Information Bulletin of the BRICS Trade Union Forum
Issue 40.2017
2017.09.25 — 2017.10.01
International relations
Foreign policy in the context of BRICS
BRICS: Turning into a global organization (БРИКС: превращение в глобальную организацию) / Russia, September, 2017
Keywords: Xiamen_summit, Xiamen_declaration, expert_opinion, Alexander_Yakovenko
2017-09-25
2017-09-25
Russia
Source: www.rt.com
The 9th BRICS summit in Xiamen, China has emphasized the proximity of member states' positions on current global problems, demonstrating that over the last 10 years, BRICS has grown into a full-fledged international mechanism for global cooperation.
The main outcomes of the summit are reflected in the final Declaration, which outlines the common goals of ensuring equal multilateralism of political and economic affairs, and global security on the basis of international law, and the principles of the UN Charter. It also condemns military interventions and unilateral sanctions that violate international law.
The leaders of the BRICS countries are united in their assessments of the situations in the Middle East and Africa, as well as Afghanistan and Iraq. Russian efforts to provide a sustainable solution for the Syrian crisis were welcomed. As for the situation regarding North Korea, the leaders unanimously expressed their commitment to resolve the Korean Peninsula crisis through diplomatic means, including by launching direct negotiations between the parties involved.
The discussions at the summit also demonstrated the growth of the diverse and mutually beneficial cooperation between the BRICS countries, which contributes to a more equitable and democratic world order.
Source: www.rt.com
The 9th BRICS summit in Xiamen, China has emphasized the proximity of member states' positions on current global problems, demonstrating that over the last 10 years, BRICS has grown into a full-fledged international mechanism for global cooperation.
The main outcomes of the summit are reflected in the final Declaration, which outlines the common goals of ensuring equal multilateralism of political and economic affairs, and global security on the basis of international law, and the principles of the UN Charter. It also condemns military interventions and unilateral sanctions that violate international law.
The leaders of the BRICS countries are united in their assessments of the situations in the Middle East and Africa, as well as Afghanistan and Iraq. Russian efforts to provide a sustainable solution for the Syrian crisis were welcomed. As for the situation regarding North Korea, the leaders unanimously expressed their commitment to resolve the Korean Peninsula crisis through diplomatic means, including by launching direct negotiations between the parties involved.
The discussions at the summit also demonstrated the growth of the diverse and mutually beneficial cooperation between the BRICS countries, which contributes to a more equitable and democratic world order.
BRICS: Anomaly, cooperation or defiance (БРИКС: аномалия, сотрудничество или неповиновение) / Pakistan, September, 2017
Keywords: expert_opinion
2017-09-25
2017-09-25
Pakistan
Author: Maryam Nazir
Source: pakobserver.net
Over the years, BRICS has emerged as a synonym to the concept of South- South Cooperation (SSC). Together, BRICS represents 26 per cent of the planet's land mass, and is home to 46 per cent of the world's population. More than an acronym that identifies countries emerging in the international economic order, BRICS has become a new and promising political-diplomatic entity, far beyond the original concept tailored for the financial markets. Alongside the formation of New Development Bank (NDB), Asian Infrastructure and Investment Bank (AIIB) and BRICS Contingent Reserve Arrangement (CRA) for financial empowerment and putting an end to the over-reliance on existing systems, BRICS accounts for more than 30 per cent (in terms of purchasing power parity) of the global GDP and accounts for more than half of global growth, which have given the group power to influence global trends and trajectories and inflect economic reforms and restructuring. Grounded in the SSC paradigm, intra-BRICS trade, as percentage of their total foreign trade, doubled from 6 per cent to 12 per cent between 2001 and 2015. Since 2010, BRICS has evolved in an incremental manner. Seeing the level of at least regular annual interactions among its leadership alongside the successful completion of Summit cycles (each member country has hosted a meeting of leaders), BRICS seems to go a long way, contesting along the current global politico-economic order. More so, in this time of evolution, member states have been able to establish consensus in areas of importance, strengthening its two main pillars i.e. (i) coordination in multilateral fora, with a focus on economic and political governance; and (ii) cooperation between members. And if we analyze the development of body, somehow the results are yielding. Now as the group consists of members such as China, India and Russia, one can certainly not ignore the complexities and anomalies, these states hold against each other. Tangential might be the interests of these states, given the region's overall strategic environment, the group has not been made hostage to these differences or mere egoism, as we see in the prevalent case of SAARC. In fact, keeping engaged far countries of other regions like Brazil and South Africa is impressive for it requires mutual grounds of cooperation, indeed. However, it is widely questioned that these countries specifically India and China, despite making huge investments in advanced industrialized countries, will their actions/differences dilute BRICS' commitment to South-South cooperation and overall development? For instance, Russia seems to be an advocate of India's entrance in the United Nations Security Council (UNSC) and Nuclear Suppliers Group (NSG) while China discourages. Similarly, India seems to be at a great difference over China's initiative of Belt and Road as it rejects economic explanation of CPEC and BCIM-EC. Meanwhile, India's enhanced ties with the US, does raise the concern curvature of Russia and China. Similarly, Indian ambitions to exploit such forums against the cause of terrorism as part of campaign designed to isolate Pakistan globally, also go tangential to China's friendship with Pakistan and overall interests in the region. Meanwhile, as India strengthens its presence at regional platforms like SCO and BRICS; it is important for Pakistan to analyze its diplomatic moves. With increased reliance on lobbying, BRICS does stand to be another platform for India to materialize its foreign policy objectives for which Pakistan too needs to diversify its diplomatic options. SAARC is not serving the purpose it is supposed to, given the stubbornness of India but all the other options Pakistan has are not effective, any better. Without an iota of doubt, China's friendship with Pakistan has withststood the pressures but Pakistan must also analyze those factors by which China is maintaining ties with India despite opposition to BRI and Sikkim escalations. It is nothing but to wonder that despite passing of declaration against terrorists entities operating from the region, why Pakistan was not able to verbalize Indian involvement in activities of sabotage inside Pakistan. The case of Kulbhushan Yadav and his confession does speak for itself. But I guess, that wasn't considered important so. Aside from issues of regional implications, intra-BRICS differences are also there. It is to be noted that the lending of both the NDB and the CRA will be done in US dollars rather than the currencies of the BRICS countries themselves. By far, there is no arrangement of common currency or swap setup among member countries. Even to have an access to the CRA, a state has to go through IMF's structural adjustments. BRICS members have openly stated their opposition to the European and American monopoly over the IMF leadership position. But following the departure of Dominic Strauss Kahn, China and Brazil did support the US choice for the nomination of their own candidates for leadership positions. It is just one example. More so, the issues of horizontal proliferation of technology, expertise and experience still persist, manifestoed in the original concept of SSC. BRICS turns out to be combination of all three i.e. anomaly, considering the differences; cooperation and defiance, as it maintains itself. BRICS as it sustains, represents a strong source of empowerment and inspiration for most developing countries. It is one case study of SSC, there are other options and opportunities to study and implement. As the recent Summit states 'BRICS: Stronger Partnership for a Brighter Future', with grave differences among states of concern, the vision seems viable. At the end of the day, it is only enhanced economic engagement among countries that could ensure sustainable development at the global level.— The writer is Assistant Research Officer, Islamabad Policy Research Institute, a think-tank based in Islamabad. Email:maryamnazir1991@gmail.com
Author: Maryam Nazir
Source: pakobserver.net
