ARE OUR CLINICAL TESTERS REALLY WORTH A SHOT? BY ROHIT TILLU
The IBS times December 2015, Issue No. 187
COVER STORY
DRIVING THE ELECTRIC CAR TREND IN CHINA BY EYAMINI N.
LOVE IN TOKYO ENDURES
BULLET PROOF INDIA BY ANUPAMA KUMARSWAMI
PFIZER AND ALLERGAN MERGER
$160 BILLION DEAL BY SWARUPA ROY
GOODS AND SERVICES TAX
ONE HUNDERED AND TWENTY SECOND AMENDEMENT BILL, 2014 BY RANU SARUPRIA 1|DECEMBER2015
FinStreet, IBS Hyderabad
ISSUE NO. 187, DECEMBER 2015
What’s Inside
2|DECEMBER2015
INTELLIGENCE BEYOND SUCCESS
LETTER FROM THE EDITOR TEAM IBS TIMES KAUSHIK CHANDELL (EDITOR-IN-CHIEF) AVIK CHAKRABARTY (MANAGING EDITOR) ALISHA SINGH
Dear Readers, Greetings from Team FinStreet. We wish you the Very Best for the New Year. Thank you everyone who has contributed and made us where we stand today. We look forward to continue our work of making available of all the latest happenings round the globe with all your gracious support in the year 2016.
APOORVA ANUSHA
KOLISETTY AISHWARYA MANJARI SHARMA NAVJOTH SAHU PRIYANKA MALIK RAHUL MISHRA RIPU TANDON SACHI KHESKANI SAMEENA USMAN SRISHTI KARMAKAR ABHINAV BANERJEE ANUPAMA KUMARSWAMI CHESTHA KUMAR EYAMINI N HEMLATA HAJONG
Team FinStreet is proud to present the 187th edition of The IBS Times. We’ve observed that Indian Elephant in the recent past has managed a neck to neck competition with Chinese Dragon and so we serve you with three different write-ups about China, going by the name of KHULLJA SIM SIM, DRIVING THE ELECTRIC TREND IN CHINA & OUTPACING CHINA. Make sure you go through all of them and keep yourself updated with Chinese economy in comparison with Indian Economy. We’ve covered the $160 billion deal between Pfizer and Allergan which is the largest pharmaceutical merger till date. Also, from the learning perspective we bring to you about the 7th Pay Commission, Dr. Lal PathLabs IPO and the One Hundred and Twenty Second Amendment Bill (GST), 2014. For Sector research we’ve published a report on Indian Hotel Industry and the Market Watch, A Make or Break? will help you understand the movement of market for your future reference. From the investment point of view, this issue also brings to you an exhaustive report on Jagaran Prakashan by Team Vriddhi Research. Do make the most out of it and keep enjoying the experience of The IBS TIMES. Your feedbacks and opinions will help us make it better. Once again, a very happy and prosperous new year to all our readers. Kaushik Chandell Team FinStreet
ISHAN GUPTA JATIN SHARMA JHARNA SONI PRATEEK PANDEY RANU SARUPRIA RAVI RANJAN PANDIT ROHIT TILLU SAKSHI ISSAR SANDHYA ADHAVAN SUPRIYA GAUR SWARUPA ROY 3|DECEMBER2015
-THEODORE ROOSEVELT
CHINESE DRAGON IN INDIAN MARKET
KHULLJA SIM SIM
-Abhinav Banerjee
The image of a Chinese Dragon respiring fire is
India continues to tempt big business houses around
catching the global imagination, while the Indian
the world. A large and burgeoning English-speaking
elephant trundles along at a slow pace. China and India
middle class and democratic political climate make
have lot in common but are also vastly different. The
it an ideal place to do business. Alibaba, China's e-
growth trajectory of China has surprised many
commerce giant, the subsidiary of the Jack Ma-led
observers. Lately, Chinese online ventures like Alibaba
company, is planning to more than double the
have parachuted into the e-commerce space and made
number of Indian SMEs (small and medium
pots of money for investors. Can India, which has
enterprises) on its podium by next month. It plans to
always been a step or two behind China, replicate this
take the total number of Indian sellers on board to 10
online success? The answer is not a simple yes or no.
million from 4.5 million at present. In contrast,
By comparison, today’s Indian ecommerce endeavors
home-grown B2C ecommerce company Snapdeal, in
have a fierce competition and have to work in a
which Alibaba has a stake, has around 0.25 million
surrounding which is almost do or die. The latest breed
sellers.
of Indian online shop was created off the block quite
Alibaba launched an online platform SMILE (small
late, Flipkart in 2007 and Snapdeal in 2010. The
and medium industries leveraging export) in
pressure to perform was huge and it forced Indian
association with partners such as ICICI Bank, Kotak
players to offer unrealistic discounts which could result
Mahindra Bank, Crisil Rating, Tally, Capital Float,
in a disaster in future.
Jeena, SGS and Mypacco to encourage Indian SMEs
The loss of more than $20 million by Snapdeal during
to come on board. Alibaba, along with these allies,
the current fiscal year looks ominous. But initial losses
will provide a complete support system, which will
alone do not reflect on the future of any online entity.
include finance and training, to small businesses that
Amazon continues to bleed and still remains a favorite
are looking to scale up. The sellers will be able to
among the bourses. This means we probably have to
trade over the globe on the Alibaba platform.
look at ecommerce platforms differently from brick and
"This is Alibaba's way of digging in heels in the
mortar companies because valuations are usually not
Indian e-commerce industry. They will first cement
realistic.
a supply chain and explore it in detail. Then, they
Market size is also important The Indian part of the
will bring in their business-to-customer (B2C)
ecommerce story revolves around three main heroes –
business here after the discounting game is over. Ma
Flipkart, Snapdeal and Amazon. So you can imagine the
knows that funding others is not the way to enjoy the
kind of ferocious competition that exists between them.
potential of this market," said a top executive of one of the India's largest e-commerce companies.
4|DECEMBER2015
of the India's largest e-commerce companies.
the ecosystem. He said the company was not looking
Alibaba.com Global Business Development Timothy Leung said in a press conference in New Delhi “India is a very important market for us. It is the 2nd largest for us after China. SMEs are an important contributor to any economy and the same is the case with India. In the next few years, we hope to have 10 million businesses
at immediate returns with the SMILE program. Instead, it will focus on strengthening its ecosystem. On B2C side, Alibaba has invested $680 million to acquire 40% stake in Indian mobile payment startup Paytm. It has also picked up a close to 5% stake in India’s
second-largest
e-commerce
platform
Snapdeal. Chinese products are set to enter Indian
from India on our platform,"
shores on a big scale. After China’s DHgate and
The SMILE program hopes to simplify and make easier
India’s Shopclues’ integration, Alibaba will also
cross-border trading, helping more than 100 million
enable entry of Chinese sellers in Indian ecommerce
SME’s in India and help them explore global trading
world. Come August, one lakh Chinese sellers from
opportunities in a much economic way. Leung also
AliExpress (Alibaba’s online shopping portal) will
coated that it was Alibaba’s way of extending support
get listed on Paytm. Paytm’s gross merchandise
to Indian Prime Minister Narendra Modi’s ‘Make in
value (GMV) is expected to be $1.5 billion more in
India’ and ‘Digital India’ initiatives. The Chinese
6 months after the deal with AliExpress materializes.
ecommerce firm has also paired up with Mumbai-based
Vice President-payments of Paytm said, “We are
Allcargo Logistics’ international subsidiary ECU Line
undergoing quite a complex integration with
to transport ‘less-than-container load’ (LCL) shipments
AliExpress, something we haven’t done in the past.”
to India. Delivery timeline is one the key element that
He added, “According to our initial estimates, we’ll
company’s
be able to double our gross merchandise within 6
determines
an
online
shopping
performance. The alliance with Alcargo will ensure
months with the help of AliExpress association.”
Alibaba’s consignments reach its Indian customers quickly.
Biswanath
Bhattacharya,
partner
at
KPMG said, “As ecommerce has boomed, supply chains are getting stretched and hence companies compete on timelines. With LCL, frequencies would increase and that would mean better timelines for customers.”
Invasion of Chinese sellers will definitely shake-up Indian ecommerce scene. Known to make handy products at cheap rates, the neighbor merchants might
make
the
existing
similar to the Chinese market. In China, the company’s B2B platform brought suppliers and buyers together, and then expanded its business to different aspects of the ecosystem. He said the company was not looking at 5|DECEMBER2015
online
competition even more brutal. Ultimately the customers will decide, whether they bend towards Made in India or Made in China.
Leung also stated that the Indian B2B market was pretty
cut-throat
COVER STORY
DRIVING THE ELECTRIC CAR TREND IN CHINA
-Eyamini N.
China is forecast to become the world's biggest electric
technological investment as no additional fuel supply
car market this year, with sales estimated at 220,000 to
chains are needed. Alternatives are needed soon, as
250,000 vehicles, according to the official news
China's
agency, quoting the China Association of Automobile
exponentially over the coming decades, exacerbating
Manufacturers.
the current oil and pollution problems.
