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from Expert Zone:

Rupee should not harden further

(Any opinions expressed here are those of the author and not of Thomson Reuters)

The rupee has recovered over the past few weeks after falling to a record low of 68.85 per dollar in August. After a period of unease, the finance ministry and the Reserve Bank of India can now take it a little easy. But care needs to be taken that the rupee is not driven up further.

Speculation about the end of the U.S. Federal Reserve’s bond-buying programme in May affected global currencies and the rupee was not alone in this predicament. The announcement had created a scare about the tapering of quantitative easing. That would have dried up liquidity that the market had got used to. The Brazilian real, Indonesian rupiah, and the Indian rupee were the principal losers.

The market scare hit sensitive FII investment and the total net outflow from India between June and August was 226 billion rupees. That hit the stock and currency markets. The rupee, which was at 50-51 to the dollar in May, was near 69 in August.

The subsequent hardening of the rupee was partly due to a series of measures introduced by the RBI to curb speculation by increasing short rates and making it easier for banks to borrow dollar funds from abroad. More important was Federal Reserve Chairman Ben Bernanke’s surprise postponement of imminent QE tapering. That brought relief to the market and most currencies recovered.

from Breakingviews:

Cooper-Apollo spat forces investors to pick lanes

By Una Galani and Peter Thal Larsen

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Investors in Cooper Tire & Rubber are being forced to pick lanes. Legal wrangles have put Apollo Tyres’ agreed $2.5 billion offer for its U.S. rival in doubt, and tensions at its China joint venture have undermined Cooper’s value. But a negotiated price reduction still looks possible. Cooper shares may be pricing in too much bad news.

from Expert Zone:

India Markets Weekahead: Investors should wait for a correction to buy

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Markets continued a strong rally to close the week around 3 percent higher. After the partial U.S. shutdown was confirmed and triggered speculation over the postponement of QE tapering, a weakening dollar and the rupee’s subsequent appreciation also helped lift the mood.

Though the current account deficit for the first quarter was a better-than-expected 4.9 percent, IIP data that came in after market hours on Friday showed India’s industrial production had slowed to a dismal 0.6 percent in August. This suggests that buoyancy in the stock markets was driven by liquidity and sentiment, while things are different on the ground.

from Global Investing:

The hit from China’s growth slowdown

China's slowing economy is raising concern about the potential spillovers beyond its shores, in particular the impact on other emerging markets. Because developing countries have over the past decade significantly boosted exports to China to offset slow growth in the West and Japan, these countries are unquestionably vulnerable to a Chinese slowdown. But how big will the hit be?

Goldman Sachs analysts have crunched the numbers to show which markets and regions could be hardest hit. On the face of it non-Japan Asia should be most worried -- exports to China account for almost 3 percent of GDP while in Latin America it is 2 percent and in emerging Europe, Middle East and Africa (CEEMEA) it is just 1.1 percent, their data shows.

from India Insight:

Stamp collecting stages quiet comeback in India’s digital era

Rajjesh Mittal spends 20 minutes each morning placing bids for postage stamps on eBay. The IT entrepreneur began flirting with philately, or stamp collecting, two years ago, and has become such an ardent collector that he wants to demonstrate his love for postage by getting a tattoo of independent India’s first commemorative postmark.

Mittal is part of a generation of urban, educated Indians celebrating all things postal in the age of e-mail and Twitter. Though numbers are hard to come by, philately appears to be staging a revival in India, with estimates ranging from 25,000 to over 100,000 active collectors. Like Mittal, working professionals are taking up the hobby, joining stamp-collecting clubs and fostering friendships with enthusiasts from all walks of life.

from India Insight:

Interview: Chidambaram on Modi, Rahul Gandhi and becoming PM

By John Chalmers, Frank Jack Daniel and Manoj Kumar

(This article is website-exclusive and cannot be reproduced without permission)

P. Chidambaram, now in his third stint as finance minister, spoke to Reuters about Narendra Modi and the 2014 elections in an interview on Monday ahead of a trip to the United States. Here are edited excerpts from the interview:

If Congress returns to power in the elections next year and Rahul Gandhi is the prime minister, do you see yourself as finance minister?
That’s a question you should put to the prime minister. I am glad you acknowledge Prime Minister Rahul Gandhi but that is a question you should put to him.

from India Insight:

Interview: Chidambaram on the state of India’s economy

By John Chalmers, Frank Jack Daniel and Manoj Kumar

(This article is website-exclusive and cannot be reproduced without permission)

The Indian government will have to rein in spending and cut subsidies to meet its fiscal deficit target, Finance Minister P. Chidambaram said on Monday, underlining that an austerity drive will not be blown off course by an election due next year.

The urbane Harvard-educated lawyer, now in his third stint as finance minister, spoke to Reuters in an interview ahead of a trip to the United States. Here are edited excerpts from the interview:

from Breakingviews:

Tyremakers’ takeover spat faces high toll

By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Apollo Tyres’ spat with its U.S. target could face a high toll. The Indian firm wants to renegotiate its $2.5 billion takeover of Cooper Tire & Rubber following protracted disputes with workers in the United States and China. Cooper has gone to court to force its suitor to pay up. In this fight, a compromise looks like the least bad outcome.

from Expert Zone:

SEBI tries to get it REIT again

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Ease of funding is a key recommendation for the growth and development of the Indian realty sector in the coming decade. New instruments of funding should be allowed into the sector, especially real estate investment trusts (REITs) -- an investment mechanism that buys income-generating real estate assets and passes on the yield to investors.

In this current climate of dwindling investor sentiment and a plunging rupee, there is a need to implement funding options such as REITs for infusing much needed liquidity into the sector. The total REIT market size in the Asia-Pacific region is approximately $205 billion but India has been unable to take advantage of this funding opportunity, mainly because of the lack of an existing regulatory framework.

from India Insight:

Modi, Kejriwal become latest video game characters as developers focus on elections

Politicians are becoming the Super Mario Brothers equivalent for Indian video gamers as 2014 election fever starts to settle over the country.

Software developers have been developing all kinds of new games and apps in recent years as Indians increasingly shift to smartphones of companies such as Samsung, Apple, Micromax and Karbonn. Now politics has crept into the mix.

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