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Friday, January 3, 2020

economic news of india - world economic news - economics news for students - indian economy news

economic news of india - world economic news - economics news for students - indian economy news


In Modi's Budget, a plan to cut a Rs 8 lakh crore Gordian knot

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MUMBAI: The government is considering a litigation settlement scheme in the upcoming budget that will allow companies to put an end to legacy tax disputes by paying a portion of the money demanded by the revenue department, said four people with knowledge of the matter.This could help bridge the fiscal deficit gap and monetise a part of the amount stuck in tax litigation, they said.An estimated 500,000 cases have been pending in the courts and quasi-judicial forums for years and it could take a long while before the tax department sees any of the money, assuming it eventually wins. The total value of these disputes is pegged at Rs 7-8 lakh crore, said the people.A government task force had recommended the litigation settlement scheme in July last year. Such a move will also help improve ease of doing business. Separately, the Central Board of Direct Taxes (CBDT) had set up a panel to help reduce tax litigation in February last year focused on resolving pending direct tax disputes urgently.Precise details of the proposal under consideration aren't available but it could be along the lines of the Sabka Vishwas--Legacy Dispute Resolution Scheme, which is aimed at reducing old service tax and central excise cases, said the persons cited above.73094408 The Sabka Vikas scheme could collect about Rs 30,000 crore. "There are over Rs 8 lakh crore stuck in direct tax litigation and a resolution scheme could be a good way to unlock value for the government," said Girish Vanvari, founder of tax advisory Transaction Square."The government should come out with this scheme where companies could settle the disputes by paying, say 10-20% of the tax demand. There are several companies that would like to avail this scheme."The government could ask companies to pay part of the disputed amount along with interest and penalties levied on that, EThas learnt. Or it could ask them to pay 40-50% of the tax demanded. The tax rate may not be the same for every company — it could depend on the litigation amount and even the details of the case."A litigation settlement scheme in direct tax is one of ways the government can aim to bridge a part of the fiscal deficit gap," said Gautam Mehra, partner and leader, tax and regulatory, PwC India. "While the increase in the threshold limits for higher litigation has reduced the number of cases under litigation, given the large stakes involved, it yet could have a potential of netting in good revenues for the government, while at the same time reducing the cost and effort involved in litigation at both ends."The fiscal deficit stood at Rs 8.07 lakh crore at the end of November last year, 13% above the full-year target, as per the Controller General of Accounts.This comes as revenue collections have been below expectation. To be sure, goods and services tax (GST) collections were at Rs 1.03 lakh crore in December but the annual figure could still fall short of the government's internal target of Rs 1.25 lakh crore. Direct tax collections were estimated at Rs 5.5 lakh crore by the end of September last year, 16% short of the internal target.Experts said the Sabka Vikas scheme had worked unlike previous ones that failed to attract companies because they offered few options. "The recent scheme in indirect taxes has met with success with estimates of over Rs 30,000 crore of revenue collections until now, which was possible since the scheme also left something on the table for the taxpayer," said Mehra of PwC.

