Latest news with #Garg
Business Times
17 hours ago
- Business
- Business Times
Rupiah to consolidate before further gains, Citi strategist says
[JAKARTA] The Indonesian rupiah's recent gains are set to pause in the coming month before advancing to levels last seen in December, according to the currency's top forecaster. Emerging-market currencies, especially those that are high-yielding, tend to weaken for various reasons in August, said Rohit Garg, head of foreign exchange and rates strategy Asia ex-Japan for Citigroup. By the end of the year, the strategist forecasts the rupiah to rally almost 2 per cent against the US dollar. 'Right now our recommendation is to stay neutral, see what happens on Aug 1 and see how the month evolves,' said Garg, referring to US President Donald Trump's tariff deadline. 'But we are still looking at a little bit of a lower USD/IDR, closer to 16,000 than higher.' The rupiah closed at 16,311 per US dollar on Monday (Jul 21). The rupiah is rebounding from earlier losses in the year as concerns over a global trade war and Indonesia's fiscal policy ease. Pledges to cap the nation's budget deficit below 3 per cent of gross domestic product and plans to tap cash reserves to cover shortfalls this year have helped calm investor nerves, Garg said. The rupiah has also been benefiting from US dollar weakness, driven by Trump-era trade tariffs and growing US fiscal deficits. Potentially softer data, especially in the labour market this summer, will boost expectations for Federal Reserve rate cuts and the 'de-dollarisation' theme is likely to persist, the strategist said. 'We have been long rupiah, short US dollar since the middle of April,' said Garg. 'We were expecting rupiah to appreciate a fair bit and it has, but we are expecting USD/IDR to stabilise at least for the next few weeks. And it's mostly got to do with external factors than necessarily domestic factors.' Garg was the top forecaster for the rupiah in the second quarter, according to Bloomberg-compiled data. The ranking is based on criteria such as margin of error, timing and directional accuracy. BLOOMBERG
Mint
17 hours ago
- Business
- Mint
Rupiah to Consolidate Before Further Gains, Citi Strategist Says
(Bloomberg) -- The Indonesian rupiah's recent gains are set to pause in the coming month before advancing to levels last seen in December, according to the currency's top forecaster. Emerging-market currencies, especially those that are high-yielding, tend to weaken for various reasons in August, said Rohit Garg, head of foreign exchange and rates strategy Asia ex-Japan for Citigroup Inc. By the end of the year, the strategist forecasts the rupiah to rally almost 2% against the dollar. 'Right now our recommendation is to stay neutral, see what happens on Aug. 1 and see how the month evolves,' said Garg, referring to US President Donald Trump's tariff deadline. 'But we are still looking at a little bit of a lower USD/IDR, closer to 16,000 than higher.' The rupiah closed at 16,311 per dollar on Monday. The rupiah is rebounding from earlier losses in the year as concerns over a global trade war and Indonesia's fiscal policy ease. Pledges to cap the nation's budget deficit below 3% of gross domestic product and plans to tap cash reserves to cover shortfalls this year have helped calm investor nerves, Garg said. The rupiah has also been benefiting from dollar weakness, driven by Trump-era trade tariffs and growing US fiscal deficits. Potentially softer data — especially in the labor market this summer — will boost expectations for Federal Reserve rate cuts and the 'de-dollarization' theme is likely to persist, the strategist said. 'We have been long rupiah, short dollar since the middle of April,' said Garg. 'We were expecting rupiah to appreciate a fair bit and it has, but we are expecting USD/IDR to stabilize at least for the next few weeks. And it's mostly got to do with external factors than necessarily domestic factors.' Garg was the top forecaster for the rupiah in the second quarter, according to Bloomberg-compiled data. The ranking is based on criteria such as margin of error, timing and directional accuracy. More stories like this are available on
The Print
a day ago
- Business
- The Print
‘Said I treated her like bachchi, bitched about her'—behind Sitharaman's ire at ex-finance secy Subhash Garg
