Oil price falls ahead of Opec meeting

The price of oil has fallen as Opec oil producers prepare for their meeting on Thursday and data showed crude stocks rose last week. Inventories of commercial US crude oil increased by 1.9 million barrels from the previous week, according to the US Energy Information Administration.

Brent crude slid 58 cents to $77.75 a barrel after the data. The drop came as Saudi Arabia indicated it would not push for output cuts to help push up oil prices.US crude finished Wednesday's business down 40 cents at $73.69 a barrel.
           

The oil market will "stabilise itself eventually", said Saudi Oil Minister Ali al-Naimi.

Saudi Arabia is the largest producer of the 12 members of the Organization of the Petroleum Exporting Countries (Opec).


The oil cartel is split over how to react to the sharp slump in oil prices.
The price of Brent crude has plunged 30% since June, triggered by a sharp rise in US shale oil output and weakening global demand. There is speculation that on Thursday Opec could announce its first cut in oil production since 2009 in an attempt to support the oil price.

Among the Opec members, Venezuela and Iraq have called for output cuts. However, fellow Opec member United Arab Emirates's (UAE) Oil Minister Suhail bin Mohammed al-Mazroui appeared to side with Saudi Arabia, indicating it would not push for a cut in production, saying "the market will fix itself ultimately"."We are not going to panic, this is not the first time, this is not a crisis that requires us to panic ... we have seen [prices] way lower. We are not interested in the short fixes because we know they will not last," Mr al-Mazroui told Reuters.

Russia says 'no'

The responses from Saudi Arabia and UAE come a day after non-Opec member Russia, which produces an estimated 11% of global oil, said it would not co-operate with any production cut.Following a meeting with Saudi Arabia, Venezuela and Mexico representatives, Russian Energy Minister Alexander Novak said the country's energy companies would produce around the same amount of oil next year as they did in 2014.He told reporters in Moscow he was sceptical that Opec would decide on Thursday to cut output quotas.


The heated debate over how to react to the sharp fall in oil prices has led to some suggesting that Thursday's meeting could last longer much longer than usual. "It might take a bit longer than the ordinary meetings," said one delegate. "They must agree, even if they have to stay here for two days. It is a matter of death or survival for budgets."

US economy grows faster than first forecast

The US economy grew much faster in the third quarter than first reported, official figures have shown.It expanded at an annualised rate of 3.9% between July and September, up from the 3.5% first estimated by the Bureau of Economic Analysis.The rise, which follows a strong second quarter, means the US has seen its strongest two consecutive quarters of growth for a decade.

Consumer spending was the biggest driver of the raised estimate.It grew by 2.2% according to the latest estimate, which was higher than the initial calculation of 1.8%.Consumer spending is closely watched as it accounts for 70% of US gross domestic product (GDP).

Moving on

The data suggests the US has shrugged off the slow start to the year when heavy snow saw the economy shrink."The question of whether the economy is accelerating or will accelerate is no longer a question; we can say somewhat definitively that the economy has already accelerated," said Dan Greenhaus, chief strategist at BTIG.Meanwhile, a separate survey, showed US house prices rose by more than expected in September.

The closely-watched S&P/Case Shiller index jumped 4.9% year-on-year.The index, which measures single-family home prices in 20 cities, showed that prices were up 0.3% month-on-month on a seasonally adjusted basis."With the economy looking better than a year ago, the housing outlook for 2015 is stable to slightly better," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.

March rate rise?

Capital Economics economist Paul Dales said the strong GDP upgrade underlined his expectation that the Federal Reserve could raise interest rates as soon as March next year. "Most people were expecting a downward revision so this was a real surprise," he added. At the end of October, the US Federal Reserve said it would not raise interest rates for a "considerable time".

It also ended its quantitative easing (QE) stimulus programme of buying financial assets and creating new money to pay for them, aimed at stimulating the economy. However, it said it was confident the US economic recovery would continue, despite a global economic slowdown.

Western economies can learn from India: Amartya Sen

At a time when several economies in the western world are facing severe crisis, Nobel laureate Amartya Sen believes that they can learn from countries such as India and China which are witnessing rapid economic growth.

