India's Patil to explore business opportunities in SA

A business delegation accompanying India's president to SA will explore business opportunities in the country, said India's President Pratibha Patil.

A business delegation accompanying India’s president to South Africa will further explore business opportunities in the country, India’s President Pratibha Patil said on Wednesday.

“President Jacob Zuma and I will be participating in the business forum tomorrow [Thursday] to listen to the views of captains of industries from both sides, and encourage them to contribute to the economic exchanges,” Patil told reporters in Pretoria.

President Jacob Zuma received Patil and her delegation at the Union Buildings earlier on Wednesday. It was part of a state visit which would see them visit Gauteng, Durban and Cape Town.

“Indian companies are investing in capacity building by creating jobs and playing an important role in the development and economic growth of South Africa,” said Patil.

The Indian president, on her last state visit before her term ends, said the two countries would monitor the implementation of previous agreements.

These include agreements on health, science and technology, renewable energy, tourism, and infrastructure development.

She said the two states would work together to ensure their trade was not harmed by piracy in the Indian Ocean. “We are deeply committed to working with the government of South Africa and its people to ensure that our trade routes are not affected and we are able to bring a sense of safety and security,” Patil said.

Zuma said the visit would see the two countries strengthening their social, economic and cultural ties. He said it was especially important for South Africa to enhance its cooperation with India in infrastructure development and trade relations.

“We have once again extended an invitation to Indian business to invest in our infrastructure development programme, in which we are to invest more than R800-billion until 2014,” he said. This would translate into R300-billion in the energy sector and R262-billion in transport and logistics, said Zuma.

He said the presidential infrastructure co-ordinating commission had identified and developed 43 projects from state-owned enterprises, as well as national, provincial and local government departments.

Zuma said South Africa would seek help from India in acquiring skills in engineering, information and communication technology, finance, economics, and accounting to boost the infrastructure programmes. He said both countries had to work harder to reach higher trade figures.

“In 2011, bilateral trade between India and South Africa stood at R53.7-billion; with South Africa exporting goods to the value of R24.4-billion to India and importing goods from India to the value of R29.3-billion,” Zuma said.—Sapa

View the original article here

India's Patil to explore business opportunities in SA

"President Jacob Zuma and I will be participating in the business forum tomorrow [Thursday] to listen to the views of captains of industries from both sides, and encourage them to contribute to the economic exchanges," Patil told reporters in Pretoria.

President Jacob Zuma received Patil and her delegation at the Union Buildings earlier on Wednesday. It was part of a state visit which would see them visit Gauteng, Durban and Cape Town.

"Indian companies are investing in capacity building by creating jobs and playing an important role in the development and economic growth of South Africa," said Patil.

The Indian president, on her last state visit before her term ends, said the two countries would monitor the implementation of previous agreements. These include agreements on health, science and technology, renewable energy, tourism, and infrastructure development.

She said the two states would work together to ensure their trade was not harmed by piracy in the Indian Ocean. "We are deeply committed to working with the government of South Africa and its people to ensure that our trade routes are not affected and we are able to bring a sense of safety and security," Patil said.

Zuma said the visit would see the two countries strengthening their social, economic and cultural ties. He said it was especially important for South Africa to enhance its cooperation with India in infrastructure development and trade relations.

"We have once again extended an invitation to Indian business to invest in our infrastructure development programme, in which we are to invest more than R800-billion until 2014," he said. This would translate into R300-billion in the energy sector and R262-billion in transport and logistics, said Zuma.

He said the presidential infrastructure co-ordinating commission had identified and developed 43 projects from state-owned enterprises, as well as national, provincial and local government departments.

CONTINUES BELOW

Zuma said South Africa would seek help from India in acquiring skills in engineering, information and communication technology, finance, economics, and accounting to boost the infrastructure programmes. He said both countries had to work harder to reach higher trade figures.

"In 2011, bilateral trade between India and South Africa stood at R53.7-billion; with South Africa exporting goods to the value of R24.4-billion to India and importing goods from India to the value of R29.3-billion," Zuma said. -- Sapa

View the original article here

Schroders to buy 25 pct of India's AXIS Asset Mgt

LONDON (Reuters) - Funds firm Schroders Plc is buying a 25 percent stake in India's Axis Asset Management Co, aiming to tap into growing business opportunities in Asia's third-largest economy and meet demand for financial products from its burgeoning middle class.

Axis AMC, founded in 2009 by Axis Bank, is ranked 15th in India's 44-player asset management business with around $2.3 billion (1.4 billion pounds) of assets under management. The purchase price has been kept confidential, a spokesman for Schroders said.

Lured by the long-term prospects seen in India, overseas fund managers such as U.S.-based T. Rowe Price Group Inc have been buying into Indian money managers.

Nippon Life Insurance in January agreed to pay $290 million for a 26 percent stake in the asset management unit of India's Reliance Capital Ltd , joining other foreign fund managers seeking to tap into the country's growing middle class.

Assets under management by Indian fund managers rose to 5.9 trillion rupees as of March 2011 from 2.3 trillion in March 2006, according to a study by PricewaterhouseCoopers.

"We are delighted to enter a long-term partnership with Axis Bank with the objective of building a leading Indian asset management business," Michael Dobson, chief executive of Schroders, said in a statement.

"This enables us to participate in the growth opportunity represented by the Indian mutual fund market through a strategic relationship with a leading private sector bank."

The transaction is subject to regulatory approval and is expected to complete during 2012.

Not known for frequent corporate acquisition activity, Schroders, which manages assets worth around 180 billion pounds ($291.4 billion), tends to enter new markets through joint ventures. In 2006, the 200-year old British fund firm bought a 30 percent stake in a fund management company run by China's Bank of Communications.

