Richest 1% to own more than rest of the world by 2016: Oxfam

Wealth accumulated by the richest one percent will exceed that of the other 99 percent in 2016, the Oxfam charity said on Monday, ahead of the annual meeting of the world’s most powerful at Davos, Switzerland. 

“The scale of global inequality is quite simply staggering and despite the issues shooting up the global agenda, the gap between the richest and the rest is widening fast,” Oxfam executive director Winnie Byanyima said. 

The richest one percent’s share of global wealth increased from 44 percent in 2009 to 48 percent in 2014, the British charity said in a report, adding that it will be more that 50 percent in 2016. 
The average wealth per adult in this group is $2.7 million (2.3 million euros), Oxfam said. 

Of the remaining 52 percent, almost all – 46 percent – is owned by the rest of the richest fifth of the world’s population, leaving the other 80 percent to share just 5.5 percent with an average wealth of $3,851 (3,330 euros) per adult, the report says. 

Byanyima, who is to co-chair at the Davos World Economic Forum taking place Wednesday through Friday, urged leaders to take on “vested interests that stand in the way of a fairer and more prosperous world.” 

Oxfam called upon states to tackle tax evasion, improve public services, tax capital rather than labour, and introduce living minimum wages, among other measures, in a bid to ensure a more equitable distribution of wealth. 

The 45th World Economic Forum that runs from Wednesday to Saturday will draw a record number of participants this year with more than 300 heads of state and government attending. 

Rising inequality will be competing with other global crises including terrorist threats in Europe, the worst post-Cold War stand-off between Russia and the West and renewed fears of financial turmoil. 

France’s Francois Hollande, Germany’s Angela Merkel and China’s Li Keqiang will be among world leaders seeking to chart a path away from fundamentalism towards solidarity. 

Italian Prime Minister Matteo Renzi and US Secretary of State John Kerry are also expected. 

Beyond geopolitical crises, hot-button issues like the Ebola epidemic, the challenges posed by plunging oil prices and the future of technology will also be addressed at the posh Swiss ski resort.

ONGC stake sale after new subsidy sharing formula: Pradhan

The Government will go for its stake sale in ONGC after finalising a new subsidy sharing formula as it would help in fetching better price in the market.

“The Government is looking at new subsidy sharing formula. As far as ONGC is concerned, they have some issues regarding subsidy sharing formula. Let’s have re-look on the issue. I am sure ONGC will get better price,” Oil Minister, Dharmendra Pradhan said.

However, the Department of Disinvestment will take a call on time of divestment of ONGC, he said after meeting with Finance Minister Arun Jaitley here.

During the meeting, also attended by senior officials, discussions were focused on selling of government stakes in oil companies other than ONGC, a source said.

“Well I am not ruling out ONGC but today’s meeting was on other oil companies. I can tell you all options are open and I am watching the market and getting enough stocks in place, when the market is good I will do,” the source added.

The Cabinet has approved 5 per cent stake sale in ONGC, which could fetch an estimated Rs 11,500 crore to the exchequer. The Government holds 68.94 per cent in ONGC.

Source said the Oil Ministry is reworking the fuel subsidy sharing formula to cut ONGC payout by a quarter through adjustment of statutory oil cess against its share.

The move to lessen the subsidy burden is expected to give a fillip to government’s plan to sell 5 per cent stake in Oil and Natural Gas Corp (ONGC).

Upstream producers like ONGC met nearly half of the revenue loss or under-recoveries that fuel retailers incurred on selling cooking fuel and diesel until recently at government controlled rates.

In 2013-14, ONGC paid a record Rs 56,384 crore subsidy, which this fiscal is likely to come down to around Rs 32,000 crore.

India Pips China in December Manufacturing Growth: HSBC

The manufacturing and services sectors in India expanded at a faster pace than those in China in December, an HSBC survey said today.

The HSBC Emerging Markets Index (EMI), a monthly indicator derived from PMI surveys, rose to three-month high of 51.7, from November’s six-month low of 51.2, but still signalled only a modest rate of expansion.