The price India may pay for Trump's airstrike

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NEW DELHI| MUMBAI: Oil prices jumped $3 on Friday after a US air strike killed a top Iranian general, escalating tension in the world's biggest crude-exporting region and stoking fears of a supply disruption. The impact of any possible retaliation worried key importers like India where fuel prices are already at a 13-month high.India's benchmark stock indices fell 0.4%, logging their worst weekly performance in a month, as global markets declined with rising tensions. Gold surged Rs 700 to Rs 39,872 per 10 gm and advanced toward a six-year high internationally. The rupee lost about 0.60%, or 44 paise, to close at 71.80 per dollar. Wall Street stocks opened sharply lower. The Dow Jones Industrial Average was down 0.56% at press time. 73088050 Although local equity indices recovered some ground after dropping as much as 0.7%, the biggest one-day gain in four months in the local fear gauge India VIX showed that sentiment will remain wobbly amid concerns of retaliation by Iran. Any further surge in crude oil prices will also be a threat to India's fiscal deficit, which is budgeted at 3.3% of gross domestic product in the year ending March 31.Iran vowed "severe retaliation" after Qassem Soleimani was killed by US missiles in Baghdad, triggering speculation about its next move and turmoil in the oil market early Friday. Brent crude rose as much as $69.16 a barrel, the highest since attacks on Saudi Arabian oil infrastructure in September.India, which imports 84% of its oil needs and nearly 60% of it from the Middle East, is closely watching the situation in the Gulf region."We will have to see how Iran reacts to it. That would determine how the oil market behaves hereon," said an oil ministry official after a meeting with top executives of state refiners. The September drone attack on the Saudi facility, which hit 5% of the world's oil supply, caused barely any supply disruption but briefly sent prices soaring. Quick supply management by the Saudis and abundant supply elsewhere brought prices to pre-attack levels quickly."After the Saudi attack, it was feared that there would be escalation and supplies will get disrupted but that didn't happen. Let's see if Iran shows the same maturity as Saudi did," Indian Oil chairman Sanjiv Singh told ET. Refiners can plan for minor disruptions but if the region goes up in flames, no plan can really work, said an executive at a state refiner.Most Asian equity markets ended weak, with Japan's Nikkei dropping 0.8%. Investors shifted away from risky assets. The Sensex fell 162 points to 41,464.61and the Nifty was down 55.55 points at 12,226.65, having hit a record in the previous session. India VIX surged 10.5% to 12.7. Oil marketing companies ended in the red and other sectors linked to oil prices such as paint manufacturers, also slipped. Asian Paints was the worst performer on the Sensex, down over 2%.Axis Bank, NTPC, State Bank of India, Bajaj Auto, HDFC Bank and Maruti ended down 1-2%. The BSE Mid-Cap index fell 0.4% and the BSE SmallCap index ended flat. Foreign portfolio investors (FPIs) bought Indian shares worth Rs 1,263.05 crore and domestic institutional investors (DIIs) sold shares worth Rs 1,029 crore on Friday."Tensions building up in the Middle East have led to spike in crude oil prices and there is a negative undertone across global markets," said Harsha Upadhyaya, chief investment officer, equity, Kotak Mahindra AMC. "Any upside in crude oil prices would be negative for India as it is coming at a time when fiscal space to kick-start the economy is limited." The rupee joined other currencies in weakening."An element of uncertainty weighed on investors with rising crude oil prices," said Shreeshanth Arayangat, chief dealer at DCB Bank."The rupee's fall is in line with other emerging markets as investors seek safety of US-backed assets. The weakness is likely to extend unless the political turmoil between US and Iran dilutes down bringing stability in global oil prices."The benchmark bond yield rose marginally to close at 6.51% Friday. Bond yields and prices move in opposite directions.The central bank will on Monday buy longer maturity bonds while selling shorter duration papers for Rs 10,000 each, seeking to bring yields down in line with the policy rate.Such a move was seen positive for bond market as yields were expected to fall."This has checked any sharp rise in yields as traders won't turn panicky unless US and Iran are engaged in a full-blown war," said a senior executive at a large bond house.Oil prices had jumped nearly 15% in the last quarter of 2019 on the extension of a production cut pact by key producers, including OPEC members and Russia. Friday's attack drove prices up more than 4% and dimmed hopes of a global economic recovery."The market is adding a risk premium on fears things could escalate," said UBS Group AG analyst Giovanni Staunovo in a Bloomberg report."The Middle East is a powder keg — too much oil comes out of the region and no one knows if and how Iran will respond." For a heavy energy importer like India, high oil prices cut consumer spending, stoke inflation, erode forex reserves, expand the current account deficit, balloon the fuel subsidy bill and leave less resources for more productive public spending.India is estimated to spend $112 billion on oil imports in FY20 but runaway prices could expand this further.A sharp rise in domestic fuel prices, which are deregulated and linked to international fuel rates, triggers consumer clamour for price control. Domestic rates of petrol and diesel are at a 13-month high.Although the year started off on a positive note for Indian equities due to easing US-China trade war tensions and expectations of growthboosting measures from the government in the February 1 budget, the immediate focus of investors will be on any retaliation from Iran. A hit on the balance of payments front could hurt India at a time when growth is weakening. Growth in the three months ended September fell to 4.5% — the lowest reading since 4.3% recorded for the January-March quarter of 2013."Oil is likely to be on the boil. Bad for large oil importing countries, especially those with large trade and current account deficit like India," said Ajay Bodke, CEO-PMS at Prabhudas Lilladher.Bodke said investors may again find comfort in large-caps and shun mid and small-cap stocks which had outperformed the benchmarks recently.Bond yields also need to be watched as any outflows by foreign investors due to rising risk-aversion may spark a selloff, leading to a rise in bond yields, said Bodke.War between the US and Iran could be damaging for global growth."The major concern for the world economy is that events spiral out of control and the US launches a fullblown military assault on Iran...the resulting collapse in Iran's economy could knock as much as 0.3%-pts off the global GDP – equal to our estimate of the damage from the US-China trade war," said Capital Economics in a note. "In EMs, those countries where higher oil prices exacerbate balance of payments strains or an inflation problem would probably hike interest rates. Turkey would be a prime candidate, but India would face strains too."Iran threatened to hit back hard after the US air strike killed Soleimani, commander of the elite Quds Force.Soleimani, a general, was regarded as the second most powerful figure in Iran after supreme leader Ayatollah Ali Khamenei. Top Iraqi militia commander Abu Mahdi al-Muhandis, an adviser to Soleimani, was also killed in the attack. Khamenei appointed Soleimani's deputy, Brigadier General Esmail Ghaani, to replace him as Quds Force head.With inputs from Saikat Das

5G phones are here, but where's the service?