Worldwide electric cars sales are expected to increase
China has big advantage over other countries in
to 600,000 this year. China can overtake United States
developing strong electric car market, namely it has
as the world's biggest electric car market estimate of
ample ithium and rare earth metals and these are the
180,000 vehicles in the US market. China is no doubt
two main ingredients needed for development of
the leader in global clean energy race but it’s also
electric vehicles.
world’s largest polluter, with large share of its pollution
vehicle
fleet
is
expected
to
grow
Government Encouragement and Regulation
coming from cars. The environmental benefits are really the main reason why china plans rapid
To try and get past these barriers, the central
development of its electric vehicle industry but there are
government has recently pledged millions of RMB
also other benefits to such policy such for instance
towards the domestic development of both EV(
energy conservation and reduce oil imports. There are
Electric
two main reasons why the Chinese government and
capabilities. This investment has come in the form of
industry leaders are enthusiastic about promoting
both consumer-focused subsidies as well as direct
electric vehicles:
government
vehicle)
grants
markets
towards
and
production
research
and
development. EV funding was even recently (1) To reduce China's dependence on imported oil, and |(2) To establish a profitable low emissions vehicle industry in China that would reduce significant pollution problems in urban areas. Electric Vehicles have become the clear leader in achieving these goals when compared to other technologies such as liquid natural gas, hydrogen, or alcohol-based fuel systems. The Electric Vehicle technology, while not fully mature, has had more experience in the real world than many other non-petroleum alternatives. It also requires significantly less, although by no means negligible, technological investment as no additional fuel supply | D needed. E C E M B Alternatives ER2015 chains 6are are needed soon, as
China's vehicle fleet is expected to grow exponentially
included as part of the central government's R&Doriented 863 central plan. Locally, the Shenzhen government has partnered with BYD (Chinese Automobile Company) to start introducing plug-in hybrid government vehicles. This was done to encourage their overall use. On the demand side of the market, a 13-city subsidy program was recently initiated in which the central government offered up to ÂĽ60,000 to anyone who purchased an electric or hybrid vehicle.
first time in more than two years in June with buyer cZ
sentiment hit by slowing growth and the country’s stock
market
crash.
The Chinese
economy is
growing at its slowest annual rate in a quarter century and second-quarter growth figures due out next week may
show
that
it
has
slipped
below
the
government’s 7 per cent target for 2015. According to the CAAM (Chinese Association Of Automobile China Association for Automobile Manufacturers
Manufacturers), car inventories grew 6.6 per cent in
announced the country’s plan to have 1million energy
June. Slower economic growth and now declining
vehicles on Chinese roads by 2015, and China has
car sales have led to series of price cuts by foreign
already invested heavily in many research centres
car brands, putting pressure on their domestic rivals.
across the country as Chinese aim to become global
Why are sales booming?
leaders in electric vehicles manufacturing in 10 years time. They have announced that China plans to invest more than 100 billion Yuan (around $15 billion) over next 10 years.
An analyst from the China Automotive Technology Research Centre attributed the jump to the elimination of the vehicle tax on Chinese electric vehicles (until September 2014, buyers were taxed at
China’s priorities are plug-in and pure electrical
10% of the purchase price). Policy-led price
vehicles with lithium ion batteries. China has recently
adjustments have sometimes had spectacular results
managed to overtake United States as the world's
in China’s auto market. For instance, when the
biggest car market. In 2010 alone, China sold more than
country joined the World Trade Organization in
13.5 million cars. China's electric-car industry is
2001, it
developing rapidly, but quality and not just quantity
automobiles. That year, China’s auto market grew by
should be the focus for the development to be
37%, as some domestic producers were forced to
sustainable. Safety and the quality of batteries should
lower prices to remain competitive.
be carefully supervised. The industry saw explosive growth in the past two years, mainly because of supportive government policies, including subsidies and tax cuts.
lowered import tariffs
on foreign
Another possibility is that China’s policies to promote electric vehicles have finally reached a tipping point. For instance, to deal with traffic congestion in major Chinese cities, many municipal
In the first 10 months of this year, sales of electric cars
governments – including Beijing – have limited the
surged 290 percent year-on-year to 171,145, according
number of new vehicle registrations. In Beijing,
to the association's data. Chinese car sales fell for the
electric vehicles are exempt from this quota
first time in more than two years in June with buyer
system. The central government as also instituted a
7 | hit D Eby C Eslowing M B E R 2growth 0 1 5 and the country’s stock sentiment
new set of policies to encourage competition among
market crash. The Chinese economy is growing at its
domestic manufacturers — competitive pressure that
demonstrated a correlation between money locked in stocks and falling sales. The electric vehicle industry has been rapidly developing internationally due to a confluence of factors such as government support, industry shifts, and private consumer demand. The automobile industry in China has also begun to develop a large and reputable electrical vehicle sector, supported by both the private and public sector. system. The central government as also instituted a new set of policies to encourage competition among domestic manufacturers — competitive pressure that was woefully lacking during the early years of China’s electric vehicle program. Perhaps locally produced vehicles have finally reached a quality threshold that makes them attractive to Chinese buyers. Carmakers in China may likely reveal a fourth month of contracting sales for July after a stock market crash sapped consumer sentiment. Many Chinese who put money in the mainland bull market in the first half of this year had to delay expensive purchases like cars; however, a crash from mid-June erased as much as US$4 trillion in share value in under a month. What is left of their money is now locked in stocks as many try to avoid losses. Sales in the world's biggest car market were already down as the economy grows at its slowest in 25 years. But the crash likely left July sales falling more than June's 2.3 per cent, analysts said. China's car manufacturing body said it more than halved its sales forecast for this year because of the crash's impact on sentiment, while consultancy
Automotive
Foresight
last
week
demonstrated a correlation between money locked in stocks and falling sales.
8|DECEMBER2015
The
electric vehicle industry
has been rapidly
Dr. LAL PATHLABS LIMITED IPO
ARE OUR CLINICAL TESTERS REALLY WORTH A SHOT?
-Rohit Tillu
India’s been growing at an increasing pace in the recent
situated across India. The share of market that
years. We are expecting a 7.1% GDP growth in the
remains in the hands of the Pan-India institutional
financial year 2015-16. We have been experiencing
players is about 15-16%. Two major private players
high growth rates since the year 2010. Higher GDP
in this industry are Dr. Lal Path Labs and Alkem
growth brings in more employment, more purchasing
Industries Private Ltd, both of which have come up
power and more disposable income in the hands of the
with and Initial public offering for raising capital for
people. The GDP growth is nothing but a function of
expanding their presence throughout India.
higher disposable income as people tend to purchase
Dr. Lal Path Labs
more goods and services when they have more money, which is, nothing but our GDP itself. Nearly all the sectors have been experiencing growth due to increase in the income levels throughout the economy. One of these sectors is the Healthcare sector, which occupies a special place in the expenditure plan and the same has been experiencing a high rate of growth in the recent years. According to a research report, the healthcare sector in India is growing at a compounded annual growth rate (CAGR) of 15%. Also it is expected to reach a valuation of $18.7 billion by the year 2020. The primary reasons that are attributable to its growth are rising lifestyle disorders and the practice of medicine being more evidence based.
Started by Dr. Major S.K. Lal, Dr. Lal path labs is the largest diagnostic chain in the country. With a network of 172 laboratories, 1554 patient service centers and about 7,000 pickup points, they have made sure that their presence is felt throughout the country. Although they operate on a Pan-India scale, 70% of their revenues come from the North Indian region. The company offered 1.16 crore shares which were equivalent to 14% stake in the company. The promoters offloaded 5% of their share whereas the Private Equity Investors released 9% of their ownership. After the IPO, the stake of the Private Equity holders will be around 23%.This offering was primarily to dilute the promoter stake in the
The diagnostic industry constitutes a small portion of
company, that is, the proceeds of this issue won’t
the healthcare sector. It represents the 9% of the total
issue any fresh capital. The price band for the shares
sector. Valued at ₹37,000 crore, the diagnostic industry
was ₹540-550. It aimed to raise ₹632 crore if the
is growing at a rate of 16-17% in the recent years.
higher price is used for calculation. The issue was
Roughly, 85% of the market in this sector is
oversubscribed by 33 times. They received bids for
unorganized, 48% of which is captured by the
27, 04, 07,780 shares instead of the 81, 20,000 share
standalone private labs throughout the country and the
limit which was prescribed to be taken up by the
rest 37% being tapped by the labs in the hospitals
Securities Exchange Board of India (SEBI).
situated across India. The share of market that remains in the 9hands the | D E CofE M B EPan-India R 2 0 1 5 institutional players is about 15-16%. Two major private players in this
Financially, Dr. Lal path labs seems to be very strong
1.28 crore shares. The price band for the book
as the company is growing at a compounded growth
building process was set at ₹1,020-1,050 which
rate of 21% in the last three years as compared to the
aimed to raise up to ₹1,350 crore. The demand they
industry which is experiencing a 16-17% rate of
received was emphatic. Out of the 90, 87,084 that
growth. The company earned a profit of ₹95 crore on a
they wished to raise, they received applications for
sales of ₹636 crore. The company functions on an
40, 18, 87,780 shares. The portion reserved for the
Asset-light model which entails that the samples are
Qualified Institutional buyers, who are supposed to
picked up from thousands of franchise centers and other
buy up a particular amount of equity stock
labs and processed at their main laboratories, which in
necessarily, was oversubscribed by 57 times. The
turn reduces the setup costs and provides on time and
portion set aside for retail or individual investors was
cost efficient services to their customers. Additionally,
oversubscribed by 2.9 whereas the portion of high
their pick up points facilitate the patients as they
net worth individuals was oversubscribed to an
locations are spread out evenly across the country.
extent of 129 times.
Alkem Laboratories Private Ltd.