The EMI averaged 51.4 over 2014 as a whole, the lowest for a calendar year since the series began in late-2005.

“Although growth picked up slightly across the world’s main emerging markets on an average, rates of expansion remain subdued,” Markit Chief Economist Chris Williamson said.

Data for the four largest emerging economies portrayed mixed fortunes in December.

China registered growth for the eighth month running, while India’s tentative recovery continued. Brazil saw a decline in activity for the eighth time in nine months, while Russia endured a steepening downturn.

During December, the HSBC composite index for India, that maps both manufacturing and services, stood at 52.9, whereas for China it was 51.4, Brazil (49.2) and Russia (47.2).

An index measure of above 50 indicates expansion.

“Of the four ‘BRIC’ economies, India saw the strongest rate of expansion in December, despite the rate of expansion slipping from November’s five-month peak,” said Williamson, adding that the rate of growth for both India and China slowed from an already “lacklustre pace”.

The outlook for global emerging markets remained muted in December.

The HSBC Emerging Markets Future Output Index, which tracks firms’ expectations for activity in 12 months’ time, picked up from November’s record low on the back of strengthening sentiment in Brazil and India.

Overall inflationary pressures across emerging markets remained subdued, HSBC said, adding that both new orders and employment in emerging markets increased in December.

India might become 2nd biggest market for smartphones by 2016

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According to a study conducted by research firm eMarketer, India is all poised to become the second largest market for smartphones anywhere in the world. The year 2016 has been predicted as the year this will happen. It has been said that India will surpass the US to reach this spot. 

The report of eMarketer says “India will exceed 200 million smartphone users, topping the US as the world’s second largest smartphone market by 2016″, and goes on to say “Inexpensive smartphones are opening new opportunities for marketing and commerce in emerging markets where many consumers previously had no access to the Internet.”

The report also claims that China will still be the foremost market for smartphones even in 2016 with  624.7 million smartphones. The number of smartphones in India is predicted to be 204.1 million , followed by the US-198.5 million, Russia-65.1 million and Japan-61.2 million.

It is also being predicted that while more than 1/4th of the population of the world will be using smartphones in 2015, this figure will reach 1/3rd in the year 2016, and that smartphone users globally in 2016 will number more than 2 billion.

Putin says Russia economy will be cured but offers no remedy

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President Vladimir Putin said on Thursday Russia’s economy would inevitably rebound after the ruble’s dramatic slide this year but offered no remedy to a deepening financial crisis.

Under pressure to show he has a plan to fix the economy, Putin told an end-of-year news conference the actions of the central bank and government had been “adequate” in a crisis he blamed on external factors.

But hinting at internal divisions, he said more measures were needed and the central bank should have halted foreign exchange interventions to support the rouble sooner. Earlier, more decisive action by the central bank, he implied, might have made this week’s big interest rate rise unnecessary.

The economy is heading into recession in what one minister called a “perfect storm” of low oil prices, Western sanctions in theUkraine crisis and global economic problems. The rouble has fallen about 45 percent against the dollar this year.

“If the situation develops unfavorably, we will have to amend our plans. Beyond doubt, we will have to cut some (spending). But a positive turn and emergence from the current situation are inevitable,” Putin said.

“The growth of the global economy will continue and our economy will rebound from the current situation,” he said, sitting at a large desk and looking confident as he spoke to a studio audience and live on television.

He said Russia must diversify its economy to reduce dependence on oil, its major export and a key source of state income, and a recovery could start at some point next year.

But he stuck largely to broad promises rather than going into details and announced no major new proposals. He has said many times during 15 years in power that he will reduce Russia’s reliance on energy exports but has failed to do so.

The rouble slipped as he spoke, moving to around 3 percent weaker on the day. The bank increased its key lending rate by 6.5 percentage points to 17 percent on Tuesday, and has spent more than $80 billion trying to shore up the rouble this year, but to little avail.



Analysts said Putin’s assessment of the government and central bank’s performance was lukewarm and could indicate that heads would roll.