Over the years, BRICS has emerged as a synonym to the concept of South- South Cooperation (SSC). Together, BRICS represents 26 per cent of the planet's land mass, and is home to 46 per cent of the world's population. More than an acronym that identifies countries emerging in the international economic order, BRICS has become a new and promising political-diplomatic entity, far beyond the original concept tailored for the financial markets. Alongside the formation of New Development Bank (NDB), Asian Infrastructure and Investment Bank (AIIB) and BRICS Contingent Reserve Arrangement (CRA) for financial empowerment and putting an end to the over-reliance on existing systems, BRICS accounts for more than 30 per cent (in terms of purchasing power parity) of the global GDP and accounts for more than half of global growth, which have given the group power to influence global trends and trajectories and inflect economic reforms and restructuring. Grounded in the SSC paradigm, intra-BRICS trade, as percentage of their total foreign trade, doubled from 6 per cent to 12 per cent between 2001 and 2015. Since 2010, BRICS has evolved in an incremental manner. Seeing the level of at least regular annual interactions among its leadership alongside the successful completion of Summit cycles (each member country has hosted a meeting of leaders), BRICS seems to go a long way, contesting along the current global politico-economic order. More so, in this time of evolution, member states have been able to establish consensus in areas of importance, strengthening its two main pillars i.e. (i) coordination in multilateral fora, with a focus on economic and political governance; and (ii) cooperation between members. And if we analyze the development of body, somehow the results are yielding. Now as the group consists of members such as China, India and Russia, one can certainly not ignore the complexities and anomalies, these states hold against each other. Tangential might be the interests of these states, given the region's overall strategic environment, the group has not been made hostage to these differences or mere egoism, as we see in the prevalent case of SAARC. In fact, keeping engaged far countries of other regions like Brazil and South Africa is impressive for it requires mutual grounds of cooperation, indeed. However, it is widely questioned that these countries specifically India and China, despite making huge investments in advanced industrialized countries, will their actions/differences dilute BRICS' commitment to South-South cooperation and overall development? For instance, Russia seems to be an advocate of India's entrance in the United Nations Security Council (UNSC) and Nuclear Suppliers Group (NSG) while China discourages. Similarly, India seems to be at a great difference over China's initiative of Belt and Road as it rejects economic explanation of CPEC and BCIM-EC. Meanwhile, India's enhanced ties with the US, does raise the concern curvature of Russia and China. Similarly, Indian ambitions to exploit such forums against the cause of terrorism as part of campaign designed to isolate Pakistan globally, also go tangential to China's friendship with Pakistan and overall interests in the region. Meanwhile, as India strengthens its presence at regional platforms like SCO and BRICS; it is important for Pakistan to analyze its diplomatic moves. With increased reliance on lobbying, BRICS does stand to be another platform for India to materialize its foreign policy objectives for which Pakistan too needs to diversify its diplomatic options. SAARC is not serving the purpose it is supposed to, given the stubbornness of India but all the other options Pakistan has are not effective, any better. Without an iota of doubt, China's friendship with Pakistan has withststood the pressures but Pakistan must also analyze those factors by which China is maintaining ties with India despite opposition to BRI and Sikkim escalations. It is nothing but to wonder that despite passing of declaration against terrorists entities operating from the region, why Pakistan was not able to verbalize Indian involvement in activities of sabotage inside Pakistan. The case of Kulbhushan Yadav and his confession does speak for itself. But I guess, that wasn't considered important so. Aside from issues of regional implications, intra-BRICS differences are also there. It is to be noted that the lending of both the NDB and the CRA will be done in US dollars rather than the currencies of the BRICS countries themselves. By far, there is no arrangement of common currency or swap setup among member countries. Even to have an access to the CRA, a state has to go through IMF's structural adjustments. BRICS members have openly stated their opposition to the European and American monopoly over the IMF leadership position. But following the departure of Dominic Strauss Kahn, China and Brazil did support the US choice for the nomination of their own candidates for leadership positions. It is just one example. More so, the issues of horizontal proliferation of technology, expertise and experience still persist, manifestoed in the original concept of SSC. BRICS turns out to be combination of all three i.e. anomaly, considering the differences; cooperation and defiance, as it maintains itself. BRICS as it sustains, represents a strong source of empowerment and inspiration for most developing countries. It is one case study of SSC, there are other options and opportunities to study and implement. As the recent Summit states 'BRICS: Stronger Partnership for a Brighter Future', with grave differences among states of concern, the vision seems viable. At the end of the day, it is only enhanced economic engagement among countries that could ensure sustainable development at the global level.— The writer is Assistant Research Officer, Islamabad Policy Research Institute, a think-tank based in Islamabad. Email:maryamnazir1991@gmail.com
Investment and Finance
Investment and finance in BRICS
Time to lay the BRICS to rest (Пора оставить БРИКС отдохнуть) / Australia, September, 2017
Keywords: expert_opinion
2017-09-28
2017-09-28
Australia
Author: Dylan Hubbard
Source: www.youngausint.org.au/
The 2017 annual BRICS summit was recently held between 3-5 September in Xiamen, China and attended by the heads of state/government of each of the five member states of Brazil, Russia, India, China and South Africa. These five countries together make up approximately 40% of the world's population, 25% of the world's land, and each country is a major economy and member of the G20. With factoids such as these, the 2017 BRICS summit had the markings of an event capable of impacting the future of the global economy.
Since the first inception of the BRICS in 2001 (or more accurately 'BRIC' at the time), however, the once incredible economic growth of these nations that heralded them as upcoming key economic players has long since faded, and the world is left with an annual reminder of a time that is now well behind us. Even for those countries still forging ahead with high growth (India and China), weak geopolitical relationships within BRICS highlight an all-too-clear inability for the member nations to capitalise on their economic strengths to instigate their desired changes to the global economic order.
Held under the theme of 'BRICS: Stronger Partnership for a Brighter Future', the ninth BRICS summit to be held since 2009 provided a somewhat ironic reminder of the rather dim economic futures and weak partnerships that the BRICS countries consist of in 2017.
Brazil
Between 2002 and 2008, Brazil's economy expanded at an average of 4% a year thanks to commodity demand and domestic spending. This resulted in increased living standards and a drastic reduction in poverty. This was a time of considerable optimism, both domestically and for foreign investors. However, the 2008 Global Financial Crisis and 2009 European Sovereign Debt Crisis brought demand for Brazilian commodities down to a trickle at a time when Brazil's domestic consumption had also been stalled by interest rate hikes. This combination of unfavourable internal and external factors led to Brazil's economic growth slowing, eventually grinding to a halt in 2014, and contracting 3.9% in 2015. It's only now that Brazil is showing signs of recovery, having broken its recession with two consecutive quarters of growth in 2017 despite the political scandals that continue to plague the nation.
Russia
Similarly to Brazil, but on an overall larger scale, Russia's economy expanded significantly between 2000 and 2008. Averaging 7% growth per year during this time, rising commodity prices and increased domestic consumption led to poverty drastically falling. Unlike Brazil, Russia managed to keep the good times rolling through to 2014. During this time, Russia enjoyed continued high growth, as well as international influence through both its trade and permanent place on the UN Security Council. However, both Russia's economic growth and geopolitical capital dropped sharply in 2014, following the annexation of Crimea in March and the subsequent sanctions placed on Russia by many of its largest trading partners. With a 2.5% growth rate in the second quarter of 2017, but a 0.5% growth rate in the first, Russia's economic future remains murky and is little helped by its the alleged meddling in the United States' 2016 election.