According to various expert opinions, Dr. Lal Path
Alkem labs is a Mumbai based provider of diagnostic services which has maintained its position in the top 10 diagnostic service providers for the past 12 years in the country. Alkem produces branded generic drugs and nutraceuticals not only in India but also in 55 other countries around the globe. Alkem has a good chunk of business coming from the United States, but the Indian brands form the major part of its revenue. The company uses the inorganic expansion to drive its growth. Generally, mergers and acquisitions form the inorganic strategy of expansion.
Labs seem to be a bit overvalued given the quantum of business it does. But having a huge chunk of cash in the Balance Sheet is definitely a good situation as the company does not need to raise fresh funds for their expansion projects, it also seems to be a company whose growth rate is more than the industry average of 16%. If the quantum of business is one of the major criterions of investment evaluation, then Alkem would surely win the treble as it is massive when the revenue and profit figures are concerned. Alkem’s revenues are nearly 5 times as compared to those of Dr. Lal Path labs, and why
Coming to their financials, Alkem has been growing at
would it not be. Dr. Lal Path labs is driving its
a compounded rate of 17-18% which is very much close
business entirely from the Indian Subcontinent itself.
to the industry average. They have posted a robust
As an Investor, both the companies are offering
performance in the financial year 2015-16 with their
equally good opportunities, it is just a matter of one’s
revenue zooming up to ₹2,659 crore. Also the net profit
opinion where they want to invest as it is really
of the company rose by 157% from ₹439 crore to ₹550
difficult to distinguish between them.
crore. The initial public offering of Alkem Labs offers 1.28 crore shares. The price band for the book building | D set E C EatM₹1,020-1,050 B E R 2 0 1 5 which aimed to raise process10was
up to ₹1,350 crore. The demand they received was
LOVE IN TOKYO ENDURES
BULLET PROOF INDIA
-Anupama Kumarswami
23 million people and one mode of transport; one prime
India is ready to hold tender for contracts once it
minister and 1.252 billion people. One promise to
decides upon the Japanese technology. A consortium
broaden this network of transport; one country and one
which would include JR East, Kawasaki Heavy
big investment. A three day visit by the Japanese Prime
Industries and Hitachi is expected to bid for that
Minister Shinzo Abe to India, every futuristic aspect
tender. The Japan International Cooperation Agency
related to this country was finalized. India’s first high
and India’s rail ministry had begun a joint feasibility
speed bullet train project costing $15bn linking
study on high speed bullet trains almost two years
Mumbai in Maharashtra with Ahmedabad in Gujarat
ago. While a report recommending the Shinkansen
with 505km railway line was announced during that
format of bullet trains was issued this late July.
visit. Tokyo will be financing this project through an
Bullet trains zooming off up to 320kph, along the
$8bn loan to New Delhi.
Mumbai-Ahmedabad railway will shorten the travel timespan between the two cities from around eight
Someone truly said, failure is the stepping stone of success. Japan had once failed to win a high speed train deal in Indonesia earlier this year and had lost to a Chinese proposal. Japan won over China and it would be the second successful case of Japan exporting its bullet train technology to a foreign market next to a deal with Taiwan in 2007. Japan’s ministry stated that India was ranked as the second biggest recipient of Japanese government backed yen loans as of fiscal year 2013 with a running total of 4.45 trillion yen. While departing from India, Abe informed the country that Japan will be soon providing one trillion yen ($8.1 billion) worth of loans during the next decade that would finance more
hours to roughly two. Construction is expected to begin in 2017 with a completion slated for the year 2023. The western dedicated freight corridor from Dadri to Jawaharlal Nehru Port (1502km) project is funded
substantially
by
Japan
International
Cooperation Agency. DFCC, a special purpose vehicle (SPV) is engaged in planning, construction, operation and maintenance of the dedicated freight corridors. The eastern corridor from Mughalsarai to Ludhiana is being funded by the World Bank. Mumbai-Ahmedabad route is the first among the seven high speed rail corridors considered within the investment.
than half of the approximately 980 billion Indian rupee cost of project. It was not just Japan’s success but also
Both Mr. Modi as well as Mr. Abe noted that India’s
was an accomplishment of what Mr. Modi had once
railway modernization and expansion plans open up
promised of high speed links and bullet trains as a key
commercial opportunities for Japanese companies in
campaign promises during the 2014 elections. This
high speed rail, station redevelopment and rolling
railway loan deal would thrust ahead of Indonesia, the
stock manufacturing. Both the countries will further
largest borrower which had a 4.72 trillion yen tally.
explore strengthening their partnership in high speed
India is ready to hold tender for contracts once it 11 | D E C E M B E R 2 0 1 5 decides upon the
railways, which is a high technology field having potential to transform India’s transportation sector.
railways, which is a high technology field having
Indian government has no intentions of taking sides
potential to transform India’s transportation sector.
between China and Japan and it is very well aware
Prime Minister Abe even conveyed his intentions of
that setting itself against Beijing would not bring any
supporting India’s efforts in ‘Make in India, Digital
good to New Delhi. With the help of China’s rise,
India, Skill India, Clean India and Smart City’ by
India is trying to obtain more economic benefits and
sharing advanced skills and technologies and through
thus is unwilling to upset world’s second largest
active mobilization of Japanese public and private
economy. India is very well aware of ties between
sector involvement including the Official Development
Beijing and Tokyo and is being very cautious in
Assistance (ODA). There will be steady progress in
developing ties with Tokyo so as to leave itself a
realizing 3.5 trillion yen of public and private financing
leeway in handling its relations with Beijing. There
to India in five years under the ‘Japan-India Investment
is no need for China being too concerned; still they
Promotion Partnership’. Mr. Modi welcomed the
have sufficient risks in India-Japan tie-up which may
‘Japan-India Make-in-India Special Finance Facility’
become a threat to the regional peace and stability.
up to 1.5 trillion Yen by Nippon Export and Investment
Communications between these nations is very
Insurance (NEXI) and Japan Bank for International
important in this phase of time.
Cooperation (JBIC), which aims to promote direct
India – Japan relationship is going on a new level and
investment of Japanese companies and trade from Japan to India, to support their business activities with
these buds have turned into beautiful blossoms. With Mr. Modi recognizing this special relationship
counterparts in India, including development of
announced that India will extend ‘visa-on-arrival’ to
necessary infrastructure, and to help materialize Make-
all Japanese citizens from 1st march 2016. Mr. Modi
in-India policy of the Government of India. Both the Prime Ministers shared the viewpoints of satisfaction and strengthening of ties between both the countries and this bullet train deal is the first step towards its attainment.
even mentioned about these strong ties by referring the Kyoto-Varanasi partnership as one of its kind strong symbols. Not just Mr. Modi but also Mr. Abe underlines the need for closer coordination and effective communication, bilaterally and with
This India – Japan strategic relationship can contribute
partners to address existing and emerging challenges
to peace and prosperity in Asia and the world. There are
in aspects such as security, stability and sustainable
more benefits of innovation that is awaited by both the
development. India and Japan will be working
countries. China plays a crucial factor behind this closer
towards strengthening regional, economic and
India-Japan relationship. Tokyo is trying every possible
security forums and coordinate their actions to tackle
way to besiege Beijing and Mr. Abe would not ever lose
global opportunities and challenges including the
an opportunity to draw India closer to Japan. While the
reforms of the United Nations, climate change and as
Indian government has no intentions of taking sides
well as terrorism. Japan even invited India’s
between China and Japan and it is very well aware that
intensified engagement with export control regimes
setting itself against Beijing would not bring any good
and two Prime Ministers affirmed their commitment
12 | D E C E M B E R 2 0 1 5
intensified engagement with export control regimes and
Japanese Foreign Direct Investment Flows to
two Prime Ministers affirmed their commitment
India
towards making India a full member in the four
Year
(US $ million)
Regime,
2008-2009
266
Wassenaar Arrangement and Australia Group with an
2009-2010
971
2010-2011
1,256
2011-2012
2,089 (provisional)
2012-2013
1,340 (provisional)
2013-2014
1,795 (provisional)
international export control regimes: Nuclear Suppliers Group,
Missile
Technology
Control
aim of strengthening the international non-proliferation efforts.
ODA loans from Japan Year
Commitment Yen Billion
Disbursement Rs. Crores
Yen Billion
Rs. Crores
2008-09 236.047
11713.32
122.56
5861.48
2009-10 218.2
10694.93
128.95
6553.43
2010-11 203.566
11197.81
123.84
6581.67
2011-12 134.288
8303.01
139.22
8497.43
2012-13 353.106
23179.77
113.964
7259.95
2013-14 101.703
6812
22.320
1249.85
(upto 30.06.2013)
(upto 30.06.2013)
(upto 31.05.2013)
13 | D E C E M B E R 2 0 1 5
PFIZER AND ALLERGAN- THE LARGEST PHARMACEUTICAL MERGER
$160 BILLION DEAL
-Swarupa Roy
The world of corporate and companies are much
affordable healthcare that will cater to every human
broader than we actually think. There are many forces
being. Over the time period 166 years, Pfizer had
that drive the successful business dimension. Most of
several successful acquisitions including Wyeth
the times, it is about a single company’s growth,
which is a Philadelphia based known pharmaceutical
development and profit making, but then, history has
company specializing in manufacturing of OTC
witnessed many ‘Mergers and Acquisitions’ that have
(over-the-counter)
not only changed the course and future of the
Headquartered at New York, Pfizer is listed at New
companies involved, but have also led to powerful
York Stock Exchange, London (PFZ), Euronext and
impact on the world market and economy. Usually
Swiss. The company generated revenue of $49.6
economic background of the companies plays an
billion in the year 2014, and as of 14th December
important role when it comes to merger and
2015, the stock prices of Pfizer Inc. stood at $31.89.
acquisitions, but sometimes the idea or the innovation
Allergan Plc
drugs
and
ibuprofen.
involved also brings two companies together to create a new future altogether. One such recent merger that has caught the world’s attention is the $160 Billion deal between Pfizer and Allergan. The deal has raised discussions and put forth many topics that are being debated world over as we speak now. So, here we are with Pfizer, Allergan and the current most talked merger in the world.
