Specialist in Indian Banking and Economic Research

Hemindra Hazari

Thematic (Sector/Industry)

In a move unprecedented in its scale in independent India, the Reserve Bank of India demonetised the Rs500 and Rs1,000 rupee note on November 8, 2016. The withdrawing and replacing of 86% of the currency in circulation in a cash economy like India has led to an upheaval in markets leading to a severe shortage of cash. While supporters of the prime minister have hailed the move as a “surgical strike” against black money, there is nothing surgical or precision-guided about it and the entire…

In a move unprecedented in its scale in independent India, the Reserve Bank of India demonetised the Rs500 and Rs1,000 rupee note on November 8, 2016. The withdrawing and replacing of 86% of the currency in circulation in a cash economy like India has led to an upheaval in markets leading to a severe shortage of cash. While supporters of the prime minister have hailed the move as a “surgical strike” against black money, there is nothing surgical or precision-guided about it and the entire…

Independent Insight Provider

Stewart Paterson

Taurus Advisors LLP

Macroeconomics

Friday saw the release of the Monthly Chinese monetary aggregates. M2 rose 11.6% year-over-year. Although this is one the lowest percentage growth rates in the past 20 years, the money stock is now so huge that the incremental growth remains outsized relative to both GDP and (form an FX point of view ) the equivalent growth in the USA. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/016/341/original/China-M2-growth-YoY-Last-Price_chartbuilder.png?1479113085" class="editor-image img-responsive" data-smartkarma-image-id="16341"></figure>Over the past 12 months China's money stock has risen from RMB136tr to RMB152tr (USD22.3tr at current fx rates) a growth of RMB16tr (USD2.35tr) in an economy that…

Friday saw the release of the Monthly Chinese monetary aggregates. M2 rose 11.6% year-over-year. Although this is one the lowest percentage growth rates in the past 20 years, the money stock is now so huge that the incremental growth remains outsized relative to both GDP and (form an FX point of view ) the equivalent growth in the USA. Over the past 12 months China's money stock has risen from RMB136tr to RMB152tr (USD22.3tr at current fx rates) a growth of RMB16tr (USD2.35tr) in an economy that…

Money Matters: Chinese Monetary Aggregates Point to Accelerating RMB Weakness.

There are high hopes that Urjit Patel, the new RBI governor will attempt to revive bank lending, and thereby stimulate capital investment in the Indian economy. But that would require his having the right diagnosis in the first place. The current approach is that India suffers from a 'balance sheet' issue of over-leveraged large corporates and banks burdened with poor asset quality. Resolving these issues through stringent asset recognition norms and recovery mechanisms combined with economic reforms will put India back on the track of high investments. However, RBI's own data shifts the spotlight elsewhere but strangely nobody appears interested in exploring further as it challenges the mainstream view.

There are high hopes that Urjit Patel, the new RBI governor will attempt to revive bank lending, and thereby stimulate capital investment in the Indian economy. But that would require his having the right diagnosis in the first place. The current approach is that India suffers from a 'balance sheet' issue of over-leveraged large corporates and banks burdened with poor asset quality. Resolving these issues through stringent asset recognition norms and recovery mechanisms combined with economic reforms will put India back on the track of high investments. However, RBI's own data shifts the spotlight elsewhere but strangely nobody appears interested in exploring further as it challenges the mainstream view.

Asia focused research insights & advisory, Asia Advisors

Vinay Patel

Asia focused research insights & advisory

Asia Advisors

Asia Advisors is an independent financial advisory and research firm working closely with corporates and institutions to provide consulting solutions & research insights. We provide advisory services including capital solutions, business strategy and investment insights.
Firm is headed by Vinay Patel who has close to two decades of experience in research and business development at large, international investment banks such as HSBC and ICICI Securities. Led research efforts in areas of Macroeconomics, Asset Allocation & Investment Strategy for close to a decade in global & domestic research teams. As a business head in Singapore, advised top global investment management firms & Portfolio managers in Asia for India related investments.
Vinay was recently joined by Swapnil Manish, an investment banker and ex-ecommerce entrepreneur with more than 12 years of experience. Swapnil was the TMT banker at BNP Paribas and was part of several large M&A and ECM transactions (Bharti-Zain, Bharti Infratel IPO, Schneider-Zicom among several others). He's also had a stint as an ecommerce entrepreneur having launched & led Mumbai's first online grocery player.

