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Trump Effect triggered Indian and Chinese stock exchanges to decouple

The correlation between the CSI 300 and the Nifty 50 indexes survived Xi Jinping’s ascent to power in 2012 and Narendra Modi’s election in 2014. Donald Trump, however, has succeeded in driving through a wedge.

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US President Donald Trump, Wikimedia

Singapore, 1st May 2017: US president Donald Trump has managed to do what Chinese President and Indian Prime minister could not do upon being elected to their respective offices.

The correlation between the CSI 300 and the Nifty 50 indexes survived Xi Jinping’s ascent to power in 2012 and Narendra Modi’s election in 2014. Donald Trump, however, has succeeded in driving a wedge. The link between equity prices of the world’s two most populous economies is now the weakest since at least the 2008 financial crisis. Trump’s effect has severed the relations between Indian and Chinese stock exchanges.

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In some ways, the decoupling predates the US presidential election. Markets that ebb and flow in tandem 30 to 40% of the time had developed minds of their own by the time Britain voted to leave the European Union last summer.
However, correlations are supposed to be mean-reverting. The continued divergence of China and India this year, with the Nifty’s 21% jump in dollar terms overshadowing a 5% gain in the CSI 300, shows that Trump’s policies may be prolonging the separation.

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It isn’t that investors have become relatively more bullish on Indian earnings compared with those in China. On a price-earnings basis, the Nifty has on average enjoyed a 40% premium over the CSI 300 since early 2012. The gap, which widened to almost 100% when Modi’s election as Indian prime minister started to look like a cinch, is currently 29%.

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Even so, every gain in the Indian benchmark is making investors sceptical. A friendless rally, as Gadfly has argued, is good for the market because it’s keeping investors focused on how, for example, Trump’s proposed clampdown on H-1B work visas would hurt India’s software exports. But companies like Tata Consultancy Services Ltd and Infosys Ltd are anyway stoking the embers of a dying industry. What’s not getting enough attention is the impact of the other Trump proposal – “tax reforms”.

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Now, a 15% US corporate tax rate is probably a chimaera, but if the ultimate political compromise in Washington is for a meaningful reduction in what companies pay, the lift to their profitability is bound to make them search for growth markets.

As New Delhi’s own tax reforms pave the way for a common domestic market of 1.25 billion people, some of those US investments could head to India.

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While India has a massive jobs deficit, the almost 6% gain in the rupee this year suggests that becoming the next factory to the world with the help of a cheap currency is not on Modi’s wish list. That’s one more reason why a recoupling of the Chinese and Indian markets is unlikely to happen soon.

– prepared by Nikita Tayal of NewsGram, Twitter: @NikitaTayal6 

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Trump Endorses Short-Term Bipartisan Fix For Obama Care

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Washington, October 18: US President Donald Trump on Wednesday expressed support for a bipartisan initiative to restore the Obama Care subsidies he suspended last week.

“We have been involved and this is a short-term deal because we think ultimately block grants going to the states is going to be the answer,” Trump told reporters at the White House, Efe news reported.

Senators Lamar Alexander (R-Tenn.) and Patty Murray (D-Wa.) announced on Tuesday an accord “in principle” to re-instate for two years the cost-sharing reduction payments, known as CSRs, that Trump halted last week.

The proposal would at the same time give states “more flexibility in the variety of choices they can give to consumers”, Alexander said.

Alexander, the chair of the Senate Health Committee, received encouragement from the President last weekend for his attempt to find common ground with the Democrats.

“Lamar has been working very, very hard with … his colleagues on the other side, and, Patty Murray is one of them in particular, and they’re coming up, and they’re fairly close to a short-term solution. The solution will be for about a year or two years, and it will get us over this intermediate hump,” Trump said on Tuesday.

Trump signed an executive order last Thursday loosening some of the requirements set down for health insurance plans by the Affordable Care Act (ACA), the signature domestic policy initiative of his predecessor Barack Obama.

He signed another directive terminating the CSR payments late Thursday night.

The President, who vowed to repeal and replace the ACA – popularly known as ObamaCare – has grown frustrated by the failure of the Republican-controlled Congress to pass a bill undoing the 2010 legislation.

“This takes care of the next two years,” Alexander said of his and Murray’s proposal. “After that, we can have a full-fledged debate on where we go long-term on health care.”

Murray, meanwhile, said that the plan would protect people from sharp increases in premiums resulting from Trump’s decision to end the CSR payments.

“Overall we are very pleased with this agreement,” Senate Democratic leader Chuck Schumer said, praising the deal for including “anti-sabotage provisions” to prevent the administration from undermining the ACA.

The Republican lawmakers were reluctant to comment on the Alexander-Murray accord.

“We haven’t had a chance to think about the way forward yet,” Senate Majority Leader Mitch McConnell said after meeting with his Republican colleagues.

Despite his encouraging words for Alexander, Trump kept up his criticism of the ACA.

