Among the best performing areas of the emerging markets, India country-specific exchange traded funds have made a drastic surge since the start of the new year.

Specifically, the India ETFs that focus on small capitalization stocks have been among the best performers in the emerging markets category year-to-date, with the Columbia India Small Cap ETF (NYSEArca: SCIN) up 15.8%, VanEck Vectors India Small-Cap Index ETF (NYSEArca: SCIF) 15.3% higher and iShares MSCI India Small-Cap ETF (BATS: SMIN) up 14.6%.

New Delhi projects India's economy could expand between 6.75% and 7.5% in 2017-18 as the government shifts tactics on its economy.

India's market suffered a blow at the end of 2016 after Prime Minister Narendra Modi yanked about 86% of all cash from the economy to fight so-called black money to fight back against the huge shadow economy.

While the economy may experience a short-term setback from the move, the results of demonetization could usher in long-term benefits to the economy.

Prime Minister Modi has also hinted at encouraging SMEs, or small and medium enterprises, with tax relaxation and new incentives offered toward small business owners. The government has brought a renewed focus on SMEs to capture a larger market space.

The economy as a whole is also on a more stable ground and is stronger than most of its developing market peers. India is enjoying one of the world's fastest growth rates, improved fiscal discipline, a stable rupee currency, moderate current account deficit and slowing inflationary pressures.

With the country's renewed focus on its domestic economy and growth among smaller business, India small-cap ETFs have been leading the charge in the recent rebound.

SCIF tracks the MVIS India Small-Cap Index of small-cap companies in India. The fund has a broader 158 components and is more sector heavy on industrials 21.5%, followed by consumer discretionary 19.7% and financials 17.0%.

SMIN follws the MSCI India Small-Cap Index and is the most diversified with 256 components, with a heavy sector weight toward consumer discretionary 22.6%, followed by financials 19.4% and industrials 16.9%.

While each of the three are "small-cap" ETFs, the iShares offering includes a 11.5% tilt toward large-cap names and a big 61.5% position in mid-caps. The Columbia ETF does not have large-cap exposure, but it does include a large 59.8% weight toward mid-caps. SCIF may be the closest to a small-cap focus, with 71.7% small-caps and 6.9% micro-caps exposure.

News source: Fox Business

Posted On Wednesday, 22 February 2017 09:58


NEW DELHI: India's millennial population is a massive disruptive force and driven by this supportive demographics alongwith government's policy action, Indian economy is likely to reach USD 5 trillion by 2025, says a report.

India's USD 2.2 trillion economy makes it the seventh largest in the world in terms of nominal GDP (and the third largest in PPP terms), but the country's per capita income is less significant.
With a per capita income of USD 1,700, India ranks well behind some of the key emerging markets, like China, Russia, Brazil, Indonesia, the Philippines, Mexico, and Turkey.
"We expect a confluence of supportive factors, led by demographics, government policy action, and globalisation, to lead to a sustained period of productive growth in the medium term," Morgan Stanley said in a research note adding "in our base case, we expect the Indian economy to reach USD 5 trillion by FY2025.

By financial year 2024-25, Morgan Stanley expects per capita income to rise 125 per cent to USD 3,650.
The report said India's millennial population of 400 million is the largest in the world and is armed with around USD 180 billion in spending power and with high smartphone adoption and widespread availability of mobile broadband infrastructure, it will become a disruptive force faster than most businesses expect.
The population dynamics will therefore be a key force in shaping India's overall growth trajectory and also in shaping how product markets will develop as the preferences of the population evolve, Morgan Stanley said.