The Indian Government has taken a significant step in curbing the parallel economy by removing Rs500 and Rs1000 notes from circulation and plans to replace it with new notes. People having high-value notes will need to deposit it in a bank and exchange it for new notes until end December'16 ( and in the process, any large volume of cash deposits if undertaken will attract the tax authorities). High-value currency notes have always served as convenient storage points of undeclared and/or illegal…

The Indian Government has taken a significant step in curbing the parallel economy by removing Rs500 and Rs1000 notes from circulation and plans to replace it with new notes. People having high-value notes will need to deposit it in a bank and exchange it for new notes until end December'16 ( and in the process, any large volume of cash deposits if undertaken will attract the tax authorities). High-value currency notes have always served as convenient storage points of undeclared and/or illegal…

Demonetisation in India: High-Value Currency De-Notified; Con.Discretionary to Slow; Rate Cut Likely

Axis Bank shocked analysts when it declared profits of only Rs 3.19 bn for the quarter ended September 30, 2016 (2QFY2017). This was  a precipitous fall of 83% from a year ago. The reason: a large chunk of its corporate watch list loans were reported as non-performing. The same analysts in the March-end quarter (4QFY2016) had hailed the bank for its transparency when it declared its watch list. At that time, the management’s guidance was that 60% of the watch list would become non-performing within 8 quarters. By October 25, Axis Bank was stating that “materially more than 60%” of the watch list would become bad, as the economy was unfavourable and the tools announced by the banking regulator for asset recovery were inadequate. Blaming the external environment for performance shortfalls is a time honoured tradition for entities unwilling to accept responsibility. If negative developments are to be attributed to extraneous factors, then why should management exist and why should they be so highly paid?

Axis Bank shocked analysts when it declared profits of only Rs 3.19 bn for the quarter ended September 30, 2016 (2QFY2017). This was  a precipitous fall of 83% from a year ago. The reason: a large chunk of its corporate watch list loans were reported as non-performing. The same analysts in the March-end quarter (4QFY2016) had hailed the bank for its transparency when it declared its watch list. At that time, the management’s guidance was that 60% of the watch list would become non-performing within 8 quarters. By October 25, Axis Bank was stating that “materially more than 60%” of the watch list would become bad, as the economy was unfavourable and the tools announced by the banking regulator for asset recovery were inadequate. Blaming the external environment for performance shortfalls is a time honoured tradition for entities unwilling to accept responsibility. If negative developments are to be attributed to extraneous factors, then why should management exist and why should they be so highly paid?

Axis Bank:Profits Have Many Parents, Fiascos Are Orphans

India

Axis Bank Limited provides a full range of banking services throughout India. The Group's activities include retail banking, investment management, merchant banking, treasury and NRI services, cash and credit management services, and ATM facilities.

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Axis Bank Ltd (AXSB IN)

Demonetisation: Self Inflicted

In a move unprecedented in its scale in independent India, the Reserve Bank of India demonetised the Rs500 and Rs1,000 rupee note on November 8,...

Hemindra Hazari

Money Matters: Chinese Monetary Aggregates Point to Accelerating RMB Weakness.

Friday saw the release of the Monthly Chinese monetary aggregates. M2 rose 11.6% year-over-year. Although this is one the lowest percentage growth...

Stewart Paterson

Bank Credit Growth: Wrong Diagnosis ?

There are high hopes that Urjit Patel, the new RBI governor will attempt to revive bank lending, and thereby stimulate capital investment in the...

Hemindra Hazari

Demonetisation in India: High-Value Currency De-Notified; Con.Discretionary to Slow; Rate Cut Likely

The Indian Government has taken a significant step in curbing the parallel economy by removing Rs500 and Rs1000 notes from circulation and plans to...

Asia Advisors

Axis Bank:Profits Have Many Parents, Fiascos Are Orphans

Axis Bank shocked analysts when it declared profits of only Rs 3.19 bn for the quarter ended September 30, 2016 (2QFY2017). This was a precipitous...

Hemindra Hazari

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