Sensex plunges 441 points on US bond yield worries; Nifty settles below 14,950
Equity indices fell for second straight session on Friday as rising US Treasury yields spooked investors. The benchmark BSE sensex plunged 441 points or 0.87 per cent to close at 50,405; while the broader NSE Nifty moved 142 points or 0.95 per cent lower to settle at 14,938.
RIL to cover Covid vaccination costs for staff
Billionaire Mukesh Ambani's Reliance Industries Ltd will bear the cost of vaccinating its employees and their immediate family, totaling an estimated 12.2 lakh, as the oil-to-telecom conglomerate looks to safeguard them against the Covid-19 virus.
Indian tea exports dip 18% in 2020
India, the world’s second largest tea producer, saw tea exports fall by about 18% or 44 million kg (mkg) to 208mkg in 2020 compared to 252mkg in the previous year, according to industry sources. However, Kenya, the country’s toughest competitor in tea exports, saw its exports increase by 22mkg to 519mkg in 2020.
Tata to go solo, no tie-up with Tesla, says Chandra
Putting at rest all speculation around a partnership with Tesla, Tata Sons chairman N Chandrasekaran said on Wednesday that there is “no dialogue” with the Elon Musk-owned car company for a partnership in India, while adding, “We will do it on our own.”
Indian-American named 1st VP, COO of Federal Reserve Bank of New York
Banking|: New York: Indian-American Naureen Hassan, a 25-year veteran of the financial services industry, has been named as the First Vice President and Chief Operating Officer (COO) of Federal Reserve Bank of New York. In a statement issued on Thursday, the Bank said that the appointment effective March 15, was approved by the Board of Governors of the Federal Reserve System. "As First Vice President, Hassan will be the New York Fed's second ranking officer as well as an alternate voting member of the Federal Open Market Committee," the statement said. "Naureen's leadership background, deep commitment to fostering diverse teams, and extensive technology and financial experience will be critical to her role as a bank leader," John C. Williams, President and CEO of the New York Fed, was quoted as saying in the statement. "I am confident that Naureen will be an inspiring and innovative leader, and look forward to working with her to move our organisation forward in line with our values," he added. Meanwhile, Denise Scott, Executive Vice President of the Local Initiatives Support Corporation (LISC) and chair of the New York Fed's Board of Directors, said that "Naureen's leadership experience and operational expertise are fully aligned with what the search committee and I envisioned for this role". According to the statement, Hassan has previously served in various capacities in the financial services industry, focusing primarily on digital and business process transformation. For the past four years, she was Chief Digital Officer of wealth management at Morgan Stanley. Hassan's parents are immigrants from Kerala, India. Her father, Javad K. Hassan was a former senior executive at IBM and former president of Global Inter Connect Systems at AMP Inc (now TE Connectivity).
Sensex slumps over 440 pts, Nifty below 15,000
The BSE benchmark sensex tumbled over 440 points and the NSE Nifty cracked below the key 15,000-level in early trade on Friday in line with a slump in other Asian markets as US bond market turmoil continued to fan investor worries globally
Advertisers and their partners need to be on same page with their service contracts
Analysis|: The Emirates had been a commercial hub for the region long before even its formation as a country. It’s business conditions, multilingual population and ease of connections made it the destination of choice for the headquarters of multinationals. Support industries also established themselves here – among them the marketing services and advertising industry. The COVID-19 has had an impact on almost every sector, meaning advertisers are being far more prudent with marketing investments. In fact, ad spend in the region fell by up to 20 per cent in 2020, according to WARC. Therefore, justifying and accounting for every dollar spent is ever more essential. Marketing budgets are now spent with an increasing variety of marketing agencies offering everything from media buying to creative development to handling influencers. Two aspects have to be managed carefully by these advertisers: • Are the agency services and costs clear and justifiable? • Is the advertiser paying the agreed cost? What about the discounts agreed to? There can be a disconnect between what is agreed and what is actually paid or recouped, particularly in multi-year, multi country contracts. Since many of the largest advertisers are headquartered in the UAE, they invariably want their strategic marketing agency partners to be based here too. To give marketing advice, but also manage and implement projects at a country level. This is especially true when it comes to creative agency networks. Local understanding is particularly relevant, whether in terms of dialect, or to ensure that a localised look-and-feel are achieved. Read More UAE's facilities management industry needs immediate help