The last week observed a few ups and downs in diverse global industries. JSB Market Research’s new ThrowbackThursday series a new weekly update for its readers. Now, get a closer view of the market every week!
Subsea 7 gives a push to its new oil and gas projects
Subsea 7 plans to continue its Engineering Conversion Program. The company invests in skilled engineers for building new careers in subsea oil and gas industry. The new project installation engineers will be given the responsibility for the delivery and execution of its upcoming ventures.
California powers FCV with 40 new hydrogen fuel stations
Forty new Hydrogen Fuelling stations in California encourage fuel cell viability with its active presence. Fuel Cell Vehicles owners driving from San Diego to Lake Tahoe now will not lose out of hydrogen fuel as the new stations get them covered. It has encouraged other regions in the states to push forward hydrogen fuel stations sooner than later.
Finance industries face most Cyber trouble
Recent cybersecurity research reports found that there’s more threat of cybersecurity in the financial industries. For finance institutes, brokerage firms and other banking organizations, SQL injection attacks, Ransomware, and cross-site scripting are said to be the highest expected threats.
US Trade War to affect medical device technologies market
Saudi Arabia emerges as the largest outbound travel market
As per the recent Saudi Arabia outbound travel and tourism report, the residents of Saudi Arabia are the biggest spenders when it comes to traveling abroad. For Saudis, UAE, Bahrain, and Jordan are the top destinations for traveling.
Libra manages to get into another controversy within a few weeks of its plan of launch. While the US administration opposes the launch of Libra, how does Facebook plan to get out of it?
The US administration is pretty clear with its views on cryptocurrencies. The US Treasury Secretary Steven Munchin opposed the launch of Libra in the US stating it to be a ‘national security issue’ for the US government.
He further added that Facebook’s Libra has to convince financial regulators and ensure high privacy standards.
“Treasury has been very clear to Facebook, bitcoin users, and other providers of digital financial services that they must implement the same anti-money laundering and countering (the) financing of terrorism, known as AML CFT safeguards, as traditional financial institutions,” he stated.
The statements were expected to come ahead of the US president’s tweet which clearly stated disagreements in the launch of bitcoin and cryptocurrencies.
It came when bitcoin was in talks to have an impressive year for its growth. The largest cryptocurrency fell as much as 17% after the president’s tweet was enough to explain how. Facebook will be no exception to the snowball effect of the President’s statement.
How was Libra planned?
Facebook released a huge document giving details of Libra and Calibra and how the cryptocurrency plan to be. It was a bold bid of Facebook to come up with Libra as the global digital currency promoting financial inclusion the unbanked. Unexpectedly, Libra is said to have built decentralization and addressed better privacy in its functioning.
Facebook plans to make it a long-play as it pulls payments into its online domain. Rather than dominating Libra’s future soon after its launch, Facebook takes it slow and steady for its new brainchild.
During a recent interview, VP of blockchain at Facebook, David Marcus stated, “If more commerce happens, then more small businesses will sell more on and off-platform, and they’ll want to buy more ads on the platform so it will be good for our ads business.”
Unlike the case in credit cards, Facebook plans to change what’s typical in the transaction world today. It eliminates the idea of transaction fees while buying or selling through digital payments.
There are around 1.7 billion unbanked people who Facebook sees as potential prospects to turn to Facebook’s digital currency.
How have Facebook officials reacted to the Libra criticism?
Marcus, one of the Coinbase Board of Directors Libra will not be launched unless it manages the necessary regulatory approvals and meets their concerns. However, he also said that If the US doesn’t take initiative in the new digital innovations, others may lead the market.
Libra does not intend to compete with the sovereign currencies. He further added there’s fair transparency and democracy in the decisions of Libra. The customer information will not be shared with Facebook, neither will it be made available for ad advertising. The discussions following the administrative statements by the US officials should make the decision on the proceeding.
Since Facebook’s never misses a chance to be in the news for its controversial currency, not just the launch of Libra, but the other cryptocurrency market may get a shake. The administrative continuous talks on the crypto world may bring about new regulations on digital currencies. Will Facebook manage to come out of the controversial circle? If yes, Libra should be all set to make the electronic and digital transaction “conventional”
India’s interim budget was announced last week and each sector peeks into the policies to see what’s ‘in’ for them. This is a #ThrowbackThursday to India’s Interim budget that fairly focused on the agricultural and rural sector, infrastructure, education, job creation, digital economy among others.
Despite criticism received for inadequate allocation to the agricultural sector, the new government managed to view 2.9 % annual growth rate during 2018-19. The 2019-20 interim budget encouraged women participation in the sector while it puts forward the agri-schemes. The Agri sector Rs 1,30,485 crore and fertilizer subsidy is Rs 79,996 crore for the year 2019-20 through initiatives such as PM-Kisan scheme, Pradhan Mantri Krishi Sinchai Yojana, etc.
