Fact Box
January 10FII inflows
With the record FII (foreign institutional investor) inflow of over INR 80,500 crore, 2009 will go down as one of the best years in the history of the Indian stock market. The number of FIIs who registered themselves with the Securities & Exchange Board of India (SEBI) this year was higher by seven per cent over 2008. However, the number of new registrations this year is 70 per cent less than the new registrations recorded in 2008 and 2007. The primary reason for this is the global economic crisis. Despite a slump in the number of new entrants, the trend of overseas investors pouring money into Indian equity continues unabated thanks to the low interest rate regime in the US and Europe that has enabled them to borrow money at a cheaper cost and invest in high-yielding riskier assets like commodities and equities. After an outflow of INR 53,000 crore in 2008 and a net purchase of INR 71,500 crore in 2007, 2009 is expected to end with record inflows.
GDP
According to the Prime Minister’s Economic Advisory Council (PMEAC), the Indian economy is set to grow between 7 per cent and 7.5 per cent in the current fiscal. The services and industrial services are projected to grow at 8.7 per cent and 8.6 per cent respectively. A consistent growth of nine per cent in the industrial and services sector and four per cent in agriculture over the next 20 years, could place India among the developed nations.
Domestic market to drive hiring in 2010
The domestic market is expected to spearhead hiring activity in 2010, unlike in recent years when recruitment was led by outsourcing requirements. According to TMG (Talent Management Group), there was a 50 per cent increase in recruitment billing revenues during the October-December quarter. January has already shown a 20 per cent increase in this area. This is clearly an indication of the kind of job numbers that are going to come up during the first calendar quarter itself and beyond. Staffing firm TeamLease reports a quantum increase in the number of active positions (at around 4,000 currently), as against just 800 positions around June last year. Unlike in the past, hiring is not driven by outsourcing or global markets. It’s the domestic market that is responsible for the current spurt in hiring, which is going to be a sustained and well-rounded growth. Recruitment volumes will pick up across verticals like telecom, manufacturing , FMCG, retail, BFSI, IT and government.
India ranks second on the consumer confidence index
India ranks second with 117 points in consumer confidence in the fourth quarter of 2009, according to a Nielsen Global Consumer Confidence survey. The survey results indicate that the recovery from the global economic downturn is faster in India as compared with other countries in the world. The survey also indicates that countries with a higher willingness to spend are showing better signs of revival. Indonesia tops the survey with 119 points with Hong Kong, China, Singapore and Brazil also showing accelerated recovery. The survey highlights that eight of the Top 10 most confident markets were from Asia Pacific in the fourth quarter of 2009.
Exports rise nine per cent in December
According to the Ministry of Commerce, exports rose for the second successive month in December. Exports from India were estimated to touch USD 14.6 billion (around INR 66,035 crore) in December 2009, which was 9.4 per cent higher than the level in November. The growth in December was driven by sectors such as pharmaceuticals, engineering and auto components, while leather, handicrafts and apparel continued to be affected by lower demand in the developed markets. In November 2009, the 13-month trend of falling exports was reversed, with the country’s merchandise exports registering 18 per cent growth, at USD 13.2 billion, compared with USD 11.16 billion in the same month a year ago. However, exports during April-November 2009 were estimated to have declined by 22.3 per cent to USD 104.25 billion from USD 134.2 billion in the corresponding period in 2008.
Industrial output at a two-year high
Industrial production grew at 11.7 per cent in November 2009, putting India on track to achieve an 8 per cent economic growth in the current financial year. Industrial growth in November 2008 was a lowly 2.5 per cent, exaggerating the rate of expansion in November 2009. For the first eight months of this fiscal, industrial growth stood at 7.6 per cent against 4.1 per cent a year ago. The fiscal deficit for the current year is budgeted to deteriorate to a 16-year high of 6.8 per cent. The strong growth will give the government room to bring down the deficit.
M&A volume at highest Year To Date level since 2000
Merger and Acquisition (M&A) volumes touched USD 74.5 billion in mid-January 2010 — the highest Year To Date (YTD) level since year 2000. According to Dealogic, in 2010, 610 deals worth USD 74.5 billion have been announced. The year 2000 saw over 1,000 M&A deals worth USD 171.5 billion being announced. The 2010 YTD figure is 79 per cent higher than the USD 41.7 billion figure for 2009. The largest deal so far this year is the USD 28.1 billion acquisition of eye-care company Alcon, by Novartis. The healthcare sector has been witnessing maximum deal flow and has accounted for 54 per cent of the volumes so far in 2010. It is followed by the food and beverage, oil and gas, finance and mining sectors.
