Tokenization, which has come into effect from October 1, offers a hassle-free process of checking out as it takes away the anxiety about data leaks.

Most of us have been using our debit and credit cards for almost every online transaction, but not without the anxiety about data leaks. The uncertainty surrounding online transactions and cyber safety are always making us doubt whether we are right or wrong in doing it. The Reserve Bank of India was constantly receiving complaints from the consumers about data leakage and evaluated the threat and thus mandated the tokenization of cards by June 30, 2021. But the merchants, payment aggregators, card companies, and banks expressed inability to complete this herculean task by then and were granted an extension up to December 31, 2021. The deadline got extended again by six months and then for three months, before it finally became a reality on October 1, 2022.

An extra layer of security that would be added by the system of tokenization is set to make digital shopping a safer haven

Who can do it?
Certain card payment networks have been authorized by RBI to take up the tokenization service for the customers who request it, to make the transition process smooth. From October 1, 2022, as per RBI regulations, no entity in the payment chain and the card transaction business, can store the actual card data, other than the card issuer or the card network; and any such previously stored data will have to be purged.

Online frauds and cyber attacks have always been a major deterrent to the complete adoption of digital technology by consumers. An extra layer of security that would be added by the system of tokenization is set to make digital shopping a safer haven. Tokenization was indeed an obvious necessary step in the ever-evolving digital ecosystem, wherein mobile payments and payments through contactless options are being promoted by businesses. Most of us would have saved our payment information including the card details, on not just one, but several merchant websites, just for the sake of convenience, without realizing what can be the possible repercussions. This ease of making payments surpasses the security concern most times. Few customers avoid saving their sensitive card details on merchant websites, but then they have to key in the details every time they intend to make a purchase, leading to higher chances .    Full Article ...

We have created a strong moat by virtue of our long-term business relationships and the strength of our technology platform. Our deep entrenchment with our clients, which has been built over many years, is a significant entry barrier for any new entrant.

"Our first-mover advantage in the lounge access aggregator industry in India has enabled us to become a dominant player in the industry with a share of over 80% in the domestic lounge access market in the country today."

From a humble beginning as an airport lounge access service operator about a decade ago, serving a single corporate client (Mastercard), to becoming India's largest and only airport service aggregator platform, for DreamFolks, it has been an extraordinary tale of hard work, perseverance, grit and gumption. And the credit for the Gurugram-headquartered firm's phenomenal success goes to the visionary and dynamic leadership of its founder Liberatha Kallat and her hand-picked team of extraordinary talent. Today, DreamFolks counts many of India's prominent card issuers amongst its clients. In an exclusive interview with Amit Singh Sisodiya, Deputy Editor, The Global ANALYST, Liberatha Kallat, Founder and Chairperson, DreamFolks, talks about her incredible journey as an entrepreneur, the many milestones she and her team reached during this journey, what makes her firm stand out, its unique business model, factors behind her firm's remarkable success story, the competitive landscape and future plans. "Over the years, we have transformed from being an airport lounge access aggregator to an end-to-end technology solutions provider for designing and delivering services that enhance the airport experience for travelers," says she. According to her, "DreamFolks' business model, by design, is asset-light, HR-light and our ability to scale up our business requires minimal incremental capital deployment, resulting in high operating leverage." This is one of the key reasons that we have a strong track record of delivering consistent growth along with high capital efficiency,    Full Article ...

Equities have been on a roller-coaster ride for most part of the ongoing calendar year amidst a number of adverse events. However, what is surprising is that valuations, in general, continue to remain out of the comfort zone, notwithstanding several rounds of corrections witnessed, of late. So, is that of concern, and if equities are still a better alternative compared to any other asset class? In an exclusive interview with Amit Singh Sisodiya, Deputy Editor, The Global ANALYST, Hardick Bora, Fund Manager, Equity, Union Asset Management Company Private Limited ("Union AMC"), talks of his views about the current volatility in the market, his expectations from the upcoming earnings season, the sectors which he feels are currently better placed, his take on India's consumption story, his fund house's investment philosophy and his outlook on equities from a long-term perspective. Edited excerpts>>>

Equities have been on a roller- coaster ride, of late. What do you think has added to the volatility on the bourses in the recent times?
The heightened uncertainty in the past few months has resulted in volatility on bourses. Factors that have contributed to this are the erratic nature of inflation, increase in interest rates to fight persistent inflation, the geo political tensions between Russia and Ukraine, and not to forget the global spike in prices of crude, coal and other commodities.    Full Article ...

India's much-anticipated entry into global bond indexes like JP Morgan GBI - EM Global is likely to translate into passive bond inflows of almost $30 bn in the first year-with continued investments in excess of $200 bn over the next decade!