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NEW DELHI: Indian consumers can expect to start buying the first set of 5G phones as early as in the first half of 2020, with some devices likely to be available in the first quarter, albeit at the higher end.However, the government prepares to auction 5G spectrum only in the April-June quarter.Research firm TechArc expects 15-18 models (excluding variants) to be introduced in India this year in the premium or luxe categories (priced above Rs 30,000) to start with.International Data Corporation says due to the affordability factor, companies will come up with both 4G and 5G variants in 2020, while full-fledged sales of 5G phones will pick up only in 2021.73093530 Chinese handset maker Xiaomi has said it will launch about 10 5G models globally. Realme, the newest entrant in India, will bring its first 5G flagship device in the first quarter.Oppo, Vivo, OnePlus and Samsung have stated their 5G timelines for 2020."We believe in 2020, brands will come up with 5G phones priced above $500 (Rs 35,800) along with their 4G variants, which will be cheaper by Rs 10,000. Only towards the beginning of 2021do we expect prices of 5G phones to fall below $300," said Navkender Singh, research director at IDC India.As per TechArc, 1.5 million 5G phones will be sold in India this year, about 1% of the country's overall smartphone sales.Samsung, OnePlus, Huawei, Vivo, Oppo, Xiaomi and Micromax already sell 5G phones in the US, Australia and Europe. Mobile chipset makers Qualcomm (Snapdragon), MediaTek (Dimnesty), Samsung (Exynos) and Huawei (Kirin) are designing faster and more power-efficient processors to fulfil the low-latency promises of 5G technology.OnePlus, which dominates India's premium smartphone sales, has started exporting 5G smartphones on a pilot basis from the country. Qualcomm has reportedly said India will see 5G ready phones in the next two quarters.Analysts said smartphone companies would want to be ready with devices well ahead of the 5G network rollouts by telcos. India plans to start 5G trials soon, ahead of the spectrum auction."We are not expecting any large scale commercialisation of 5G phones in 2020 because of the uncertainty around 5G network. It is difficult to say whether debt-laden telecom operators will be able to bid for highpriced 5G spectrum auction in 2020," said Neil Shah, research director at Counterpoint Technology Market Research. "However, once this happens, the prices of 5G models will fall faster than they did for their 4G or 3G counterparts."Indian mobile phone manufacturers are likely to be left further behind as the market moves to 5G, analysts said."With 5G coming, we might see the end of an era of Indian brands in smartphones," said Faisal Kawoosa, founder of TechArc. "This is because of two reasons – they have zero acceptability in premium and luxe segments and they lack in technology and R&D capabilities."

Soleimani responsible for terrorist plots in Delhi: Trump

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LOS ANGELES: US President Donald Trump has accused the slain Iranian military leader Qassam Soleimani of being responsible for terrorist plots in New Delhi."Soleimani made the death of innocent people his sick passion, contributing to terrorist plots as far away as New Delhi and London,a Trump said on Friday at his Mar-a-Lago resort in Palm Beach, Flordia.Speaking about the missile strike he ordered to kill Soleimani, he said, "Today we remember and honour the victims of Soleimani's many atrocities and we take comfort in knowing that his reign of terror is over."73088050 While Trump did not specify the plots in India, he may have been referring to a 2012 bombing of the car of the wife of the Israeli defence attache to India.Tal Yehoshua Koren was injured and underwent surgery to remove shrapnel and her driver and two bystanders were also hurt in the attack on February 13, 2012, using a bomb that was attached to the vehicle with a magnet.Israeli Prime Minister Benjamin Netanyahu said that Iran was behind that attack and another attempted attack using similar technique in Georgia.The New Delhi case not been resolved so far and a conclusive link to Iran has not been made by India.News reports at that time said that the attack was carried out by Iran in retaliation for the killing of Iranian nuclear scientist Mostafa Ahmadi Roshan in Teheran using a bomb with a magnet attached to his car, allegedly by Israelis.An Indian journalist, Syed Mohammad Ahmad Kazmi, was arrested on March 6 that year and accused of being a part of a conspiracy to carry out the attack and held under the Unlawful Activities Prevention Act.He was released on bail by the Supreme Court in October on the condition that he does not go abroad.AAccording to news reports at that time, Delhi police alleged that he had carried out reconnaissance for the Iranians who carried out the attack.The five persons who carried out the attacks were Iranian members of the Islamic Revolutionary Guard who had visited Delhi, police were quoted as saying. They were not arrested although police identified them.An Iranian major general, Soleimani was the leader of the Quds force of the Islamic Revolutionary Guards. But his name did not figure in the reports at that time on theAIndian attack.In his address on the killing of Soleimani in Iraq on Thursday, Trump said on Friday, "Soleimani was plotting imminent and sinister attacks on American diplomats and military personnel, but we caught him in the act and terminated him."He listed several alleged attacks directed by Soleimani and carried out by the Quds Force and allied militias."For years, the Islamic Revolutionary Guard Corps and its ruthless Quds Force -- under Soleimani's leadership -- has targeted, injured, and murdered hundreds of American civilians and servicemen," Trump said.He blamed Soleimani fro the recent attacks on US targets in Iraq, including rocket strikes that killed an American and injured four American servicemen, as well as the assault on the US embassy in Baghdad earlier this week.