India and China
Unlike their BRICS counterparts, India and China remain strong economic powers and geopolitical influencers. Although China's growth has long since fallen from its heady double digits days, it still holds to an annual growth rate of 6.8%, while its 'One Belt, One Road' initiative is likely to further its prosperity and influence with developing nations.
India likewise has gone from strength to strength, looking poised to emerge as an economic superpower with its young populace compared to the ageing populations of China and the Asian Tiger economies. But in contrast to their enviable growth, both India and China have had their influence shackled by geopolitical tensions, including ongoing territorial disputes between India and Pakistan, and China's relative inaction against North Korea's weapon testing. Days prior to the summit, India and China successfully agreed to an expeditious disengagement from the Doklam border dispute. This underscores the ongoing tensions between the strongest of the BRICS economies which will still require significant time to overcome.
South Africa
Always somewhat of an odd inclusion to the bloc being a comparatively small economy next to the giant BRICs, and not particularly notable in growth, South Africa's economic outlook nonetheless echoes its Brazilian and Russian counterparts. A bleak economic outlook and ongoing political scandal arguably makes South Africa fit into BRICS more than its economy ever has.
16 years since inception, and nine since the first summit, perhaps it's now time to abandon the economic predictions of the past and work towards functioning relations before jumping to more multilateral summits. Despite the catchy acronym, it's hard to see a future where these BRICS will be building anything together.
Author: Dylan Hubbard
Source: www.youngausint.org.au/
The 2017 annual BRICS summit was recently held between 3-5 September in Xiamen, China and attended by the heads of state/government of each of the five member states of Brazil, Russia, India, China and South Africa. These five countries together make up approximately 40% of the world's population, 25% of the world's land, and each country is a major economy and member of the G20. With factoids such as these, the 2017 BRICS summit had the markings of an event capable of impacting the future of the global economy.
Since the first inception of the BRICS in 2001 (or more accurately 'BRIC' at the time), however, the once incredible economic growth of these nations that heralded them as upcoming key economic players has long since faded, and the world is left with an annual reminder of a time that is now well behind us. Even for those countries still forging ahead with high growth (India and China), weak geopolitical relationships within BRICS highlight an all-too-clear inability for the member nations to capitalise on their economic strengths to instigate their desired changes to the global economic order.
Held under the theme of 'BRICS: Stronger Partnership for a Brighter Future', the ninth BRICS summit to be held since 2009 provided a somewhat ironic reminder of the rather dim economic futures and weak partnerships that the BRICS countries consist of in 2017.
Brazil
Between 2002 and 2008, Brazil's economy expanded at an average of 4% a year thanks to commodity demand and domestic spending. This resulted in increased living standards and a drastic reduction in poverty. This was a time of considerable optimism, both domestically and for foreign investors. However, the 2008 Global Financial Crisis and 2009 European Sovereign Debt Crisis brought demand for Brazilian commodities down to a trickle at a time when Brazil's domestic consumption had also been stalled by interest rate hikes. This combination of unfavourable internal and external factors led to Brazil's economic growth slowing, eventually grinding to a halt in 2014, and contracting 3.9% in 2015. It's only now that Brazil is showing signs of recovery, having broken its recession with two consecutive quarters of growth in 2017 despite the political scandals that continue to plague the nation.
Russia
Similarly to Brazil, but on an overall larger scale, Russia's economy expanded significantly between 2000 and 2008. Averaging 7% growth per year during this time, rising commodity prices and increased domestic consumption led to poverty drastically falling. Unlike Brazil, Russia managed to keep the good times rolling through to 2014. During this time, Russia enjoyed continued high growth, as well as international influence through both its trade and permanent place on the UN Security Council. However, both Russia's economic growth and geopolitical capital dropped sharply in 2014, following the annexation of Crimea in March and the subsequent sanctions placed on Russia by many of its largest trading partners. With a 2.5% growth rate in the second quarter of 2017, but a 0.5% growth rate in the first, Russia's economic future remains murky and is little helped by its the alleged meddling in the United States' 2016 election.
India and China
Unlike their BRICS counterparts, India and China remain strong economic powers and geopolitical influencers. Although China's growth has long since fallen from its heady double digits days, it still holds to an annual growth rate of 6.8%, while its 'One Belt, One Road' initiative is likely to further its prosperity and influence with developing nations.
India likewise has gone from strength to strength, looking poised to emerge as an economic superpower with its young populace compared to the ageing populations of China and the Asian Tiger economies. But in contrast to their enviable growth, both India and China have had their influence shackled by geopolitical tensions, including ongoing territorial disputes between India and Pakistan, and China's relative inaction against North Korea's weapon testing. Days prior to the summit, India and China successfully agreed to an expeditious disengagement from the Doklam border dispute. This underscores the ongoing tensions between the strongest of the BRICS economies which will still require significant time to overcome.
South Africa
Always somewhat of an odd inclusion to the bloc being a comparatively small economy next to the giant BRICs, and not particularly notable in growth, South Africa's economic outlook nonetheless echoes its Brazilian and Russian counterparts. A bleak economic outlook and ongoing political scandal arguably makes South Africa fit into BRICS more than its economy ever has.
16 years since inception, and nine since the first summit, perhaps it's now time to abandon the economic predictions of the past and work towards functioning relations before jumping to more multilateral summits. Despite the catchy acronym, it's hard to see a future where these BRICS will be building anything together.
The 5 Biggest Electric Vehicle Manufacturers in BRICS Nations (5 крупнейших производителей электромобилей в странах БРИКС) / India, September, 2017
Keywords: Electric_Vehicle_Manufacturers
2017-09-26
2017-09-26
India
Author: Surbhi Jain
Source: frontera.net
Electric vehicle manufacturers to rise with the tide
Electric vehicles (or EVs) continue to grab headlines as various governments worldwide continue to announce new legislation and strategies to reduce vehicles powered by gasoline and diesel engines. Indeed, Bernstein research predicts that EVs could represent 40% of auto sales and 30% of the global car market in 20 years. UBS Group (UBS) believes that a growing global electric vehicle fleet will begin to be disruptive to gasoline demand by 2031.
Surprisingly, emerging markets (EEM) (VWO), are in many cases keeping pace with their developed market peers in the drive away from traditional auto engines. Tracking new technology and related products in these markets is an investment theme set to attract major fund flows.
The 5 biggest electric vehicle manufacturers in BRICS
We ran a filter on all the automakers currently selling products into the electric vehicle space, and originating from the BRICS nations (being the prominent area of focus within the emerging markets due to size and scale), to arrive at 5 largest automakers in the EV space. Here's the list of the five biggest auto manufacturers (by revenue) from BRICS nations (Brazil (EWZ)-Russia (RSX)-India (EPI)-China (FXI)-South Africa (EZA)) that are currently cashing in on growing demand in the electric vehicle space:
As is evident from the table above, all of these firms have delivered strong returns to investors so far this year. Maruti Suzuki's stock is up about 55%, while SAIC Motor and Hero Motocorp have delivered over 36% and 31% returns to investors, respectively.
SAIC Motor Corp (600104.SS)
SAIC Motor Corp is China's largest automaker. With over $341 billion in market capitalization, the company's stock is listed on the Shanghai stock exchange under the ticker 600104. The stock has returned 36.6% YTD (as of September 21) and currently trades at a P/E of 10.4.
