Foreign bank market – Arab Center Fri, 01 Jul 2022 10:41:23 +0000 en-US hourly 1 Foreign bank market – Arab Center 32 32 Column: Dollar reserves shock from weather sanctions: Mike Dolan Fri, 01 Jul 2022 10:14:00 +0000

U.S. dollar banknotes are shown in this illustration taken February 14, 2022. REUTERS/Dado Ruvic/File Photo

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LONDON, July 1 (Reuters) – The weaponization of foreign currency holdings by Western governments that froze Russian assets after Moscow invaded Ukraine does not appear to have scared reserve managers so far. Many may even increase their US dollar holdings.

The latest figures from the International Monetary Fund showed on Thursday that the dollar’s share of the more than $12.5 trillion in global foreign exchange reserves was unchanged at 58.8% in the first quarter – even after the invasion and financial sanctions of reprisals against Moscow at the end of February.

This may mask a marginal 1-2% drop in its actual share when fluctuations in currency values ​​during the quarter are taken into account and the fact that the overall global count fell by about a third of a trillion dollars per year. from last year’s record highs.

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The euro’s share slipped slightly to 20.6% at first glance, but this is also likely due to exchange rate effects.

And any change that could be detected went to the half-dozen other most widely held currencies.

In short, no shock or sudden lurch in reserve management more broadly after the G7 and European Union governments decided to freeze about half of the central bank’s $640 billion in foreign assets. Russia.

While central banks are loath to disrupt sensitive stocks overnight, the lack of any immediate change may surprise those who thought this rare sanction could make other central banks reluctant to let national savings into Western markets by fear of a similar fate in the future. political confrontation. Read more

Not only did the IMF reading show that dollar holdings were relatively unscathed to begin with, but an annual UBS survey of around 30 reserve managers over the past three months showed that many may even end up adding more dollars.


In a series of questions related to their reaction to the Russian freeze, 60% said they expected at least some impact and 10% saw “significant” fallout. More than a quarter expected another major central bank to face sanctions comparable to those imposed on Russia in the next few years.

But nearly two-thirds saw no or limited impact on the role of the dollar in reserves more broadly.

But perhaps most strikingly, given initial concerns, nearly half saw the dollar benefit the most from a shift to a more multipolar world in the wake of recent events.

While 80% saw the Chinese yuan benefit, this is less surprising given that the yuan currently accounts for less than 3% of global reserves.

While nearly 60% said they had taken direct action so far, a net positive response of nearly 10% said they had actually increased their exposure to US Treasuries.

Two-thirds said it would accelerate the adoption of central bank digital currencies.

Taking everything into account going forward – not just Russian sanctions – the only currencies more respondents expected to cut than rise were the Japanese yen and the British pound.

They were as divided as many in the market on whether the whole constellation of recent events meant we had entered a new paradigm for inflation and fixed income.

When asked if they saw a turning point in the 40-year bond bull market, 54% said yes and 46% no. When asked if the current increase in inflation is temporary or permanent, 48% choose temporary and 52% permanent.

If an earthquake is predicted, don’t hold your breath.

“We may see some marginal diversification over a very long period, but the dollar’s dominance will remain,” said Capital Group fixed income director Flavio Carpenzano.

The author is Finance and Markets Editor at Reuters News. All opinions expressed here are his own.

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By Mike Dolan, Twitter: @ReutersMikeD; Editing by Edmund Blair

Our standards: The Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and freedom from bias by principles of trust.

Hong Kong’s elite descend on Tokyo for bargain property purchases Wed, 29 Jun 2022 00:00:57 +0000

A group of investors from Hong Kong will fly to Tokyo in August for an unforgettable shopping spree: a hunt for real estate bargains fueled by the historic weakness of the yen, the unwavering policies of the Bank of Japan and sushi at $440 per person.

The tour, organized by Hong Kong-based real estate brokerage JP Invest, follows a flurry of inquiries about Tokyo real estate from hedge funds and ultra-wealthy clients keen to exploit the fall. sharp drop in the yen to its lowest level in 24 years.

Among the souvenirs bought by business and institutional customers on a tour of Tokyo this year – just as the yen hit a 20-year low against the US dollar – was a luxury car dealership in the uptown Azabu-Juban, known for selling vintage Porsches for around $600,000.