Personal finances could always do with a 'deep cleaning' Localisation comes with layers While a marketing campaign may be developed in the UAE for multiple Middle Eastern markets, getting the degree of localisation required without appointing suppliers in each market means the regional advertiser just has to brief its UAE-based agency, which can then subcontract jobs to a local partner or an affiliate. As with creatives, several print management companies have their headquarters in the UAE to service brands’ regional needs. They offer a one-stop shop handling all the production of high-volume materials, for everything from supermarket stands to countertop displays and printed material. They will also manage the logistics around the region with a single payment option. This allows advertisers to consolidate spend with one company, which manages the buy, in a similar way to how media agencies offer a single point-of-contact to buy advertising inventory. No agendas, please But there is the risk that transparency suffers and advertisers must ensure that third-party agency selections are not to a closed pools of bidders, to push up commissions. Media auditing to ensure media buying agreements are being kept is essential – but the same scrutiny of contracts is needed across marketing services. As the touchpoints between brands and consumers grow, more channels and suppliers are involved. And because most advertisers operate across multiple countries, there is the added layer of complexity. With increasing investments and layers come the risk of erroneous charges, misapplied mark-ups and commissions, and a lack of transparency in selection and use of third-party suppliers. Compliance checks Ensuring brand guidelines are adhered to, identifying the intermediaries used and avoiding foreign exchange variances means extra vigilance and control is required. This will make sure quality is maintained across all assets and that any related relationships remain fair. Advertisers need full transparency in who these sub-contracted partners are, to ensure their brand’s reputation is protected. After all, if things go wrong, it will be the brand’s name making the headlines for the wrong reasons, not the local supplier. Working in the current unusual business conditions means keeping a close eye on contract compliance. For marketers and procurement teams to be able to demonstrate to finance that their marketing investments are getting a fair return and avoid the dreaded annual budget cut, an audit is often the best way to start. Marketing and media auditing needs to extend across relationships with multiple suppliers to ensure full transparency. Be it media, creative, digital, sales promotion, event management, PR and more, the contracts agreed are a bond of trust. Scrutinising the compliance of contracts and making ongoing corrective actions improves the relationship between advertiser and supplier. The best business relationships require – above all else – that those involved deliver on their promises. And it is within the contract, that those promises are laid out. This is why contract compliance is vital for both ongoing and future relationships. And the checks and balances to abiding by the agreements are determined by auditing. - Stewart Morrison is Managing Director - MENA at FirmDecisions.
Payday lender lines of credit and instalment loans at 47% create debt traps, critics say
News/Business: Consumers who take instalment loans from payday lenders pay as much as 47 per cent on their debt, and now a chorus of voices are calling for the federal government to take urgent action.
OPEC's output cut extension sparks forecasts of $80 a barrel in third quarter
Energy|: London: Oil briefly moved above $65 a barrel after OPEC+ chose not to relax supply curbs even as the global economy pulls out of its pandemic-driven slump, confounding widespread expectations the group would loosen the taps. The surprise decision spurred a wave of crude price forecast upgrades by major banks. The producer alliance agreed to hold output steady in April, while Saudi Arabia said that it will maintain its 1 million barrel-a-day voluntary production cut. West Texas Intermediate rose as much as 1.9 per cent and Brent briefly topped $68. Crude has soared this year, shepherded higher by OPEC+ restraining supplies and the vaccine-aided recovery in consumption that's drained inventories. The group's decision represents a victory for Riyadh, which has advocated for tight curbs to keep prices supported. Read More OPEC+ faces calls to cool oil market frenzy with extra barrels Ahmed Zaki Yamani: Long-serving minister who led Saudi Arabia through 1973 oil crisis One for oil bulls "Overall, this was the most bullish outcome we could have expected," JPMorgan Chase & Co. analysts including Natasha Kaneva wrote in a note to clients. The Organization of Petroleum Exporting Countries and its allies, including Russia, had been debating whether to restore as much as 1.5 million barrels a day of output. As part of the agreement, which was struck at a virtual meeting on Thursday, Russia and Kazakhstan were granted exemptions. The group's next meeting is set for April 1 to discuss production levels for