The company is keen on the plug-in hybrid electric vehicle (PHEV), electric vehicle (EV) and fuel cell technologies. Its electric drive unit (EDU) was awarded first place at the 2016 China Automotive S&T Award Ceremony. In 2016, sales of new energy vehicles under SAIC's self-owned brands increased 84% year-on-year to surpass 25,000 units. In 2017, SAIC Motor plans to launch more new brands to improve the sales of new energy vehicles to over 80,000 units.
The company has founded the Global Car Sharing & Rental Co Ltd to offer timeshare leasing of electric cars. In 2016, the car-sharing company launched 8,400 new energy cars and built 2,800 charging stations in 20 cities. The service is scheduled to cover 100 cities in 2020, with 300,000 vehicles.
Mahindra & Mahindra Ltd. (M&M.BO) (MAHMF)
Currently, Mahindra & Mahindra is the only manufacturer of electric cars in India (INDA) (INDY). The company's stock is listed on the Bombay Stock Exchange with the symbol M&M and also on the NYSE's OTC market under the ticker MAHMF. With $802 billion in market capitalization, the India-listed stock of the company trades at a P/E of 18.8 currently. The stock has returned 10% to investors YTD.
Mahindra Electric, the company's electric vehicles division, has the e20plus, eVerito and eSupro in its stable. The company expects EV sales to triple in 2017. It has already partnered with shared mobility platforms, rental firms (such as Zoomcar) and cab aggregators to promote the usage of electric cars.
The company has a current capacity to make 400-500 EVs/month and seeks to increase this capacity to 5,000 vehicles a month over the next 2 years. Mahindra is also working on a high-end electric powertrain technology, which will allow cars to run for 200-300 km with a single charge from the existing range of 100-140 km. A luxury electric sedan could also come from the M&M stable, targeting international markets.
Related Article Why the US Needs Co-Operation, Not Conflict, With China to Deal with North Korea
The company has also entered into a partnership with Ford Motor Co. (F) to cooperate in areas including driverless and electric cars. For M&M, there's money to be made in a nascent EV sector. "This is not a trade-off. This is the single biggest business opportunity for the next couple of decades," said Anand Mahindra, the company's chairman on clean technology, at the Bloomberg Global Business Forum in New York on September 20. The company is also currently looking for a joint venture partner in the world's biggest EV market, China (YINN).
Maruti Suzuki India Ltd. (MARUTI.BO) (MRZUY)
This Indian automaker's stock is listed on the Bombay Stock Exchange with the symbol MARUTI and also on the NYSE's OTC market under the ticker MRZUY. The company boasts of a $2.5 trillion in market capitalization on the Indian exchange. The stock is expensive at a P/E of 32.5 currently. However, the stock has returned 54.6% to investors YTD.
While the company currently does not offer a pure electric vehicle, its product offerings include hybrid cars – Ciaz SHVS and Ertiga SHVS. These smart hybrid vehicle offerings of the company have record cumulative sales of over 100,000 units a month and participate in the government of India's FAME India* scheme, which aims to promote Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India.
Hero Motocorp (HEROMOTOCO.BO) (HRTQY)
Hero Motocorp is a leading motorcycle and scooter manufacturer based in India. The company's stock is listed on the Bombay Stock Exchange with the symbol HEROMOTOCO and also on the NYSE's OTC market under the ticker HRTQY. With $770 billion in market capitalization, the India-listed stock of the company trades at a P/E of 21.1 currently. The stock has returned over 31% to investors YTD.
The company currently offers a range of electric 2-wheelers and 3-wheelers. Hero Electric began developing electric vehicles over ten years ago which resulted in the first electric scooter products launched in the Indian market in 2007. Since then the company has sold over 100,000 vehicles in India. With over 50% market share in the electric scooter market, the company is the dominant player in India's electric two-wheeler market.
The company has also been very active in promoting the electric vehicle industry through the formation of an industry association and by approaching the government to provide subsidies of up to 20-25% on all electric scooter sales.
Avtovaz PJSC (AVAZ.ME)
AvtoVAZ is the Russian automobile manufacturer formerly known as VAZ: Volzhsky Avtomobilny Zavod, but better known to the world under the trade name Lada. The VAZ factory is the largest car manufacturer in Russia, and one of the largest in the world. The company is the single Russian company pursuing electric cars, with their electric Lada Vesta.
The company's stock trades on the MICEX exchange under the ticker AVAZ, commanding a market cap of $48.5 billion. The stock has returned 13.8% YTD.
Tata Motors (TTM)
While the above five top the list of BRICS automakers that have forayed into electric vehicles, the overall biggest automaker BRICS nations by revenue, Tata Motors (TTM), is set to zoom into the electric vehicle space as well. There's talk of Tata Motors launching an all-electric Tiago. The UK-based subsidiary Tata Motors European Technical Centre (TMETC) hinted that the Tiago EV might deliver 100 km on one full electric charge, will accelerate from 0-100 kmph in about 11 seconds in sports mode, and would be capable of a top speed of 135 kph.
Author: Surbhi Jain
Source: frontera.net
Electric vehicle manufacturers to rise with the tide
Electric vehicles (or EVs) continue to grab headlines as various governments worldwide continue to announce new legislation and strategies to reduce vehicles powered by gasoline and diesel engines. Indeed, Bernstein research predicts that EVs could represent 40% of auto sales and 30% of the global car market in 20 years. UBS Group (UBS) believes that a growing global electric vehicle fleet will begin to be disruptive to gasoline demand by 2031.
Surprisingly, emerging markets (EEM) (VWO), are in many cases keeping pace with their developed market peers in the drive away from traditional auto engines. Tracking new technology and related products in these markets is an investment theme set to attract major fund flows.
The 5 biggest electric vehicle manufacturers in BRICS
We ran a filter on all the automakers currently selling products into the electric vehicle space, and originating from the BRICS nations (being the prominent area of focus within the emerging markets due to size and scale), to arrive at 5 largest automakers in the EV space. Here's the list of the five biggest auto manufacturers (by revenue) from BRICS nations (Brazil (EWZ)-Russia (RSX)-India (EPI)-China (FXI)-South Africa (EZA)) that are currently cashing in on growing demand in the electric vehicle space:
As is evident from the table above, all of these firms have delivered strong returns to investors so far this year. Maruti Suzuki's stock is up about 55%, while SAIC Motor and Hero Motocorp have delivered over 36% and 31% returns to investors, respectively.
SAIC Motor Corp (600104.SS)
SAIC Motor Corp is China's largest automaker. With over $341 billion in market capitalization, the company's stock is listed on the Shanghai stock exchange under the ticker 600104. The stock has returned 36.6% YTD (as of September 21) and currently trades at a P/E of 10.4.
The company is keen on the plug-in hybrid electric vehicle (PHEV), electric vehicle (EV) and fuel cell technologies. Its electric drive unit (EDU) was awarded first place at the 2016 China Automotive S&T Award Ceremony. In 2016, sales of new energy vehicles under SAIC's self-owned brands increased 84% year-on-year to surpass 25,000 units. In 2017, SAIC Motor plans to launch more new brands to improve the sales of new energy vehicles to over 80,000 units.
The company has founded the Global Car Sharing & Rental Co Ltd to offer timeshare leasing of electric cars. In 2016, the car-sharing company launched 8,400 new energy cars and built 2,800 charging stations in 20 cities. The service is scheduled to cover 100 cities in 2020, with 300,000 vehicles.