The tour cost of HK$128,000 (US$16,300) per person includes stays at the Aman Hotel in Tokyo’s Otemachi business district and the traditional Gora Kadan onsen in the southern hot spring town of Hakone -west of the city, as well as a seven-day hotel quarantine package in Hong Kong on return. Meals include a reservation at Sushi Yoshitake, the 13-seat, three-star Michelin restaurant in Ginza that specializes in abalone in a sauce made from its own liver.

Elite tour participants, who will shuttle around Japan’s capital in a chauffeur-driven Bentley and a helicopter, are expected to focus on post-pandemic picks in Tokyo’s property market. Cash-strapped hotels built or renovated before the Olympics without tourists that have sat largely empty for more than two years should be of particular interest, analysts said.

“Hong Kong-based real estate funds and private equity expect a recovery in Japan’s inbound tourism story and therefore see it as a good opportunity to buy hotels,” said Japanese real estate analyst Sachiko Okada. at Goldman Sachs. “They can now come to Japan to view the properties to decide whether to invest or not. The interest rate is low, so it is easy to invest.

Kelvin Chung, director of JP Invest, said the agency responds to about eight to 10 inquiries a day and held the first such tour in May to meet growing demand from wealthy investors to visit Japan. after the country eased entry restrictions in April.

Customers are often interested in buying outlets in Tokyo, Chung said, adding that on average, each customer or family has spent HK$3 million to 10 million on investments in Tokyo.

Real estate brokers said that as well as highlighting the allure of the weak yen, the visits highlighted how the Tokyo market seemed sheltered from the recessionary worries swirling around other capitals.

Part of that, analysts say, stems from the ultra-low interest rates offered to investors in Japan, with the central bank firmly resisting pressure to follow its counterparts in Europe and the United States in tightening policy.

Jennifer Chan, a private banker in her 30s who also makes real estate investments in Hong Kong and the UK, is expected to join the trip in August. She said that in addition to wanting to buy outlets in Tokyo’s main districts, she was looking forward to the vacation element of a high-end package tour after two years of not being able to take leisure trips.

“I plan to deploy more of my capital in Japan over the next few years and hope to buy land to build my own properties. Now seems like the right time as price levels are expected to rise after reopening international borders,” she said, adding that the lower dollar-to-yen exchange rate meant that Japanese property felt like it was available at 20 for 30 percent off the same period last year.

Additional reporting by Riko Otsuka in Tokyo

9.36 billion transactions worth Rs 10.25 lakh cr processed in Q1 2022 via digital payments: report Mon, 27 Jun 2022 10:54:16 +0000

India reported 9.36 billion transactions worth Rs 10.25 lakh crore processed through payment methods like credit and debit cards, prepaid payment instruments (PPI) like mobile wallets and prepaid and UPI P2M (person-to-merchant) cards, said payments industry leader Worldline in a report on digital payments in the first quarter of 2022.

He further added that UPI P2M transactions emerged as the preferred payment method for consumers with a market share of 64% in terms of volume and 50% in terms of value. Credit cards accounted for 7% of transactions but 26% by value, while debit cards accounted for 10% of transactions but 18% by value.

UPI reported 14.55 billion transactions in terms of volume and Rs 26.19 lakh crore in terms of value in India, according to this report. Its volume and value of transactions have almost doubled since 2021, registering an increase of around 99% in volume and 90% in value.

State Bank of India (SBI), HDFC Bank, Bank of Baroda (BoB), Union Bank and Paytm Payments Bank were the top issuing banks during the same period. The main beneficiary banks were Paytm Payments Bank, SBI, YES Bank, Axis Bank and ICICI Bank. PhonePe, Google Pay and Paytm accounted for 94.8% of UPI transaction volume and 93% of UPI transaction volume in March 2022.

The average ticket size for UPI P2P transactions was 2,455 rupees and 860 rupees for UPI P2M transactions. The average ticket size for mobile wallets, prepaid cards, debit and credit cards stood at Rs 400, Rs 503, Rs 1,922 and Rs 4,329 respectively. Of the total UPI transaction volume in Q1 2022, 56% of transactions were P2P while 44% were P2M. in terms of value, P2M transactions contributed about 19% of UPI transactions, while P2P transactions contributed 81%.

