Engaged minds

Africa,  the new frontier and a competitor in agricultural and resource space:   Africa has almost 60% of world’s source of uncultivated and arable land. Africa is rich in natural resources such as copper, coal, cobalt, and diamonds. It also has a large English speaking population with about 360million cell phone users.  Egypt , Morocco , South Africa and Tunisia have significant manufacturing and service industries. Algeria , Angola , Libya and Nigeria earned about US$1 trillion from petroleum exports from 2000-2008.  Along with rich dividends, Africa is a mixed bag and is often fraught with political, financial and economic volatility.  South American countries like Chile and Peru are also seeking increasing investments.    Investments are displacing aid: The China model of investing in Africa is gaining ground displacing developed markets aid! The African’s love it as it is helping develop skills, infrastructure and jobs – it’s...

Every company is playing to its strength or weakness in developing growth strategies in emerging markets. There are a few important strategies that are being played out daily. Acquisition strategy :  As GDP and population grows coupled with a better quality of life,  the demand and trade for energy, commodities and technology have been increasing partly to achieve energy, food and technology security.  Acquisition strategies have spurred demand of energy and resources from Indonesia , Australia , South Africa , Brazil and Middle East ; investment activities have also increased in these countries. Cross border trades between Iran-India , China - Russia - Mongolia has also increased. The resource acquisition strategy has increase trade and investments for crude oil from Africa and Canada, mining into Indonesia, Mauritania, South Africa and Australia, fertilizers from Middle East and North Africa, organic chemical processing in agricultural rich belts of India, Chi...

My early experience and curiosity on international trade was fuelled by purchase my granddad’s stories of his travel in pursuit of trade, his British passport with stamps of Aden, Kenya, Tanzania, and the spice and diamond trade in which my distant relatives were involved, and learning history and geography around the Silkroad route.  As I grew, I experienced trade around export of oil seal and auto parts to Africa, trading of export subsidies and license, diamond and jeweler exports from India to western countries, the export of toothbrush and plastic wares from India to Russia, Russia export of heavy equipments to India and the growth of state owned enterprises in India, the barter and escrow clearance mechanism between Russia and India, exports of garments and electronics from Thailand and Malaysia, and the migration of Indian doctors and engineers to developed markets.   Over the past 15 years, there has been a dramatic change in trade corridors and patterns. India...

India ’s problems are purely on account of its inertia, contentedness, and lack of self realization of what it could potentially achieve and how much it could grow! Before we discuss a few potential solutions, let us analyze a few key facts: Indian economy is about 60-70% dollarized and is interconnected and coupled with the global economy. There is material impact of import of oil and petroleum products (US$169b), gold (US$54b), coal (US$15.5b), telecom, electronics and transportation (US$87b) and defense equipments (US$20b), ferrous and non ferrous raw materials (US$37b); the co-relation between international and local commodity prices are strong as local commodity and foreign exchanges proliferate, corporate and banks heavily rely on equity and loan funding or NRI remittances, and India's exports are service oriented. Imports of raw materials such as coal, non ferrous ore, iron and steel and scrap especially driven by lack o...

Ringa ringa roses…..all fall down!   The music has stopped on the NSEL the verdict is out: sellers have become lenders and have to fend for them to recover or enforce obligations from the buyers or borrowers. Looking at the position that NSEL has assumed and situation unwind, I fail to accept why participants should be called buyers or sellers while they have been lending and borrowing with an underlying commodity!  NSEL is just proving itself to be a pass through intermediary and its platform an unregulated NBFC providing commodity secured (?) funding for the buyers and run a carry trade. It all went sell until the commodity prices inverted.    Let us think of a few matters that any lender or fund manager, that offer investment financial products to small investors, would have thought of in the course of its respective lending operations or its investment advice: ·         Borrower due diligence process. ·  ...