Mahindra & Mahindra Ltd. (M&M.BO) (MAHMF)
Currently, Mahindra & Mahindra is the only manufacturer of electric cars in India (INDA) (INDY). The company's stock is listed on the Bombay Stock Exchange with the symbol M&M and also on the NYSE's OTC market under the ticker MAHMF. With $802 billion in market capitalization, the India-listed stock of the company trades at a P/E of 18.8 currently. The stock has returned 10% to investors YTD.
Mahindra Electric, the company's electric vehicles division, has the e20plus, eVerito and eSupro in its stable. The company expects EV sales to triple in 2017. It has already partnered with shared mobility platforms, rental firms (such as Zoomcar) and cab aggregators to promote the usage of electric cars.
The company has a current capacity to make 400-500 EVs/month and seeks to increase this capacity to 5,000 vehicles a month over the next 2 years. Mahindra is also working on a high-end electric powertrain technology, which will allow cars to run for 200-300 km with a single charge from the existing range of 100-140 km. A luxury electric sedan could also come from the M&M stable, targeting international markets.
Related Article Why the US Needs Co-Operation, Not Conflict, With China to Deal with North Korea
The company has also entered into a partnership with Ford Motor Co. (F) to cooperate in areas including driverless and electric cars. For M&M, there's money to be made in a nascent EV sector. "This is not a trade-off. This is the single biggest business opportunity for the next couple of decades," said Anand Mahindra, the company's chairman on clean technology, at the Bloomberg Global Business Forum in New York on September 20. The company is also currently looking for a joint venture partner in the world's biggest EV market, China (YINN).
Maruti Suzuki India Ltd. (MARUTI.BO) (MRZUY)
This Indian automaker's stock is listed on the Bombay Stock Exchange with the symbol MARUTI and also on the NYSE's OTC market under the ticker MRZUY. The company boasts of a $2.5 trillion in market capitalization on the Indian exchange. The stock is expensive at a P/E of 32.5 currently. However, the stock has returned 54.6% to investors YTD.
While the company currently does not offer a pure electric vehicle, its product offerings include hybrid cars – Ciaz SHVS and Ertiga SHVS. These smart hybrid vehicle offerings of the company have record cumulative sales of over 100,000 units a month and participate in the government of India's FAME India* scheme, which aims to promote Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India.
Hero Motocorp (HEROMOTOCO.BO) (HRTQY)
Hero Motocorp is a leading motorcycle and scooter manufacturer based in India. The company's stock is listed on the Bombay Stock Exchange with the symbol HEROMOTOCO and also on the NYSE's OTC market under the ticker HRTQY. With $770 billion in market capitalization, the India-listed stock of the company trades at a P/E of 21.1 currently. The stock has returned over 31% to investors YTD.
The company currently offers a range of electric 2-wheelers and 3-wheelers. Hero Electric began developing electric vehicles over ten years ago which resulted in the first electric scooter products launched in the Indian market in 2007. Since then the company has sold over 100,000 vehicles in India. With over 50% market share in the electric scooter market, the company is the dominant player in India's electric two-wheeler market.
The company has also been very active in promoting the electric vehicle industry through the formation of an industry association and by approaching the government to provide subsidies of up to 20-25% on all electric scooter sales.
Avtovaz PJSC (AVAZ.ME)
AvtoVAZ is the Russian automobile manufacturer formerly known as VAZ: Volzhsky Avtomobilny Zavod, but better known to the world under the trade name Lada. The VAZ factory is the largest car manufacturer in Russia, and one of the largest in the world. The company is the single Russian company pursuing electric cars, with their electric Lada Vesta.
The company's stock trades on the MICEX exchange under the ticker AVAZ, commanding a market cap of $48.5 billion. The stock has returned 13.8% YTD.
Tata Motors (TTM)
While the above five top the list of BRICS automakers that have forayed into electric vehicles, the overall biggest automaker BRICS nations by revenue, Tata Motors (TTM), is set to zoom into the electric vehicle space as well. There's talk of Tata Motors launching an all-electric Tiago. The UK-based subsidiary Tata Motors European Technical Centre (TMETC) hinted that the Tiago EV might deliver 100 km on one full electric charge, will accelerate from 0-100 kmph in about 11 seconds in sports mode, and would be capable of a top speed of 135 kph.
Nod for pacts by Exim Bank under BRICS mechanism (Одобрение договора Exim Bank в рамках механизма БРИКС) / India, September, 2017
Keywords: concluded_agreements, Exim_Bank
2017-09-27
2017-09-27
India
Source: www.thehindubusinessline.com
Exim Bank can now enter into bilateral agreement for co-financing with large developmental institutionsto ensure lending in single currency. This follows a decision by the Union Cabinet giving its approval to the signing of the Interbank Local Currency Credit Line Agreement and Cooperation Memorandum Relating to Credit Ratings by Exim Bank with participating member banks under BRICS Interbank Cooperation Mechanism.
The move follows expiry of an initial Master Agreement in March. The agreement was on extending credit facility in local currency under the BRICS Interbank Cooperation Mechanism.
It is understood that some of the member banks (like CDB and VEB; CDB and BNDES) have entered into bilateral agreements for local currency financing under the Master Agreement signed in 2012. Although the current conditions are not conducive to usage, it was useful to keep the same alive as an enabling feature in case a suitable opportunity materialises in future.
As both the agreement and the MoU are umbrella pacts, and are non-binding in nature, the Board of Directors of Exim Bank have been authorised to negotiate and conclude any individual contracts and commitments within their framework, it added. The agreements will promote multilateral interaction within the area of mutual interest which will deepen political and economic relations with BRICS nations.
Signing of the agreement will position Exim Bank in the international platform along with large development finance institutions, like CDS, VEB and BNDES.
According to an official release, at an appropriate time, Exim Bank, leveraging this umbrella agreement, could enter into bilateral agreement with any of these member institutions to raise resources for its business. As and when an opportunity arises for co-financing in commercial terms, by any two member institutions (say India and South Africa), lending in single currency by both the institutions would also be possible.
Exim Bank finances, facilitates and promotes India's international trade. It provides competitive finance at various stages of the business cycle covering import of technology, export product development, export production and export credit at pre-shipment and post-shipment stages and investments overseas.
It would enable sharing of credit ratings amongst the BRICS member banks, based on the request received from another bank. This would be an ideal mechanism to mitigate the credit risks associated with cross-border financing. In future, such a mechanism could also serve as pre-cursor to the proposal of having an alternate rating agency by BRICS nations.
The agreement and the MoU have also been highlighted in the BRICS Leaders Xiamen Declaration made in Xiamen, China on September 4.
Source: www.thehindubusinessline.com
Exim Bank can now enter into bilateral agreement for co-financing with large developmental institutionsto ensure lending in single currency. This follows a decision by the Union Cabinet giving its approval to the signing of the Interbank Local Currency Credit Line Agreement and Cooperation Memorandum Relating to Credit Ratings by Exim Bank with participating member banks under BRICS Interbank Cooperation Mechanism.
The move follows expiry of an initial Master Agreement in March. The agreement was on extending credit facility in local currency under the BRICS Interbank Cooperation Mechanism.
It is understood that some of the member banks (like CDB and VEB; CDB and BNDES) have entered into bilateral agreements for local currency financing under the Master Agreement signed in 2012. Although the current conditions are not conducive to usage, it was useful to keep the same alive as an enabling feature in case a suitable opportunity materialises in future.