India is likely to be included in a leading international bond index JP Morgan GBI-EM Global soon if things go as per plan. There is also a likelihood that the country's sovereign bonds may join some more global indexes, going by a slew of media reports. The move, if it materializes, can be a potential game-changer for India's bond market as it could open the floodgates for foreign inflows. However, as the saying goes, there is no free lunch, meaning there could be no reward without risks. N Janardhan Rao, Deputy Editor, The Global ANALYST, spoke to Manohar V Dansingani, author and corporate trainer based in Pune, to know his views on the development, what it could mean for the domestic bond market and its likely impact in terms of inflows, and also the potential risks investors could face, besides a host of other issues. According to him, the total foreign investment in G-Secs even post-Fully Accessible Route (FAR) is a mere $19 bn at present. "Just compare this with the foreign investment in equities which is over $650 bn! The expected inflows are extremely substantial," reckons he, adding, "Being a part of an index creates goodwill and investor respect while providing all-important peace of mind to long-term investors." He, however, cautions, investors must also be wary of risks arising out of things like carry-trade. Edited excerpts>>>

What is the JP Morgan bond index in which Indian sovereign bonds may be included?
Just as there are several indices like Morgan Stanley Capital International (MSCI) which track equities worldwide, there are bond indices that facilitate passive investments and are used to benchmark fund or portfolio performance. The JP Morgan Government Bond Index - Emerging Markets Global (GBI-EM Global) is a clear leader. It tracks sovereign bonds issued in emerging markets which are denominated in the local currency of the issuer. Over $300 bn of G-Secs Assets Under Management (AUM), invested globally, tracks this index. It covers countries spread over Asia, Europe, Latin America, and Middle East & Africa.    Full Article ...

A little over a year after India set up its first 'Bad Bank', an interesting misnomer for the asset reconstruction firm National Asset Reconstruction Company Ltd. (NARCL), the domestic banking sector's wait for an end to the stressed asset menace that has haunted it for the past several years could materialize soon.

When in July last year, Prime Minister Narendra Modi's government at the center announced the launch of India's first state-owned asset reconstruction firm, National Asset Reconstruction Company Ltd. (NARCL), popularly known as 'Bad Bank', it raised hopes that banks hit by one of the world's worst-bad loan piles'-at around 2 tn or $27 bn (while the overall gross Non-Performing Assets (NPAs) stood at over 8 tn, as of September 2021)-could now heave a sigh of relief as it promises a much faster resolution compared to the existing mechanisms including the widely hailed Insolvency and Bankruptcy Code (IBC), was introduced in 2016, which has been criticized for being 'slow' and 'skewed'. The initial euphoria though is now threatening to turn into a major disappointment as the so-called Bad Bank, which formally started functioning in October last year after obtaining all the mandatory clearances and licence to operate as an Asset Reconstruction Company (ARC) from the Reserve Bank of India, hasn't made any headway so far.

But wait, the logjam may end soon, thanks to an apex bank's rule which requires an asset reconstruction firm to conclude at least one transaction within a year of starting operation, failing which it risks losing its license. No surprise, the state-owned ARC has begun pulling out all the stops to speed-up the takeover of stressed accounts before it became too late. To ensure it meets the deadline, the government has been nudging Public Sector Banks (PSBs) to cooperate as it was on their demand that an ARC in the public sector was formed for the first time in the country.    Full Article ...

"The inclusion of India in the global bond indexes will be a welcome move by foreign investors. However, the exact inflow to India on account of inclusion in global bond indexes will depend on India's weightage in the bond indexes.".

India remained cautious in opening up the bond market to foreign investors. What is your take on the buzz of India's inclusion in Global Bond indexes?
India opened its equity markets to foreign investors in the 1990s. However, the bonds were not made open to foreign investors. There were concerns that in the event of a sudden reversal of flows from India's debt markets due to global developments there would be pressures on the currency. However, in the last decade, India took several measures to ease foreign investment restrictions in bonds. It decided to merge the QFIs and FIIs into one category called FPIs. From April 2020, RBI introduced a channel called Fully Accessible Route (FAR) for non-resident investment in government-dated securities. The eligible investors were allowed to invest in those specified government securities without any investment ceiling. Thus, FAR served as a step towards resolving the concern of hot money outflows and their impact on currency and at the same time it opened up a list of government papers for foreign investment.

How much foreign investment do you think India's inclusion in global bond indexes will bring?
Global investors wanted to invest in India as India's macro-financial stability is well known to global investors. The country has taken several reform measures to attract investment and businesses. Moreover, the government has been spending significantly on CAPEX. All these measures keep India's domestic growth fundamentals very strong. The size of India's economy is now fifth in the world. India's sovereign bond market is one of the    Full Article ...