5G phones may reach Indian shores in H1

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NEW DELHI: Indian consumers can expect to start buying the first set of 5G phones as early as in the first half of 2020, with some devices likely to be available in the first quarter, albeit at the higher end.However, the government prepares to auction 5G spectrum only in the April-June quarter.Research firm TechArc expects 15-18 models (excluding variants) to be introduced in India this year in the premium or luxe categories (priced above Rs 30,000) to start with.International Data Corporation says due to the affordability factor, companies will come up with both 4G and 5G variants in 2020, while full-fledged sales of 5G phones will pick up only in 2021.73093530 Chinese handset maker Xiaomi has said it will launch about 10 5G models globally. Realme, the newest entrant in India, will bring its first 5G flagship device in the first quarter.Oppo, Vivo, OnePlus and Samsung have stated their 5G timelines for 2020."We believe in 2020, brands will come up with 5G phones priced above $500 (Rs 35,800) along with their 4G variants, which will be cheaper by Rs 10,000. Only towards the beginning of 2021do we expect prices of 5G phones to fall below $300," said Navkender Singh, research director at IDC India.As per TechArc, 1.5 million 5G phones will be sold in India this year, about 1% of the country's overall smartphone sales.Samsung, OnePlus, Huawei, Vivo, Oppo, Xiaomi and Micromax already sell 5G phones in the US, Australia and Europe. Mobile chipset makers Qualcomm (Snapdragon), MediaTek (Dimnesty), Samsung (Exynos) and Huawei (Kirin) are designing faster and more power-efficient processors to fulfil the low-latency promises of 5G technology.OnePlus, which dominates India's premium smartphone sales, has started exporting 5G smartphones on a pilot basis from the country. Qualcomm has reportedly said India will see 5G ready phones in the next two quarters.Analysts said smartphone companies would want to be ready with devices well ahead of the 5G network rollouts by telcos. India plans to start 5G trials soon, ahead of the spectrum auction."We are not expecting any large scale commercialisation of 5G phones in 2020 because of the uncertainty around 5G network. It is difficult to say whether debt-laden telecom operators will be able to bid for highpriced 5G spectrum auction in 2020," said Neil Shah, research director at Counterpoint Technology Market Research. "However, once this happens, the prices of 5G models will fall faster than they did for their 4G or 3G counterparts."Indian mobile phone manufacturers are likely to be left further behind as the market moves to 5G, analysts said."With 5G coming, we might see the end of an era of Indian brands in smartphones," said Faisal Kawoosa, founder of TechArc. "This is because of two reasons – they have zero acceptability in premium and luxe segments and they lack in technology and R&D capabilities."

