Winning Bizness Economic Desk
India’s stock-market has overtaken Hong Kong and has become the world’s fourth biggest stock-market for the first time.
The combined value of shares listed on Indian exchange as at close of Monday (January 22, 2024) was USD 4.33-trillion. This is as compared to USD 4.29-trillion for Hong Kong, according to data by Bloomberg.
Interestingly, January 22 of this year was also the day of the Pran Prathishta in Ayodhya.
The country’s stock-market capitalisation breached the USD 4-trillion mark for the first time on December 5 of last year (2023). A significant point that requires highlighting here is that about half of this has come in just the past four-years.
Another important point to be noted here is that overseas funds brought-in more than USD 21-billion in 2023.
The sharp slide in China’s attraction to the world is one big reason for Hong Kong’s stock-market falling behind. Some of China’s most influential and innovative companies are listed on the Hong Kong stock-exchange.
Other factors that have also contributed to the declining appeal of China are that country’s strict anti-Covid-19 curbs, regulatory crackdowns on companies, the crisis in the real estate sector and geo-political tensions.
The total market value of Chinese and Hong Kong stocks have sharply slid southward by more than USD 6-trillion since their peaks in 2021.
Direct Listing of Indian Companies Allowed on GIFT City’s International Exchanges
India’s Central Government has given its permission for the listing of Indian companies on the international exchanges of the GIFT City. This move is aimed at encouraging foreign investments in the country.
GIFT City is located on the banks of the Sabarmati river between Ahmedabad and Gandhinagar in the western state of Gujarat. GIFT City’s full form is Gujarat International Finance Tec-City.
The Department of Economic Affairs (DEA) in the Ministry of Finance notified the `Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme’ after amending the Foreign Exchange Management (non-debt instruments) Rules earlier this month.
Last year, the country’s Union Finance Minister Mrs Nirmala Sitharaman had stated that the procedure to allow the direct listing of Indian companies on GIFT City’s exchanges was underway. Earlier this month, the Minister said that this listing would proceed in a “very systematic manner.”
The eligible international exchanges for the GIFT City are the India International Exchange and NSE International Exchange.
Chennai Now a Big Player in the Office Real Estate Market
The south Indian coastal city of Chennai is now becoming a big player in the highly-competitive Indian office real estate segment.
The numbers testify to this—with an uptake of 6.5-million square feet (msf) of office space in the first nine-months of last year (between January-to-September 2023), the capital city of Tamil Nadu has surpassed its entire 2022 consumption.
Here, it must be pointed out that traditionally this segment has been dominated by cities such as Mumbai, Delhi-NCR, Bangalore and Hyderabad.
As per data from commercial real estate services and investment firm CBRE, Chennai now stands alongside Mumbai (5.6 msf), Delhi-NCR (6.5 msf), Bangalore (10.6 msf) and Hyderabad (6.6 msf).
What needs highlighting here is that Chennai has accounted for 15 per cent of the country’s total office space absorption during this period. What this reveals is that Chennai’s office market has exhibited resilience despite global challenges.
Major real estate players such as L&T Realty, DLF, RMZ and the Olympia Group are presently developing expensive office space in the city.
A significant highlight here is that leading multi-national corporations in the IT, BFSI (Banking, Financial Services & Insurance), global capability centres and even legacy Chennai companies are securing huge office spaces.
A buzzing economy supported by a large pool of skilled talent, robust infrastructure and lower rental costs as compared to its competitors are all factors working in the southern city’s favour, adding to its attractiveness.
Jefferies: Ram Temple To Lead Infra-Driven Growth for Tourism in Ayodhya
Leading international brokerage firm Jefferies has said that it feels that the Ram Temple in Ayodhya will have a very big impact economically as India would get a new tourist spot that could attract in excess of 50-million tourists every year.
Ayodhya is located in the north Indian state of Uttar Pradesh (UP) and the Pran Prathishta of the Ram Temple was done on January 22 of this year.
According to Jefferies, the development will also set a template for infrastructure-driven growth for tourism in the country.
A new airport, a revamped railway station and improved road connectivity, among other things, are likely to drive a multiplier effect with new hotels and other economic activities, Jefferies said.
The globally-reputed brokerage firm expects growth in multiple sectors fuelled by a sharp increase in tourism and increased economic and religious migration to the city.
These sectors include hotels, airlines, hospitality companies, FMCG firms, travel ancillaries and cement-makers.
Ayodhya is expected to receive about 50-to-100-million visitors every year—this will overtake both the Vatican and Mecca in terms of footfalls. The Vatican receives about 9-million visitors while Mecca about 20-million every year.
Adani Group to Buy Six Business Jets
Leading Indian business group the Adani group, is in the process of purchasing six Pilatus PC-24 aircraft. The move is aimed at ensuring sufficient aircraft for the transportation of the group’s top executives, a leading business publication reported.
The conglomerate’s aviation company, Karnavati Aviation, will acquire the aircraft from the resale market.
A top executive of the group was quoted in the report as saying that the deal would cost the company over Rs 300-crore for all the six aircraft since the purchase is from the resale market.
India To Be Third Largest Economy in 3-Years
India is expected to become the third largest economy globally in the next three-years. The country’s GDP is expected to be USD 5-trillion in the next three-years and touch the USD 7-trillion mark by 2030 on the back of continued reforms, the Union Finance Ministry said.
Ten years ago, India was the tenth largest economy in the world with a GDP of USD 1.9-trillion at current market prices.
Today, India is the fifth largest economy with a GDP of USD 3.7-trillion (estimate for FY 24) despite the pandemic and inheriting an economy with macro imbalances and a broken financial sector, said the Finance Ministry’s January 2024 review of the economy.
“The 10-year journey is marked by several reforms, both substantive and incremental, which have significantly contributed to the country’s economic progress,” the Ministry said.
The Ministry further stressed that the reforms would be more purposeful and fruitful with the full participation of state governments.
It was eminently possible for the Indian economy to grow in the coming years at a rate above seven per cent on the strength of the financial sector and other recent and future structural reforms. Only the elevated risk of geo-political conflicts is an area of concern, the review report said.
“Furthermore, under a reasonable set of assumptions with respect to the inflation differentials and the exchange rate, India can aspire to become an USD 7-trillion economy in the next 6-7-years (by 2030),” it said.
In the preface of the review report, the country’s Chief Economic Advisor Mr V Anantha Nageswaran said that the union government has built infrastructure at a historically unprecedented rate, and it has taken the overall public sector capital investment from Rs 5.6-lakh-crore in FY 15 to Rs 18.6-lakh-crore in FY 24, as per budget estimates.
Mr Nageswaran noted that the global economy was struggling to maintain its recovery post-Covid because successive shocks have buffeted it.
Some of them such as supply-chain disruptions have returned in 2024.
If they persist, they would impact trade flows, transportation costs, economic output and inflation world-wide, Mr Nageswaran said.