In the first quarter of 2022, credit card transactions stood at 2.02 billion in terms of volume and Rs 8.77 lakh crore in terms of value, while debit card transactions stood at 942, 7 million in terms of volume and at Rs 1.81 lakh crore respectively. Major credit card issuers during the period were HDFC Bank, SBI, ICICI Bank, Axis Bank and RBL Bank. Major debit card issuing banks during the period included SBI, Bank of Baroda, Union Bank, Canara Bank and PNB.

Given the growing adoption of digital payments, the total number of point-of-sale (POS) terminals deployed by merchant acquiring banks stood at 6.07 million, of which more than half a million terminals were deployed in the first quarter of 2022. POS deployment grew by approximately 28 percent. cent in the first quarter of 2022 compared to the previous year.

The total number of Bharat QRs was 4.97 million in March this year, an increase of 39% from March 2021. UPI QRs stood at 172.73 million in March 2022, a huge increase of 87% compared to March 2021. Private sector banks accounted for ~70% of POS terminals while public sector banks accounted for 22%. Payment banks represented 7% and foreign banks remained at 1%.

Major acquiring banks in terms of POS deployment include HDFC Bank, Axis Bank, ICICI Bank, SBI, RBL Bank, Paytm Payments Bank, IndusInd Bank and Union Bank of India. Axis Bank and ICICI Bank recorded 68% annual growth and 52% in the first quarter of 2022 in terms of POS market share. Paytm Payments Bank is a close competitor as it saw 66% growth among the top banks deploying POS terminals.

Also read: RBI Payments Vision 2025 seeks to triple digital payments

Also read: Gig headcount set to increase to 2.35 cr by 2029-30: NITI Aayog report

Why does it make sense for Indian investors to diversify into US stocks? Sat, 25 Jun 2022 13:42:44 +0000

By Raj Gandhi

Investing around 15-20% of your portfolio in US markets is a good investment strategy against two major risks: rupee depreciation and inflation. It also works well for aligning financial goals with future dollar goals — higher education for kids, destination wedding, international vacations, buying real estate overseas.

Diversification is not only synonymous with minimizing risk. US markets offer investment opportunities among the best companies in the world. It is not necessary to be limited to companies that operate in the same geographical area and in fact include the megaliths that have the largest market capitalization in the world.

As a beginner, here are some sectors that one can consider investing in the US stock market.

Banking and financial services

It’s no wonder Warren Buffett likes bank stocks. The legendary billionaire investor holds more than $80 billion of Berkshire Hathaway’s (NYSE: BRK.A) (NYSE: BRK.B) $330 billion equity portfolio invested in this sector alone.

The reason is simple: Bank stocks have many of Buffett’s staples. First, banks serve an important societal need that will never go away. Second, banking business models are relatively simple to understand. Third, despite the dramatic improvement in the health of many banks since the 2008 financial crisis, some bank stocks are trading at a premium – a key indicator that now is the best time to invest.

Pharmaceuticals and biotechnology

Early-stage biotech companies are prone to sharp swings in revenue due to the fact that they go from almost no revenue to a significant revenue stream once a drug is approved or a partnership with another company is concluded. This means that growth numbers should be seen more as an indication that the company has achieved some sort of breakthrough with regard to research, corporate partnerships or other events in its business life cycle, rather than the way you normally think of growing up. .

Artificial intelligence

Alpha generation: For companies seeking organic growth through outperformance, the adoption of alternative datasets and artificial intelligence (AI) has proven to be a differentiator for generating additional alpha.

Improved operational efficiency: Companies will continue to deploy AI and advanced automation to continuously improve the efficiency of their operations. Beyond that, companies can turn these traditional cost centers into AI-powered “as a service” offerings.

Improve the distribution of products and content: Customer experience is a new battleground, and AI is helping advisors generate more insights, personalize content more efficiently, and deliver it to customers with greater agility and speed.

Risk management : AI is a game-changer for risk management. AI provides businesses with the tools to strengthen compliance and risk management functions, augment and automate data analysis, and anticipate and manage ambiguous events.

AI is created through machine learning, which involves training a system with massive amounts of data. It then uses the trained system to make inferences about new data it has never seen.