Oil prices on the boil as Middle East simmers

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NEW DELHI| MUMBAI: Oil prices jumped $3 on Friday after a US air strike killed a top Iranian general, escalating tension in the world's biggest crude-exporting region and stoking fears of a supply disruption. The impact of any possible retaliation worried key importers like India where fuel prices are already at a 13-month high.India's benchmark stock indices fell 0.4%, logging their worst weekly performance in a month, as global markets declined with rising tensions. Gold surged Rs 700 to Rs 39,872 per 10 gm and advanced toward a six-year high internationally. The rupee lost about 0.60%, or 44 paise, to close at 71.80 per dollar. Wall Street stocks opened sharply lower. The Dow Jones Industrial Average was down 0.56% at press time. 73088050 Although local equity indices recovered some ground after dropping as much as 0.7%, the biggest one-day gain in four months in the local fear gauge India VIX showed that sentiment will remain wobbly amid concerns of retaliation by Iran. Any further surge in crude oil prices will also be a threat to India's fiscal deficit, which is budgeted at 3.3% of gross domestic product in the year ending March 31.Iran vowed "severe retaliation" after Qassem Soleimani was killed by US missiles in Baghdad, triggering speculation about its next move and turmoil in the oil market early Friday. Brent crude rose as much as $69.16 a barrel, the highest since attacks on Saudi Arabian oil infrastructure in September.India, which imports 84% of its oil needs and nearly 60% of it from the Middle East, is closely watching the situation in the Gulf region."We will have to see how Iran reacts to it. That would determine how the oil market behaves hereon," said an oil ministry official after a meeting with top executives of state refiners. The September drone attack on the Saudi facility, which hit 5% of the world's oil supply, caused barely any supply disruption but briefly sent prices soaring. Quick supply management by the Saudis and abundant supply elsewhere brought prices to pre-attack levels quickly."After the Saudi attack, it was feared that there would be escalation and supplies will get disrupted but that didn't happen. Let's see if Iran shows the same maturity as Saudi did," Indian Oil chairman Sanjiv Singh told ET. Refiners can plan for minor disruptions but if the region goes up in flames, no plan can really work, said an executive at a state refiner.Most Asian equity markets ended weak, with Japan's Nikkei dropping 0.8%. Investors shifted away from risky assets. The Sensex fell 162 points to 41,464.61and the Nifty was down 55.55 points at 12,226.65, having hit a record in the previous session. India VIX surged 10.5% to 12.7. Oil marketing companies ended in the red and other sectors linked to oil prices such as paint manufacturers, also slipped. Asian Paints was the worst performer on the Sensex, down over 2%.Axis Bank, NTPC, State Bank of India, Bajaj Auto, HDFC Bank and Maruti ended down 1-2%. The BSE Mid-Cap index fell 0.4% and the BSE SmallCap index ended flat. Foreign portfolio investors (FPIs) bought Indian shares worth Rs 1,263.05 crore and domestic institutional investors (DIIs) sold shares worth Rs 1,029 crore on Friday."Tensions building up in the Middle East have led to spike in crude oil prices and there is a negative undertone across global markets," said Harsha Upadhyaya, chief investment officer, equity, Kotak Mahindra AMC. "Any upside in crude oil prices would be negative for India as it is coming at a time when fiscal space to kick-start the economy is limited." The rupee joined other currencies in weakening."An element of uncertainty weighed on investors with rising crude oil prices," said Shreeshanth Arayangat, chief dealer at DCB Bank."The rupee's fall is in line with other emerging markets as investors seek safety of US-backed assets. The weakness is likely to extend unless the political turmoil between US and Iran dilutes down bringing stability in global oil prices."The benchmark bond yield rose marginally to close at 6.51% Friday. Bond yields and prices move in opposite directions.The central bank will on Monday buy longer maturity bonds while selling shorter duration papers for Rs 10,000 each, seeking to bring yields down in line with the policy rate.Such a move was seen positive for bond market as yields were expected to fall."This has checked any sharp rise in yields as traders won't turn panicky unless US and Iran are engaged in a full-blown war," said a senior executive at a large bond house.Oil prices had jumped nearly 15% in the last quarter of 2019 on the extension of a production cut pact by key producers, including OPEC members and Russia. Friday's attack drove prices up more than 4% and dimmed hopes of a global economic recovery."The market is adding a risk premium on fears things could escalate," said UBS Group AG analyst Giovanni Staunovo in a Bloomberg report."The Middle East is a powder keg — too much oil comes out of the region and no one knows if and how Iran will respond." For a heavy energy importer like India, high oil prices cut consumer spending, stoke inflation, erode forex reserves, expand the current account deficit, balloon the fuel subsidy bill and leave less resources for more productive public spending.India is estimated to spend $112 billion on oil imports in FY20 but runaway prices could expand this further.A sharp rise in domestic fuel prices, which are deregulated and linked to international fuel rates, triggers consumer clamour for price control. Domestic rates of petrol and diesel are at a 13-month high.Although the year started off on a positive note for Indian equities due to easing US-China trade war tensions and expectations of growthboosting measures from the government in the February 1 budget, the immediate focus of investors will be on any retaliation from Iran. A hit on the balance of payments front could hurt India at a time when growth is weakening. Growth in the three months ended September fell to 4.5% — the lowest reading since 4.3% recorded for the January-March quarter of 2013."Oil is likely to be on the boil. Bad for large oil importing countries, especially those with large trade and current account deficit like India," said Ajay Bodke, CEO-PMS at Prabhudas Lilladher.Bodke said investors may again find comfort in large-caps and shun mid and small-cap stocks which had outperformed the benchmarks recently.Bond yields also need to be watched as any outflows by foreign investors due to rising risk-aversion may spark a selloff, leading to a rise in bond yields, said Bodke.War between the US and Iran could be damaging for global growth."The major concern for the world economy is that events spiral out of control and the US launches a fullblown military assault on Iran...the resulting collapse in Iran's economy could knock as much as 0.3%-pts off the global GDP – equal to our estimate of the damage from the US-China trade war," said Capital Economics in a note. "In EMs, those countries where higher oil prices exacerbate balance of payments strains or an inflation problem would probably hike interest rates. Turkey would be a prime candidate, but India would face strains too."Iran threatened to hit back hard after the US air strike killed Soleimani, commander of the elite Quds Force.Soleimani, a general, was regarded as the second most powerful figure in Iran after supreme leader Ayatollah Ali Khamenei. Top Iraqi militia commander Abu Mahdi al-Muhandis, an adviser to Soleimani, was also killed in the attack. Khamenei appointed Soleimani's deputy, Brigadier General Esmail Ghaani, to replace him as Quds Force head.With inputs from Saikat Das