The acquisition of Allergan Inc. by Actavis Plc. led to a newly named company ‘Allergen Plc’. Serving people in over 100 countries, Allergan has established itself as a new leader in the field of ‘Growth Pharma’ and has become a potential name in the area of world generic business. It majorly deals in six areas of health care which includes Dermatology and Aesthetics, CNS, Women’s Health
Pfizer Inc.
and Urology, Cardiovascular and Infectious Disease,
Quoted to be amongst world’s foremost pharmaceutical
Eye Care and GI and Cystic Fibrosis. Recently the
company, Pfizer is a known and trusted name when it
company
comes to producing vaccines, number of medicines and
(Eluxadoine) in United States for the people
drugs. Currently, the company is working towards
suffering from irritable bowel syndrome. Currently,
providing potential vaccines and drugs against diseases
the company is valued at $23 billion and has its
like Cancer and Alzheimer. Founded by Charles Pfizer
headquarters are in Dublin, Ireland and United
and Charles F.Erhart in the year 1849, today, it is one
States. Incorporated in 1985, Allergan earlier known
of the top research oriented pharmaceutical firms in the
as Watson Pharmaceutical, Inc went public in the
world that is applying science at its best to come up with
year 1993. The company’s stock are listed on the
affordable healthcare that will cater to every human
New York Stock Exchange and its stocks are priced
14 | Dthe E C time E M Bperiod ER2015 being. Over
at $ 301.88 as per data on December 14th 2015.
also
launched
a
drug
VIBZERI
New York Stock Exchange and its stocks are priced at
shaping of this merger. Another aspect that merger
$ 301.88 as per data on December 14th 2015.
has highlighted is the tax bill reduction of Pfizer.
The largest merger of pharmaceutical world
This inversion will help the Pfizer Inc. to avoid the American corporate taxes. Overall the finances
In what is said to be the world’s third largest merger and
including the effective tax rate holds promises for
the largest in the pharmaceutical industry, both the
both the companies.
companies Pfizer and Allergan have agreed for a merger deal at $160 billion which will lead to the
Tax aversion, critics and the future ahead
creation of the world’s largest drug company. The main
The merger has paved way for the “tax aversion” to
goal behind this merger is to create a world class global
become the talk of the town. Avoiding the corporate
biopharmaceutical leader that promises innovation and
American taxes is said to be the main reason for the
research at the most optimum level along with including
overseas incorporation. As compared to the
production and delivery of drugs, medicines and
corporate tax rate of 35% in United States, Ireland
therapies that will shape the future of a better health
has only 12.5 percent which will eventually play a
care.
vital role in savings of Pfizer. While the decision is
The merger if successful would be highly beneficial for the both companies who are considered amongst the best in their league. The combined company would be led by Pfizer’s CEO Ian Read, while the position of President and Chief Operating Officer (COO) will be undertaken by Allergan’s CEO Brent Saunders. The announcement of the deal already had it breaking records and setting new records, with it being called the largest inversion till date where a U.S based company will merge with a foreign company according to which it will officially become a foreign-owned firm but its main business and operations would continue in the United States. With the merger, the enterprise will retain its listing in primary stock exchange. A number of aspects including the production of medicines and vaccines will receive a boost up, plus the different acquisitions that the respective companies were planning or have confirmed will play a vital role in shaping of this merger. Another aspect that merger has 15 | DisEthe C E tax M Bbill E R 2reduction 015 highlighted of Pfizer. This
totally on a positive side for the company, it has not gone down well with many, with the critics having considering it a step that will cost the U.S treasury the tax amount. And, in the lights of the events and the current markets, the merger is quoted to be ‘highly strategic’ which has only strengthen the company’s position by giving an uplift to the slightly declining stock prices of Pfizer. The deal has pros and cons like every other thing. So, while the PfizerAllergan merger promises to make the world a better place by trying to deliver some of the finest medicines and therapies, there will be a hole if only a small one in the United States tax revenues, whereas the Ireland will welcome some amount of cash flow in their economy. What the world’s biggest drug makers plan to deliver with this merger is the point entire the world has its eyes on.
INDIA’S GDP AT 7.4%
OUTPACING CHINA
-Hemlata Hajong
It is like a dream come true for the Indian economy for
during April-June 2015, but slower than the 8.4 %
it is growing faster than China. Average growth rate of
growth registered during the second quarter of the
7% for the last two decades made India the seventh
last fiscal year. However it was better than the
largest in the world by nominal GDP and the third
market expectations of a 7.3% increase. GDP annual
largest by purchasing power parity (PPP). But from the
growth rate in India averaged 6.02 % from 1951 until
last quarter of 2014 India became the world’s fastest
2015, reaching an all-time high of 11.40 percent in
growing major economy as the growth rate rose to
the first quarter of 2010 and a record low of -5.2% in
7.4%. With this the Indian economy has the potential to
the fourth quarter of 1979.
become the world’s third largest economy by the next
Various reasons lead to the increase in GDP. From
decade and one of the largest economies by mid-
RBI’s low tax rate to Prime Minister Narendra
century. Two years ago, an HSBC analyst called India
Modi’s “Make in India” agenda, everything left a
a “gasping elephant”. And from the third quarter of 2013, India has become the center of emerging market investors.
positive note on the GDP. GDP is calculated on the basis of three sectors, namely-agriculture, industry and services. India ranks second worldwide in terms
By the turn of the 21st century India became a free
of farm output. It is the largest producer in the world
market economy. Also India enjoyed high growth rates
of milk, jute and pulses and the second largest
for a period from 2003 to 2007 with an average growth
producer of rice, wheat, sugarcane, cotton and
rate of 9%. Goldman Sachs then predicted that India’s
groundnuts. In 2014 agriculture accounted for 17%
GDP in current prices would overtake France and Italy
of the GDP. Whereas Industry accounted for 26%
by 2020, Germany, UK and Russia by 2025 and Japan
and services accounted for 57% of the GDP. But the
by 2035, making it to the third largest economy of the
major areas for the growth of GDP in the second
world, behind the US and China. But the global
quarter of fiscal year 2015 are manufacturing,
financial crisis of 2008 changed the game. India entered
mining and services sectors. Higher domestic
a period of slow growth. Other economic problems also
demand and manufacturing activity charged the pace
became evident. And so foreign investors pulled out
and that is why the sector that witnessed a splendid
money from the Indian markets. But India has gained
growth was manufacturing, where the output rose 9.3
its pace again. From a growth rate of 7% in the previous
% as against 7.9% a year ago. According to the
quarter it has accelerated to 7.4 % in the July-September
World Bank, India’s industrial manufacturing GDP
quarter, overtaking China whose growth rate stood at
output in 2015 was 6th largest in the world on current
6.9%. The expansion was more rapid than the 7.1% rise
US dollar basis. The agriculture sector stood at 2.2%
during April-June 2015, but slower than the 8.4 %
as against 2.1%. Due to lack of monsoon this sector
growth registered during the second quarter of the last
has seen a slow growth for the second consecutive
fiscal year. However it was better than the market
year. Trade, hotels and transport and others
16 | D E C E M B E R 2 0 1 5
as against 2.1%. Due to lack of monsoon this sector has
growth in manufacturing but weak rural and external
seen a slow growth for the second consecutive year.
demand holds back stronger overall outlook.
Trade, hotels and transport and others witnessed a better growth of 10.6% as against 8.9% a year ago. Public administration, defense and other services increased 4.7%, the construction sector increased 2.6%, mining and quarrying went up 3.2% and utilities production rose 6.7%. Government expenditure also increased 5.2% and gross fixed capital formation went up to 6.8%. The Gross Value Added (GVA), a new concept introduced by CSO (Central Statistics Office) to measure the economic activity, also increased during the second quarter to 7.4% from 7.1%. Also, the Reserve Bank of India cut the interest rates by half a percentage point to 6.75%. This allowed banks to lend more capital, rather than keep it locked away. The Finance Minister of India, Arun Jaitley has also revised individual and corporate taxes. The corporate tax rate in India now stands at 34.61%. It averaged 35.02% from 1997 until 2015, reaching an all-time high of 38.95% in 2001 and a record low of 32.44% in 2011. This happened in the wake of Indian companies relocating to Dubai and Mauritius because of taxes. Then the decline in commodity prices came as a light in the darkness. India’s economy has gained a lot from this decline. It’s deficits are mainly due to oil and gold imports. The decline has helped to absorb the loss faced by oil companies and kept inflation under control, which in turn has helped the Reserve Bank to ease up the rates. The fall in prices has given a chance to make farm subsidy reforms that could reduce government expenditures
on
fertilizer
and
food
subsidies.
According to Raghuram Rajan there are areas of robust growth 17 | D E C E M B E R 2 0 1 5
All these are a part of Modi’s “Make in India” agenda. The Modi government has completed one year on 26th of May this year. And within a year the country has seen a lot of changes, both positive and negative. The acceleration in economic growth will boost the government to get the economy back on rails as the top-most priority. Modi has vowed to provide a transparent and predictable tax regime as well as protection to Intellectual Property Rights. Now, the government is aiming for the economy to grow at over 8% as India is seen as a bright spot after the contraction witnessed in some of the other emerging market economies such as Brazil and Russia. Yet, the demand doesn’t allow much of fresh investments. It needs to go slow. Narendra Modi said, “Reform is not an end in itself. Reform for me is just a way station on the long journey to the destination. The destination is the transformation of India.”
