China & East Asia 02 Feb 2016 by Tojo Jose

Politically neutral Germany gets key position in China led AIIB

Politically neutral Germany gets key position in China led AIIB

In the China led AIIB, Germany will get key position of a vice president and Chief Operating Officer. Both functions will be done by the same person. As per the information published by South China Morning Post, there will be four other vice presidents besides the German nominee. The other vice presidents will be from India, South Korea, UK and Indonesia. India as the second largest share holder of the bank after China will have the Chief Financial Officer as well; as its vice president will be the CFO.   Britain who shocked its evergreen ally US while joining the AIIB will get a vice president post and he will be in charge of communications. UK is the ninth largest share ho

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Global Economy 27 Jan 2016 by Tojo Jose

Raghuram Rajan in the WEF task force to study about the future of global financial system

Raghuram Rajan in the WEF task force to study about the future of global financial system

RBI’s Raghuram Rajan has joined a WEF created task force of eight experts including Central Bankers to study about the future of global financial system. The Task Force was launched by the WEF as per the request of central bankers including Mark Carney, Governor, Bank of England who raised concerns about the future of global financial system in the context of technological advancements and financial stability risks. Many of the participants from the central banking folk have observed that disruptive technologies and increasing interconnectedness poses risk to the global economy. Mr Rajan’s inclusion in the Task Force certifies his expertise and skill in matters relat

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Emerging Markets 24 Jan 2016 by Tojo Jose

Davos WEF: Experts highlights the economic opportunity for India

Davos WEF: Experts highlights the economic opportunity for India

India has got substantial attention at the Davos World Economic Forum as the fastest growing large economy at a time most of the heavy weights are slowing fast. Fiancé Minister Arun Jaitely declared that India can grow at 9% provided the right conditions. "Fastest is still not good enough for India," said Arun Jaitley at the Summit that usually attended by leaders and businessmen. This year’s WEF was remarkable as it happened in the context of a quickly slowing global economy. The emerging markets that stood steady are showing signs of weakness with leader China recording slow growth and financial sector turmoil. If there is an economy that seems steady, that

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US and Europe 23 Jan 2016 by Tojo Jose

BEPS effect: Google agrees to pay tax demanded by UK tax authorities

BEPS effect: Google agrees to pay tax demanded by UK tax authorities

In a break through development, Google has agreed to pay 130 mn pound taxes demanded by the authorities in UK. The tax attracted global attention at a time when most digital companies were shifting profits to tax havens after reaping revenues in one jurisdiction. According to UK tax authorities, Google paid only £20.5 mn in tax in 2013 out of its UK revenues of $5.6 bn. As per the agreement, Google will start paying tax for its advertisement revenues from UK including a part of the profit. Google’s action will have wide implications as several other countries have initiated similar measures as UK. Similarly, the OECD has launched BEPS (Base Erosion and Profit Shifting

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China & East Asia 19 Jan 2016 by Tojo Jose

China records its lowest growth in 25 years; peers fear devaluation of Yuan

China records its lowest growth in 25 years; peers fear devaluation of Yuan

China has officially confirmed that its growth rate in 2015 was 6.9%, the lowest growth the country has registered during the last twenty five years. The official data about the economy’ performance came at a time when financial markets and policy makers fearing a backlash from the slowing Chinese economy. Data was revealed by National Bureau of Statistics- China’s national income accounting entity. Chinese official media- the global times has described the growth rate as ‘within the people’s expectations’. Premeier Li Kequiang has mentioned the increasing downward pressure on the economy that is complicated by poor global demand. The declining grow

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Emerging Markets 17 Jan 2016 by Tojo Jose

Oil may get a price shock from Iran’s reentry

Oil may get a price shock from Iran’s reentry

Iran is reentering into the world market in full swing. After the West imposed sanctions are removed today, the OPEC member can engage the market with its traditional product-crude oil. The Persian Gulf country was the second largest producer of oil in the OPEC in 2011. Iran has made limited supplies during the sanction period; but was unable to make an impact as its production was quite low. Now, Tehran is expected to add around 2 million barrels of crude per day, and it will become the fourth largest producer after Russia, Saudi Arabia and the US. Production is expected to peak after six months from now and reports indicate that Iran is not wary of the present low price of crud

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Emerging Markets 13 Jan 2016 by Tojo Jose

Emerging world will be caught into the tranquility of the developed countries: warns IMF

Emerging world will be caught into the tranquility of the developed countries: warns IMF

The IMF has cautioned that there is no escape for the emerging countries from the ongoing recession emitted by the advanced bloc. Trends show that in the immediate future, the growth trend of the developing and advanced countries will converge. IMF’s Director General Ms Chrsitine Legarde in a meeting of the monetary economists in Paris told that there is no escape for the vibrant EMEs, but to get into the recession trend in a year or two.   Ms Legarde reminded that the slowdown of the emerging countries will further dip down growth in the advanced world.  One percent decline of growth in the emerging world will reduce GDP of the advanced countries by 0.2%. Alread

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China & East Asia 12 Jan 2016 by Tojo Jose

Oil may dive to new lows under Chinese impact-warns forecasters

Oil may dive to new lows under Chinese impact-warns forecasters

Crude prices that reached its eleven year low and trading near to early $30s may fall to new lows. According to ace forecasters, decline of the world’s largest commodity buyer- China, may push oil to the new lows. Morgan Stanley has predicted that China’s economic uncertainty and its spread effect on the rest of the Emerging Markets may bring down crude prices to $20. In the past, investment bankers and rating agencies have made varied prediction for the future price path of crude extending from $20 to $80. Other major trackers of crude –Bank of America, Goldman Sachs, Citigroup and Merrill Lynch also reported that a scoop to $20s is very possible. Crude price

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China & East Asia 08 Jan 2016 by Tojo Jose

China brings harsh measures to rebalance financial markets and currency

China brings harsh measures to rebalance financial markets and currency

After prolonged loss of the currency’s value and frequent shut down of the stock market, China has launched stringent measures to correct its market and currency. Reports from financial quarters indicate that the government and the central bank are issuing unpublished warnings to banks and corporate to stop buying dollars beyond a level. This latest move on checking dollar outflow, which is called capital control, is usually adopted by an ordinary developing country while facing foreign currency scarcity. The Peoples Bank of China has already sold significant amount of Dollar into the foreign exchange market to stop further depreciation of its currency. In December itself,

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Emerging Markets 05 Jan 2016 by Tojo Jose

Crude rises on the shoulders of Middle-East tension

Crude rises on the shoulders of Middle-East tension

Oil has found a new messiah for escaping from the present downward scoop- political tension between Saudi Arabia and Iran. After staying for a considerable period around the somewhat ‘new low normal’ of near $ 35, Brent- the most quoted index has resurged to $38.8 in the first New Year trading day. Escalation of tension between the two largest OPEC producers will definitely cause upward price pressure; bringing joy to both countries. So far, trends reveal that market is following the tension so intensively apart from anything else and it may control price movement in the immediate future. Both Suadi Arabia and Iran were muscling in Yemen throughout last year and the

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