As both the agreement and the MoU are umbrella pacts, and are non-binding in nature, the Board of Directors of Exim Bank have been authorised to negotiate and conclude any individual contracts and commitments within their framework, it added. The agreements will promote multilateral interaction within the area of mutual interest which will deepen political and economic relations with BRICS nations.
Signing of the agreement will position Exim Bank in the international platform along with large development finance institutions, like CDS, VEB and BNDES.
According to an official release, at an appropriate time, Exim Bank, leveraging this umbrella agreement, could enter into bilateral agreement with any of these member institutions to raise resources for its business. As and when an opportunity arises for co-financing in commercial terms, by any two member institutions (say India and South Africa), lending in single currency by both the institutions would also be possible.
Exim Bank finances, facilitates and promotes India's international trade. It provides competitive finance at various stages of the business cycle covering import of technology, export product development, export production and export credit at pre-shipment and post-shipment stages and investments overseas.
It would enable sharing of credit ratings amongst the BRICS member banks, based on the request received from another bank. This would be an ideal mechanism to mitigate the credit risks associated with cross-border financing. In future, such a mechanism could also serve as pre-cursor to the proposal of having an alternate rating agency by BRICS nations.
The agreement and the MoU have also been highlighted in the BRICS Leaders Xiamen Declaration made in Xiamen, China on September 4.
India ranks 40th in Global Competitiveness Index, 3rd among BRICS nations (Индия занимает 40-е место в рейтинге глобальной конкурентоспособности, 3-е место среди стран БРИКС) / India, September, 2017
Keywords: rating, BRICS_India, WEF_GCI
2017-09-28
2017-09-28
India
Source: zeenews.india.com
India has been placed at 40th spot in the World Economic Forum's (WEF) Global Competitiveness Index (GCI) 2017-18.
New Delhi: India has been placed at 40th spot in the World Economic Forum's (WEF) Global Competitiveness Index (GCI) 2017-18.
According to a World Economic Forum report, India is ranked 40th among 137 economies on the Global Competitiveness Index.
Switzerland, United States, and Singapore continue to be the world's top three competitive economies, while China (27th) and Russia (38th) outshine India among the BRICS group of large emerging markets.
According to the WEF report, India is 3rd among the BRICS countries on the Global Competitiveness Index.
The WEF report highlights that India, which remains the top-ranked economy in South Asia, has significantly improved in infrastructure, higher education, and labour market efficiency.
"Among the emerging markets seen as having great potential in the early 2000s, Brazil and Turkey have now lost much of the ground they gained before 2013, but China, India and Indonesia continue to improve," the WEF report said.
While India has been placed at the 40th spot, it is one position lower than last year. However, media reports quoted the WEF as saying that though India's ranking is one lower than last year's, the two rankings cannot be compared because of a change in the methodology.
The GCI report, which measures the factors that are crucial to future productivity and prosperity of countries, highlights how 10 years after the 2008 global crisis the financial sector is still vulnerable and unprepared for the next wave of innovation and automation.
The WEF report comes at a time when India is trying hard to improve the 2017-18 ranking in the World Bank's ease of doing the business survey.
It is to be noted that the GCI scores are calculated on the basis of 12 categories called 'pillars of competitiveness', which include parameters like institutions, infrastructure, health and primary education, labour market efficiency, financial market development, technological readiness and market size.
Source: zeenews.india.com
India has been placed at 40th spot in the World Economic Forum's (WEF) Global Competitiveness Index (GCI) 2017-18.
New Delhi: India has been placed at 40th spot in the World Economic Forum's (WEF) Global Competitiveness Index (GCI) 2017-18.
According to a World Economic Forum report, India is ranked 40th among 137 economies on the Global Competitiveness Index.
Switzerland, United States, and Singapore continue to be the world's top three competitive economies, while China (27th) and Russia (38th) outshine India among the BRICS group of large emerging markets.
According to the WEF report, India is 3rd among the BRICS countries on the Global Competitiveness Index.
The WEF report highlights that India, which remains the top-ranked economy in South Asia, has significantly improved in infrastructure, higher education, and labour market efficiency.
"Among the emerging markets seen as having great potential in the early 2000s, Brazil and Turkey have now lost much of the ground they gained before 2013, but China, India and Indonesia continue to improve," the WEF report said.
While India has been placed at the 40th spot, it is one position lower than last year. However, media reports quoted the WEF as saying that though India's ranking is one lower than last year's, the two rankings cannot be compared because of a change in the methodology.
The GCI report, which measures the factors that are crucial to future productivity and prosperity of countries, highlights how 10 years after the 2008 global crisis the financial sector is still vulnerable and unprepared for the next wave of innovation and automation.
The WEF report comes at a time when India is trying hard to improve the 2017-18 ranking in the World Bank's ease of doing the business survey.
It is to be noted that the GCI scores are calculated on the basis of 12 categories called 'pillars of competitiveness', which include parameters like institutions, infrastructure, health and primary education, labour market efficiency, financial market development, technological readiness and market size.
China's innovation tops 'many advanced economies' (Инновации Китая превышают многие страны с развитой экономикой) / China, September, 2017
Keywords: innovations, rating
2017-09-28
2017-09-28
China
Author: Fu Jing
Source: usa.chinadaily.com.cn
Out of 137 economies surveyed worldwide, the Chinese mainland ranks 27th in terms of overall competitiveness while in innovation, it is "on par or even better than many advanced economies," the Geneva-based World Economic Forum said on Wednesday.
The Chinese mainland placed between South Korea and Iceland in the annual ranking based on factors contributing to productivity and prosperity, according to a report released by the forum.
The mainland ranks highest among the BRICS group of five emerging markets and moved up to 27th, one place higher than in last year's assessment. BRICS also includes Brazil, Russia, India and South Africa.
Switzerland ranks as the world's most competitive economy, narrowly ahead of the United States and Singapore. Hong Kong moves up three spots to sixth place as Japan dropped one spot to ninth.
The authors of this year's report examined the data back to 2007. They said 10 years after the global financial crisis, many economies remain ill-prepared for the next wave of innovation and automation.
David Aikman, chief representative of the World Economic Forum's China operation, said the most important development in the past decade has been the mainland's emergence as an innovation powerhouse.
"Various indicators suggest its innovation capacity is now on par or even better than that of many advanced economies. More generally, we observe that the country's innovation ecosystem has improved significantly," Aikman told China Daily on Wednesday.
Aikman also said that Chinese companies are becoming much more sophisticated and are rapidly moving up the value chain, while at the turn of the century most exporting firms were merely suppliers of basic manufactured goods.
China has made "steep progress" in innovation and in science and technology in recent years, underpinned by educational strides, said Reinhilde Veugelers, professor of Leuven University of Belgium.
Author: Fu Jing
Source: usa.chinadaily.com.cn
Out of 137 economies surveyed worldwide, the Chinese mainland ranks 27th in terms of overall competitiveness while in innovation, it is "on par or even better than many advanced economies," the Geneva-based World Economic Forum said on Wednesday.
The Chinese mainland placed between South Korea and Iceland in the annual ranking based on factors contributing to productivity and prosperity, according to a report released by the forum.
The mainland ranks highest among the BRICS group of five emerging markets and moved up to 27th, one place higher than in last year's assessment. BRICS also includes Brazil, Russia, India and South Africa.