This resulted in a 'broken functional relationship' between the two, and Garg's eventual resignation as finance secretary, he has written in this richly detailed account of the rough and tumble of administrative life, including the many run-ins he had with politicians throughout his career. The reason for her angst? She thought that Garg went about 'bitching' about her and treating her like a bachchi (child). New Delhi: Soon after she assumed the charge of the finance ministry, Nirmala Sitharaman's attitude towards the finance secretary, Subhash Chandra Garg, was frosty, the IAS officer of 1983 batch Rajasthan cadre has written in his new book, 'No, Minister: Navigating Power, Politics and Bureaucracy with a Steely Resolve'. In the book, he also describes former Rajasthan chief minister Vasundhara Raje as an 'official split personality,' who felt 'cheated' when he was called by the Prime Minister's Office (PMO) in 2014, soon after Modi became PM. Also Read: Home Secy Govind Mohan joins IAS/IPS/IRS officers who have benefited from Modi govt's extension culture A strange accusation—'bitching' about the finance minister On their official visit to Japan in June 2019, Garg complimented Sitharaman for speaking effectively at the G-20 finance ministers' meeting. Her reaction surprised him. 'I hope I did not disappoint you,' she retorted. 'My suspicion that she was carrying biases against me were confirmed but I chose to ignore it,' Garg writes. The second instance came soon after. In June, 2019, Garg sought to conclude a pre-budget meeting with stakeholders by thanking them for their participation, and telling them their inputs will be put up in front of the minister for her consideration. 'I will abide by what the finance secretary says, especially a finance secretary who is much older than me in the finance ministry, and not discuss the suggestions,' Garg recalls her as saying. She did not close the meeting thereafter, and the stakeholders continued to make their interventions. Even as they were talking, Sitharaman turned to Garg, and said, 'What do you think, I cannot violate you? I would.' When Garg went to her room to clear the air after the meeting, she was 'livid' and 'relentless', he writes. 'She said I treated her like a bachchi (child). At one stage, she said that I had gone to various people and 'bitched' about her, which was false. She also threatened to bring the entire matter to the notice of the prime minister.' 'I don't know what had got into her. It was clear, though, that there was a serious problem and that our functional relationship had broken down,' Garg says. In the run-up to the Budget, things became worse. While the finance minister and secretary are supposed to work in tandem on the budget speech, which is closely vetted by the prime minister, the finance minister refused to share the draft of the speech with Garg before the meeting with the PM, he said. 'This created an unprecedented situation. I was responsible for finalising the speech and seeing it through to print without any glitches. Further, I was also primarily responsible for presenting and defending the speech in the PMO,' he writes. 'Still, I did not have a draft of it which my finance minister had finalised.' The 'last straw' for Garg was, however, the non-banking financial company (NBFC) package, which the PMO wanted to announce. The secretary of the Department of Financial Services (DFS), Rajiv Kumar, who recently retired as the chief election commissioner, proposed amendments in the Reserve Bank of India (RBI) Act, including conferring regulatory and resolution jurisdiction to RBI. Garg opposed this. While Sitharaman sided with Garg on this issue, he ended up irking Nripendra Misra, former principal secretary to the PM. The PMO decided to go ahead with the initial proposal made by Kumar. Garg signed the file with a fresh note saying that the proposal of the DFS is to be accepted. Sitharaman—who he says, 'found it difficult to clear any file on which differing views were recorded' —wanted Garg's earlier oppositions to be removed. 'She would not sign the file with the earlier notes still in it. Her office conveyed this clearly to Rajiv. Rajiv told me the note sheets recorded earlier would have to be taken out, destroyed and replaced with new note sheets with the same dates and numbers,' he writes. 'Though I had never allowed such a thing in my life, I acquiesced only to ensure that the budget process could go through.' 'But I decided that I would not be party to something like this ever again. It was the moment I made up my mind to quit the IAS,' he writes. 'Official split personality' This was not the first time Garg had irked a politician. In 2014, Garg was called by P.K. Mishra, then Additional Principal Secretary to the newly appointed Prime Minister Narendra Modi, and was asked to join as India's Executive Director at the World Bank. His acceptance irrevocably antagonised his then chief minister, Vasundhara Raje, with whom he had worked for several years. Raje had an 'official split personality'—extraordinarily efficient and transparent on one hand, but 'different' on matters concerning revenue-earning departments like excise, land allotment, etc., he says. Yet, he enjoyed a close working relationship with her for years. When Raje learnt of his appointment, 'all hell broke loose' in Rajasthan, he writes. 