SECTOR GROWTH SLUMP 25-MONTH LOW
MANUFACTURING ACTIVITY DIP
-Sandhya Adhavan
India’s development as well as growth strategy has
services, industrials and manufacturing, mining and
placed an enormous importance to realize its dream of
agriculture. For each sector we have a method of
industry–led development. Manufacturing industry is
measuring the growth. One such index that helps us
of utmost importance for the development of any
to measure the growth of the manufacturing sector is
economy. India is believed to have a large number of
PMI (Purchasing Managers Index). PMI is a very
people who fall under the working age group, which in
important
itself is a double edged sword. India largely depends on
manufacturing, but also the economy as a whole. It
manufacturing industry for growth and employment.
is good indicator of future GDP levels. Many
Which is why initiatives like Make in India, MUDRA
economists will adjust their GDP estimates after
etc. were started, encouraging the entrepreneurial spirit
reading the PMI report.
thereby aiming at making India the manufacturing hub of the world. Large
scale
sentiment
reading,
not
only
for
PMI indicates the health of the manufacturing sector. It is a composite index of five "sub-indicators",
industries
not
only
provide
job
which are extracted through surveys from more than
opportunities but also play a vital role in exports,
300 purchasing managers from around the country,
resulting in an increased foreign exchange earnings
chosen
leading to overall inclusive growth. Though the
diversification benefits. The five sub indicators are
contribution of Indian manufacturing sector has been
new orders, inventory level, production, supplier
satisfactory, it has not been able to keep pace of
deliveries and the employment environment. PMI is
employment generation. The contribution of this sector
classified into eight categories of basic metals,
has to increase so as to improve the people’s standard
chemicals and plastics, electrical and optical, food
of living.
and drink, mechanical engineering, textiles and
Purchasing Managers Index One of the best methods of measuring the standard of
for
their
geographic
and
industry
clothing, timber and paper and transport. Performance of the Manufacturing sector
living of the people is Gross Domestic Product (GDP).
Now that we know the importance of manufacturing
It is also one of the primary indicators that is used in
sector in India, let’s understand the current scenario
estimating the health of the country’s economy. That is,
of the sector and try to unveil its impacts on our
monetary value of all the finished goods produced in the
economy.
country in a specified time. The total GDP comes from four components of economic activity which are services, industrials and manufacturing, mining and 18 | D E C E M B E R 2 0 1 5
agriculture. For each sector we have a method of
"November PMI data point to tepid manufacturing growth across India, with gloomy domestic demand resulting in weakest expansion in production in 25 months," said Pollyanna De Lima, economist
growth across India, with gloomy domestic demand
while a contraction was seen in the capital goods
resulting in weakest expansion in production in 25
category,” the survey said. Significant increase in
months," said Pollyanna De Lima, economist at Markit,
Export orders at consumer and intermediate goods traded in US currency, an increase in value of dollar firms were witnessed. Delayed payments from accompanies a decrease in its price. clients and labor shortages were also faced my many The crisis in"Digging international market has also negatively companies. deeper into detail, intermediate
the agency that compiles the PMI index. The manufacturing sector grew at its weakest pace in two years in November due to the sluggish flow of orders and decreased demand. The Nikkei India Manufacturing Purchasing Managers' Index (PMI) fell from 50.7 to 50.3 in November from the previous month. If the PMI is more than 50, it represents expansion and if it is less than 50 then it indicates contraction in the sector’s growth. This clearly indicates the need for sustainable reform measures for growth. Various reasons for the decrease in PMI are as follows. Input cost inflation increased and there was a fall in the factory gate prices. Depletion of finished goods at the market happened in a faster pace in three years. Improvement in the business conditions were noted as the consumer goods performance was more than expected. But the conditions of the intermediate
affected the pricedrove of gold. The downfall in the goods sub-sector the deceleration in growth. Chinese economy has and led output to massive of fell 30 New business inflows in thisselling category tonnes Shanghai Exchange for thegold first attime since Gold December 2013.because While people in market wanted to pay off the debts investment goods producers saw a reboundand in liquidate every possible investment they had done. November, the consumer goods sector remained the As a result price goldThere dipped toaits lowest due bright spot,"the said De of Lima. was marginal rate to thanthe demand and forcing people of excessive inflation, supply however companies were said to to sellpaid at lower prices. Iran’s with and the have higher process fornuclear metals,deal textiles West led toBank reduction in conflicts in those regions food. has Reserve of India (RBI) had not changed which in turn indicated gold prices be lowered. the policy rates. It was the stagnant at 6.75topercent. Further, Greece has been in the danger of being Conclusion removed from Euro list. It has a huge amount of debt which it dealt with by itself sealinginto a last minute dealnation with India will transform a developed its creditors imbibing less value of gold. through the thus growth of its manufacturing industry in
a slower pace. “New business from abroad increased
a sustainable manner. For this we need to emphasize Moving to the factors internal to Indian economy, the not just an increase in tax incentives, infrastructure government and Reserve Bank of India (RBI) have projects but a continuous improvement in price, taken several measures to curb gold imports resulting quality and response. Therefore, need for in lowering its prices and making it as an option for comprehensive, long-term novel policies are investment asset. This reduction has attracted required for sustainable growth of manufacturing consumers leading to healthy demand and high industry. The PMI of manufacturing sector is closely consumerism. The unpredictable pattern of monsoon watched not just for the sector but for the economy is also a matter of concern. India is the second largest as a whole, as it is the industry where the recession consumer of gold out of which rural population tends to begin and end. contributes to about 60% of overall buying of
further in November. Although only slight, the rate of
products. With a good monsoon over the year the
growth was the strongest in three months. New export
demand for gold would increase especially during
orders rose at consumer and intermediate goods firms,
the festive season. On the other hand, lower levels of
while a contraction was seen in the capital goods
monsoon would negatively impact the demand for
goods companies fell for the first time in two years. “Signs of the sector slowing have been building up, as growth of both new orders and output has eased in each of the past four months,” said Pollyanna De Lima, economist at Markit. She added that the disappointing news is accompanied by a stagnant labor market in the sector. Increase in the new businesses from abroad was seen at
19 | D E C E M B E R 2 0 1 5
category,” the survey said.
gold thus leading to an increase in its price. According to the facts, India has been the world’s
SECTOR ANALYSIS
THE INDIAN HOTEL INDUSTRY
-Jatin Sharma
India is on its way to become a sought after tourist
companies like EIH and foreign hotel chains like
destination in the World. Foreign tourists and inbound
Shangri-La, Marriot, etc. International brands are
tourist are increasing rapidly due to factors like
looking forward to increase their presence in India
increasing
in
due continuous strong performance of Indian tourism
telecommunication technologies - tourism are services
industry. A segment that is picking up is budget
just a click away. The domestic hotel industry is
hotels to cater to the needs of young travellers. Tier
estimated to touch $1.8 billion by 2016, from $0.8
1 and Tier 2 cities are witnessing increasing influx of
billion presently, buoyed by rise in online bookings
people and most of the big players have already
(ICRA Report 2015).
committed investments in this region.
disposable
incomes,
advancement
Improvement in medical
facilities is another factor attracting people to India. The
Financial dynamics of Hotel industries
Indian Medical Tourism market is expected to grow from its current size of USD 3 billion to USD 7-8 billion by 2020," Grant Thornton India's National Managing Partner Vishesh C Chandiok said. With expectations of high growth and increase in competition, the dynamics of industry are undergoing a big change. The increasing importance of online travel agents (OTA) like MakeMyTrip, Yatra.com and GoIbibo. Airbnb – an online marketplace for people to list, find and rent an accommodation. Airbnb is like the OLX of hospitality. Online budget hotel online portals like OYO Rooms, Zoyo Rooms and stayzilla are an instant hit amongst students and middle class travellers. Online booking is still underpenetrated with just 16% bookings done online while online booking rate in 70% in Europe, 35 - 40% in the US.
The three major indicators of financials of hotel industry are ARR (average room revenue) and occupancy and Revpar (revenue per available room). Tourism is a highly seasonal business with demand picking up in the beginning of the year and towards the end of it.
The numbers for both ARR and
occupancy have weakened compared to last year for hotels of different categories, which means that the Revpar overall would take a beating. Revpar shows the monthly revenue per available room of hotels in India in 2014 and 2015. In April 2014, the revenue per available room of hotels in India was 51.50 U.S. dollars, down from the 59.56 dollars seen in March. High debt levels would come in the way of investments for the industry as a whole though there are some firms with prudent levels of debt-equity
Hoteliers in India
that can leverage this advantage to strengthen their
The major players in Indian hotel business are Indian
current positions.
conglomerates like TATA and ITC, pure hotel companies like EIH and foreign hotel chains like Shangri-La, Marriot, etc. International brands are | D E C EtoMincrease B E R 2 0their 1 5 presence in India due looking20forward
continuous strong performance of Indian tourism
Key Players Company
Type of properties Luxury,
Indian Hotels
Brands
mid-segment Taj, Gateway, Vivanta and Ginger
and budget
Company Limited Luxury, budget and ITC
heritage hotels
ITC Hotel—Luxury Collection, Welcome Hotel—Sheraton, Fortune and Welcome Heritage
Welcome Group Oberoi Group
Business hotels,
EIH
leisure hotels and
Oberoi and Trident
cruises Luxury, business hotels, Radisson Hotels and Resorts, Park Carlson
economy and
Plaza, Country Inns & Suites, Park Inn
cruises Luxury, InterContinental
mid-segment InterContinental, Crowne Plaza,
and business hotels
Holiday Inn, Holiday Inn Express, Hotel
21 | D E C E M B E R 2 0 1 5
% of
Company
Last Price
Change
% Chg.
