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Industry output to expand 6.1% in 08-09: CMIE
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Signs of Recovery in Indian Economy
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Industry output to expand 6.1% in 08-09: CMIE
New Delhi, Source: Business Standard
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India’s industrial sector, which was affected the most due to the global economic crisis, is likely to grow at a faster rate in the current fiscal because of strong domestic demand, the Centre for Monitoring Indian Economy (CMIE) said.
The economic think tank predicts industrial output to expand by 6.1 per cent in 2009-10, compared with the expected 4.3 per cent growth in FY 08-09. “We expect the current recovery seen in cement, steel, automobile and in the core industries index to gather further momentum in the coming months,” CMIE said in its April edition of Economic Intelligence Services (EIS).
Higher industrial output would help India’s Gross Domestic Production (GDP) to grow by 6.6 per cent, compared with estimated 6.5 per cent in just ended fiscal, it said. CMIE based its optimism on better industry performance on the fact that two issues — high inventory levels and liquidity problem — that plagued the industrial sector in three months ended December 2008 have eased.
The industrial sector, which make up nearly 28 per cent of India’s output, is the most affected from the global crisis because of falling global demand and also because of liquidity crunch that adversely affected their operations. Exports are expected to shrink for the sixth consecutive month in March 2009. However, CMIE said recovery in automobile and steel sectors indicate strong domestic demand. “Low inflation and low interest rates are expected to further strengthen this demand impetus,” said CMIE.
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Indian wellness services market to grow
at 30-35% in 5 yrs
New Delhi, Source: The Hindu Business Line
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Notwithstanding the current economic slowdown, the Rs 11,000-crore Indian wellness services market is expected to grow at about 30-35 per cent for the next five years on the back of rising consumerism, globalisation and changing lifestyles, according to a study.
According to a FICCI-Ernst and Young study titled 'Wellness-Exploring the Untapped Potential', the wellness services market, presently estimated at Rs 11,000 crore, would sustain an annual growth rate of about 30-35 per cent for the next five years.
The report classified wellness industry into seven core segments of allopathy, alternative therapies, beauty, counseling, fitness/slimming, nutrition and rejuvenation. While rejuvenation services such as spas, alternative therapies, ayurveda treatments and beauty services are expected to grow by as much as 30 per cent, fitness comprising gyms and slimming centers are expected to grow by more than 25 per cent, the study said. “Given the favourable demand and supply dynamics, wellness presents strong business potential,'' Ernst and Young Partner (Advisory Services) Mr Farokh Balsara said.
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Overseas investors' inflows turn positive
Foreign Institutional Investors (FIIs) have turned net buyers in the Indian markets in 2009.
Consistent inflows from FIIs, especially in April, have resulted in net inflows of Rs 530 crore on a year-to-date basis, according to data available with the SEBI.
FII flows turned net positive this week from being negative a week ago. April alone saw the Indian markets receive net inflows of Rs 6,682 crore from FIIs.
This influx reversed the entire outflow of Rs 6,151 crore in the three months to March 2009. This sudden arrival of foreign funds was perhaps a key reason for the strong rally witnessed by the Sensex in the current month. Even as the Indian stock market continues to lag a number of global indices in 2009, April has a different story to tell.
The Sensex has been the top performing index among leading global indices this month, with smart returns of 17.5 per cent (in dollar terms) till date.
Sensex in the lead
This is a good 3 percentage points above the next best performing market (Indonesia) during this period.
The Sensex has outperformed major indices in the Americas, Europe and the Asia-Pacific, barring the less significant markets of Italy and Sweden.
Overall, markets in the Asia-Pacific region have turned in better returns in April on the back of increased inflow of funds. According to data provided by EPFR Global, the Asia ex-Japan equity funds alone absorbed $946 million, or a good 51 per cent, of the $1.86 billion net flows into equity funds for the week ended April 22. Inflows into Asian markets have also received support from their strengthening currencies.
Currencies such as the rupee, won (South Korea), ringgit (Malaysia) and Thai bhat (Thailand) have all marginally strengthened against the US dollar.
The benchmark indices in these countries have as a result delivered superior returns in local currencies when compared with the dollar returns.
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Capital Account posts deficit in Q3
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The balance of payment figures released by Govt. of India for the third quarter (October –December) of 2008 –09 showed that the capital account balance was in the negative with gross capital outflows of US $ 73.6 billion as against inflows US $ 70 billion. This is the first time in ten years (since first quarter of 1998 –99) that the capital account balance showed deficit. The deficit was caused by net outflows in the areas of portfolio investment, banking capital and short term trade credit alongwith reduced inflows under FDI and ECB’s.
Negative export growth resulted in a higher trade deficit of US $ 36.3 billion as against the figure of US $ 26.1 billion during the corresponding period of last year. Merchandise exports had fallen by 10.4 % to US $ 36.70 billion while imports had increased marginally by 8.9 % to US $ 73.01 billion. Foreign exchange reserves also fell by US $ 17.9 billion during the last quarter thus taking the decline in foreign exchange reserves to US $ 53.75 billion during the nine month period from April – December 2008. |
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Sistema Shyam launches services in India
Sistema Shyam Teleservices (SSTL) a joint venture between Sistema of Russia and Shyam group of India announced their decision to launch their services under the branch name ‘’ MTS ‘’ in India. SSTL has acquired licenses and spectrum to provide mobile telephonic services on the CDMM platform in all 22 circles in India and have already commenced operations in Rajasthan and Tamil Nadu. They are planning to expand their presence to over 580 cities in the next two months. Meanwhile, Hinduja Global Solutions, an outsourcing solutions company announced that they were entering to strategic partnership with SSTL.
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