'She was infuriated and felt cheated,' he writes. 'She summoned Rajiv Mehrishi (then the chief secretary of Rajasthan) and declared, 'Subhash is not going anywhere.'' She asked Mehrishi to write to the PMO that Garg will not be relieved, but the chief secretary advised her against it, given that 'the relationship between the two was also not very cordial'. Later, Garg was unceremoniously excluded from a cabinet meeting for which he went, and his relieving orders were suddenly handed to him. He was asked to immediately proceed on central deputation without even a courtesy visit to Raje, which he requested twice. 'I made one more request to see her before I departed Jaipur lock, stock and barrel on 24 September,' he writes. 'Her secretary did not revert. I decided that was the end of the matter. I never reached out to her thereafter. We have neither met nor spoken to each other since September 2014.' The recalcitrant minister Unlike Sitharaman and Raje, Garg did not work directly with the 'recalcitrant minister' Jayanthi Natrajan, who was the environment minister in the 'policy paralysis' era of the UPA II. In 2013, when Garg was appointed in the cabinet secretariat, first as a joint secretary and then an additional secretary, there was an 'evident rot' in the environment ministry, he writes. Not only was it procedurally difficult to get clearances, Natarajan 'sat on files for months', he writes. 'The environment secretary's helplessness was apparent—there were over 400 files reportedly pending, waiting for the minister's approval and signature,' he says. Even the constitution of the cabinet committee on investments did not succeed in getting the 'recalcitrant minister' to act. He relates one particular incident, 'a bizarre spectacle', where Natrajan kept former prime minister Manmohan Singh waiting for 40 minutes at a meeting of the cabinet committee on investments. When she finally showed up, she just said she would take more time to examine the projects without any explanation for the delay, Garg writes. 'The meeting ended with the prime minister advising the minister to try to clear the projects at the earliest,' he says. 'No one needed better evidence to conclude how weak and ineffectual Manmohan Singh had become in his own cabinet.' In the over-400-page book, Garg also writes of the difficult relationship he shared with Andhra Pradesh chief minister Chandrababu Naidu and former principal secretary to the PM, Misra. Naidu, who like present times was a key coalition partner of the NDA government in the early 2000s, sought to direct disproportionate amount of central funds to Andhra Pradesh, Garg writes. When as director in the Department of Economic Affairs (DEA), Garg sought to check this, Babu started 'baying for his blood', he says. As for Misra, on one occasion, Garg says he told him, 'Don't ever go to the PM over my head.' On another, he explicitly said, 'The prime minister is unhappy with you. The finance minister is unhappy with you. Subhash, you are not in tune with the thinking of the government.' (Edited by Zinnia Ray Chaudhuri) Also read: IAS seeing progress on gender parity—1 of 5 secretaries at Centre are women
The Print
a day ago
- Business
- The Print
Chandrababu Naidu is dreaming new dreams at 75. What other CMs are missing
That was in 2000. The Telugu Desam Party (TDP) provided crucial support to the Atal Bihari Vajpayee-led government then. Garg was the director of the Department of Economic Affairs (DEA) in the finance ministry. He writes that the hoarding of resources 'was clearly unfair and lopsided.' The World Bank assistance, specifically cheaper credits from the International Development Agency (IDA), was meant for low-income and poorer states. 'Using the efficiency of his administration and his political clout, Chandrababu Naidu was able to manoeuvre the system in Delhi, including the DEA, to divert a disproportionate part of the Government of India budget and external assistance to Andhra Pradesh,' writes Garg. Chandrababu Naidu bays for my blood'—This is a subhead in Subhash Chandra Garg's new book No, Minister . In the section, the former finance secretary of India writes how the Naidu-led Andhra Pradesh had 'cornered more than 40 per cent of the total portfolio of projects' approved by the World Bank in 1999–2000. He has cited another example. In 2001, the Andhra Pradesh Structural Adjustment Loan (SAL) for $250 million was being negotiated with the World Bank. The package also included a $100 million grant from the Department for International Development (DFID) to India. The DFID grant and the World Bank loan were to go to Andhra Pradesh on the standard 70:30 loan–grant ratio. The Naidu-led government, however, reached an understanding with the DFID—without the DEA's concurrence—to make it a 100 per cent grant. Garg wouldn't agree to it; he got them to agree to the DEA's terms. Two days after the negotiations were completed, the DEA Secretary asked Garg to again submit the Andhra file to him. The file came back with orders, approved by the finance minister, that an exception be made in the case and that the DFID grant be given to Andhra Pradesh as a 100 per cent grant. 