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More economic reforms to drive Indian equity markets in 2016

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Mumbai:  Hopes of more reforms, coupled with lower commodity prices and rising consumer confidence, are expected to aid key Indian indices in 2016 to pare their losses in the year gone by.

“The year 2016 is broadly expected to deliver positive returns; for this it is important for markets to have some momentum in reforms, private capex cycle, global stability and growth,” said Devendra Nevgi, chief executive of ZyFin Advisors.

According to Nevgi, other factors such as improvement in bank NPA’s and a rise in corporate earnings will buoy the Indian equity markets in the year ahead.

Vaibhav Agarwal, vice president and research head at Angel Broking, predicted that earnings’ growth will pick up from the second half of the year and drive the rally forward.

“Investor interest continues to remain strong as favourable macro cues such as low inflation, declining interest rates, cheap global commodities and strong governance are likely to drive improvement in corporate performance over the coming years,” Agarwal elaborated.

Other market observers pointed out that India will continue attracting foreign funds over the long term, even as other emerging markets (EMs) like China, Brazil and Russia continue to grapple with a slowdown.

“India is in a sweet spot as compared to other emerging markets given its strong fundamentals, expected improvement in economic growth, lower inflation and cut in interest rates. For these reasons, we expect FIIs’ (foreign institutional investors) interest to return to the equity markets,” said Nitasha Shankar, vice president for research with YES Securities.

“However, trends in 2016 would also depend on geopolitical events both within India (related to reform announcements) and on the global front. So, while we do expect FIIs to return to India, whether this would happen on a large scale in 2016 or be pushed to 2017 remains to be seen,” Shankar maintained.

The unpredictability of foreign funds during 2015 has been blamed for the rout seen in the bellwether indices last year.

Figures from the National Securities Depository Limited (NSDL) showed that the FPIs (foreign portfolio investors) bought stocks and debt worth Rs.63,663 crore (over $10 billion) in 2015 from the previous year’s levels that exceeded Rs.1 lakh crore.

Nevertheless, data with the stock exchanges disclosed that FPIs had taken out a total of Rs.20,373.69 crore during 2015.

“Reforms such as the GST (Goods and Services Tax) bill remains the key to attracting more foreign flows. Domestic flows are expected to remain buoyant,” Nevgi said.

In addition, experts cited that the softness in commodity prices, particularly that of crude oil, is expected to help in keeping a check on inflation and create room for further rate cuts that can help in reviving the investment sentiment.

“With oil and commodity prices expected to remain low, we expect the inflation trajectory to continue to trend downwards in 2016,” said Agarwal.

“Assuming a normal monsoon, we expect inflation to remain in the RBI’s (Reserve Bank of India) comfort zone giving them enough headroom to cut interest rates further by at least another 50-100 basis points in this year.”

Nevgi explained: “Oil and commodity prices are important, but the market sentiments may not change on day-to-day moves. Larger and unexpected movements in the short run will, however, affect the sentiments.”

Moreover, with investors’ focus now back on the chances of RBI easing key lending rates, inflation rhetoric is likely to become dominant in the initial months of 2016.

“The monsoon would be in the focus as the rabi crop acreage so far has fallen by over five percent,” said Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services.

Besides, investors would look forward to parliament’s budget session beginning end-February and the US Fed’s moves on the next round of rate hikes.

“With the last two budgets being slightly underwhelming when weighed against the markets’ hopes, budget 2016-2017 will go a long way in making the market believe again,” James said.

“Certainly, more US rate hikes can be expected, but markets would not be as weary of these as much it would if such hikes were fast-paced.”

However, on the downside, volatility on account of global divergence on monetary policy is expected to hurt Indian markets, as the US is expected to go in for more rate hikes and ECB (European Central Bank), Japan and China continue with their stimulus programmes.

“The divergence in monetary policy of the US and the rest of the world and the political realignment will flare up volatility in 2016,” said Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities.