May. Betting against shale Saudi Arabia's bold and unexpected gamble to restrain production is founded upon its view that, this time around, higher prices will not lead to a big increase in output by American shale drillers. Saudi Energy Minister Prince Abdulaziz bin Salman said that shale companies are now more focused on dividends. Oil's rapid gains this year stand to intensify the debate about the potential resurgence in inflation, and complicate the task facing the Federal Reserve as it supports the US recovery. The Treasury market is already looking for signs of faster price gains, with yields rising rapidly. Crude is up more than 8 per cent since Tuesday's close despite a strengthening of the dollar and a steep sell-off in other major commodities, especially economic bellwether copper. Goldman Sachs Group Inc. raised its Brent forecasts by $5 a barrel and now sees the global crude benchmark at $80 in the third quarter. JPMorgan increased its Brent projection by $2 to $3 a barrel and Australia & New Zealand Banking Group Ltd. boosted its three-month target to $70. Citigroup Inc. said crude prices could top $70 before the end of this month. Directional change Oil rising to these levels will likely increase strains within OPEC+ as some members will want to pump more to relieve under-pressure economies, Citi said in a note. Top importers such as China and India would also not be happy and the alliance is likely to change course at its next meeting, it said. More evidence of the demand recovery continued to emerge, especially in Asia. Gasoline and diesel consumption in China has extended its run above pre-virus levels this year after the faster-than-expected return of factory activity and infrastructure building following the Lunar New Year holiday.
Reliance will bear full cost of COVID-19 vaccination for employees and families: Nita Ambani
Business|: New Delhi: Reliance Industries Limited (RIL) will bear the full cost of COVID-19 vaccination for its employees and their families. Nita Mukesh Ambani, Founder and Chairperson, Reliance Foundation in a letter to members of the Reliance family said, "In our Reliance Family Day 2020 message, Mukesh and I had personally assured you that as soon as any approved Covid 19 vaccine is available in India, we will do our best to plan early vaccination for all Reliance employees and family members. We remain committed to this goal and to contributing to our nation's collective ability to end the coronavirus pandemic as soon as possible." "For those who are eligible to be vaccinated, we strongly urge you to register quickly for the Government of India's vaccination programme currently underway," Nita Ambani said. "As per our earlier commitment, Reliance will bear full cost of vaccination for you, your spouse, your parents and vaccine eligible aged children. You and your family's safety and well being is our responsibility. Mukesh and I truly believe that cherishing the health and happiness of our loved ones is what it means to be part of a family-Reliance family," Ambani said. "With your support, we will soon be able to put the pandemic behind us. Until then, please do not let your guard down against the scourge of the coronavirus just yet. Continue to maintain utmost safety and hygiene precautions. We are in the last stage of the collective battle. Together we must win and we will!" Ambani said.
A post-pandemic world order will be rebuilt around innovation
Analysis|: We are witnessing a once-in-a-lifetime generational shift. Processes, systems, and ways of working that were the norm have given way to a new order, driven by digital transformation, and accelerated by the reality of the pandemic. The biggest lesson we can take from what we are witnessing is refreshingly simple: those who survive and emerge stronger are those who invest in innovation. This is as much applicable for individuals, corporates, and nations. Those who will come out of the crisis faster are those that have focused on innovation, leveraging investments in next-generation tech, and creating an innovation-conducive environment. In fact, one study conducted on the impact of the economic crisis of 2008 revealed that businesses that invested in innovation were the fastest to recover… and gained stronger returns when the economy rebounded. Read More UAE needs to create pools of harvested rainwater for its needs There can't be any slackness on the cyber security agenda Pay off The power of innovation to accelerate growth, through new opportunities in diverse sectors, is evident in the UAE. One of the first countries in the region to establish a National Innovation Strategy, the UAE’s focus on expanding its capabilities, through innovation, is highlighted by many breakthroughs – the Hope Probe, the Arab world’s first interplanetary mission to Mars; the world's first 3D-printed commercial building; the establishment of ministries focused on AI and Advanced Technology – the list goes on. The UAE has long invested in building national competencies in energy, healthcare, aviation, manufacturing, and finance, by leveraging the potential offered by Artificial Intelligence and machine learning. The country is also focused on its human