Debt
1
Hotel Leela
19.75
0.10
0.51
4,996.38
85.73
2
Indian Hotels
107.55
0.65
0.61
2,899.09
40.27
3
Asian Hotels
129.10
1.70
1.33
809.79
42.65
4
Viceroy Hotels
17.70
-0.35
-1.94
389.03
51.76
5
Country Club
12.55
0.03
0.24
331.74
28.21
6
Oriental Hotels
22.05
0.35
1.61
289.36
43.31
7
Taj GVK Hotels
90.80
0.55
0.61
285.56
39.28
8
Kamat Hotels
47.55
-2.60
-5.18
202.06
36.65
Liability
Table 1: Debt levels
Type
Occupancy (%)
Room Rate (MOP$) %
2015
2014
Diff.
2015
2014
Growth
All type of Hotels
83.89
89.95
-6.06
1,418.31
1,540.20
-7.91
5 star hotels
81.93
89.69
-7.76
1,744.95
1,822.59
-4.26
4 star hotels
86.53
89.85
-3.32
865.16
1,023.17
-15.44
3 star hotels
88.81
91.65
-2.84
978.03
1,207.46
-19.00
Table 2: Trend of ARR and Occupancy Rates
22 | D E C E M B E R 2 0 1 5
Consolidation in Industry With India emerging as a hot tourist destination, International tourism players are having a heightened interest in India. Brand swapping which is uncommon in developing nations is becoming a common sight. For an instance ITC has taken over four Raviz properties in Kerala, Lemon Tree replaced Golden Tulip in Jaipur and the Meridien in Ahmedabad. The merger of Starwood hotels into Marriott International, Inc. will create the World’s biggest Hotel Company in India. The
agencies, tour operating agencies and Tourist transport operating agencies, units which facilitates cultural, adventure and wild life experience to tourists, units providing surface, air and water transport facilities to tourists, sectors which offers leisure, entertainment, amusement, sports, and health related facilities to the tourists. Inclusion of Hotels in infrastructure has opened access to rational rates of interest and would untie the debt tied hands of hotels investors.
combined group would even surpass IHC in terms of
Visa Rules
numbers of rooms. This gives a global presence and
The ease in Visa norms in terms of including more
increased bargaining power against agents both online
countries in the VISA on arrival list. Reducing
and offline. Even the Indian companies are on an
documentation requirements on Visa exempted
expansion phase with more than 200 new hotels spread
countries and including features like biometrics
across nearly 50 brands are expected to be operational
scanner and online visa application would simplify
in the next four-to-five years in India. About 52,000
the process of visa acquiring.
rooms are expected to come on stream by 2017.The major chunk of new hotels coming from the house of Marriott, ITC and IHC. Policies
Conclusion The tourism industry is slated to continue its strong performance due series of factors like affordability, rich ecological bounty – ranging from snowcapped
Investment Policy
mountains of the North to the deserts of Rajasthan
1oo percent FDI is permitted in the Hotel and Tourism
and beaches of south. Quality medical facilities that
in India under various approvals. Under Automatic
will not burn a whole in your pocket is also bringing
route, FDI is allowed only up to 51 percent in this
hordes of travelers from inside and outside the
industry. As per FDI guidelines for hotel and tourism
country. Air travel getting economical and wide-
industry in India, following are the sectors, in hotels,
spanned and quality national highways laid across
which have been receiving the maximum amount of
the length and breadth of the country are all giving
FDI Inflows for the past few years are restaurants,
rise to tourism. Government support in terms of visa
beach resorts, tourist complexes which facilitates
norms relaxation, easy financing and increased
accommodation and catering to the tourists, travel
cleanliness through Swach Bharat Abhiyaan.
agencies, tour operating agencies and Tourist transport operating agencies, units which facilitates cultural, 23 | and D E Cwild E M Blife E R 2experience 015 adventure to tourists, units
providing surface, air and water transport facilities to
ECONOMIC CONCERNS
-Prateek Pandey
THE DANGEROUS DEBT “Need not be Lannister, but will have to pay the debt”. Indian debt has been the third-highest recipient of foreign fund inflows in 2014-15 after Japan and South Korea in the Asia-Pacific region excluding China. The main reason behind the foreign investors preference in putting money into India is the yield differential between India and developed markets like US. The accommodative monetary policy being followed by
increasing by US$ 29.5 billion (6.6 per cent) over the
Federal Reserve in US and European Central Bank to
level at end-March 2014. The external debt-GDP
revive their economies and stimulate investment
ratio was 23.8 per cent at end-March 2015, as against
demand and consumption has kept the interest rates low
23.6 per cent at end March 2014. The increase in
in those countries. The debt flows in India are high due
long-term external debt during the year was
to the prevailing high interest rates and also because the
primarily on account of rise in commercial
rupee is a relatively stable currency among other
borrowings and NRI deposits. The growth in
emerging markets. The Indian rupee has depreciated
commercial borrowings can be attributed to the rise
relatively lesser as compared to Brazil’s real and
in
Russian ruble.
borrowings. Short-term external debt stood at US$
Debt scenario in India is very close to those which have
84.7 billion at end March 2015, showing a decline of
affected other emerging economies within the world,
7.6 per cent over US$ 91.7 billion at the end March
namely from having an overheated economic situation
2014. This owed mainly to the decline in Foreign
which expanded very quickly just at the time economies
Institutional
in the rest of the world slowed down or stagnated. The
Government Treasury bills (T-bills). Beginning
problem, however seems to lie with how India didn’t
April 07, 2014, FIIs were prohibited from investing
fend for its own. In short, it allowed investors to come
in Treasury bills. All outstanding FII holdings in T-
in with their cash, establish themselves with their
bills as on April 07, 2014 were allowed to taper off
interests and companies, and pay off those who in turn,
on maturity/sale. On account of this, FII holdings in
paid no attention to the country’s internal ailments such
T-bills (stock position) has steadily declined from
as production slowdowns. India’s external debt stock
US$ 3.7 billion at end March 2014 to zero at end
stood at US$ 475.8 billion at end-March 2015,
March 2015. Also, the share of short-term external
increasing by US$ 29.5 billion (6.6 per cent) over the
debt in total external debt declined from 20.5 per cent
| D E C E M2014. B E R 2The 0 1 5external debt-GDP ratio level at24end-March
at end-March 2014 to 17.8 per cent at end-March
was 23.8 per cent at end-March 2015, as against 23.6
2015.
commercial
bank
Investors
loans
(FII)
and
securitized
investment
in
25 | D E C E M B E R 2 0 1 5
debt in total external debt declined from 20.5 per cent
As far as other sources which constitute to the debt
at end-March 2014 to 17.8 per cent at end-March 2015.
composition
The currency composition of India’s external debt also showed that the debt denominated in US dollar continues to remain the predominant component accounting for 58.3 per cent of total external debt at end March 2015, followed by debt denominated in Indian rupee (27.9 per cent), Japanese yen (4.0 per cent) and Euro (2.4 per cent) as per the august financial report of the country. The rise in external debt during the period i.e. financial year 2014-2015 was also due to the higher levels
of
commercial
borrowings,
particularly
commercial bank loans and securitized borrowings, and NRI deposits. External commercial borrowings (ECB) has been a crucial determinant of the magnitude of India’s external debt.
of
the
country
are
concerned,
multilateral sources continue to dominate India’s sovereign external debt and Japan remains the single largest bilateral creditor. The composition of multilateral sovereign borrowing is undergoing a transformation with increase in the share of International
Bank
for
Reconstruction
and
Development (IBRD) and Asian Development bank (ADB) loans over the last few years indicating lesser access to loans on concessional terms in the coming years, especially with terms on International Development
Association
(IDA)
borrowings
beginning to harden. To Sum-Up At the end, Indian economy is more resilient today
External Commercial Borrowings (ECB) has been a
than in mid-2013. But complacency is not an option.
significant component in India’s external debt and the
The remaining soft spots will come under scrutiny
key driver of its magnitude. Increase in India’s external
during bouts of weak risk appetite, reiterating the
debt during financial year 2014-15 was primarily on
need for pre-emptive measures to deal with potential
account of rise in commercial borrowings and NRI
external shocks. We expect the RBI to continue
deposits. The rise in commercial borrowings was due to
building reserves to counter the consistent rise in
spike in commercial bank loans and securitized
external debt, guard against volatility and arrest
borrowing. ECB has always been occupying the highest
undue Indian rupee appreciation. This has been a
share in India’s external debt over the years. Debt
hard lesson for India, and one it will soon not forget.
service on external commercial borrowings, with share
India might possibly rebound, but as of now, the
of 75.1 per cent, dominated the India’s debt service
gloom and doom seems continues to increase across
payments, followed by NRI deposits, external
the board, from those who prospered and others who
assistance and rupee debt. The dominance of external
never was part of the good times the country
commercial borrowings is an indication of growing
previously enjoyed.
recourse to the use of ECBs by the companies to meet their financing requirements. Even through, International comparison based on | D E C E'International M B E R 2 0 1 5 Debt Statistics 2015' World 26Bank's
indicates that India continues to be among the less
MARKET WATCH
A MAKE OR BREAK?