Rising debt, particularly short-term debt (to be repaid within a year), puts a severe burden on the ability of countries to defend their currency's value against the dollar, especially when these countries have relatively low foreign exchange reserves in dollars.

The depreciation dilemma
In September, central banks (with a few exceptions) hiked their policy interest rate yet further to control the acceleration of global inflation rates. About 90 central banks have raised interest rates this year, and half of them have hiked by at least 75 bps in one shot. Many did so more than once. The result is the broadest tightening of monetary policy for 15 years.

Rising interest rates have dramatically strengthened the dollar against all other currencies. The trade-weighted index for the dollar is up 15% since the beginning of 2022

Once the US Federal Reserve starts hiking, others have little option but to follow suit or face severe currency devaluation, which, by raising import prices, will stoke further inflation. Though we think of the world economy as being one of the flexible exchange rates, in fact, many currencies, from the Bahamas to Hong Kong, are pegged more or less explicitly to the dollar. As Shang-Jin Wei, former chief economist at the Asian Development Bank points out: "For the 66 smaller economies that peg their currencies to the US dollar-especially those without significant capital controls, like Hong Kong, Panama, and Saudi Arabia-local interest rates tend to rise automatically whenever US raises its interest rate, even when higher rates are harmful to their economic prospects."

Nor, in 2022, is it only monetary policy that is set in contractionary mode. On the fiscal side, growth in government spending is being retrenched.    Full Article ...

The core-satellite investment style combines the benefits of an index fund-lower cost and diversification-and an actively managed fund in order to generate superior returns.

Equity investment world is filled with recommendations, but sometimes tricky ones. Is this a good time to invest in Pharma stocks? How about Environmental, Social, and Governance (ESG)? Can Amazon be a good inclusion in the portfolio now since it is nearly 26% down from its peak? Should I sell Nifty futures since I know for sure that markets will tank further? etc.

This model keeps the unavoidable exposure to the core and avoidable exposure to the satellite part. While the core always remains intact, the satellite options keep changing based on market conditions (also called tactical allocation)

Acting upon them can clutter the investment approach as one cannot access and provide for the varying risk/return profile of such diverse recommendations. Mostly, these recommendations are analyzed from a potential return perspective and not so much in terms of what can go wrong. In order to provide some method to this madness, sophisticated investors construct something called "Core/Satellite Portfolio" (CSP). This model keeps the unavoidable exposure to the core and avoidable exposure to the satellite part. While the core always remains intact, the satellite options keep changing based on market conditions (also called tactical allocation).

The core part would be the equity portfolio with defined exposure to large cap, midcap and small cap. The ratio of allocation between these categories is a function of risk appetite. The core exposure can easily be built in a low-cost manner using Exchange Traded Funds (ETFs) which is like investing in index funds with the additional benefit of ETFs being more cost-effective and liquid as they are traded real time on the stock exchange. Investing in ETFs can provide market returns while investing with mutual funds can either give more or less returns compared to the benchmark based on the effectiveness of the manager. If one wishes to avoid risk, then the best low-cost option would be ETFs.

At this stage, one should determine how much of the total equity portfolio should be in core and how much should be in satellite. Typically, a majority of the allocation (say up to 80%) should be in core and the balance could be in satellite,    Full Article ...

The IPEF is less about the trade volume and more about setting the standards and facilitating trade. So, trade blocs which involve China may not be a competition with respect to the trade. At the same time, the IPEF can go a longer way in promoting the region's interests and trade through other mechanisms than solely the tariff cuts.

Indo-Pacific Economic Framework (IPEF) for Prosperity, the Asia showpiece event of the Joe Biden administration, unveiled in May this year, has been in the news after India, announced its decision to stay out of the joint declaration on the fourth pillar that is trade, during the ministerial meet held in Los Angeles in September. IPEF is promoted by 14 nations including India, Australia, Brunei Darussalam, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, United States and Vietnam, which 'share a commitment to a free, open, fair, inclusive, interconnected, resilient, secure, and prosperous Indo-Pacific region that has the potential to achieve sustainable and inclusive economic growth with the aim to jointly tackle challenges thrown by the post-pandemic world'. The framework comprises four aspects or pillars, viz., supply chains; clean energy, decarbonization and infrastructure; tax and anti-corruption; and trade. So, what prompted India to reconsider its decision and take a wait-and-watch approach as far as the fourth pillar is concerned? New Delhi's stand puts a big question mark over the success of this ambitious, new regional trade arrangement, as it has been a big votary of such kinds of cooperation among like-minded, pro-trade nations in a bid to challenge Beijing's hegemony in global manufacturing arena and its eve-growing dominance in international trade. Amit Singh Sisodiya, Deputy Editor, The Global ANALYST, speaks to S Prahalathan, Chief General Manager, India Exim Bank, to know his views on this sudden development and the reasons behind India's latest move. If such a move means the fate of the multilateral trade arrangement now hangs in balance, and does he see plurilateral deal becoming more of a norm in the post-Covid world, notwithstanding the fact that similar efforts in the past have not met with much success. Edited excerpts >>>    Full Article ...