Volatility had dented key Indian indices last year, with markets scaling record highs, only to see their valuations drop sharply over the months.

As a result, the two most-quoted indices – the 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) and the 50-scrip Nifty of the NSE – fell by five percent and 4.1 percent respectively.

In comparison, the two indices had logged gains of 29.89 percent (Sensex) and 31.38 percent (Nifty) in 2014 to emerge as the best performers globally. (IANS, Rohit Vaid), (image courtesy: upload.wikimedia.org)

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Narendra Modi pays Tribute to India’s Former PM Narasimha Rao on his 95th Birth Anniversary

Narasimha Rao was India's 9th Prime Minister and is referred to as the "Father of Indian Economic Reforms"

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P.V. Narasimha Rao. Image source: www.thedailybeast.com
  • PV Narsimha Rao was India’s 8th Prime Minister and is referred to as “Father of Indian Economic Reforms”
  • He died at the age of 83 due to heart attack on December 23, 2004
  • Rao was born on June 28, 1921 at Karimnagar in Telangana

Prime Minister of India, Narendra Modi paid respect to former Prime Minister of India- P.V. Narasimha Rao on his 95th birthday on Tuesday, June 28.

Pamulaparti Venkata Narasimha Rao was by profession an Indian Lawyer and a politician who served India as a Prime Minister from (1991–1996). He was India’s 9th Prime Minister and is referred to as the “Father of Indian Economic Reforms”.

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PM pays tributr to PV Narsimha Rao (Source: Wikimedia Commons)
PM Narendra Modi pays tribute to P.V. Narasimha Rao Image Source: Wikimedia Commons

“Tributes to P.V. Narasimha Rao on his birth anniversary. He led India at a crucial time and his leadership was both notable and vital,” Modi tweeted.

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Narasimha Rao was born on June 28, 1921 at Karimnagar in Telangana and served as the Prime Minister of India from June 21, 1991 to May 16, 1996. P.V. Narasimha Rao died at the age of 83 due to heart attack on 23rd December 2004.

(inputs from IANS)

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Iowa Students run Farm and cultivate love for Sustainable Agriculture

The Student Organic Farm, where working is often independent of academic interests, works on the model of CSA (Community Supported Agriculture)

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An agricultural land in Vietnam. Image. Wikimedia
  • Student Organisation Farm began in the 90s’ as a practical application of sustainability in agriculture
  • A group of university students who started cultivating in farms for local consumption
  • About 40 different fruits, vegetables and herbs are on the list for the present season of growth at the Iowa Student Organisation Farms

Students of the Iowa State University donning casual tees, covered in mud and carefully pulling up weeds as they distinguish between different stages of perennial chives, rhubarb, etc., with their diligently gloved hands might be an unusual sight 20 years ago, but today, a whole new concept of farming has evolved from among the youth in campus.

About two decades back, the lure of multiple small-scale farming groups on the coast pulled shoppers to the markets for their fresh produce and their rich practice of sustainable agriculture. The same was adopted by a group of university students who started cultivating in farms for local consumption. Thus emerged the first ‘community-supported-agriculture’ (CSA) farm in the area, marking a new trend of sustainable growth in the heartland.

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Student Organisation Farm began in the 90s’ as a practical application of sustainability in agriculture. As more and more learners of agronomy enrolled for a dedicated weekly programme, the work got divided, and productive. “I didn’t know how passionate I [would] become for physical work,” says culinary science major Heidi Engelhardt.

“People want to work in kitchens and they want to work in big cities. And that is important, but it’s also important to have that farming aspect. And I think I’m very lucky to have discovered that” adds Heidi as she walks towards the student farm landscaped by basic agricultural tools and farming equipments in the campus.

An agricultural Land. Image source: Wikimedia Commons
An agricultural Land using liquid fertilizers. Image source: Wikimedia Commons

The Student Organic Farm, where working is often independent of academic interests, works on the model of CSA. Boxes full of freshly produced soybeans, corns and other plants are sent out to the local community during the ripe growing season. Those among students who work three hours a week are entitled to a discounted subscription price.