Oil industry braces for Mideast turmoil after Soleimani killing

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By James Herron, Grant Smith and Alex LongleyThe US assassination of one of Iran's most powerful generals has the oil industry bracing for something it has long feared and anticipated -- direct military confrontation between the two adversaries.In the hours after President Donald Trump ordered the killing at Baghdad airport of Qassem Soleimani, who led Iran's Quds force, crude oil surged, American workers began to withdraw from Iraqi fields and traders scrambled to position themselves for even higher prices."We should all be bracing for a ferocious response," said Helima Croft, chief commodities strategist at RBC Capital Markets. "The stage is set for a retaliatory spiral that could keep markets on edge well into 2020."Rising tensions between the Iran and the US have already caused unprecedented disruptions to oil markets, but so far they've been short-lived. Last year, Washington blamed Tehran for sabotage attacks on supertankers and a missile and drone attack on Saudi Arabia's Abqaiq crude-processing plant in September -- the largest single supply halt in the industry's history.An escalation into direct fighting between US and Iranian forces in the world's most important oil-producing region would have longer lasting consequences for the global economy.Severe RetaliationIran's Foreign Minister Javad Zarif denounced the attack on Twitter as "an act of international terrorism." The country's Supreme Leader Ayatollah Ali Khamenei threatened "severe retaliation."The Iranian leadership is signaling that it will probably target US military installations and bases in the Middle East and mobilize its network of militias across the region. One official told the state broadcaster that some 36 US military bases and facilities are within reach of Iran's defense forces, with the closest being in Bahrain.The US State Department issued a directive urging American citizens to leave Iraq immediately due to the threat.Iraq is the second-largest producer in the Organization of Petroleum Exporting Countries, pumping 4.65 million barrels a day last month. It's immediate neighbors in the region -- Saudi Arabia, Kuwait and Iran -- together produce about 15 million barrels a day. Most of their exports leave the Persian Gulf through the Strait of Hormuz, a narrow waterway that Iran has repeatedly threatened to shut down if there's a war.Emergency MeetingsBeyond the initial 4.8 per cent surge in New York crude futures to an eight-month high, there were other signals in the market that people were preparing for further disruption.Volatility rose to its highest level in a month and the cost of derivatives that insure against price spikes increased. Four million barrels of options contracts that would profit from a jump in Brent crude to $95 a barrel traded for both March and September. 73094172 Two commodity-trading houses called emergency meetings of senior staff on Friday to assess the new risks to the oil market, said people familiar with the matter.Possible retaliation could include targeted strikes on oil facilities in the area, attacks on pipelines or oil flows through the Strait of Hormuz, Citigroup Inc. analysts including Ed Morse said in a report."We expect retaliation to be in the region, most likely in Iraq," analysts at ESAI Energy LLC said in a report. "This could have significant impact on crude oil prices."Vulnerable TargetsIraq's oil fields are working normally, the country's Oil Minister Thamir Ghadhban told Bloomberg by phone on Friday. Four US citizens working at an Exxon Mobil Corp.-operated project have been asked to leave, he said."We are closely monitoring the situation in Iraq," ExxonMobil said in an emailed statement. The company declined to comment on specific staffing levels, but said it has "programs and measures in place to provide security to protect its people, operations and facilities."Italy's Eni SpA, which operates Iraq's Zubair field, also said it's monitoring the situation, while BP Plc and Royal Dutch Shell Plc declined to comment.International companies have reason to be cautious as Iranian proxies have repeatedly proved their ability to strike targets within Iraq. The latest escalation in tensions came after a rocket attack on a military base late last month, which killed an American contractor and wounded several US and Iraqi military personnel."The Soleimani hit moves us closer to a full-blown war scenario than Abqaiq," Bobb McNally, a former energy adviser to President George W. Bush and president of the consulting firm Rapidan Energy Group, said on Twitter. Still, "both DC and Tehran want to avoid war and will try to contain brinkmanship," he said.--With assistance from Rakteem Katakey, Kevin Crowley and Javier Blas.

Stocks with operating leverage will fly now, says Shyam Sekhar

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India's government-run companies have a problem of perception with stock investors, thanks to a legacy of unprofessional management, irrational profit extraction and random offloading of shares by the promoter entity.As some PSUs come out of these traps and turn more nimble-footed, contrarian investors are rushing in to capture value.Market veteran Shyam Sekhar is vocal about it. "Public sector stocks have been beaten down irrationally in the past despite superior balance sheets, just because the government is their owner," says he.Take out the name of the owner and look at their balance sheets, profit & loss statements and payouts, and you find these companies have done significantly better than their private sector peers, says Sekhar, who runs contrarian investment advisory firm iThought as Chief Ideator & Founder,.Out of the 62 stocks in the BSE PSU index, 16 gave positive returns for last one year, while the rest plunged up to 59 per cent.Indian Bank, Allahabad Bank, Chennai Petroleum Corporation, IFCI and Central Bank of India were among those that reduced investor wealth by more than half.Sekhar says if the government manages to sell a few PSUs, as it is planning to do, these stocks will go through a significant re-rating."I would expect a semblance of normalcy to return if the government shows that it is serious about selling these companies or letting private owners take over and run them," said the Chennai-based wealth manager.Economy-market divergence normal?Sekhar, who has spent nearly three decades on Dalal Street, finds nothing abnormal about the divergence between a slowing economy and a performing market. The market usually tends to move ahead of the economy, says he."If you notice, during the 2018 boom in smaller stocks, the market was unwilling to buy larger companies. And now it has shifted away from those companies back into larger names. This is reflective of the fact that the market is actually ahead of the economy," Sekhar says.India's GDP growth rate has been on a downtrend since April 2018 and hit over six-year low of 4.5 per cent in September quarter, 2019. BSE Sensex expanded 25.17 per cent between April, 2018 and December, 2019, while BSE Smallcap Index tanked 19.60 per cent and BSE Midcap Index 6.20 per cent.Sekhar points out that the valuation gap between largecaps and the broader market actually widened during this period."The market has been polarised between extremely overvalued and extremely undervalued stocks. I would expect a convergence to happen between these two parts, and that will allow investors to find out the overvalued companies and price in the chances of a correction. On the other hand, there is value hunting in the extremely undervalued parts of the market, and this will probably continue all through 2020," says the market veteran. Some analysts expect India's economic growth to start reviving in the second half of 2020, which they say would infuse blood in midcaps and smallcaps to help outperform their largecap peers.Sekhar believes companies that have operating leverage will come into their own now. "Many of the undervalued stocks typically belong to those businesses which have taken a lot of capital investments in the past but have not yet seen the operating leverage kick in," he adds. 73033201 Downturn domestically engineeredMarket regulator Sebi and the government has carried out several changes in last few years, which Sekhar thinks were ill-timed. In his opinion, while they were well intentioned, bad timing caused them to engineer the downturn in the broader market."Everybody knew the market's investment focus was in small- and mid-sized companies. So when you suddenly alter the rules of the game, such a disruption probably creates more damage. I believe the damage was not anticipated at the time of formulating the changes. In that sense the most well-intentioned move of cleaning of the system has actually created a very sharp reaction," Sekhar says.Pointing especially at Sebi's recategorisation of mutual funds, which created a liquidity crunch in the broader market, Sekhar said companies should be classified on enterprise value instead of market-cap.Through the recategorisation, Sebi put the top 100 companies by market-cap in the largecap category, the next 150 firms in midcaps and the rest in the smallcap segment."We should not leave it to the market. Stock categorization should be independent of the market's irrationality. This would be a more stable way of categorising stocks to benefit investors," says the Chennai-based investor.Political turmoil not a problemSekhar is not too perturbed by the ongoing political tensions in the country and does not see it as a threat to the market. Protests and government interference are part of the democratic process, says he."A right balance should be struck between the two rights. I do not think we should take such a grim view of the democratic processes. Only when a democratic process is not met by a democratic process, only then do you have a problem," he feels.He says foreign investors will be more pragmatic and come to India despite these issues, as India has got the potential to regain growth rates whereas many other markets are not at that level.He says financialisation would be key theme to play going ahead, as it has a long runway. He also likes tourism and domestic services as they are under-penetrated areas with huge potential because of a change in the way millennials spend money.