"Since India imports a major chunk of crude from Russia, dealing in rupee-denominated assets for the payments shall help the country, considering the US Dollar Index (DXY) is on the uptrend."

Being the world's most widely used reserve currency, the soaring value of the US dollar has broad implications for the US consumers and the global economy. A strong dollar can put a financial squeeze across the developing world. The US Dollar Index (DXY) (which measures the dollar against the euro, yen and other major currencies) has climbed more than 18% during the calendar year. In an exclusive interview with N Janardhan Rao, Deputy Editor, The Global ANALYST, Aamar Deo Singh, Senior Vice President - Equity, Commodity, and Currency, Angel One Ltd., Mumbai, shares his views on the major drivers of the strong dollar and its effect on the global economy, especially its impact on the Indian economy, the challenges faced by the central bankers and the outlook on forex markets, in general, and the dollar, in particular.    Full Article ...

M&A activity regained momentum in India during August after an unusually dismal show in the previous month. However, a fall in the number of big-ticket transactions as well as in deal volumes turned out to be party poopers.

Deal-making made a strong comeback in India in August after witnessing an unusually poor show in July. The overall deal value rose sharply to $4.1 bn, after touching a low of $280 mn, the second lowest monthly values till date, due to lack of high-value transactions, according to the Grant Thornton Bharat Dealtracker Report. Deal-making was down significantly in July, hit by lacklustre cross-border deal activity, which fell 58% over July 2021 volumes, the global tax and advisory firm said. There were a total of 131 deals, during the month, which included 21 deals valued at $1.5 bn, while Private Equity (PE) investments recorded $2.5 bn across 110 deals. However, on the flipside, this was 40% lower in terms of deal volume compared with August 2021 and 52% lower in terms of deal value (partly due to the non-disclosure of values in most M&A deals).

The downtrend in deal activity could be attributed to the cautious approach of buyers and investors in committing large capital, given the global macroeconomic scenario and capital market conditions, the report's findings suggest. This was also probably the reason for the absence of large transactions. Interestingly, the deal activity during the month was dominated by the early-stage companies, where the ticket sizes were low, the report highlights. According to the report, while August 2021 recorded 21 deals valued at over $100 mn in addition to a $1 bn-plus deal, August 2022 saw only two such deals as a result of which the overall average deal size also fell to $31 mn.    Full Article ...

Unwanted, unwelcome and destructive behaviors are likely to arise when leaders become obsessed and fixated with their own importance, believe their own rhetoric and promotional publicity, and deny data which contrasts and contests with their preferred view of the world, writes Michael Walton, Business Psychologist and Visiting Professor, UK.

Entitlement is rather like a double-edged sword. On the one hand, it enables the incumbent to exercise influence, facilitate the achievement of business objectives, unblock corporate obstacles and generally get things accomplished. On the other hand, entitlement can also become disabling when executives become self-obsessed, narcissistic and penalistic to those who fail to acquiesce with their demands and meet their expectations. Whilst prominent executives and leaders are entitled to certain benefits-and respect for their competence and experience-they are not entitled to do whatever they wish without constraint. Unfortunately this will not necessarily stop those in positions of significant political influence and organizational power from misusing their privileges and doing just what they want. In spite of entreaties to the contrary, and the likely adverse consequences and damage which their behavior will cause, some leaders will do what they want just 'because they can'!

Whilst those occupying prominent and important positions are entitled to certain benefits-and respect for their competence and experience -they are not entitled to do whatever they wish without constraint

This article discusses how the acquisition of organizational power, when combined with a sense of personal entitlement, puts executives at risk of failure ... failure through the 'impunity' of their behavior derived from a false belief in their 'immunity' from any consequent sanctions.

Dangers lurk when leaders have total control. Unwanted, unwelcome and destructive behaviors are likely to arise when leaders (i) become obsessed and fixated with their own importance, (ii) believe their    Full Article ...

A rising dollar is a pain for everyone but United States.