“All this implies pretty big divisions within the administration as to how to react to the crisis and pressure on the rouble,” Timothy Ash, head of emerging market research at Standard Bank in London, said in a note.

A prominent opponent, former Prime Minister Mikhail Kasyanov, said the crisis showed Putin had mismanaged the economy and his problems would increase because prices are expected to surge next year because of the ruble’s weakness.

“Russia is going into decline,” Kasyanov told Reuters in an interview late on Wednesday, suggesting Putin should accept that “he needs an exit strategy” to leave power.

Economy Minister Alexei Ulyukayev said in a newspaper interview the Western sanctions were likely to last “a very long time” and Russia was paying the price for failing to carry out structural reforms, describing events as “the perfect storm”.

But Putin said: “Under the most unfavorable external economic scenario, this situation may go on for about two years. But it may also start improving in the first quarter, in the middle, at the end of the next year.”

Opinion polls show Putin has high popularity ratings since annexing the Crimea peninsula from Ukraine in March, but the ruble’s decline and Russia’s slide toward recession could erode faith in Putin’s ability to provide financial stability.

Asked about Ukraine, where Russia has irked the West by backing separatists fighting government forces in the east, Putin said Moscow wanted to restore political unity and denied any link between the conflict and Russia’s economic problems.

He said he wanted the conflict, in which more than 4,700 people have been killed, resolved by political means. But he criticized NATO over its eastward expansion following the fall of the Berlin Wall and said Kiev had been wrong to use forces against the separatists.

Reliance Ind in venture with China’s Shandong Ruyi Science

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Reliance Industries Limited has formed a joint venture company with China’s Shandong Ruyi Science in a bid to revive its struggling textile business. RIL had started as a textile company under Dhirubhai Ambani but today its textile business accounts for a miniscule part of the company’s revenue

The new venture will bring together RIL’s Vimal brand and Ruyi’s worsted suiting brand ‘Georgia Gullini’. As per the definitive agreements, RIL will transfer its existing textile business into a newly incorporated company, for which RIL will receive cash consideration. RIL will own a majority 51 per cent in the proposed venture, with the balance owned by Ruyi. The company did not disclose the size of the deal. Nikhil R. Meswani, Executive Director, Reliance Industries Ltd., said that the move will help Reliance reposition its textile business on a higher growth path.”

Growth potential

Our partner’s deep commitment and global reach in the textile business will enable this venture to harness the growth potential of the Indian market and emerge as a global textile player,” he said.

Ruyi has revenues of over $3 billion and has a global presence including in the US, Europe, Japan, Australia, New Zealand and China. Ruyi has a portfolio of brands such as ‘Taylor & Lodge’, ‘Harris Tweed’, ‘Royal Ruyi China’, ‘Nogara Italy’ and ‘Indios Italy’. The joint venture company will look at launching some of these brands in India. Qiu Yafu, Chairman, Shandong Ruyi Group, said the partnership with RIL reflected the closer economic relations between China and India.

Through the joint venture Ruyi will hope to capitalise on RIL’s wide distribution network in India while RIL will gain access to Ruyi’s technology and its global reach.

It was earlier reported that in 2012 RIL had put its textile business on the block but did not find any buyer. The textile business contributes $300-350 million to RIL’s overall $65-billion annual revenue. The company’s textile business, located at Naroda, near Ahmedabad, was set up in 1966.

A good reason why Chinese economic growth might not slump as much as expected

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China may be facing export growth issues from lacklustre global growth picture but domestically they may not be anywhere close to a slowdown.

At the recent Star Trek convention in Beijing, China signed a pledge with the US on tackling climate change which is expected to run to over $2tn.

To meet the agreement they will need to build either 1000 nuclear reactors, 50,000 solar farms or 500,000 wind turbines.

To put that into perspective, the US has just 100 reactors in 62 plants and just over 45,000 (end of 2012) wind turbines.