-Chestha Kumar
It was a brutal weak across the capital markets. From
26500
stocks to oil to junk bonds, the selloff took it tolls on
26000 25500
Top 5 gainers
LTP
% change
Reliance Com.
80.90
6.24
Adani Ports
254.55
5.56
JSW steel
1020.5
5.43
Hindalco Inds.
78.80
3.34
are Paras Petrofils and Rasoya Proteins with -ve change
Cummins India
1023.45 3.30
(-20) and (-14.29).
Top 5 losers
LTP
% change
Paras Petrofils
0.20
-20
Rasoya
0.30
-14.29
2.70
-12.90
Blue Chip India 0.35
-12.50
JCT electronics 0.35
-12.50
2012.37. More than half of that came on friday alone, with the index dropped 1.9%. The S&P is now off 5.6% from its may, and all-time high, of 2131. It is now down 2.3% on the year, and 3.3% for december. Among the top gainer is Reliance Comm. and Adani Ports with the change in (6.24) and 5.56. The top losers
8000 7900 7800 7700 7600 7500 7400
Proteins Chromatic
CHART 1: NIFTY
27 | D E C E M B E R 2 0 1 5
12/10/2015
12/8/2015
12/6/2015
12/4/2015
12/2/2015
11/30/2015
11/28/2015
11/26/2015
11/24/2015
11/22/2015
11/20/2015
11/18/2015
11/16/2015
India
CHART 3: S&P 500
12/10/2015
12/8/2015
12/6/2015
12/4/2015
12/2/2015
CHART 2: SENSEX
For equities, it was the worst week . The S&P 500 lost 3.79% this week, down 79 points and finishing at
11/30/2015
EQUITY
11/28/2015
really is for higher interest rate.
11/26/2015
24000
11/24/2015
fresh relief the question of just how prepared the market
11/22/2015
24500
11/16/2015
pivotal meeting of the federal-reserve, it throws into
11/20/2015
25000
11/18/2015
investors everywhere. Coming just days ahead of a
Commodity Market
Currency Market
Gold price jumped by Rs. 290 to regain the Rs. 26000
The Indian Rupee generated at a fresh 2 year low
level in Delhi bullion market on saturday. Bullion
today. It is expected to open above 67/dollar as
traders attributed the rally in precious metals to a firm
globally the markets are reflecting strong risk-off
tend overseas and fresh buying by jewellers to meet the
sentiment. Any dips towards 66.75/dollar should
ongoing wedding season demand. Gold rates in new
lead to importers buying dollars to hedge their future
york, which normally determine price trend on the
dollar payables. Rupee may appreciate as dollar
domestic front, rose by 0.25% to $1,074.20 an ounce in
weakened in the international market and the US
friday's trade. In the national capital, gold of 99.9 and
non-farm payroll data is expected to be against the
99.5% purity zoomed by Rs. 290 each to Rs. 26000 and
dollar.
Rs. 25,850 per ten grams respectively. The precious
Currency
Rupees
other hand, silver dipped below 34,000 by losing
DOLLAR
66.79
Rs.200 to Rs.33,850 per kg and weekly based was down
EURO
73.44
POUND
101.71
metal had lost Rs. 130 in previous two days. On the
by Rs.265 to Rs.33,980 per kg. Brent and US crude's West Texas Intermediate (WTI) futures fell a much as 5 percent on the day and 12 percent on the week as mild pre-winter weather and a plummeting US stock market added to the toll on oil prices. Oil prices end below $36
BOND Market
barrel, down about 11% for the week- their largest
Stocks finally noticing the Red Flag In JUNK-
weekly decline of the. year.
BONDS. The junk-bond market has been flashing a
Commodity
Prices
GOLD
25,850
SILVER
33,980
NATURAL GAS
134.30
CRUDE OIL
2,403
warning-sign about conditions in the capital market for some-time. Conclusion The volatility in the commodity market and the U.S federal decisions may create ambiguity in the trading patterns of the investors. Though the stock market closed in red but comparatively performed better in the emerging markets.
28 | D E C E M B E R 2 0 1 5
READY FOR CONSUMPTION-DRIVEN GROWTH?
7th PAY COMMISSION BOOSTER
-Ishan Gupta
The seventh pay commission last month submitted its
revenue was going into paying salaries. In some
report to the central government. The commission
cases it was so brutal that 13 states had no money to
which is constituted once every 10 years generally has
pay salaries in 2000. In the wake of this disaster some
two consequences. On one hand it boosts India’s
state governments sought a mechanism which would
consumption driven economy and on the other hand it
stop the centre from announcing a pay revision
destabilizes the already strained central and state
without consulting the states. Despite such carnage,
government finances. Before we proceed with the
bowing to coalition pressures the UPA government
economic impact let us first understand the basics of the
formed the sixth pay commission which was
pay commission. The pay commission was setup in
implemented in 2006. The sixth pay commission
1956 by the government of India to determine the
pegged the minimum salary to Rs 7,000 a month
salaries of government employees. The first pay
(2.74 times). The street is split about the impact of
commission was established in the same year and since
the sixth pay commission in 2008. There was an
then after every decade a new commission is
impact on consumption but according to an HSBC
established that decides the wages of government
report it was marginal.
employees for a particular time-frame. The last pay
The seventh pay commission proposes an increase of
commission, the sixth pay commission, was formed in
~24% to wages. The minimum wages has been raised
2006 when the UPA government was in power.
to Rs. 18,000 (2.57 times). Some experts also hailed
To better understand the pay commission and its impact
other suggestions of the report like a reasonable hike
on the economy let us look at the previous two
(as compares to the previous commissions), breaking
commissions in brief. The fifth pay commission
from the vicious cycle of higher expenditure-higher
recommended to increase the minimum salary of
inflation and reduction in the duration of the
government employees by 3.4 times to Rs. 2,550 per
commission to 5 years from 10 years. Although the
month. This came into force in 1996 and the effect it
seventh pay commission proposes a lower hike than
had was felt by the government for years to come.
the last two, it is going to have a strong impact on the
Before the Fifth Pay Commission recommendations
government finances and the economy. Let us look
came into effect, the central government's wage bill
at the two sides of this coin.
stood at Rs. 218.85 bn in 1996-1997. It shot up by
The commission recommendation comes as a blow
nearly 99% to Rs. 435.68 bn in 2000. The state
to the investors expecting a strong recovery in
governments' wage bill went up by 74% to Rs. 898.13
government finances set in motion by the reduced
bn in 1999. Experts estimate that almost 90% of states
commodity prices (mainly crude oil). Although the
revenue was going into paying salaries. In some cases
government is trying to negate the impact on its
it was 29 so |brutal D E C Ethat M B E13R 2states 0 1 5 had no money to pay salaries in 2000. In the wake of this disaster some state
finances, but in absolute terms it is
government is trying to negate the impact on its finances, but in absolute terms it is a sizable flow. It will result in an additional outflow of Rs. 1.02 lakh crores (0.65% of the GDP). About 30% of this will come from the railway budget. The impact is sizeable considering that the government does not even plan to reduce the deficit by this margin. The government defended the impact by saying that the recommendations will be implemented in the next few years (the employees will be paid arrears from Jan 2016) and by that time, based on growth prospects of the country, they will be able to manage both the higher expense and the fiscal consolidation. But one must also realize that the government main source of income (corporate tax) will be reduced in the coming years. It will be interesting to see as to how government will manage the higher growth when the global economy is going through such
irrespective of market conditions. Thus it will be interesting to see what impact it will have. The market is expecting the states to follow suite and pump in an addition Rs. 2.4 lakh crores or another ~1.5% to the GDP over the next few years. The bulls are riding on automobile, consumer durables, jewelry and real estate companies to gain most from the pay hikes. Also, sectors like steel, electric goods, auto ancillaries and banking are likely to gain from this extra consumption.
turmoil and the extensive part of the fiscal consolidation
This step to increase consumption is a good step
can be attributed to commodity prices (and the
forward, but there are still a lot of things that need to
government has to maintain the OROP as well).
be factored in. The major question relates to the
On the flip side, it means higher consumption expenditure. India is a consumption driven economy and one can expect that this will boost the GDP by at least ~0.5%. However, the market reaction was pretty diluted. This can be attributed to two reasons: firstly, the increase was lower than the sixth pay commission; secondly, even after the implementation of the sixth pay commission there was not an immediate or strong jump in consumption. One can suggest that the sub-prime crisis and the inflated prices in the economy had a role to play in this. However, one must remember that a government employee is assured of a fixed amount irrespective of market conditions. Thus it will be interesting to see what impact it will have. The market 30 | D E C E M B E R 2 0 1 5
is expecting the states to follow suite and pump in an
government ability to fund this burden. It heavily depends upon a robust economic growth and suppressed
commodity
prices;
otherwise
the
government will be forced to raise taxes which will negatively affect the consumption in the economy. In case the response remains as muted as it was after the sixth pay commission then what was the use of such a large burden on the exchequer and with this kind of spending are we again looking at a delay in fiscal consolidation.
GST BILL
ONE HUNDRED AND TWENTY-SECOND AMENDMENT BILL, 2014
-Ranu Sarupria
The Goods and Services Tax is a value added tax that
For manufacturers and producers
will replace all the indirect taxes levied on goods and
One tax: The common base for charging GST for
services by the Government both the Central and States,
Centre and the state will consist of an amalgamation
once this is implemented. The GST is all set to
of both centre and state taxes which will enable them
consolidate all the state economies. This will be one of
to give one tax rather than giving about 16 taxes.
the biggest taxation reforms that will take place in India
once the bill gets officially green signal to implement.