Schroders shares were trading around 2 percent higher at 1330 GMT at 1,448 pence, while the blue chip FTSE index <.FTSE> was up half a percent. ($1 = 0.6178 British pounds)

(Additional reporting by Swati Pandey in Mumbai; Editing by David Holmes)

View the original article here

A.M. Best Publishes New Special Report Examining Opportunities and Frustrations of India’s Insurance Market

LONDON--(BUSINESS WIRE)-- Further growth is anticipated for India’s insurance market, although achieving profitability continues to remain a struggle for many insurers, a new special report from A.M. Best Co. finds.

The report, "Growth Anticipated for Indian Insurers, But Frustrations Remain,” states continued economic growth, an expanding middle class and heightened demand for health insurance is resulting in foreign insurers and reinsurers seeking to establish a greater presence in the country. However, while the insurance sector offers the prospect for growth, it is also characterised by challenges and frustrations.

In the long term, India’s middle class is continuing to benefit from increased wealth, although a slowdown in the pace of gross domestic product growth and inflationary pressures could dampen the rate of insurance market growth. While the insurance market is expected to continue to grow, it has been characterised by intense competition.

Private insurers have also been frustrated by losses emanating from the motor pool and have called for its restructuring or abolishment for years. In December, the Insurance Regulatory and Development Authority unveiled plans to dismantle the pool in light of an alarming increase in its liabilities which severely affected the financial viability of the general insurance sector due to alarming capital depletion in the sector. The regulator said policyholders’ interests were also being eroded as there were huge inefficiencies in claim settlement. The impact of the change on the existing motor pool is unclear.

A.M. Best’s report also examines the ways that non-life insurers are attempting to improve underwriting performance and how the life sector is adjusting to regulations restructuring unit-linked insurance policies. Life insurers have experienced a sharp drop in first year premium, and companies are adjusting their product mix toward conventional offerings.

The report also identifies some of the main reasons why the Indian insurance market is attractive to overseas insurers and the difficulties they face in increasing their involvement.

Yvette Essen, report author and director of industry research – Europe & emerging markets, said: “International insurers and reinsurers continue to be attracted by the opportunities emerging in the world’s second most populated country. However, they face repeated frustrations in attempting to increase their involvement in India, with a lifting of the foreign direct investment limit from 26% to 49% unlikely to occur in the near term.”

To access this special report, please visit www.ambest.com/press/011601IndiaMarketReview.pdf.

For a video discussion with Yvette Essen, director of industry research – Europe & emerging markets, about the special report, please click here.

A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

View the original article here

How India’s ‘untouchable’ entrepreneurs use capital to fight caste

Equal Rights

Published Friday, Dec. 23, 2011 7:42PM ESTLast updated Saturday, Dec. 24, 2011 12:13AM EST

37 comments

When Prashant Tambe sought a loan to expand his private college last year, the bank didn’t turn him down outright. “It was just red-tape-ism,” the young entrepreneur said, using a popular Indian expression for business death by a thousand bureaucratic hurdles.

His brother, Avinash Tambe, had an identical experience seeking funds to build his coal import firm. They have no illusions about the source of the banks’ reluctance: It began when they wrote their surname on their loan applications.

The name Tambe identifies them as Dalits – the people once known as “untouchables,” at the bottom of the Hindu caste system. And so despite the fact that the brothers have eight post-graduate degrees and two successful businesses between them, they struggle to get access to capital and chafe at the opportunities they are missing.

They recently had an opportunity to share that frustration, and to seek out new partners, at a first-ever trade fair organized by the Dalit Indian Chamber of Commerce and Industry.

“It’s a strange irony and it tells you a lot about the ground reality of India,” Prashant Tambe mused as they set up their stall in a vast Mumbai exhibition hall – it’s popular wisdom in the country today that the booming economy will end the influence of caste, but the best way they can find to be part of that economy is to join a caste-based business association.

The Dalit business lobby, founded in 2005, has 1,000 members; 180 of them came from across the country to exhibit and network at the three-day fair. There were companies making solar-power systems, military uniforms, car parts, pharmaceuticals, pesticides and industrial piping; there were also small financial-service companies and construction firms.

The DICCI slogan is “fighting caste with capital.” But many business owners at the fair said they share one key problem: They can’t get their hands on that capital.

As the Tambes and others described, Dalit business owners struggle to obtain conventional bank loans. Sometimes it’s malice from dominant-caste bank employees who do not want to see a Dalit business succeed, said Prashant Tambe; other times it’s simply that the bankers doubt that a first-generation Dalit business owner will have the acumen to be a safe loan risk.

Almost always, they lack collateral – while Dalits are a sixth of India’s population, they control only an estimated 1 per cent of the country’s wealth. The vast bulk of the population continues to be landless labourers working for occasional daily wages of one or two dollars.

And they have no access to the other key source of funding for Indian entrepreneurs; loans from extended family or their caste community – “internal funding,” as it’s known here. The Tambes’ father was the kind of general labourer called a “peon” here and their mother was a nursing assistant with a primary-school education; the cousin who is a co-owner of the coal business is the son of a cycle rickshaw driver. They pushed their sons to seek education, but they had no funds to bankroll their good ideas.

The Indian government has attempted to address the issue through a Dalit-focused national finance-development corporation, but it provides only small loans of up to $5,000 – enough, as DICCI chairperson Milind Kamble put it, to buy a large photocopier and set a family up as a corner copy shop, but not enough to bankroll an entrepreneur whose ambitions stretch beyond that.

View the original article here