'Evidently, on his return to India, Chandrababu Naidu had moved heaven and earth and forced the government at the highest level to agree to his completely unjustified demand,' writes Garg. 'The utter disregard for fair distribution of central government resources to all the states and the manic zeal and insistence to grab all resources for Andhra Pradesh were disturbing,' he writes. V Srinivas, private secretary to then finance minister Jaswant Singh, later told Garg that VS Sampath, the Andhra finance secretary who went on to become the chief election commissioner of India, sought his help to 'find ways to fix Subhash'. Nobody would be surprised to read ex-IAS officer Garg's account of how Chandrababu Naidu used his clout in the Vajpayee government to wrangle anything and everything from the Centre for his state. Garg's counterparts in other departments would have similar stories to tell. Let me cite just one more example here. Of the 4 million tonnes of rice the Centre sanctioned for the Food for Work programme between September 2001 and April 2002, Andhra alone got 2.15 million tonnes, 53 per cent of the total. And then it got one million tonnes more. Cut to 2025. Naidu hasn't changed. Only that it's now the Narendra Modi-led government that is going out of its way to please the Andhra CM. The Centre has already committed Rs 15,000 crore for Phase I of the Amaravati capital project. The state has secured Rs 12,157 crore from the Centre to support the first phase of the Polavaram irrigation project. In May, PM Narendra Modi laid the foundation for central projects worth Rs 5,000 crore, including a missile testing centre, Unity mall, Rail overbridge and six national highway projects in Andhra. And these are early days yet. Modi 3.0 still has four years left, and Naidu will continue to be vital for its survival. Also read: Chandrababu Naidu is important in both Centre and state. He is his own double-engine now Political opportunism or Andhra First? The former finance secretary of India has only revived an old debate. Chandrababu Naidu's political rivals and critics have a long list of his political 'betrayals'— marrying NT Rama Rao's daughter and then leaving the Congress to join the TDP; ousting NTR to become the CM; leaving the United Front to support the Atal Bihari Vajpayee government in 1998; Lok Sabha Speaker GMC Balayogi from the TDP allowing then Odisha CM Giridhar Gomang (who was yet to resign as MP) to vote against the confidence motion, which ended up bringing the Vajpayee government down in 1999; joining the NDA in 1999 Lok Sabha election to reap the electoral dividends of the Kargil War; demanding Narendra Modi resign as Gujarat CM post-2002 riots to joining hands with him ahead of the 2014 election; leaving the NDA for the Congress five years later only to re-embrace Modi before 2024 Lok Sabha and Assembly elections. It's certainly a long list. Naidu's critics would call them examples of political opportunism. His admirers would cite them as examples of his brilliant political acumen and his ability to play bigger national parties to his advantage. And, ex-IAS officer Subhash Garg as a neutral observer is only the latest to certify that Andhra Pradesh has made the biggest gains from Naidu's political somersaults. I call it his Andhra First politics. Take a look at this report by India Today in May 2002: 'Over the past five years, Naidu has managed to get the Central ministries to pour over Rs 40,000 crore into Andhra Pradesh. While the Central loans have doubled in five years from Rs 1,575.6 to Rs 3,189.9 crore, grants have jumped from Rs 1,528 crore to Rs 3,424.1 crore and external assistance has trebled from Rs 1,118 to Rs 3,640 crore. That the state has cornered a lion's share of resources is proved by just one statistic: while Central grants to all states increased by only 2.6 per cent between 2000-1 and 2001-2, Andhra Pradesh's share rose by 34 per cent.' The report quoted Congress MP Renuka Chowdhury as saying that Naidu's success in extracting resources was due to 'a weak Centre vulnerable to political blackmail'. When you talk to Congress MPs today, as the Modi-led government showers Naidu's Andhra with generosity, they echo similar sentiments. But ask the people in Andhra Pradesh. They would repeat the Onida TV slogan: 'Neighbour's envy, owner's pride.' Also read: Nobody should doubt Chandrababu Naidu's determination. If anything, they should fear it What other CMs need to learn from CBN Chandrababu Naidu, 75, is the third-oldest CM in India today—after Kerala's Pinarayi Vijayan, 80 and Karnataka's Siddaramaiah, 76. CBN, as he's known in the state, could afford to rest on his laurels. Creating something like Cyberabad and Genome Valley in Hyderabad would have been a lifetime achievement for any CM. Instead, he is setting new challenges for himself. 