Now we know with these kinds of pledges that they are often long drawn out affairs and they change like the weather, but that’s still a hell of a lot of investment and work to be done, and it comes in the midst of mounting anger from the population to tackle pollution, so it may happen fairly quickly.

If there’s one thing the Chinese are good at it’s chucking people at a problem, so they’ve certainly got the manpower to get it done. It also means greater investment into China by foreign firms in these fields.

A lot is made over China and whether they are at the end of their growth boom but there is still a long way to go and a lot of the country still lagging behind in the process.

China needs something to blow the pollution away

China needs something to blow the pollution away

It’s also an apt reminder about the Chinese manufacturing PMI’s due out early Monday morning.

We have the CFLP PMI at 01.00 gmt and then the Markit PMI at 01.45 gmt

Indian economic growth slows to 5.3%

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India said on Friday the economy grew 5.3 per cent from July-September year-on-year, significantly slower than the previous three months, stirring hopes of interest rate cuts to boost investment.

The performance was a little better than market forecasts of 5.1-per cent expansion in the second quarter of the financial year, but still a sizeable downturn from 5.7-per cent growth in the previous three months.

The data was released days before the hawkish Reserve Bank of India (RBI), which has held its benchmark lending rate at a steep eight per cent since last January, meets for its regular monetary policy review.

The latest figures “build on the growing case for rate cuts”, said Shilan Shah, analyst at research house Capital Economics.

“There is increasing slack in the economy, consumer price inflation has slowed further than most expected, and the current account has narrowed sharply over the past year,” said Shah.

Jumpstarting growth is key for India’s new Prime Minister Narendra Modi, who led his right-wing Bharatiya Janata Party to a massive electoral win in May on promises to revive Asia’s third-largest economy. India has been mired in its worst slowdown in two decades.

Growth was 4.7 per cent in the last financial year — around half of the near double-digit levels seen a few years ago — hit by high interest rates to curb inflation, a lacklustre global economy and a fall in foreign investment amid corruption scandals which embroiled the previous Congress government.

The central bank has forecast growth of 5.5 per cent this year, slightly below the government’s target of 5.8 per cent.

These figures may seem high by the standards of developed nations, but economists say India needs at least eight-to-nine per cent growth to create jobs for a ballooning youth population.

A breakdown of the latest growth figures showed activity slowed in most sectors over the quarter.

Notably, growth in the manufacturing sector softened to just 0.1 per cent year-on-year, down from 3.5 per cent expansion in the previous three months.

The figures also showed a sharp slowdown in investment and net exports. Economic growth is likely to remain sluggish in the near-term with industrial production still moribund, analysts added.

Most economists expect the RBI, which has vowed to “break the back” of chronic inflation, to hold interest rates steady until the of the next financial year in April.

But some expect the bank to begin lowering rates as early as the policy meeting on Tuesday.

AAP questions MoU between Adani and SBI

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Training its guns on the Adani group, the Aam Aadmi Party on Tuesday demanded immediate intervention of banking sector regulator to scrutinise the memorandum of understanding (MoU) signed between the Adani Group and the State Bank of India. The party said the Reserve Bank of India should step in and question the MoU since there is no justification for the largest public sector bank to provide Rs.6000 crore loan. “The banking sector regulator should scrutinise the improper memorandum of understanding between an Australian subsidiary company of the Adani Group and State Bank of India, which does not appear to be above board. “The Reserve Bank of India, should fulfil its role of the regulator and must question the MoU, since there is no justification for the largest public sector bank of the country to provide a Rs.6,000 crore loan, which is nothing but a sweet deal for the Adani Group,” the party said in a statement. “Though details of the MoU continues to be a closely guarded secret, can the finance ministry deny a fact that many global banks had refused to extend the credit facility for this venture due to environmental reasons ?” the party asked. “Can the ministry deny that the SBI has been pressurised to bail out the Adani Group in a difficult venture the returns of which are uncertain? If and when this company starts coal mining in distant future, will it not sell the coal in an open market at an international price? Can the finance ministry deny this fact ?” the party said.