The simplest example is a system designed to detect objects in images. Images with these objects are provided to the system, which “learns” how to detect these objects in other images. The more objects it detects in the images, the more accurate the detection system becomes.

Businesses use artificial intelligence in two main ways. Many tech companies are using AI to make their existing operations more powerful, for example through high-level applications including robotics, self-driving cars and virtual assistants. Google, a subsidiary of Alphabet (NASDAQ:GOOGL), (NASDAQ:GOOG), uses AI to filter spam for Gmail users. Amazon (NASDAQ: AMZN) uses AI to recommend products to customers, while Netflix (NASDAQ: NFLX) uses AI to guide content creation and recommendations.

cloud computing

These are companies that serve the cloud and contribute to its operation. They provide the software, hardware, and services needed to run the cloud. Companies like Dell Technologies and Intel are part of this group. They own the largest data centers and control the flow of information through the cloud. These include companies such as Meta (formerly Facebook), Alphabet (parent company of Google), Apple, and Microsoft.

Another faction of cloud computing includes cloud service companies. They are the main players providing information and services on the Internet – often they offer services that were not possible before the development of the Internet, or have migrated their services to be Internet-based. and are examples of web-based companies that rely on the cloud for their core business model.

(The author is co-founder of DollarBull Fintech Platform, which provides Indian investors with global investment solutions)

Explained: What exiting the REIT market means Fri, 24 Jun 2022 01:46:25 +0000 Sustained capital market outflows have confused stock markets and led to a weakening of the rupiah amid rising inflation across the globe. As the US Federal Reserve prepares to raise rates further, outflows are expected to continue, which will put pressure on the Indian currency.

Why is capital flowing out?

Foreign portfolio investors (REITs), which hold around 19.5% of the market capitalization, have withdrawn Rs 42,000 crore so far in June, bringing total outflows to Rs 260,000 crore (Rs 33 billion). dollars) since October 2021. The REIT sell-off is being attributed to monetary policy tightening by the US Fed, which has embarked on a rate-hike spree to control inflation. Other central banks, including in Britain and the eurozone, are following suit.

“Relatively high valuations in India, rising bond yields in the United States, appreciation of the dollar and concerns about the possibility of a recession in the United States triggered by aggressive tightening are factors behind the withdrawal from REITs,” said VK Vijayakumar, chief investment strategist at Geojit Financial. Services.

When the global economy took a hit, central banks around the world cut interest rates and announced liberal monetary policies. While this helped economies recover and led to higher consumption, excess liquidity in the financial system led to inflation. This is why central banks have started to tighten monetary policies and raise interest rates. In India, inflation hit an eight-year high of 7.79% in April, prompting the RBI to raise the repo rate by 90 basis points to 4.90%.

What impact does this have on the markets and the rupee?

The pullback is dampening sentiment in equity and currency markets. The benchmark Sensex plunged 16% from the October 2021 high of 62,245.43 to 52,266.72 on June 23. The impact of the sale of REITs on the markets is visible, with an increase in volatility and a drop in share prices. While these sales by foreign investors have been absorbed by domestic investors led by domestic institutional investors (DIIs) to a large extent so far, fund flows from retail investors and domestic institutions have recently slow motion. Between November 2021 and June 2022, DIIs invested a net amount of Rs 2,84,488 crore (over $37 billion) in Indian stocks, providing some counterbalance. Experts say, however, that retail flow and DII inflow are weakening now, and markets could weaken further if REIT outflows continue.

India’s foreign exchange reserves fell by $46 billion over the past nine months to $596.45 billion as of June 10, 2022, mainly due to dollar appreciation and REIT withdrawals. The rupee plunged 7.3% to an all-time low of 78.30/32 against the dollar. The depreciation of the rupee is never good for the stock market as a whole, and the withdrawal of foreign investors can lead to lower stocks and mutual fund investments. Foreign investors generally stay away when the currency is falling and interest rates are rising in the United States and in developed markets.