“Its’ hands-on learning,” says agronomy professor Mary Wiedenhoeft, who serves as an academic adviser on the farm. “And so that’s why the student organic farm is really unique.”

“Not a lot of people in agronomy are going in my direction,” says Riley Madole, who has a paid job as the summer farm manager. Riley aims to pursue the work as career after he graduates in December. As he talks about students assisting in dumping of handfuls of weeds into barrows so the compost doesn’t grow on farms, he adds, “whether it be straight organic or just reduced pesticide use,” its’ the kind of work he would love to do.

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Other than growth assistance and weed removal, students learn to grow food, take care of plants, manage a business, work as a team and know how recruitment works. All the same is inclusive of the added benefit of getting to savor the fruits of their labour, literally.

“I went out and harvested some Brussels sprouts and they’re now my favorite vegetable,” says senior Becca Clay, an agronomy major who joined the farm in her first semester.

Culinary science students express how they assimilated knowledge of their course while working in farms by gaining experience on how to “incorporate fresh herbs into cooking” and other similar tasks. About 40 different fruits, vegetables and herbs are on the list for the present season of growth at the Iowa Student Organisation Farms.

“I really like beets,” says meteorology student Kati Togliatti who started eating beets only after she enrolled as a student volunteer in the farm.

-by Maariyah Siddiquee, an intern at NewsGram. Twitter: @MaariyahSid

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Indian healthcare needs urgent reforms: The Lancet

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London: Indian healthcare system needs urgent reforms across several key challenges if the country is to achieve the government’s vision of assuring health for all, says a paper in The Lancet.

The paper, authored by professor Vikram Patel from London School of Hygiene & Tropical Medicine and colleagues, has documented India’s progress on major health indicators in the past decade but also its many deficiencies.

Key health indicators for Indian states

“The health time-bomb ticks on due to the rising burden of non-communicable diseases. There are widespread inequities in health outcomes that are apparent in the large morbidity and mortality differentials across socio-economic status, caste, class, sex, and geographic location,” Patel said.

The most disturbing indicator of the deficiencies of the Indian healthcare system is the observation that health care costs are driving millions into poverty.

The authors argue not only for more resources but for an integrated national healthcare system, built around a strong public primary care system with a clearly defined supportive role for the private and indigenous sectors.

The system should address acute as well as chronic health care needs and should be cashless at the point of service delivery, the authors said.

According to the paper, India continues to lag behind regional neighbours especially on health indicators like mortality rates for children aged under five years, with India recording 27 percent of all neonatal deaths and 21 percent of all child deaths in the world.

The paper calls for strengthening the country’s weak primary health system.

“Second is the challenge of skilled human resources, where an overall shortage was further compounded by inequitable distribution of skilled workers,” the paper said.

“Also, India needs to better harness and regulate its large private sector” in 2014, more than 70 percent of outpatient care and 60 percent of inpatient care was provided in the private sector.

“However, lack of regulation has led to corruption across the sector, with consequent poor quality of care and impoverishment of patients,” it added.

According to the authors, dismally low public spending on health has crippled the public sector and created large barriers in quality and access.

Gaps in the availability of health professionals in India

The total expenditure on health in India fell from 4.5 percent of gross domestic product (GDP) in 2004-05 to 4.0 percent of GDP in 2013-14.

Real expenditure and government expenditure on health per head from 2004 to 2014

With India spending as little 0.1 percent of its GDP on publicly funded drugs, close to two-thirds of the total out-of-pocket expenditure on health was incurred on drugs, often used irrationally.

Out-of-pocket expenditures on health per episode of inpatient and outpatient care in India

“Only a radical restructuring of India’s healthcare system will assure healthcare for all Indians,” Patel said.(IANS)

(Picture courtesy: www.thelancet.com)