“Obama Care is virtually dead. At best you could say it’s in its final legs. The premiums are going through the roof. The deductibles are so high that people don’t get to use it. Obama Care is a disgrace to our nation and we are solving the problem of Obama Care,” he said. (IANS)

 

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India Demands Data on UN Staff Misconduct, Use of Immunity

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India has demanded the secretariat disclose information about misconduct by UN staff. Flickr

United Nations, Oct 7: In an attempt to break the wall of silence around the crimes and UN staff misconduct and those on its assignments, India has demanded the secretariat disclose information about such cases and the immunity invoked against prosecutions.

Yedla Umasankar, the legal advisor in India’s UN Mission, touched a raw nerve here by criticising the UN on Friday for not vigorously following up allegations of serious wrongdoing by its employees who enjoy the equivalent of diplomatic immunity, a prized possession of its staff.

“It appears that the UN system itself may be reluctant to waive immunity even for serious misconduct carried out by its personnel while serving on its missions, so that such cases can be prosecuted by the host governments,” he told the General Assembly’s committee on legal affairs.

“Even a few of such instances or allegations of crimes committed by UN personnel is highly damaging for the image and credibility of the United Nations system and its work around the world,” he added.

His statement also touched on the practice of some countries that protect their wrongdoers at the UN.

Umasankar demanded that secretariat disclose how many cases of serious misconduct by UN personnel were registered and the number of cases where the UN refused to waive immunity to allow their prosecution.

He also wanted to know in how many cases the host country wanted the immunity waived so it can prosecute those accused; the number of times the UN asked the host country or the country that sent them to prosecute them; how many times it consulted countries before waiver of the immunity of their personnel and how many of them refused UN’s request to waive their citizens’ immunity.

The information he wanted does not cover the diplomats sent by member countries to represent them at UN bodies and enjoy diplomatic immunity with the nations hosting the UN facilities.

After scores of serious allegations of sexual misconduct by peacekeepers, especially exploitation of children, the UN vowed to uphold a policy of zero tolerance and began publishing data on such cases in peacekeeping operations including how they were dealt with.

Starting with the year 2015, it began identifying the nationalities of those accused.

However, it has not made public a roster detailing all the allegations and proven cases of serious misconduct across the entire UN.

While the focus has been on sexual exploitation and abuse reported on peacekeeping operations, Umasankar said that “at a broader level, the issue of accountability has remained elusive in some cases”.

He attributed it to “the complexities of legal aspects relating to sovereignty and jurisdiction”, the immunity or privileges that may be necessary for UN operations, and the capability or willingness of countries to investigate and prosecute the accused.

He noted that the UN itself cannot make criminal prosecutions.

While Indian laws has provisions for dealing with crimes committed abroad by its citizens, not all countries have them, he said.

Those countries should be encouraged and helped to implement such measures, he added. (IANS)

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Indo-Pak Peace Talks Futile Unless Islamabad Sheds Links with Terrorism, says Study

A Study by a U.S. think tank calls India and Pakistan talks futile, until Pakistan changes its approach.

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India and Pakistan. Wikimedia.

A Top United States of America (U.S.) think tank, Carnegie Endowment for International Peace called the relations between India and Pakistan futile, unless Islamabad changes its approach and sheds its links with Jihadi terrorism.

A report “Are India and Pakistan Peace Talks Worth a Damn”, authored by Ashley J Tellis stated that such a move supported by foreign countries would be counterproductive and misguided.

The report suggests that International community’s call for the India and Pakistan talks don’t recognize that the tension between the two countries is not actually due to the sharp differences between them, but due to the long rooted ideological, territorial and power-political hatred. The report states that these antagonisms are fueled by Pakistani army’s desire to subvert India’s powerful global position.

Tellis writes that Pakistan’s hatred is driven by its aim to be considered and treated equal to India, despite the vast differences in their achievements and capabilities.

Also ReadMilitant Groups in Pakistan Emerge as Political Parties : Can Violent Extremism and Politics Co-exist? 

New Delhi, however, has kept their stance clear and mentioned that India and Pakistan talks cannot be conducted, until, the latter stops supporting terrorism, and the people conducting destructive activities in India.

The report further suggests that Pakistan sees India as a genuine threat and continuously uses Jihadi terrorism as a source to weaken India. The report extends its support to India’s position and asks other international powers, including the U.S., to extend their support to New Delhi.

Earlier in September, Union External Affairs Minister Sushma Swaraj in the United Nations General Assembly (UNGA) slammed Pakistan for its continuous terror activities. She attacked the country by saying that India has produced engineers, doctors, and scholars; Pakistan has produced terrorists.

Sushma Swaraj further said that when India is being recognised in the world for its IT and achievements in the space, Pakistan is producing Terrorist Organisations like Lashkar-e-Taiba. She said that Pakistan is the world’s greatest exporter of havoc, death and inhumanity.

-by Megha Acharya  of NewsGram. Megha can be reached at @ImMeghaacharya.