Analysts said a weaker rupee against the dollar is keeping import bills higher, pushing inflation even higher than it is now. Higher inflation is detrimental to the whole market. If the Rupee does not strengthen, FPI outflows will continue, which is another negative. A strong dollar is good for export-oriented businesses, but bad for import-oriented industries such as oil, gas, and chemicals. With the falling rupiah, imports of oil and other imported components will become more expensive, which will further lead to higher inflation. Travelers and students studying abroad will have to shell out more rupees to buy dollars from banks. People are directly affected by the falling rupee as fuel prices soar.

REIT exits in 2022

How do REITs work?

In times of global uncertainty, foreign investors are embracing risk-free trading, meaning they are moving money from risky assets such as stocks and adding more bonds and gold. When interest rates rise in the United States and other advanced economies, they pull money out of emerging markets like India and invest in bonds in their home markets. The US 10-year bond has risen from a low of 0.54% in July 2020 to over 3.30% today.

“The global investment scenario has been plagued by risky trade since October 2021, as central bankers hinted at policy tightening as inflation shifted from a ‘transitional’ nature to a headache at This helped bond trading globally as yields began to look attractive, prompting investors to allocate a higher share to fixed income securities as an asset class,” a report said. Axis Mutual Fund. Rising global yields are not good news for Indian stocks and investors. The sale of the REIT has caused the valuation of the top 500 companies to decline, with some of them losing 15 to 20 % in the last 9 months.

How big are they in India?

REITs are the largest non-developer shareholders in the Indian market and their investment decisions have a huge bearing on stock prices and the general direction of the market. REIT holdings (by value) in NSE-listed companies stood at Rs 51.99 lakh crore as of March 31, 2022, down 3.36% from Rs 53.80 lakh crore as of December 31 2021, due to sustained sales since October 2021.

REITs hold large stakes in private banks, technology companies and large caps like Reliance Industries. The United States accounts for a large share of REIT investments at Rs 17.57 lakh crore in May 2022, followed by Mauritius Rs 5.24 lakh crore, Singapore Rs 4.25 lakh crore and Luxembourg Rs 3.58 lakh crore, according to data available from the National Securities Depository Ltd. (NSDL).

Will the rupee fall further?

The rupiah continued to depreciate beyond the general expectation of a gradual weakening despite the RBI selling dollars from its forex pool to stabilize the currency. At current spot dollar and rupee levels, year-end futures prices have exceeded their projection of 79 to the dollar by the end of 2022, according to a report from Bank of America Securities. “We believe that the risks are still tilted towards further depreciation of the rupiah, as the fundamental outlook has deteriorated further, mainly due to the rise in oil and other commodities. We have adjusted our projection upwards from 79 currently to 81 per dollar by the end of 2022. We, however, see the RBI’s strong reserves as a mitigating factor against tail risks,” he said.

Rising US inflation, rising rate concerns and falling stock market are weighing on Rupee sentiment. On the other hand, further rate hikes by the Fed will lead to larger outflows from foreign portfolio investors.

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What should investors do?

If REITs continue to exit and there is a decline in retail and DII participation, which market participants have noticed recently, equity markets could experience another correction. However, while other markets may correct further from current levels, experts say investors should stick to their existing investments in domestic equities.

“While weakness is likely to continue in the markets, investors should not look to redeem their holdings in the current market. They should stick with them as a rebound in economic activity, which is underway and could s ‘accelerate over the next couple of years, would lead to market recovery going forward and therefore gains for investors,” the CIO said with a wealth management firm. He further said investors should not opt for lump sum investments and should instead continue with the systematic investment plan mode.

Markets fall after 2-day break on weakness in Asian markets Wed, 22 Jun 2022 05:01:00 +0000

US markets posted smart gains on Tuesday

US markets posted smart gains on Tuesday

The Sensex and Nifty started trading on a muted note on Wednesday and slipped into negative territory after a two-day break, following weak trends in Asian markets.

The incessant outflows of foreign funds have also played spoilsports on the markets. The 30-stock BSE Sensex traded 418.07 points lower at 52,114. The NSE Nifty fell 131.1 points to 15,507.70.

In the Sensex pack, Bajaj Finserv, Tata Steel, Bajaj Finance, Axis Bank, IndusInd Bank, Tech Mahindra and Bharti Airtel were the major laggards in the early trades.

In contrast, Dr. Reddy’s Laboratories, Maruti Suzuki India and Hindustan Unilever were the winners.