High-rated pooled assets of BFCs amounting to a total of one lakh crore during the financial year. Government’s new schemes are expected to boost confidence in the finance industry and help it tide over liquidity issues
The budget 2019 was in talks for its pro-startups approach. Apart from the government’s TV program dedicated to startups, the governments’ budget talks a lot more than the trend. It primarily proposes to help 20 tech businesses set up resources business incubators and 20 tech business incubators by next year. The government estimates it to benefit more than 70,000 skilled startup creators. Governments’ other startup initiatives encourage Foreign Direct Investments and aim to streamline the process for business newbies.
Government plays it safe for the healthcare sector as it hikes finance allocation for the section. However, there has not been any new scheme or initiative dedicated to boosting certain crucial healthcare market segments.
With a great boost to the infrastructure sector, the government plans to support industries such as cement, chemical and other sectors. Despite which, the infrastructure sector may face challenges in overcoming commercial drawbacks. The revisions done in the duties of diverse industrial sectors remained mostly positive.
Government plans to boost commercial development of India through technological advancements, export competitiveness in various industries. It will be interesting to see how the year turns out to be for the Indian economy ahead of execution.
A number of Indian economists have been trying to get away with the relentless cycle of NPA crisis. But how far can we stretch the situation? The NPA crisis in India alarms economic policy framers with an urge to decipher it at the earliest.
As per Finance Market Research Reports, the current year witnessed the waning of the effects of the NPA crisis, its decline dropping around 10.8% in September 2018 to a significant 10.3% in September 2019. The seeds of the dipping were already sown in March 2018 that showed a comparative high of around 11.5%. Public Sector banks enjoyed a performance improvement as their credit rates grew by at least 3% approximately.
But, when did it all begin?
During the tenure of Economist Raghuram Rajan, he put forward his take on the root of the NPA crisis in which he also strived to shed light on the possible reasons for the NPA crisis in India. According to him, the catastrophe is more than a decade old when the economy had begun to bloom again. The likelihood of banking professional extrapolating about economic conditions is high in such cases.
The possible reasons:
Government Permissions and Foot-Dragging
Loss of Promoter and Banker Interest
Where did it go wrong in controlling the initial NPA?
Dating back to 2006-08, a large number of bad loans emanated though the economy was going through a strong growth phase. Since the infrastructure and other such big projects had been completed within time and given budget it built trust in financial institutes for the raised loans for different projects. Be it PSBs or RBI, none of the finance institutes took a strict action over the increasing bad loans and failed to understand the darker picture of NPAs.
What has happened in the last five years?
The government viewed the long stretched finance crisis of the economy differently at different points in time.
Though the year 2018 showed a considerable improvement in the credits, it was majorly from the private sector. Public banks have failed to deal with its debtors while they have added more bad debtors to the list.
Presently, India is observing a continued spike in its bad loan number as the losses double with both private and public financial institutions. However, the net NPA is said to be reduced from 48.6 thousand crores to 30 thousand crores. As on 31st March 2019, around 1142 are announced to be wilful debt dodgers. India has been trying to restructure the debt system for the past five years and the present circumstances are only adding to the bad loan mess.
A feature in India’s inflation targeting framework is likely to be beneficial to resolve the NPA crisis. The economic notion is proposed by the Urjit Patel Committee, addressing the long-continued insolvency catastrophe.
Commenting on the recovery, MS Sahoo, Chairperson of Insolvency and Bankruptcy Board of India said, “We are seeing active companies coming to the IBC system and we expect 100 percent recovery for the creditors”.
The RBI also witnessed contamination of fresh loans around this time, resulting in a decline of both credit ratings and deposits. In spite of PCAs being implemented across affected PSBs, India has a long way to go in terms of recovery. High through the recovery cost of repairing poor assets, there is hope for better credit assessment and operative procedures.
The central bank’s old circular on insolvency will finally be replaced as it sets new guidelines on 7th June 2019. The new policies are interesting enough to address the issue with a new and modern approach.
In the new guidelines, the time period for solving debts has been extended. Not only has it helped banks but also companies who found themselves wide open to the crisis in the first circular. The replaced directions set a more compliant solution to the problem for both parties.
RBI easing norms for defaulting corporates are expected to help India to come out of the NPA crisis valley. Though on paper the new circular seems promising, its application and practical response from the financial organization & end parties may turn out to be different. It will be a gripping situation in the finance industry in India in the near future. The question still remains unanswered. Will India come out of NPA crisis valley?