News source: Economics Times

Posted On Wednesday, 22 February 2017 09:50


Never underestimate the value of cold cash, and over a billion Indians would have sworn by that adage since early November when some 86% of currency was yanked out of circulation overnight. The comfort of much of that cold cash will be back come March 13, when all limits will be taken off, allowing people to withdraw as much money as they want from banks.
Just a little over a fortnight after that will begin the new fiscal year — for which the government set a lofty target of 2,500 crore transactions to be clocked on digital payment platforms like UPI, USSD and Aadhaar Pay, along with debit cards. This means transactions will have to scale almost three- to five-fold from the digital payment peaks hit in last three months — when India went cashless in more ways than one — to achieve the goal.
The only difference, of course, in the new fiscal year, is that cash will back. That return, along with limited penetration of the internet (around 30% pan-India), plenty of buffering where mobile net is available and the lack of knowhow among masses on using digital platforms to pay, make the 2,500-crore target announced by finance minister Arun Jaitley in his Budget speech a herculean one.
Last week, on completion of 100 days of demonetisation, the country’s largest bank State Bank of IndiaBSE 0.28 % (SBI) said that with currency supply easing some customers are returning to cash even as digital transactions begin to drop off from peak levels in December 2016.

According to SBI chairman Arundhati Bhattacharya, adoption of digital channels has slowed down as cash situation is normalising.There has been a fall in digital transactions in recent weeks but it is higher than what it was pre-demonetisation,” she told the The Times of India on 16 February.

Two days later, the country’s second largest private lender, HDFC Bank, questioned the sustainability of the mobile wallet business, which was at the vanguard of the shift to digital payments the days following demonetisation. “I think wallets have no future. There is not enough margin in the payment business for the wallets to have a future,” declared Aditya Puri, CEO, HDFC Bank, on the side lines of the Nasscom India Leadership Forum last week.

News source: The Economics Times

Posted On Tuesday, 21 February 2017 07:11


NEW DELHI: The government has started preparing a roadmap for building 8,000km of pavements and laying more cycle tracks in 106 cities in the next five years to promote walking and cycling and to reduce carbon footprint in urban areas.

The urban development ministry targets building these infrastructures, lay 1,300km bus rapid transit (BRT) corridors with dedicated fast lanes for buses, set up 500 new bus depots and promote use of electric and hybrid vehicles under the "Green Transport Scheme".
Sources said the scheme will involve investment worth nearly Rs 80,000 crore and will benefit about 22 crore urban population. The ministry has floated a detailed proposal for discussion and for carrying out the preparatory work. In the first phase, cities with population over 5 lakh will be covered.
Considering that the scheme won't be successful unless cities have necessary rules and regulations in place, so to enable cities to get financial incentive from Centre, the states are required to have and implement a parking policy, adopt street vendor regulation norms, have a policy to prevent encroachments and also have an urban transport fund.

The Centre will set up National Green Urban Mobility Fund (NGUMF), which will channelise 60% funds from central government and other agencies to cities covered under this scheme.

News source: The Economics Times

Posted On Tuesday, 21 February 2017 07:07


India has done a better job than China in promoting satellite launch technology which could prompt Beijing to fast-track commercialisation of its rocket launches to vie for the world's small satellite market, Chinese officials said today.

"The launch indicated that India can send commercial satellites into space at lower costs, giving the country's competitiveness in the global race for the burgeoning commercial space businesses," Zhang Yonghe, director with the new technology department of the Shanghai Engineering Centre for Microsatellites, said.
China may fast-track the commercialisation of its rocket launches after India's success, Chinese-state run media quoted Chinese officials as saying in a report titled 'India's satellite launch ramps up space race'.

Zhang believes that India did a better job promoting its launch services internationally than China, the report said.
Acknowledging that after reaching Mars ahead of China, India stole the march last week by putting 104 satellites into orbit from a single rocket, Zhang said, "China will likely fast-track the commercialisation of its rocket launches to vie for the world's burgeoning small satellite launch market.
"The Wednesday's launch is India's latest triumph for its space programme"," a Global Times report said.

"In 2014, India became the fourth country to successfully send a spacecraft to orbit Mars, signalling a regional rivalry with China which suffered a failure in its Mars mission in 2012," it said.

News source: The Economics Times

Posted On Tuesday, 21 February 2017 07:03
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