Elsewhere in Asia, markets in Hong Kong, Seoul, Shanghai and Tokyo were trading lower.

US markets posted smart gains on Tuesday.

“Pullback rallies can be sharp and they were sharp yesterday. The important question is – will this continue? There is no economic news, other than crude weakness, to support the rally. There is no reason for FIIs to change their selling strategy as the dollar continues to be strong and US bond yields are attractive and expected to rise further,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The BSE Sensex climbed 934.23 points or 1.81% to settle at 52,532.07 on Tuesday. The NSE Nifty climbed 288.65 points or 1.88% to end at 15,638.80.

Meanwhile, the international crude oil benchmark Brent fell 3.20% to $110.98 a barrel.

Foreign institutional investors (FIIs) remained net sellers in the capital market as they sold shares worth ₹2,701.21 crore on Tuesday, according to exchange data.

PSE index rises slightly amid peso weakness Mon, 20 Jun 2022 13:00:48 +0000

THE MAJOR INDEX edged higher on Monday amid weak trading, with the peso closing at 54 pesos to the dollar and US markets closed for a holiday.

The benchmark Philippine Stock Exchange Index (PSEi) rose 2.38 points or 0.03% to close at 6,333.94 on Monday, while the broader all-stock index fell 7, 17 points or 0.21% at 3,387.78.

“The stock market opened the week in a listless mood after the Philippine peso fell against the US dollar. The local stock barometer managed to post a slight gain after trading in a narrow band. its lowest level in more than three years due to overall greenback strength on the Federal Reserve’s aggressive monetary stance,” Manny P. Cruz, equity strategist at Papa Securities Corp., said in a Viber message.

The peso closed at P54.065 against the greenback on Monday, losing 31.5 centavos from its previous finish of P53.75. It was the first time the peso ended at the 54 pesos per dollar level since its close of 54.08 pesos on October 15, 2018.

“Local trading was sluggish as U.S. stocks go on vacation today and as global markets await the U.S. Federal Reserve Chairman’s semi-annual monetary policy testimony before the U.S. Senate Banking Committee and the House Services Committee. House of the United States on June 23,” added Mr. Cruz. .

Regina Capital Development Corp. sales chief Luis A. Limlingan also said the Philippine market had a quiet start to the trading week, with Wall Street closed for a public holiday.

“Sentiment improved on Friday after traders parsed comments from Federal Reserve officials who reiterated that the central bank needed to do more to rein in the highest inflation in 40 years,” he said. -he declares.

US financial markets are closed on June 20 in commemoration of June 19 or the end of slavery in the world’s largest economy.

Federal Reserve Governor Christopher Waller said on Saturday he would support another 75 basis point (bp) hike in their July review amid rising inflation.

The majority of sector indices ended in the red with the exception of holding companies which gained 53.08 points or 0.91% to 5,841.09 and industrials which rose by 4.79 points or 0.05% to 8,789.96.

At the same time, real estate fell by 34.48 points or 1.16% to 2,933.96; mining & oil fell 114.33 points or 0.98% to 11,470.63; services fell 11.50 points or 0.67% to end at 1,696.11; and financials lost 1.05 points or 0.06% to close at 1,553.53.

Decliners outnumbered advanced, 108 to 81, while 52 names remained unchanged.

Turnover in value fell to 3.57 billion pesos on Monday, with 764.92 million shares traded against 11.71 billion pesos with 917.40 million pesos issued the previous trading day.

Net sales abroad fell to 215.28 million pesos on Monday from 292.27 million pesos seen on Friday. — Luisa Maria Jacinta C. Jocson

Will RBI raise interest rates after Fed rate hike? What should investors do? Sat, 18 Jun 2022 14:34:23 +0000

The recent aggressive interest rate hike of 75 basis points (bp) by the US Federal Reserve could push the Reserve Bank of India (RBI) to opt for further rate hikes over the next two or three quarters, believe experts, adding that it would have a direct impact on GDP (gross domestic product) growth and market movement.

The U.S. Fed’s interest rate hike is the third since March and comes after inflation in the country unexpectedly spiked last month. More importantly, the US central bank signaled similarly large increases later this year, which could potentially hurt investors’ already fragile outlook in global markets.