capital, where its digital-savvy youth plays a central role. Mindset change One of the central themes moving forward must be how we can further equip national talent to embody an ‘innovation mindset’. This focus on innovation makes the UAE stronger and more resilient to the inevitable disruptions. One example is in the energy sector. Delivering uninterrupted power is a key engine for a rebounding economy. The question before innovators is how we can continue to produce, transmit and distribute electricity with a lower carbon footprint? How can we achieve higher efficiencies at existing power plants? How can we continue to scale up renewable energy generation and make it work with natural gas to meet demand in a sustainable way? These are the kind of questions innovators ask continuously and work towards achieving solutions – not just in energy, but also in healthcare and aviation. All round gains The strengthening of innovation culture has a positive ripple effect on the economy. In addition to nurturing a new generation of scientists and technology leaders who will contribute to the country’s knowledge base, innovative businesses create local entrepreneurial opportunities and support the growth of SMEs, which are an integral part of the national economy. The innovation environment the UAE provides reflects in the findings of GE’s Global Innovation Barometer, which revealed that business executives rank the nation as a global leader in creating an ‘innovation-conducive environment’. With the business community rallying for innovation and the government investing in building an innovation-conducive environment, the task before us all is embrace innovation to accelerate growth – not just for a week or a month – but for years ahead. - Dr. Dalya Al Muthanna is President of GE in the UAE and Chief of Strategy & Operations for GE International Markets.
Cement prices offer only relief for UAE and Gulf developers as steel shoots up
Property|: Dubai: Developers in the UAE and Gulf will not have to worry about one key commodity – cement – even as steel and wood prices rocket over supply issues. And they won’t have to bother with cement supply issues for quite a long time. “The UAE and Saudi Arabia have over 30 million tonnes of surplus cement stock and excess capacities - there is no chance of a shortage within the region,” said Joey Ghose, CEO of Oman-based Raysut Cement Company, which by next year expects to have a 10 million tonne annual capacity by next year. “The GCC faces a serious oversupply.” The last time cement prices in the Gulf shot up was in 2007, in the tail end of the construction and real estate boom. Since then, there has been a continuous decline. That's in sharp contrast to the 25-30 per cent hike recorded by most other building material prices in the UAE since October last. Steel's gains are the most spectacular, from Dh1,800 a tonne to Dh2,600, while white wood is now at Dh1,000 and up from Dh600. Ripe for a mix In the last two years, there has been active speculation that some of the cement companies in the Gulf will have to merge to stand a better chance of surviving long-term. Many of these factories had raised significant capacities in the last 10 years, keeping in mind the real estate development activity. But with new projects dropping significantly, at least for the next two to three years, cement companies are caught in a bind. Industry sources say that informal talks have happened between mid-sized players over mergers and acquisition possibilities. But for the moment, they are making do with controlling production and not pushing too hard on output increases. But Ghose still has concerns – “There are new clinker plants in Fujairah and new grinding units being built. The business model for these new capacities are not fully understood.” Joey Ghose, Group CEO of Raysut Cement Co.: "We have best estimated a 50% decline in the regional demand which, continues to increase..." Image Credit: Supplied Lower offtake Even in a best-estimate situation, regional demand for cement in the near-term could be down by 50 per cent or so. The decline “continues to increase,” said Ghose. “The only upside is that exports from the region have increased.” Massive capacity The UAE has an - installed - capacity of 35 million tonnes for cement, while Saudi Arabia has 70 million tonnes and Oman comes up with 10 million tonnes. Add all of that and it is the main reason why cement prices remain stuck in a low range. “Prices in Saudi Arabia have always been low due to the subsidised energy costs,” the CEO added. “But of late, they have declined from $40 a tonne to $32 in- country and as low as $15 a tonne for export FOB (freight-on-board). “Oman prices have remained stable at OR21 a tonne. The UAE’s domestic prices range from Dh140-Dh190 a tonne, whilst exports to Oman are at as low as Dh110.” No import pressures With prices already this low, Gulf cement producers don’t see a lot of cheaper imports happening. Unlike what local and regional steel mills have to contend with. So much so, “Some producers in one market have been dumping in another Gulf market since 2015,” he said. “Some border taxes have been imposed - but these [cheaper] imports continue.”