Japan's dovish monetary policy and Europe's ongoing worries compared to a strong US economy and a hawkish Federal Reserve are widely believed to be driving the dollar to new highs almost everyday. Consequently, the dollar index has seen one of its best years, rallying more than 14% in 2022. The greenback rose against almost all currencies, notching a two-decade high of 110.8 in September. Even hard currencies such as the euro, the pound, and the yen plunged to multi-decade lows as the dollar skyrocketed. A hawkish Fed hiking rates fueled the rally to rein in inflation roaring past decade highs. The Fed has resorted to rate hikes since March 2022 to 225 basis points till now. Simultaneously, safe-haven bids further strengthened the greenback amid concerns of a global recession and the slowdown in China. Meanwhile, Europe continues to grapple with its ongoing energy crisis, weighing on the index's heavy-weight euro, further boosting the dollar's rally.

It is the same with almost all other major currencies, be it the euro, the Canadian dollar, or the yuan. The dollar will continue to surge as its rival economies are saddled with one problem or another. No major currencies are spared the dollar strength. The euro fell below $1 parity and tumbled to a 20-year low. The yen touched 145 levels for the first time in 24 years, prompting talks of intervention by the Bank of Japan. The pound fell to a 37-year low, while the yuan breached the psychological seven to the dollar. As this phenomenon is expected to worsen, a dollar bid is the only possible hedge against what's turning into the biggest destruction of shareholder value since the global financial crisis. Global equities have already lost almost $23 tn this year and the dollar's inverse relationship with risk assets makes it the best bet for at least the rest of 2022.

Major drivers of the dollar
A hawkish Fed and a stronger US economy than others are indubitably a bullish cocktail for a stronger dollar. The US CPI rose to a 40-year high of 9.1% in June, but eased to 8.3% in Au    Full Article ...

India's leadership demonstrated true nerves in deftly handling the situation and paying little heed to the Western nations' stern warnings over the issue. A diplomacy card very well played by India. However, in my view, India could have been more aggressive and should have contracted more cheap Russian barrels on a long-term basis. This was certainly possible at that stage.

Historically, Russia had never been a major source of fossil fuel for India. However, imports of discounted Russian crude oil have seen a massive increase in the last few months, notwithstanding the simmering tension between New Delhi and several Western nations. Cheap Russian oil has helped India make significant savings courtesy of lower import bills. India, the world's third-largest consumer and importer of crude oil-reportedly netted a gain of a gargantuan 35,000 cr since the Russia*Ukraine conflict began in February, allowing Russia to even become the country's second-largest supplier of crude oil (although now it has been replaced by Saudi Arabia, while it slipped to the third rank in August). How significant is the development from India's perspective? If this can be sustained as the West rushes to plug the loopholes that have allowed Moscow to earn some extra petrodollars even as sanctions pile up? N Janardhan Rao, Deputy Editor, The Global ANALYST, invited eminent experts Rajiv Bahl, former Director (Finance, Taxation, and Legal), Federation of Indian Petroleum Industry, and Rajat K, Managing Director - Oil, Gas & Chemicals, Synergy Consulting, Inc., Mumbai, to share their views on the subject and several other related issues. Read on.    Full Article ...

A majority of Unicorns in the Indian startup space, including three of the country's four decacorns (with valuation of over $10 bn), are yet to turn profitable.

Did you know, many of the big names in the Indian startup space are yet to turn profitable? Sounds unbelievable, but it is true..Topping the list is the world's largest ed-tech Byju's, with losses of 4,588 cr in FY21, the latest fiscal year for which financial data is available. It is followed by hotel rooms aggregator Oyo which incurred a loss of nearly 4,000 cr. The other notable names which find a place in this dubious list include Walmart-owned e-commerce giant Flipkart, food tech firm Swiggy and fintech major Paytm.

The Unicorn Club
India Adds Most Number of Unicorns, After the US, in H1 2022
India added the most number of startups-the most by any country in the world, after the US-to the coveted 'Unicorns' clubs in the first half of 2022, suggests a brand new study from The Hurun Research Institute. According to Hurun Global Unicorn Index 2022 Half-Year Report, a ranking of the world's startups founded in the 2000s, are worth at least a billion dollars and not yet listed on a public exchange. India added 14 new unicorns-second only to the US (up 138) and ahead of rival China (up 11), during the first six months ended June 2022.

The rise in the number of Indian unicorns comes as a pleasant surprise, given a funding winter that has hurt entrepreneurs and seen significant layoffs and turbulence in the startup space, particularly ed-tech. India, the world's fifth-largest economy now, also boasts of the third highest number of startups in the world, after the US and China. But this is not the first time that India has managed to    Full Article ...