5G phones may reach Indian shores in H1

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NEW DELHI: Indian consumers can expect to start buying the first set of 5G phones as early as in the first half of 2020, with some devices likely to be available in the first quarter, albeit at the higher end.However, the government prepares to auction 5G spectrum only in the April-June quarter.Research firm TechArc expects 15-18 models (excluding variants) to be introduced in India this year in the premium or luxe categories (priced above Rs 30,000) to start with.International Data Corporation says due to the affordability factor, companies will come up with both 4G and 5G variants in 2020, while full-fledged sales of 5G phones will pick up only in 2021.73093530 Chinese handset maker Xiaomi has said it will launch about 10 5G models globally. Realme, the newest entrant in India, will bring its first 5G flagship device in the first quarter.Oppo, Vivo, OnePlus and Samsung have stated their 5G timelines for 2020."We believe in 2020, brands will come up with 5G phones priced above $500 (Rs 35,800) along with their 4G variants, which will be cheaper by Rs 10,000. Only towards the beginning of 2021do we expect prices of 5G phones to fall below $300," said Navkender Singh, research director at IDC India.As per TechArc, 1.5 million 5G phones will be sold in India this year, about 1% of the country's overall smartphone sales.Samsung, OnePlus, Huawei, Vivo, Oppo, Xiaomi and Micromax already sell 5G phones in the US, Australia and Europe. Mobile chipset makers Qualcomm (Snapdragon), MediaTek (Dimnesty), Samsung (Exynos) and Huawei (Kirin) are designing faster and more power-efficient processors to fulfil the low-latency promises of 5G technology.OnePlus, which dominates India's premium smartphone sales, has started exporting 5G smartphones on a pilot basis from the country. Qualcomm has reportedly said India will see 5G ready phones in the next two quarters.Analysts said smartphone companies would want to be ready with devices well ahead of the 5G network rollouts by telcos. India plans to start 5G trials soon, ahead of the spectrum auction."We are not expecting any large scale commercialisation of 5G phones in 2020 because of the uncertainty around 5G network. It is difficult to say whether debt-laden telecom operators will be able to bid for highpriced 5G spectrum auction in 2020," said Neil Shah, research director at Counterpoint Technology Market Research. "However, once this happens, the prices of 5G models will fall faster than they did for their 4G or 3G counterparts."Indian mobile phone manufacturers are likely to be left further behind as the market moves to 5G, analysts said."With 5G coming, we might see the end of an era of Indian brands in smartphones," said Faisal Kawoosa, founder of TechArc. "This is because of two reasons – they have zero acceptability in premium and luxe segments and they lack in technology and R&D capabilities."

What will technology jobs look like a decade from now?