Switzerland ranks as the world's most competitive economy, narrowly ahead of the United States and Singapore. Hong Kong moves up three spots to sixth place as Japan dropped one spot to ninth.
The authors of this year's report examined the data back to 2007. They said 10 years after the global financial crisis, many economies remain ill-prepared for the next wave of innovation and automation.
David Aikman, chief representative of the World Economic Forum's China operation, said the most important development in the past decade has been the mainland's emergence as an innovation powerhouse.
"Various indicators suggest its innovation capacity is now on par or even better than that of many advanced economies. More generally, we observe that the country's innovation ecosystem has improved significantly," Aikman told China Daily on Wednesday.
Aikman also said that Chinese companies are becoming much more sophisticated and are rapidly moving up the value chain, while at the turn of the century most exporting firms were merely suppliers of basic manufactured goods.
China has made "steep progress" in innovation and in science and technology in recent years, underpinned by educational strides, said Reinhilde Veugelers, professor of Leuven University of Belgium.
CCCC expanding overseas (CCCC расширяется за рубежом) / China, September, 2017
Keywords: CCCC, infrastructure_investment
2017-09-27
2017-09-27
China
Author: Jing Shuiyu
Source: europe.chinadaily.com.cn
China Communications Construction Co Ltd, one of the country's largest infrastructure project builders, will adopt varied models to invest in BRICS markets in fields such as infrastructure construction, industrial parks and property development, its chairman said.
Liu Qitao said CCCC has put continuous emphasis on BRICS partners, grouping Brazil, Russia, India and South Africa, which boast a "huge scale market potential".
"We'll make use of different investment models including public-private partnership, build-operate-transfer, equity participation and mergers and acquisitions," Liu told China Daily in an exclusive interview.
To further expand its market share, the company will seek alliances with capable local enterprises familiar with the local business environment, he added.
CCCC's expansion in BRICS markets can be traced back to the 1980s, when it set up its first unit in Brazil. It then branched out to India, Russia and South Africa.
During the BRICS Summit in Xiamen earlier this month, the company signed a memorandum of understanding to invest in and construct a grain handling port in Santa Catarina, a project aimed to facilitate grain trade between China and Brazil. CCCC will take charge of the port's operations, according to a public filing.
CCCC's expansion strategy targeting BRICS countries is in line with its long-lasting goal: to boost its overseas sales revenue to around 50 percent of the total by 2035 via diversified operation models.
In the first six months of 2017, the company reported that revenue from overseas markets stood at 41.25 billion yuan ($6.09 billion), accounting for 21.7 percent of the total.
During the same period, the value of newly signed contracts in overseas markets was 140.3 billion yuan, nearly one-third of the company's total.
Experts said in the second half of the year, CCCC's performance would be further fueled by the steady rise of overseas orders.
Lu Ping, an analyst at China Merchants Securities Co Ltd, said overseas business would help the company realize the goal it set for this year－newly signed contracts reaching 900 billion yuan.
Kong Lingxin, an analyst with China International Capital Corp Ltd, said: "CCCC's revenue from both domestic and overseas markets is expected to grow at a faster pace. Overseas business will benefit from the country's Belt and Road Initiative."
Author: Jing Shuiyu
Source: europe.chinadaily.com.cn
China Communications Construction Co Ltd, one of the country's largest infrastructure project builders, will adopt varied models to invest in BRICS markets in fields such as infrastructure construction, industrial parks and property development, its chairman said.
Liu Qitao said CCCC has put continuous emphasis on BRICS partners, grouping Brazil, Russia, India and South Africa, which boast a "huge scale market potential".
"We'll make use of different investment models including public-private partnership, build-operate-transfer, equity participation and mergers and acquisitions," Liu told China Daily in an exclusive interview.
To further expand its market share, the company will seek alliances with capable local enterprises familiar with the local business environment, he added.
CCCC's expansion in BRICS markets can be traced back to the 1980s, when it set up its first unit in Brazil. It then branched out to India, Russia and South Africa.
During the BRICS Summit in Xiamen earlier this month, the company signed a memorandum of understanding to invest in and construct a grain handling port in Santa Catarina, a project aimed to facilitate grain trade between China and Brazil. CCCC will take charge of the port's operations, according to a public filing.
CCCC's expansion strategy targeting BRICS countries is in line with its long-lasting goal: to boost its overseas sales revenue to around 50 percent of the total by 2035 via diversified operation models.
In the first six months of 2017, the company reported that revenue from overseas markets stood at 41.25 billion yuan ($6.09 billion), accounting for 21.7 percent of the total.
During the same period, the value of newly signed contracts in overseas markets was 140.3 billion yuan, nearly one-third of the company's total.
Experts said in the second half of the year, CCCC's performance would be further fueled by the steady rise of overseas orders.
Lu Ping, an analyst at China Merchants Securities Co Ltd, said overseas business would help the company realize the goal it set for this year－newly signed contracts reaching 900 billion yuan.
Kong Lingxin, an analyst with China International Capital Corp Ltd, said: "CCCC's revenue from both domestic and overseas markets is expected to grow at a faster pace. Overseas business will benefit from the country's Belt and Road Initiative."
Cabinet approves signing of (i) Inter-bank Local Currency Credit Line Agreement and (ii) Cooperation Memorandum relating to Credit Ratings by EXIM Bank under BRICS Interbank Cooperation mechanism (Кабинет министров одобряет подписание (i) межбанковского соглашения о кредитной линии в местной валюте и (ii) Меморандум о сотрудничестве в отношении кредитных рейтингов EXIM Bank в рамках механизма межбанковского сотрудничества БРИКС) / India, September, 2017
Keywords: concluded_agreements
2017-09-27
2017-09-27
India
Source: pib.nic.in
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval to the signing of the (i) Interbank Local Currency Credit Line Agreement and (ii) Cooperation Memorandum Relating to Credit Ratings by Exim Bank with participating member banks under BRICS Interbank Cooperation Mechanism. As both the Agreement and the MoU are umbrella pacts, and are non-binding in nature, the Board of Directors of Exim Bank has been authorized to negotiate and conclude any individual contracts and commitments within their framework.
Impact
The Agreements will promote multilateral interaction within the area of mutual interest which will deepen political and economic relations with BRICS nations.
Signing of the Agreement will position Exim Bank in the international platform along with large development finance institutions, like CDS, VEB and BNDES. At an appropriate time, Exim Bank, leveraging this umbrella agreement, could enter into bilateral agreement with any of these member institutions to raise resources for its business. As and when an opportunity arises for co-financing in commercial terms, by any two member institutions (say India and South Africa), lending in single currency by both the institutions would also be possible.
Background
Exim Bank finances, facilitates and promotes India's international trade. It provides competitive finance at various stages of the business cycle covering import of technology, export product development, export production and export credit at pre-shipment and post-shipment stages and investments overseas.
Interbank Local Currency Credit Line Agreement
The initial Master Agreement on Extending Credit Facility in Local Currency under the BRICS Interbank Cooperation Mechanism had a validity of five years, which has expired in March 2017. It is understood that some of the member banks (like CDB and VEB; CDB and BNDES) have entered into bilateral agreements for local currency financing under the Master Agreement signed in 2012. Although the current conditions are not conducive to usage, it was useful to keep the same alive as an enabling feature in case a suitable opportunity materializes in future. Exim Bank raises resources in the off-shore market in diverse currencies and swaps to mitigate the risk. The umbrella Agreement would serve as an enabler to enter into bilateral agreements with member banks subject to national laws, regulations and internal policies of the signatories.
