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Toyota-Suzuki partnership, Trump vs Clinton again and TCS results

1. India’s holdings of US treasuries on the rise

The department of treasury puts out monthly data on the foreign holdings of the US’s debt. The country with the largest increase among the BRIC nations is India, shows numbers for July 2016. PTI reported on Tuesday that India currently owns $123.7 billion worth of US treasuries. This makes India’s holdings third among its BRIC peers, ahead of Russia. Holdings were up 5.55% over June. Brazil increased it by only 0.99%. Both China and Russia cut holdings between 1-3%. US treasuries are highly liquid and are considered relatively safe compared to other country’s debt. Media reports suggest that holding such assets could be part of a strategy to prepare for any future global volatility, since the securities can be more easily sold to raise cash. Countries like China and Russia have been selling to raise cash and deal with domestic economic issues.

2. Toyota, Suzuki in talks for partnership

Rival car companies Toyota Motor Corp. and Suzuki Motor Corp. announced a research and development partnership on Wednesday. India is likely to play a key role in how the partnership evolves. Suzuki is present in India through Maruti Suzuki India Ltd. The company has a 47% share of the market. Toyota Kirloskar Motor Pvt has a 4.6% market share. Mint reported that developing hybrid technology which is also low-cost, will be a key aspect of the proposed research and development partnership.

3. Industrial growth hit worst patch in a decade

The Index of Industrial Production contracted during the first five months of the year. The 0.27% decline marks the worst phase in ten years, Mint reported on Wednesday. This is worse than for the financial year ending in 2009-when the global financial crises broke out. The 1.18% contraction in manufacturing is the worst in at least five years. The capital goods sector has also been in decline. Consumer non-durables growth has been the worst in five years. Consumer durables is up 6.31%. This too is lower than the previous year.

4. More than 15% of Indians undernourished

More than a third of India’s children under the age of five are stunted and over 15% of the population is undernourished. This makes India worse than all its neighbours barring Pakistan, according to the Washington based International Food Policy Research Institute (IFPRI) Global Hunger Index report. The report released on Tuesday noted that India ranked 97 among 118 developing nations. The rank for Bangladesh is 90, Sri Lanka is 84, Myanmar is 75, Nepal is 72 and China is 29th. Pakistan is ranked 107. India will still have ‘moderate’ to ‘alarming’ hunger scores in 2030 if hunger declines at the same rate as it has since 1992.

5. Samsung profits singed

Mobile phone maker Samsung Electronic Co Ltd was forced to cut its quarterly guidance on Wednesday less than a week after it was issued. The manufacturer’s Galaxy Note 7 cellphones propensity to catch fire is costing the company more than two billion dollars in profit, according to a regulatory statement issued on Wednesday. The company said that profit will be $4.63 billion instead of $6.95 billion as it had earlier said it would make. The South Korean company is ending production of the smartphone.

6. Spinning a victory tale

Ravichandran Ashwin’s seven-wicket haul helped propel India to a 3-0 series victory against New Zealand on Tuesday. It also propelled him to the top of the International Cricket Council (ICC) Test Cricket bowlers’ list according to rankings released on Wednesday. Ashwin took 27 wickets in the three-match series. The performance helped him jump ahead of fast-bowlers Dale Steyn from South Africa and Jimmy Anderson from England. They are ranked number two and three respectively. Ashwin had last topped the charts in July.

7. IndusInd Bank’s Q2 results

IndusInd Bank hit an all-time high net interest margin of four percent on the back of a high yielding retail portfolio, and low-cost deposits. Net interest margin or NIM is a profitability measure related to the difference between the rate at which banks raise money and the rate at which they lend it to borrowers. Net interest margins have ranged between 2-5% for major banks in recent times. State Bank of India had a NIM of 2.83% in the June quarter, while it was 3.16% for ICICI Bank. Some like Kotak Mahindra Bank had a NIM of 4.37%. The NIM has risen for eight straight quarters for IndusInd Bank and has helped it grow profits by 26% this quarter. The bank had a net profit of Rs.704.25 crore for the September quarter, according to results declared on Wednesday.

8. Clinton vs Trump: Round two

The second debate between presidential candidates Hillary Clinton and Donald Trump showed the former gaining. Ratings after Sunday’s event showed Democratic candidate Hillary widening the gap against her opponent from the Republican party. Election tracker RealClearPolitics showed that the gap between the two had widened from 4.6% to 6.2%, according to an average of major opinion polls on which the publication collects data. Trump has been dogged by controversies over his unwillingness to disclose his tax returns and the surfacing of derogatory comments about women that he had made in the past.

9. TCS results point to growth pangs

India’s biggest software services firm posted quarterly results on Thursday. The company posted Rs6,586 crore worth of net profit for the three month period ending September 2016, up 8.4% over the same period last year. A Mint analysis pointed out that the sector is facing problems including increased competition, and lower spends by customers such as those in the banking and financial services space. The business segments which are growing revenues faster than others include include manufacturing; and the communication, technology and media space. The outlook however, remains subdued because of global economic uncertainty.

10. The pounding of Britain’s currency

Worries over the United Kingdom’s decision to leave the European Union saw its currency continue to fall. The Financial Times reported that the currency is at its lowest ebb in 168 years based on its value against a basket of its trading peers on Tuesday. It also hit a 31-year low against the dollar during the week. Most of the fall has happened after the country voted on June 23rd to leave the European Union. The market is expecting a turbulent exit with negative repercussions for the country’s economy, according to foreign media reports.

Graphics by Ajay Negi.

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