'Same things (liked Cyberabad) can't be created but improved versions (can be brought),' Naidu told me in an interview last month. It's not just the creation of the new capital city of Amaravati. CBN has now set out to build India's first quantum computing valley. He has launched a space policy to leverage Sriharikota's strategic location in Andhra Pradesh. It aims to attract investment worth Rs 25,000 crore in space-linked industries. He is very optimistic about his Zero Poverty-P4 (Public-Private-People Partnership) programme. I could tell this by the child-like excitement in his voice when he was telling me about P4. At a time when most Opposition leaders seem to be convinced that poverty can be eliminated only when the rich are made poor, Naidu's P4 is an interesting idea. You don't have to be an Adani or Ambani to participate in it. If you have surplus money to spare, help a family, mentor them. You can do it at the community level, too. What differentiates CBN from other CMs is ideas—original, imaginative and innovative. Look at his counterparts in other states. Most of them are doing the same things, often aping each other. At 75, Naidu stands apart. 'Imagination has no age,' wrote senior Rashtriya Swayamsevak Sangh functionary Ram Madhav, quoting Walt Disney, in a column in The Indian Express. He was building a case for PM Modi and RSS chief Mohan Bhagwat to ignore the unwritten 75-year age ceiling for holding office. Age doesn't matter unless you are a cheese, wrote Madhav. It's true. As I mentioned, Naidu's much younger counterparts in other states already look jaded and spent in terms of originality or ideas or imagination in policymaking. Is Modi 3.0 any different? That's food for thought for another column. DK Singh is Political Editor at ThePrint. He tweets @dksingh73. Views are personal. (Edited by Theres Sudeep)
Economic Times
2 days ago
- Business
- Economic Times
SIP boom & market rally push AMCs into spotlight: 4 Analyst-backed stocks to watch
iStock Experts note that AMCs are likely to face the least regulatory risks within the non-lending financial space. Should you buy a mutual fund (MF) scheme's unit or its Asset Management Company's (AMC) equity share? This question may well be asked by many when ICICI Prudential AMC, India's second largest fund house with assets under management (AUM) worth Rs.10.3 lakh crore (at the end of June 2025), gets listed. The fund house has recently filed its papers to go public. The AMC is planning an offer for sale of 1.76 crore equity shares, where the foreign JV partner, Prudential Corporation Holdings, will offload around 10% of its stake. But what can investors gain from buying an AMC's shares, as opposed to its well-performing schemes that can diversify your money across multiple asset classes? How an AMC makes money? A fund house earns through the asset management fees it collects from investors for running the MF schemes. The AMC fees are a part of the total expense ratios (TERs) that fund houses deduct from their schemes' net asset values. The TER consists not just of AMC fees, but also comprises other charges like distributor commission, registrar and transfer fees, auditor fees, and so on. TERs vary from scheme to scheme; equity funds tend to charge higher TER (and by virtue earn more for the AMCs) than debt funds. The TER, and therefore the AMC fees, is charged as a percentage of Garg, Partner and Fund Manager at INVasset, PMS, explains that the AMC companies benefit from operating leverage as the AUM grows, and the fee income scales up. With minimal capital requirement and low fixed costs, most of the incremental revenue flows directly to the bottom line, resulting in a high return on equity (RoE). Share of equity AUM has jumped over last 10 years Equity-led growth drives profits. The revenues and the profitability of these companies are closely tied to market movements and investor sentiment. Bullish market cycles drive AUM growth via NAV appreciation and fresh inflows, especially through SIPs. Conversely, bearish phases lead to redemptions and stagnant or declining corrections of 8.3% and 0.9% in the December 2024 and March 2025 quarters, respectively, the domestic equity benchmark, Nifty 50, bounced back by 10% in the first quarter of 2025-26 (or the June quarter). AMCs are likely to be a beneficiary of the rebound in the equity market and are expected to report a strong performance in the June 2025 quarter. Costs down,markets volatile The jump in equity markets could be a positive trigger for AMC stocks. The June quarter delivered strong results. Aided by the equity market