The basic idea is to create a single, comprehensive and undivided Indian market to make the economy stronger
Distinction between goods and services will go: In some cases, there is a distinction between goods and services when they are sold as a package. These controversies will go.
and powerful.
Benefits of GST
Invoicing will be simpler: At present, the invoices are more detailed since taxes on goods and services
GST will be beneficial to the Centre, states,
are written separately for one transaction. This also
industrialists, manufacturers, the common man and the
leads to delaying of delivery of goods at destinations.
country at large since it will bring more transparency,
The abolition of entry tax will be a great boon for the
better compliance, revenue collections and increase
movement of goods by road transport.
in GDP growth.
Common
exemptions
between
Centre
and
For Centre and States
states: Now the exemptions given by the Centre and
By implementing GST, India will gain $15 billion a
the states being different, the final price becomes
year. This is because, it will promote more exports,
different in different states. In the GST regime,
create more employment opportunities and boost
exemptions will be common between the Centre and
growth.
the states which will make the rates of duty same all
It
will
divide
the
burden
between
manufacturing and services.
over India.
For Individuals and Companies
The complicated political bargaining that has held up the introduction of the goods and services tax. The
In the GST system, tax for both centre and state will be collected at the point of sale. Both will be charged on the manufacturing cost. Individuals will be benefitted as the price comes down resulting in more consumption and production which helps companies to prosper.
Narendra Modi government is keen to get the GST Bill passed in the Monsoon session of Parliament. The present bill will add to tax burden on the poor and the middle class, as taxes would now be in the range of 22%-27%, against 16%-18% proposed by the UPA.
31 | D E C E M B E R 2 0 1 5
The Congress-led UPA government had
above the GST, to safeguard their revenue. The UPA had suggested an independent dispute settlement mechanism, but that has been dropped in the new Bill. It would have enhanced confidence in the GST initiative. Impact on Market Benchmark share indices dropped to their lowest closing levels in three months, declining for a second by the UPA. The Congress-led UPA government had
consecutive week on concerns over delay in passage
brought in the GST bill in 2011, but the BJP had
of the goods and services tax (GST), crumbling oil
opposed the legislation. Now, they have included key
prices, while prospects of a rate hike by the US Fed
provisions of the Bill, which will hurt the very purpose
also weighed on investor sentiment. Investors’
of the legislation.
sentiments were dampened over a possible delay in
The GST Bill is going to hit the middle class the hardest. The UPA had sought an effective tax rate of 16%-18%, which is in line with global average. The BJP government, however, wants this to be in the range of 22%-27%, which will make India the country with
the passage of the key GST Bill. Further, oil prices tumbled to their lowest since 2009 after the Organization of the Petroleum Exporting Countries (OPEC) decided to keep production high despite depressed demand.
the highest GST rate in the world. The poor would be
Conclusion
hit the hardest by this move. Besides, the NDA
If everything goes well, most likely Bill will be
government has proposed certain crucial changes. The
legislated by April 2016. Full implementation of the
Bill adds a provision which allows the GST Council to
GST Bill would expand India’s growth gross
make recommendations related to apportionment of
domestic product by 0..9-1.5 percentage points .By
IGST
removing the multiple centre and states taxes, the
The NDA government has proposed a 1% additional tax
GST can help in reducing taxation and filling costs
and the revenues of which will accrue to manufacturing
and expand business profitability and attracting
states.
investments
Apart from protecting his home state, Modi’s move does not have any merit as it would post additional burden on the states. In addition to this, the government has allowed the States to impose a 1% tax, over and1. above the GST, to safeguard their revenue. The UPA 32 | D E C Ean M Bindependent ER2015 had suggested dispute settlement
mechanism, but that has been dropped in the new Bill.
and
promoting
GDP
growth.
Simplification of tax norms can help in improving tax compliance and increasing tax re venues. This will also help in creating a unified national market.
GST BILL 2011
GST BILL 2014
The Bill defined GST as any tax on the supply of The Bill defines GST as any tax levied on the goods or services, except taxes on the supply of: (i) Petroleum crude;
supply of goods, or services, except taxes on the supply
of
alcoholic
liquor
for
human
consumption. (ii) High speed diesel; (iii) Motor spirit (petrol); (iv) Natural gas; (v) Aviation turbine fuel; and (vi) Alcoholic liquor for human consumption. The Constitution imposed restrictions on states in This provision has been deleted by the Bill. taxation of goods that were declared by Parliament, by law, to be of special importance in inter -state trade or commerce.
The Bill made two changes:
These changes have been removed.
(i) It removed the goods listed under A. 366 from within its ambit; (related to tax on the sale or purchase of goods) (ii) It specifies that this provision was not to apply to a state law insofar as it imposed GST. It allowed states to tax entry of goods into a local The Bill deletes the provision which permits states area for use or sale only to the extent levied by a to tax entry of goods into a local area for use or Panchayat or Municipality
sale only to the extent levied by a Panchayat or Municipality.
33 | D E C E M B E R 2 0 1 5
VRIDDHI’S RESEARCH CORNER
STOCK REPORT- JAGARAN PRAKASHAN
-Vikas Verma
Fig 1: Showing Ad revenue growth bounces back 90bps YoY rise in print business. Expansion Plans of the company Jagran Prakashan’s (JAGP) consolidated ad revenue (ex-Radio City) grew 9% YoY in Q2, largely driven by higher volumes across publications, its flagship publication, Dainik Jagran, recorded an improvement in ad yield.
Management of Jagran Prakashan (JAGP) at its Analyst meet suggests intent to consolidate/ focus on: (a) Print – scale up inorganic acquisitions (Naiduniya, Midday) by leveraging on its strong franchise, (b) Radio – building next growth engine
We expect Hindi print players like JAGP to benefit
with phase III expansion and (c) Digital – expand
from revival in national ad spends due to macro
reach with calibrated investments.
recovery (Growth in spending power, 7th Pay
Naiduniya: Jagran Prakashan Ltd (JPL), which
commission) in the medium term. Moreover, expansion
publishes the country’s largest read newspaper
in the Radio business will further boost the company’s
Dainik Jagran, has acquired the Madhya Pradesh-
medium-term growth.
based Hindi daily Nai Dunia for a value of Rs 150
Management has highlighted healthy pick-up in ad
crore.
revenue across auto, consumer durables and retail
500,000 copies a day, is printed in Gwalior, Indore,
sector; JAGP also benefitted from increased ad spend
Jabalpur, Bhopal (in Madhya Pradesh) and in Raipur
allocation by E-commerce players to regional print
and Bilaspur (in Chhattisgarh). It is among the 10
(negligible spend earlier). Circulation revenue grew 5%
most-widely read newspapers in the country,
YoY while other revenues (outdoor/event management)
according to the Indian Readership Survey,
declined ~6% YoY (down 12%QoQ); management
Acquiring Nai
remains focused to exit outdoor/events space over the
expansion for the Jagran group and will strengthen
next 1-2 years. Lower newsprint cost (down 4% YoY)
its presence in central India.
Nai Dunia, with a circulation of nearly
Dunia was
a
logical
market
and other cost control measures aided. Acquisitions (of existing media brands) are the 34 | D E C E M B E R 2 0 1 5
right thing to do. There are a lot of synergies on marketing and branding efforts, and ultimately it
Acquisitions (of existing media brands) are the right thing to do. There are a lot of synergies on marketing and branding efforts, and ultimately it greatly benefits investors, “The Mid Day deal and now Nai Dunia puts Jagran on the map as an ambitious media brand.”
Radio ad market share to double over 3-5 years: Radio City to benefit: With phase III expansion, JAGP expects Radio ad share to double to ~8% (of aggregate Media ad spends) over 3-5 years. Given strong positioning of Radio City in existing/ healthy expansion in phase III cities, JAGP expects it to be the key beneficiary of such shift.
Fig: Showing returns over the past 2 years Acquisition of Radio City Radio coupled with print offers a powerful package to the advertisers where one can reach out to a larger audience base. Radio City operates 20 FM stations in seven states. It has presence in metros as Delhi, Mumbai, Bengaluru and Lucknow and has a listener base of 10.8 million. Music Broadcast had a revenue base of Rs 209.40 crore in FY 2014-15 with a growth of over 30 per cent from last year. The radio business has seen significant growth in the recent past and is expected to grow at more than 18% compounded
Fig: Showing Revenue & EBITDA growth
annual growth rate in the coming years. Most growth today is seen in regional channels and radio. The Jagran Group also runs Radio Mantra 91.9 FM, which has presence across cities like Agra, Bareilly, Gorakhpur, Hissar, Jalandhar, Karnal, Ranchi and Varanasi. The growth in the radio industry is expected to be led by two things: an explosion in listenership with the government planning to sell 839
Fig: Revenue Breakup
frequencies in 227 cities in its phase 3 radio expansion as well as its increasing importance as a tool for advertisers. To conclude Jagran Prakashan is a Win-Win. “Happy Investing”.
35 | D E C E M B E R 2 0 1 5
“FINANCIAL TRIVIA” In 1790, to pay for war debt, the federal government refinanced all federal and state Revolutionary War debt by issuing $80 million in bonds. These become the first major issues of publicly-traded securities and marked the birth of the U.S. investment markets.
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36 | D E C E M B E R 2 0 1 5