Indian companies have nearly $1 billion worth of dollar bonds maturing 2018 but Moody’s is confident that Indian companies have the required solvency and resources to meet these commitments without any hassles. For the whole of Asia the bond maturities is $850 billion till 2022 but this is predominantly in China. The Indian bonds maturing in 2018 will be dominated by $736 million worth of bonds for Vedanta, $150 million by Indiabulls Real Estate and $124 million by Tata Motors. The 10 largest bond issuers in Asia account for nearly 31% of the total bonds worth $850 billion maturing by 2022.
In a move that could be controversial and invite retaliation, Trump has decided to impose tariffs on nearly $50 billion worth of imports from China. The US and China are the two largest economies in the world and such frictions could have far reaching implications. Many of these products pertain to areas where China has sought to acquire advantages through unfair acquisitions and forced technology transfers. In a move that could be slightly more controversial, Trump also plans to instruct the US Treasury to propose measures to restrict Chinese investments in the US.
The Dow tumbled by over 400 points in early trades on Thursday as Trump’s decision to impose tariffs of $50 billion worth of imports from China triggered the likelihood of a possible trade war. The EU has already threatened the US with retaliatory tariffs on US imports into the EU. In the forex markets there was a rush to buy the Japanese Yen as a safe haven currency as the outlook for the US Dollar became more uncertain. Global markets are worried that a tit-for-tat reaction by China could escalate a trade war leading to an industrial slowdown. Gold is already higher on uncertainty expectations.
Kumaramangalam Birla will head the merged entity Idea-Vodafone as its non-executive chairman. Balesh Kumar, the current COO of Vodafone, will take over as the CEO of the merged entity. The team composition will be critical as the legacy telecom players like Idea, Bharti and Vodafone are trying hard to fend off completion from Reliance Jio. The restructuring of the industry has been rapid. Tata Tele and Aircel are already out and RCOM has sold out lock-stock-barrel to Reliance Jio. The merger of Idea and Vodafone will create the largest telecom company by sales and market share.
In a move that could be a departure from the traditional business approach, the government plans to permit 74% FDI in defence without prior approval. India is already the largest importer of arms and this will help invite global manufacturers to produce in India. Currently, only 49% is allowed through the automatic route and most analysts have commented that there was no difference between 24% and 49% as control was still out of bounds. This problem will now be resolved. The government plans to increase India’s local defence production three-fold to Rs.170,000 crore by the year 2025. Lately, cyberspace and artificial intelligence have emerged as the fourth domain of warfare and India with its strong domain expertise in IT should have a natural advantage in that space.
The recent IRDA order instructing insurers not to reject medical claims stemming from genetic orders could have a dual implication. While it is likely to protect consumer interest better, it is also likely to increase the cost of medical insurance for most people. In the general insurance arena, health is the second biggest component after motor insurance. The problem in medical insurance is that insurers are currently paying nearly Rs.101 for every Rs.100 collected premium. With genetic orders needing to be honoured, the insurance companies will have no choice but to increase the premiums.