rally, mutual fund industry AUM grew 13.2% quarter-on-quarter, while SIP inflows rose 2.9% to `80,539 crore. A decline in discontinued SIPs versus new registrations (for the second straight month in June 2025), along with a steady rise in folios, signals robust retail participation and adds momentum to the industry's are optimistic about the long-term growth prospects of mutual funds. A recent report by Antique Stock Broking suggests that AMC stocks are poised for a re-rating, backed by improving RoEs, strong operating cash flows, low capex requirements, and steady earnings. The report projects a 20% compounded annual growth in active fund AUM over the medium SIP flows and the untapped mutual fund potential in both T30 (Top 30 cities) and beyond, driven by fintech expansion, are expected to bolster AMC revenues. A possible rise in discretionary income following tax cuts, along with improved liquidity from repo rate reductions, could further accelerate equity Bathini, Equity Strategist, WealthMills Securities, says that the mutual fund investing culture is becoming stronger day by day in India with penetration into semi-urban and rural areas. This trend is expected to outpace the AUMs of AMCs in the coming years. Party spoilers Experts, however, advise investors to consider the risks involved. 'AMCs are marketlinked businesses—prolonged corrections can dampen flows and hurt profitability,' adds Garg.A key challenge facing the AMC industry is the persistent pressure to cut costs. TERs have steadily declined over the years. The latest review of TERs by the markets regulator Securities and Exchange Board of India (Sebi), proposed in May 2023, remains in limbo and, according to market chatter, is unlikely to materialise. The proposal marks the most significant overhaul since the 2018 Antique Stock Broking report expects that AMCs are likely to face the least regulatory risks within the non-lending financial space as most major regulations regarding the telescopic nature of TERs are already implemented. However, the report also asserts that any changes to the TER cap, benchmarking norms, or distributor incentive rules can squeeze margins or require abrupt business model June 2025 quarter preview report from Prabhudas Lilladher also points to higher operating expenditures on a sequential basis as a risk that might impact performance. AMC heavyweights The optimism is visible in the returns generated by the biggest four listed AMC players: UTI AMC, HDFC AMC, Aditya Birla SunLife AMC and Nippon Life India AMC. The group of these four companies generated an equal-weighted average return of 37.9% compared to the 8.8% and 11.3% returns by the Nifty 50 and Nifty 500 indices between 1 April 2025 and 11 July 2025. Here is how the four listed AMC players are placed. Nippon Life India AMC Expected first quarter 2025-26 revenue growth of 18.7% and Profit After Tax (PAT) growth of 6.4% year-on-year as per analyst consensus. Strong AUM growth and declining operating expenses driving performance. Gaining market share through better scheme performance, distributor engagement , and rising SIP flows, according to ICICI Securities report. Strong passive investing position with ETFs at 28% of total AUM. Distributor commission rationalisation in 2024-25 expected to boost future yields, according to Antique Stock Broking report. Key strengths: Strong brand, parent backing, robust equity franchise, high operating leverage, and digital focus. Aditya Birla Sun Life AMC Expected June quarter 2025-26 revenue growth of 15.3% and PAT growth of 12.5% year-on-year per as per Centrum Broking. Enhancing direct channel sourcing and expanding to 543 locations (from current 300), according to a ICICI Securities report. Expanding alternate business (AIF/PMS) and offshore operations to boost profitability. Focusing on debt fund investor awareness given strong market share in this segment. HDFC AMC Revenue and PAT growth in June 2025 quarter: 24.9% and 23.8% year-on-year respectively. Gaining market share through stable positioning, enhanced fund management team, and strong product performance driving new customer acquisitions. Strengthened prospects via retail focus, wider distribution network, and smaller city expansion. Alternative business (PMS, AIF, private credit) and global expansion through GIFT City expected to drive growth. UTI AMC Expected first quarter 2025-26 revenue growth of 5% but PAT decline of 31.3% due to lower other income, as per Prabhudas Lilladher Net equity inflows declined in 2024-25, but targeted fund launches and improved performance reviving equity flows. Efficient cost management with 8% operating expenditure on compounded basis (FY21-25) vs peers' 11-14%. Positive outlook driven by improving scheme performance, growing retail/SIP franchise, passive segment pickup, low cost escalations, and attractive valuations.