Cooperation Memorandum Relating to Credit Ratings
It would enable sharing of credit ratings amongst the BRICS member banks, based on the request received from another bank. This would be an ideal mechanism to mitigate the credit risks associated with cross-border financing. In future, such a mechanism could also serve as pre-cursor to the proposal of having an alternate rating agency by BRICS nations.
The Agreement and the MoU have also been highlighted in the BRICS Leaders Xiamen Declaration made in Xiamen, China on 4th September 2017.
Source: pib.nic.in
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval to the signing of the (i) Interbank Local Currency Credit Line Agreement and (ii) Cooperation Memorandum Relating to Credit Ratings by Exim Bank with participating member banks under BRICS Interbank Cooperation Mechanism. As both the Agreement and the MoU are umbrella pacts, and are non-binding in nature, the Board of Directors of Exim Bank has been authorized to negotiate and conclude any individual contracts and commitments within their framework.
Impact
The Agreements will promote multilateral interaction within the area of mutual interest which will deepen political and economic relations with BRICS nations.
Signing of the Agreement will position Exim Bank in the international platform along with large development finance institutions, like CDS, VEB and BNDES. At an appropriate time, Exim Bank, leveraging this umbrella agreement, could enter into bilateral agreement with any of these member institutions to raise resources for its business. As and when an opportunity arises for co-financing in commercial terms, by any two member institutions (say India and South Africa), lending in single currency by both the institutions would also be possible.
Background
Exim Bank finances, facilitates and promotes India's international trade. It provides competitive finance at various stages of the business cycle covering import of technology, export product development, export production and export credit at pre-shipment and post-shipment stages and investments overseas.
Interbank Local Currency Credit Line Agreement
The initial Master Agreement on Extending Credit Facility in Local Currency under the BRICS Interbank Cooperation Mechanism had a validity of five years, which has expired in March 2017. It is understood that some of the member banks (like CDB and VEB; CDB and BNDES) have entered into bilateral agreements for local currency financing under the Master Agreement signed in 2012. Although the current conditions are not conducive to usage, it was useful to keep the same alive as an enabling feature in case a suitable opportunity materializes in future. Exim Bank raises resources in the off-shore market in diverse currencies and swaps to mitigate the risk. The umbrella Agreement would serve as an enabler to enter into bilateral agreements with member banks subject to national laws, regulations and internal policies of the signatories.
Cooperation Memorandum Relating to Credit Ratings
It would enable sharing of credit ratings amongst the BRICS member banks, based on the request received from another bank. This would be an ideal mechanism to mitigate the credit risks associated with cross-border financing. In future, such a mechanism could also serve as pre-cursor to the proposal of having an alternate rating agency by BRICS nations.
The Agreement and the MoU have also been highlighted in the BRICS Leaders Xiamen Declaration made in Xiamen, China on 4th September 2017.
Big Four banks more influential than BRICS' peers (Банки «большой четверки» более влиятельны, чем их коллеги из БРИКС) / China, September, 2017
Keywords: Bank_Internationalization_Index, report
2017-09-25
2017-09-25
China
Source: www.chinadaily.com.cn
Bank of China (BOC) was ranked the first among banks of BRICS countries in the newly modified Bank Internationalization Index (BII), according to a report jointly released by the Academy of Internet Finance (AIF) of Zhejiang University and the International Monetary Institute (IMI) of Renmin University of China on Sept 23.
Based on the new index in the report, titled East or West, Home is Best? — Are banks becoming more global or local?, the Standard Bank of South Africa took the second spot, India's Bank of Baroda the third, VTB Bank of Russia the 4th and Bank Bradesco of Brazil the 16th rank.
The report said the four big State-owned banks, BOC, China Construction Bank (CCB), Agricultural Bank of China (ABC) and Industrial and Commercial Bank of China (ICBC) have proven to be more influential and better recognized globally than their peers from developing economies. The ICBC occupied the fifth spot, the report said.
"2016 has witnessed the sluggish recovery of the world economy and increasing policy uncertainty risks across the globe. China's economy maintained a slower but stable performance. With the supply-side structural reform pushing forward domestically, the Belt and Road Initiative, and cooperation with the BRICS economies were also strengthened," said Professor Ben Shenglin, dean of AIF.
Within the BRICS, India and South Africa each had three banks in the top 10; while both China and Russia had two banks. But the disparity is less obvious among the developing economies with BRICS economies receiving a mean BII value of 10.38, according to the report.
Three indicators: stock of overseas assets; performance of overseas operations; and global market layout were studied in the BII. The banks included not only multinational banks with a large number of overseas assets, but also medium- and small-sized shareholding commercial banks just starting to expand overseas. The report drew from a diverse data set including 49 international banks in Europe, America, Asia and Africa.
The dynamics of BII index can be "a good reflection of the development of bank internationalization over the past decade," Ben said.
The BII index has been fluctuating within a 23-26 range over the past decade, trending downward in the aftermath of the financial crisis around 2009 but started picking up in 2013, followed by a slowdown in 2015 due to the sluggish global economy, according to the report.
Banks from developed economies have maintained a stable and high level of internationalization, the report said. However, as developing economies have been catching up with remarkable achievements, the gap has been narrowing gradually year-on-year.
Source: www.chinadaily.com.cn
Bank of China (BOC) was ranked the first among banks of BRICS countries in the newly modified Bank Internationalization Index (BII), according to a report jointly released by the Academy of Internet Finance (AIF) of Zhejiang University and the International Monetary Institute (IMI) of Renmin University of China on Sept 23.
Based on the new index in the report, titled East or West, Home is Best? — Are banks becoming more global or local?, the Standard Bank of South Africa took the second spot, India's Bank of Baroda the third, VTB Bank of Russia the 4th and Bank Bradesco of Brazil the 16th rank.
The report said the four big State-owned banks, BOC, China Construction Bank (CCB), Agricultural Bank of China (ABC) and Industrial and Commercial Bank of China (ICBC) have proven to be more influential and better recognized globally than their peers from developing economies. The ICBC occupied the fifth spot, the report said.
"2016 has witnessed the sluggish recovery of the world economy and increasing policy uncertainty risks across the globe. China's economy maintained a slower but stable performance. With the supply-side structural reform pushing forward domestically, the Belt and Road Initiative, and cooperation with the BRICS economies were also strengthened," said Professor Ben Shenglin, dean of AIF.
Within the BRICS, India and South Africa each had three banks in the top 10; while both China and Russia had two banks. But the disparity is less obvious among the developing economies with BRICS economies receiving a mean BII value of 10.38, according to the report.
Three indicators: stock of overseas assets; performance of overseas operations; and global market layout were studied in the BII. The banks included not only multinational banks with a large number of overseas assets, but also medium- and small-sized shareholding commercial banks just starting to expand overseas. The report drew from a diverse data set including 49 international banks in Europe, America, Asia and Africa.
The dynamics of BII index can be "a good reflection of the development of bank internationalization over the past decade," Ben said.
The BII index has been fluctuating within a 23-26 range over the past decade, trending downward in the aftermath of the financial crisis around 2009 but started picking up in 2013, followed by a slowdown in 2015 due to the sluggish global economy, according to the report.
Banks from developed economies have maintained a stable and high level of internationalization, the report said. However, as developing economies have been catching up with remarkable achievements, the gap has been narrowing gradually year-on-year.
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