Will RBI go for aggressive rate hikes?

The central bank, according to economists and reports, could opt for an additional interest rate hike of up to 125 basis points this fiscal year, bringing the overall increase to more than 200 basis points.

This rise could not only weigh on the economy’s overall demand as well as GDP growth, but will also lead to a market correction due to the outflow of funds from foreign portfolio investors (FPIs) and an adjustment to lower earnings forecasts for listed companies due to higher cost of funds as well as cost of inputs.

The Sensex had plunged 2% to close at a 12-month low of 51,495 the day after the US Fed announced its 75 basis point interest rate hike. According to provisional data released by exchanges, REITs unloaded equity holdings worth Rs 3,257 crore on Thursday June 16 and sold holdings worth Rs 31,500 crore in June. This put pressure on domestic stocks.

What should market investors do?

A quick resolution to the ongoing war between Russia and Ukraine could revive market sentiment, as a significant portion of inflation concerns are driven by the crisis. Market participants feel that a protracted war could only weaken them further, as it could lead to higher food and oil prices.

With interest rates steadily rising and uncertainty over where yields might settle, investors believe domestic equity markets at this time should only be viewed with a horizon of investment of at least three years.

Many of them believe that India is very well positioned for higher growth over the next three to five years and that companies in all sectors are already in the midst of new capital investment, which should accelerate. In the coming months.

Even though the stock market slump has shaken investor sentiment for now, people should invest in stocks with the future in mind.

According to market analysts, investors should opt for systematic investment plans as it will help them capitalize on a further decline in the market. Investors can also put money into stocks that have traditionally performed well when inflation is high.

IMF Says Black Market Currency Premium Limits Benefits of Increased Exports Thu, 16 Jun 2022 14:08:36 +0000

The International Monetary Fund (IMF) said the improving trade balance has limited impact on foreign exchange (FX) stress, with parallel market FX premiums remaining in the 35-40% range since October 2021 .

This was revealed during IMF staff meetings with the Nigerian authorities from June 6-10, 2022, to discuss recent economic and financial developments and the country’s economic outlook.

Yesterday, the Naira to US Dollar exchange rate closed at N420/$1 at the Investors and Exporters (I&E) counter. However, the black market maintains a wide closing premium at N607/$1, according to BDC trader insights.

The IMF said real GDP growth is also spreading to all sectors except oil, but inflation remains high. International lenders added that the economic outlook is difficult, with high food prices raising food security concerns.

What the IMF says

Regarding the external sector, the current account deficit narrowed considerably in 2021, helped by the compression of imports and the increase in the net oil balance. However, the improving trade balance, which has continued so far in 2022, is having a limited impact on FX tensions, with parallel market FX premiums remaining in the 35 to 40% since October 2021. oil prices, gross foreign exchange reserves fell to $38.6 billion at the end of May 2022, after reaching $41.5 billion in September 2021, boosted by the allocation of SDRs and the issue of Eurobonds. The IMF said

International lenders have also pointed to Nigeria’s inflationary pressures and the response of the Central Bank of Nigeria. The IMF said, “Inflation reached 17.7% (y/y) in May, driven by a further spike in food prices, exacerbated by the war in Ukraine, and raising food security concerns, more than 40% of the population living below the poverty line To contain inflationary pressures, the Central Bank of Nigeria recently raised its monetary policy rate by 150 basis points to 13%.

The IMF said the economic recovery continues to strengthen thanks to services and agriculture, with GDP growth reaching 3.6% (y/y) in the first quarter of 2022.

What you should know

  • Nigeria’s foreign trade rose to 13 trillion naira in the first quarter of 2022, up 11.1% from 11.7 trillion naira recorded in the previous quarter and up 65.4% from 7.86 trillion naira. naira recorded in the first quarter of 2021. released the foreign trade report for the first quarter of 2022, by the National Bureau of Statistics (NBS).
  • Total imports in the first quarter of 2022 totaled 5.9 trillion naira, down 0.67% from the fourth quarter of 2021 (5.94 trillion naira), but up 21.04% from the comparable period of 2021 (N4,880 billion).
  • Nigeria’s export earnings in the first quarter of 2022 were 7.1 trillion naira, up 23.1% and 137.9% from 5.77 trillion naira and 2.98 trillion naira in the first and fourth quarters of 2021, respectively.
  • Despite the fact that Nigeria’s crude oil production is declining, the huge increase in crude oil prices has enabled it to increase its crude export earnings. Crude oil revenues, for example, rose 175% year-on-year to 5.62 trillion naira from 2.04 trillion naira in the first quarter of 2021.
  • Crude oil export earnings accounted for 79.16% of total export earnings in the quarter under review. As a result, Nigeria’s trade balance improved in the first quarter of 2022, with a foreign trade surplus of N1.12 trillion. Nigeria’s trade surplus is at its highest level since the third quarter of 2019.

