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Falling yuan, sinking rupee, stalled reforms subdue markets

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Mumbai, Devaluation of the Chinese yuan and the Indian rupee, as also the stalled reforms process, dampened investor sentiments in the equity markets during the weekly trade ended Aug 14.

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The barometer 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) fell by 169.08 points or 0.59 percent during the weekly trade, ending at 28,067.31 points from the previous close of 28,236.39 points on Aug 7. The S&P BSE Sensex had marginally gained by 121.83 points during the weekly trade ended Aug 7.
“The devaluation of yuan is a sign that the currency wars have started at a time when the world economy is stalling, commodities prices are falling and the Chinese markets are bleeding,” Anand James, co-head, technical research desk, Geojit BNP Paribas.
“The yuan’s surprise devaluation also stroked fears of competitive devaluation across Asia, especially before the (US) Fed’s monetary policy decision due in September,” he added
The yuan has fallen by 4.6 percent since Tuesday, its biggest devaluation since 1994.
The devaluation, intended to boost exports, has made investment in China cheaper, thereby leading foreign funds away from India.
This also impacted the rupee, which on Thursday fell to its lowest level against the US dollar in 24 months at Rs.65.23.
The logjam in parliament and the yuan’s devaluation led the markets to lose a total of 724 points during the first three trading days of the week.
However, investors were seen hopeful of a rate-cut based on healthy macro-economic data points including Consumer Price Index (CPI), Index of Industrial Production (IIP) and Wholesale Price Index (WPI).
“The recovery was led by the 0.05 percent rise of the yuan (on Friday), after three days of depreciation instigated by the People’s Bank of China, and better than expected macro data,” Rahul Dholam, senior analyst with Angel Broking, cited
The macro-economic data points showed a fall in India’s annual retail inflation rate to 3.78 percent in July, the annual wholesale inflation fell to (-)4.05 percent, however there was a rise in the factory output to 3.8 percent in June.The WPI coupled with consumer price index (CPI) have pointed at a gradual reining in of prices.
The RBI has set a target for CPI inflation at 6 percent by January 2016.
On the bright side of the volatile weekly trade was the possibility that the government might extend the “Monsoon Session” or call for a “Special Session” of parliament to pass the GST bill kept investors optimistic about the future of the key economic legislation.
“The signals that are coming — like an extension of the monsoon session or a proposed special session to get the GST bill passed — are very encouraging,” Devendra Nevgi, chief executive of ZyFin.
“The India growth story is based on the ability of the government to bring in reforms. For the central bank to be able to cut rates and usher in the demand by propping-up the consumer sentiment. The lack of reforms will send a dampening signal to the rest of the world,” Nevgi elaborated.
Lately, investors have been reluctant to chase higher prices given the possibility that the reform process might be stalled due to the government’s inability to conduct business in parliament.

(IANS)

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Chinese Behemoth BBK Group Dominates Xiaomi in Smartphone Market

This year, the group has infused another brand called iQOO in the competitive Indian market that will be the first

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Xiaomi
In comparison, Xiaomi grew 5 per cent year-over-year in 2019 driven by expansion in the offline and strong performance of its Redmi Note series. Wikimedia Commons

Chinese behemoth BBK Group, the parent company of OPPO, Vivo, Realme and OnePlus brands, dominated the India smartphone market with 37 per cent share for the full year 2019, compared to 28 per cent of Xiaomi, reveals latest data from Counterpoint Research.

In the fourth quarter of 2019, the BBK Group captured a mammoth 43 per cent share in the India smartphone market while Xiaomi had 27 per cent share.

While Vivo’s market share grew to 16 per cent in the calendar year 2019 from 10 per cent in 2018, realme’s share grew to 10 per cent in 2019 from 3 per cent in 2018, OPPO’s share grew to 9 per cent in 2019 from 8 per cent in 2018. With 29 per cent growth in market share, OnePlus also became one of the fastest growing smartphone brands in India in 2019.

While Realme grew a massive 255 per cent in 2019, Vivo registered 76 per cent growth and OPPO 28 per cent, In comparison, Xiaomi grew 5 per cent year-over-year in 2019 driven by expansion in the offline and strong performance of its Redmi Note series.

“India now has emerged as the biggest market for Xiaomi, surpassing its home market China in 2019. However, the growth rate has declined to single-digit as Xiaomi is now serving a much larger installed base in India,” according to the data.

Vivo’s stunning growth in 2019 was driven by good performance of its budget-segment series. “Also, by successfully pivoting to online and aggressively positioning the S series in the offline segment with new features, it managed to make a dent in Rs 15,000-Rs 20,000 segment,” said Counterpoint.

Overall, in the fourth quarter of 2019, the BBK group captured a mammoth 43 per cent share in the India smartphone market. Interesting here to note is that the BBK Group does not seem to be resting on its laurels.

This year, the group has infused another brand called iQOO in the competitive Indian market that will be the first, 5G-ready premium device in the country and would take on Xiaomi’s new sub-brand POCO.

Xiaomi
In the fourth quarter of 2019, the BBK Group captured a mammoth 43 per cent share in the India smartphone market while Xiaomi had 27 per cent share. Wikimedia Commons

The iQOO brand — which already has six devices in its portfolio in China with the most recent one being the iQOO Neo 855 Racing — would work as a separate legal entity in the country. With this brand, the BBK Group will now have five brands — OnePlus, Vivo, OPPO, Realme and now iQOO — to take on its rivals in India in 2020.

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“We aim to sell 10 lakh iQOO devices next month in India. It will be 100 per cent ‘make in India’ premium device focused on strong performance, design innovation and 5G-ready,” Gagan Arora, Director-Marketing, iQOO India, recently told IANS. (IANS)