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Straight from the Specialists

Hyundai makes a grand move with the Grand i10

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

In 1947, when India won freedom from British rule, an enterprising young man in South Korea was realizing a dream that was to become a global phenomenon. Chung Ju-yung, founder of the Hyundai group, set up a construction company at 32 and two decades later, the Hyundai Motor Company was born.

Today, together with Kia, Hyundai Motor Group is the world’s fourth largest carmaker based on annual vehicle sales. While the world was reeling under recession, Hyundai made an impact in markets such as Europe and the United States by offering quality products at reasonable prices vis-à-vis more established automakers. This helped the South Korean giant become a household name.

In the early 1980s, when Maruti was setting up operations, the Indian buyer didn’t have much to choose from. The automobile market comprised a handful of players like Hindustan Motors with cars such as the Ambassador and Contessa. There was also the odd Standard 2000, but that didn’t quite stir up the motoring scene in India.

Indian telecoms at the crossroads again

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

In the 18 years I have been working with Indian telecoms operators, I can recall several points where I felt the industry was at a crossroads in its evolution.

Sooner the better for RBI to unwind grip on liquidity

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

The Reserve Bank of India (RBI) wasn’t expected to do anything new at its policy review on Tuesday and it did exactly that. But the markets still reacted adversely. The stock market moved in consort with the rupee with the Sensex falling 245 points.

It is generally true that markets overreact, more so in India, partly because market sentiment is affected far too quickly. What evoked these sentiments was the undue concern expressed by RBI Governor Duvvuri Subbarao about external uncertainties, more so about quantitative easing by the U.S. Federal Reserve and food inflation in India.

The paradox of India’s real estate business

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

Over the last two years, India has been battling various economic issues such as rising fiscal deficit, a falling rupee and increasing food inflation. No, nothing new there. And what does this have to do with real estate? Quite a lot.

A country’s economic performance has direct repercussions on how its real estate market behaves. This is especially true for the residential property segment. More prosperity means higher financial confidence among home buyers, and this leads to a greater demand for homes. The opposite is, of course, equally true.

New ways to distribute insurance policies

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

On a rainy day in Mumbai, I was chatting with the taxi driver. It was a prolonged journey, made worse by a never-ending traffic jam. We talked about insurance and I asked him about his insurance cover. I heard the familiar story of a man being cheated into buying an expensive plan; he escaped only after losing a lot of money.

When we think of insurance, it’s typically life, motor and health insurance that come to mind. These are relatively expensive and an already reluctant Indian consumer stays away unless forced into it. This ‘push’ component has become the default sales mode. Motor insurance is mandatory by law and should have ready acceptance. But a large number of vehicles on Indian roads are still not insured.

How the RBI’s recent measures affect you

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

Banking is the backbone for growth in large economies such as India. Banks provide short-term finance to trade, industry and agriculture while also ensuring excess money is channelized into productive assets via deposits and financial intermediation.

Banks have to work under the stipulated policies of the central bank with respect to deposit mobilisation and lending for which they need to maintain minimum cash balances and government securities.

Time to get used to a weak rupee

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

The fall of the rupee has become politically embarrassing. When the rupee crossed 60 to the dollar, the government and the Reserve Bank of India (RBI) thought it was time to act. The RBI tried to suppress speculation that had exaggerated the rupee’s fall and the government sought to increase foreign resources to fund the current account deficit (CAD).

The RBI complied half-heartedly. “We let our exchange rate be largely market determined, but intervene in the market to smooth excess volatility and/or to prevent disruptions to macroeconomic stability,” Governor Duvvuri Subbarao said in a speech in London.

India Markets Weekahead: Prudent to hold cash

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

Indian markets ended steady on Friday after rising to its highest intraday level in nearly two months. The Nifty closed up 0.33 percent at 6029, marking its fourth weekly gain.

A weakening rupee led to intervention by the Reserve Bank of India (RBI), which tightened liquidity and lifted short-term interest rates on Monday. Though the central bank’s stance against currency speculation has made it all the more difficult for speculators, it also sent bond yields soaring and led to concerns that an increased cost to borrowers would curtail growth that is already limping at 5 percent. Bond portfolios recorded losses, wiping out gains over the last few months.

Why the rupee is linked to jobs in the U.S.

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

It appears odd that an increase in job offers in the United States should pull the rupee down in India. After all, any improvement in the U.S. economy should benefit the rest of the world. It means an increase in imports by the U.S. and exports by other countries. But there is more to it than that.

A blame game conundrum over Ranbaxy

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

Ranbaxy Laboratories pleading guilty in a U.S. Department of Justice probe in May has led to fresh concerns about the company and its generic pharmaceutical peers. Japanese drugmaker Daiichi Sankyo Co, which owns Ranbaxy, has talked of possible legal action against the company’s former Indian owners.

In 2008, the U.S. Food and Drug Administration banned imports of products made at two of Ranbaxy’s factories in India over safety issues. That’s where the company’s battle to return to the world’s largest drugs market began.

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