Live updates: Barr says Trump was ‘detached from reality’ when he claimed election victory Mon, 13 Jun 2022 22:05:18 +0000

Prepare to remember past scandals and war, which still resonate today. Tuesday is the fifth anniversary of the fire that engulfed Grenfell Tower in west London, revealing gaps in the building’s cladding and triggering a crisis for apartment owners across the UK that continues to generate repercussions.

It is also the 40th anniversary of the end of the Falklands War, the wounds of which remain fresh in Buenos Aires.

Friday marks half a century since the robbery of the Watergate hotel-apartment-office complex in Washington. Fortunately, this one was resolved more quickly, although it left the irritating legacy of the suffix added to what seems to be every subsequent political scandal.

The latest of these, ‘partygate’, has a way of working, although the main protagonist, British Prime Minister Boris Johnson, will (ironically) be at the center of a legitimate social gathering this week as he turns 58. Saturday.

Partygate spin-off series Are You Being (Poorly) Served is set to see another episode with the government promising to release controversial and long-delayed legislation on Monday to overturn the Northern Ireland Protocol. As my colleague Peter Foster noted in his excellent Brexit Briefing newsletter last week, this is unlikely to end well.

Johnson is also expected to announce a new “growth planthis week alongside his Chancellor Rishi Sunak. After the OECD’s verdict on UK growth next year – only sanctions-hit Russia is expected to downgrade among G20 countries – the country clearly needs a new plan, if not a new one. new Prime Minister to implement it.

The Falkland Islands Royal Marine garrison in Port Stanley after the surrender of Argentina in June 1982 © IWM/Getty Images

France goes to the polls again on Sunday for the second round of legislative elections. Newly elected President Emmanuel Macron’s concern is not the far right this time but an alliance of the far left.

There will be at least one resolution this week. Colombians will go to the polls on Sunday for the second round of their country’s presidential election, which will decide whether populist Rodolfo Hernández can defeat former leftist guerrilla Gustavo Petro. Whatever the outcome, it will be an interesting contest.

Economic data

It’s going to be (another) week for interest rate news. The main attraction will be the gathering of the Federal Reserve’s Open Market Committee, but there will also be decisions from the Bank of England and its equivalents in Japan, Switzerland and Brazil.

The question is not whether the tightening of monetary policy will be accelerated but by how much — the answer to this question depends in part on your confidence in the ability of the given economy to achieve a soft landing or whether it is condemned to enter a recession.

Friday’s jump in US inflation fueled talk of a quick tightening. Policymakers have already signaled that, at a minimum, the Fed will proceed with a series of half-point rate hikes. Traders have priced the federal funds rate at around 2.9% by the end of the year, compared to its current target range of 0.75 to 1%. The OECD placed its marker last week ahead of the release of US inflation figures, calling for faster action from the Fed.


Retail is heavily represented in the earnings calendar this week. The main act is Tesco, Britain’s biggest supermarket chain, with watchers keen to hear more about how inflation is hitting household spending. However, just two months after its annual results, few expect the company to deviate from its cautious scenario that this year’s earnings will be held back by the need for buyers to control prices.

I asked FT retail correspondent Jonathan Eley for a view. “The company has gained market share in recent months, but first quarter sales growth figures will be clouded by the closure of pubs and restaurants in the same period a year ago,” he said. . “It boosted supermarket sales, but hurt Booker, Tesco’s wholesaler.”

Among analysts’ comments, Barclays forecast an overall fall of 1.8% in the UK, with lower volumes partially offset by higher prices.

Read the full schedule for the coming week here