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India, till not so long ago, could not churn out enough software programmers to keep up with demand. Although the demand still exists, it has become more complex and specialised. Thomas Frey, who advises companies on future trends, says every job will be a technology job going forward. "Emerging technology will provide a lot more opportunities, where every job will have a technology element to it. It will not be about humans versus artificial intelligence, but about working with them.People, however, need to be taught how to do this and enhance their skills," the famed futurist and celebrity speaker said.The Indian IT industry is at the crossroads. It needs to take strategic decisions to remain relevant in the future.Individuals will need to upskill to ensure career longevity even as automation takes over certain jobs.Careers in vogue right now may not even exist a decade later.Blockchain, cryptocurrency, robotics and autonomous vehicles —all emerging technologies — will become mainstream over the next decade, requiring thousands of specialists.Anil Talreja, partner, Deloitte, Haskins & Sells says that people who can design and engineer apps and new use cases for technology will always remain in high demand. We will also have access to vast amounts of data going forward."There will be huge demand for people who can analyse and structure this data such that it can be useful. While management consultants may not be needed, we will need data analysts, designers and engineers who can create algorithms to retrieve and structure this data," he said.So, what will the technology jobs of the future look like?ET asked a few thought leaders and compiled a list of the most likely roles.Data DriversSolutions based on Artificial intelligence (AI) and Internet of Things will become commonplace. This, in turn, will require an army of people to manage the data they generate."As we leverage the human machine interface and as AI implementation increases, we will need a lot more people to work on data tagging and cleaning and labelling, creating millions of new jobs," said Debjani Ghosh, president of IT industry lobby Nasscom. "We will need people to work with machines to do it and if India can build skills, then we can do it. This would solve an existing problem, plus create jobs."Designing systems that can analyse and parse this data, while meeting ever evolving privacy norms across borders will be another requirement that will emerge across industry verticals.By 2030, 500 billion devices are expected to be connected to the internet. The data from many of these sensors are of importance to businesses, which require data scientists to analyse and help take business decisions. It also would throw up an opportunity for people who design these sensors, apart from implementing them across newer industries and finding new use cases.Cybersecurity ExpertsIn the future, the world will be even more connected than it is today. Personal devices, machines, appliances, automobiles, everything will be connected to the internet, and emerge as a a potential target for cyber criminals. This will need far more people than today to anticipate the potential threats and create solutions for them. The electricity grid, the water supply system and the traffic lights will all be connected and any disruption could potentially create chaos in cities. India will require thousands of security experts who design systems that can constantly monitor threats, but also prevent attacks. Already, we see cyber criminals becoming more sophisticated in terms of the attack methodologies. These are still restricted primarily to computers but it is only a matter of time before all connected devices are under threat.In addition to cyber security firms, these professionals would also be employed by device manufacturers and designers, to build in security features at the core of the deviceEvery Job will be a Tech JobLawyers and doctors will exist in the future, too, but those jobs will morph into tech jobs. "Roles like HR which are currently non-tech will become tech jobs. These will require a tech bent of mind," said Shekhar Sanyal, country head, The Institution of Engineering and Technology, India. Robotic process automation and bots will thrive in the workplace and HR professionals will need to understand technology and business to understand their implications. Within consumer products, too, things will change.The world buys close to 1.5 billion pairs of shoes a year. In the future, we will be able to slice and dice this depending on usage, and embed the required technology to enhance its functionality, such as a smart golfing shoe or to manage an injury. Gig workers will be the norm, experts say, moving across domains on the basis of their expertise in a specific technology area. What this will require is a change in how certain skills are taught in universities, with some basic tech skills being taught as part of the core curriculum, irrespective of the stream.Traffic Monitoring JobsDrones for delivery and driverless cars will spur mini-industries of their own. Control rooms of the future will require traffic management skills that include operating drones, managing autonomous cars, besides regular vehicles. Beyond command centre operators, designers, programmers and cybersecurity experts will be needed to ensure smooth functioning.Personal robots will also start replacing human assistants, in healthcare assistance or in customer service roles. This will require a dedicated ecosystem to build these robots and apps and maintain them, while keeping privacy and customer care at the core.From UI/UX skills to creating specialised program architecture, maintaining and keeping these robots secure will require a dedicated fleet of developers.Healthcare WorkersIt is estimated that there will be 300 million more people over the age of 65 in 2030, compared to the number in 2014. Spends on healthcare will increase, but healthcare as we know it today would have changed.Debjani Ghosh said health workers enabled by machines providing care would become more prevalent."If this is done in a structured way, then millions of jobs could be created. There is strong government support for skilling initiatives," she said. When AI and robotics move to implementation stage, it will create opportunities across industries. The way doctors and nurses do their jobs will be greatly impacted by how technology evolves. Personal care robots will be ubiquitous, need ing a dedicated set of tech workers to run and maintain them. These would function in collaboration with healthcare professionals. Digitisation of personal health and preventive healthcare will turn into a separate industry, driven almost entirely by data and tech professionals, and not healthcare workers.Space Tech JobsIndia's space programme looks at tapping the private sector to build satellites and rockets to launch them from its spaceports. As Isro focuses on outer space missions to the Moon, Mars, Venus and the Sun and plans its first human space flight in the next two years, it will increasingly depend on the private sector to build and launch communication and remote sensing satellites. It also is looking to make India a hub to build small satellites and launch them from Indian soil, an industry, which officials say, has potential to replicate the country's software industry. Elon Musk's SpaceX has made people rethink space travel and exploration, according to Thomas Frey. Space tourism will create a mini industry of tech experts. Mission planning, launch management and experience design will have to be looked at through a tech lens, creating thousands of jobs requiring specialised skills.

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