be substantial as in the case of usual free trade arrangements. Similarly, the number of tradeable goods under the agreement will also be limited. The APTA has six members at present – India, China, Bangladesh, Lao PDR, South Korea and Sri Lanka. Mongolia is trying to join the trade bloc. APTA is an initiative by the UN Economic and Social Commission for Asia and the Pacific for

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Emerging Markets 04 Sep 2016 by Tojo Jose

Chinese President Xi urges BRICS efforts to protect free trade

Chinese President Xi urges BRICS efforts to protect free trade

Chinese President XI Jinping urged the BRICS safeguard free trade from the emerging trend of protectionism. He also called the group to continue its effort reform the governance of major world institutions. Xi was speaking at the meeting of the BRICS heads of states meeting at Hangzhou where the G20 leaders makes their first meeting in China. The Chinese President has already emerged as the iconic leader among leaders from the largest economies of the world with China showing symptoms of firm voice in world political and economic arena in recent years. The BRICS leaders usually assembles before the G20 meeting. This time also, Xi has demanded the group to raise their voice for r

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US and Europe 30 Aug 2016 by Tojo Jose

Apple punished by $13 billion for illegal Irish tax arrangement

Apple punished by $13 billion for illegal Irish tax arrangement

The Apple Corporation was asked by European Commission to pay a record breaking tax and penalty of $13 billion as the EU Commision has found that its tax arrangement in Ireland is illegal. Both Ireland and Apple opposed the penalty and said that they will go for review petition. Apple had paid only negligible tax out of its profits from European sales. The sales in the EU were sourced through Ireland and given the tax arrangement called Double Irish, Apple was able to pay only 0.005% for considerable years. The Commission said Irish tax arrangement with Apple between 1991 and 2015 had allowed the US company to source its European sales to a “head office” that existed

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US and Europe 27 Aug 2016 by Tojo Jose

The Fed gives a rate hike warning to central banks and global markets

The Fed gives a rate hike warning to central banks and global markets

The first test for the new RBI Governor Urjit Patel is on the card. US Fed’ Chairperson Janet Yellen indicated that the Fed is thinking about the rate hike when its Federal Open Market Committee meets next month. The Federal Reserve was long waiting to continue its quantitative easing exit policy by raising its rate (like the repo rate) from it historical low of zero to the normal level. Last December the Fed raised its policy rate to 0.5%. Improvement in the macro economy anchored by increased employment is the criteria for raising the Fed rate. “In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I be

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US and Europe 14 Aug 2016 by Tojo Jose

With Hillary and Trump, TPP may go to the ventilator

With Hillary and Trump, TPP may go to the ventilator

The US election set to enter into the final phases, both candidates have given enough hints that they are not supporters of the fancied Trans Pacific Partnership (TPP), which the Obama administration portrayed as the US Pivot against the China. Of the two, Trump is more vocal against the free trade arrangement that involve the 11 major friends of the US in the Pacific region including Japan and Australia. In her campaign Hillary Clinton made her traditional opposition against multilateral trade deals - “My message to every worker across America is this: I will stop any trade deal that kills jobs or holds down wages, including the Trans-Pacific Partnership.”  Opp

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China & East Asia 01 Aug 2016 by Tojo Jose

Uber exits China after making ceasefire with Didi

Uber exits China after making ceasefire with Didi

In a surprising development, global taxi ride app leader Uber had announced to merge its Chinese businesses with its opponent and local grown rival Didi Chuxing. The new move will make both firm consolidate their businesses with cross holding of shares rather than making war on each other. As part of the deal Didi will acquire all of Uber China’s operations and investors in Uber China will get a 20 per cent stake in Didi. Uber exits China with a 5.89 per cent stake in its rival— but would have “economic interests” equivalent to 17.7 per cent in Didi. Both companies were in intense price and non-price wars during the last few years. incentives to clients a

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US and Europe 19 Jul 2016 by Tojo Jose

SoftBank makes fresh ‘internet of the things’ investment as it buys ARM Holdings

SoftBank makes fresh ‘internet of the things’ investment as it buys ARM Holdings

World’s futuristic investor – Japan’s SoftBank announced $32 bn deal to purchase the UK chip designer ARM Holdings. SoftBank which searches for next big company in the digital world is known for its seed capital in the Chinese behemoth Alibaba. ARM is at present most sophisticated chip maker for mobile phones and is supplying processors to major mobile phone manufacturers – Apple, Samsung Huawei etc. SoftBank’s investment in the Cambridge based chipmaker comes when the CEO, Masayoshi Son looking for the emergence of new titans in the digital technology world or in the area of the famed ‘internet of the things’.  This is the first inv

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Emerging Markets 14 Jul 2016 by Tojo Jose

BRICS’s NDB to issue yuan denominated green bonds

BRICS’s NDB to issue yuan denominated green bonds

New comer in international institutional finance- the New Development Bank supported by BRICS bank targets to issue green bonds worth $3 bn to finance infrastructure projects. The bank is equally sponsored by five BRICS countries and is headquartered in Shanghai. Green bonds are issued to mobilize funds for financing environment friendly projects. The bonds will be issued from July and is for five years. projects including clean energy, and infrastructure are expected to be supported from funds mobilized through the bonds. Interestingly, the bonds will be yuan denominated which implies domestic fund raising or implicit internationalization of the Chinese currency. Large sized C

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