Launching the Sanjaya Lall Visiting Professorship of Business and Development at the Said Business School of the University of Oxford, Sen said at a panel discussion last evening that there was much that the developing countries could contribute at the 'level of ideas' to ongoing economic debates in the western world.

The panel led by Sen included Martin Wolf of the Financial Times, and Robert Wade, professor of Political Economy and Development at the London School of Economics.

"I am concerned with what is happening in Europe. There are a few things that they can learn from the developing world; for example, the importance of growth in generating public revenue. Going straight at budget deficit cuts growth," Sen said, without mentioning the ongoing major public spending cuts in Britain to reduce budget deficit.

It was a reflection of the state of affairs, he said, that the dominant figures in public discourse in the west were not democratic figures but bankers.

Noting that Europe had done much to develop and further democratic norms in the last 300 years, Sen, however, said that at the current juncture in world history, the "mantle of democracy is now very much strongly held by India".

He reiterated India's commitment to democracy and to implement economic measures within a democratic framework.

Lauding the work of Patna-born Sanjaya Lall in the field of economic and business, Sen said his impact on economics was "truly fantastic". A prolific writer and researcher, based at Oxford, Lall was considered one of the world’s foremost development economists.

The visiting professorship, awarded to Professor Wade, has been made possible by generous gift from the Sanjaya Lall Memorial Fund, whose trustees include Ramnique Lall and Lord Meghnad Desai. The visiting professorship is for a period of one Oxford term; the holder is expected to deliver a public lecture and encouraged to contribute to other scholarly activities.

India could be world’s 3rd largest economy by 2030: StanChart

The country’s demographic advantage, with half its population below the age of 25 years, with rising per capita income will ensure strong domestic demand.India could emerge as the world’s third largest economy by 2030, benefiting from strong domestic demand and favourable demographics.However, the banking entity noted that country’s reform agenda need to be sustained for achieving high growth.

“India has the fundamentals to emerge a winner in the super-cycle, potentially becoming the world’s third-largest economy by 2030... India is likely to grow faster, on average, than China over the next two decades,” Standard Chartered Global Research said in ‘India in the Super Cycle.In 2010, the world’s major economies were US ($14.6 trillion), China ($5.7 trillion) and Japan ($5.4 trillion). India did not figure among the top ten, as per International Monetary Fund data.

By 2030, StanChart said India will be at number three position with an economy of $30.3 trillion, behind China ($73.5 trillion) and US ($38.2 trillion).It said that the country’s demographic advantage, with half its population below the age of 25 years, with rising per capita income will ensure strong domestic demand.“India has many of the features that will enable it to emerge as a winner in the super-cycle. We believe the winners will be those countries which have cash, commodities, or creativity, or a combination of these factors. India does not have an abundance of cash or commodities, but it has creative potential,” it said.

StanChart said India has potential to catch up with China and the developed world.

“Based on our forecasts, India’s nominal GDP could top $30 trillion by 2030, against its current level of around $1.7 trillion. By 2030, India could be 8.4 times bigger than it is today, while China is estimated to grow 4 times bigger and the EU and US 1.7 times,” it said.The banking giant said that within India there is often a hesitation to anticipate the ability of the economy to grow at a faster pace.

“Often, consensus views of India’s growth potential turn out to be too pessimistic. Thus, trend growth has often been assumed to be lower than that which materialises.Taking all of these factors together, our 9.3% projection for average Indian growth until 2030 may prove conservative. Trend growth, in my view, could even be nearer 12-13% per annum,” it said.By Super-Cycle, StanChart refers to the major periods of global economic growth.The first super-cycle took place from 1870 till the eve of the First World War in 1913 and saw the United States jumping from the fourth position to become the world’s largest economy.

Ratan Tata clarifies comments on Ambani home

The disparities in everyday living are now opening up large debates both at home and abroad.

Tata Group chairman Ratan Tata’s purported remarks expressing surprise at fellow industrialist Mukesh Ambani living in a billion-dollar mansion in Mumbai has sparked off a controversy. Mr Tata was quoted by London’s Times newspaper as having said, “It makes me wonder why someone would do that. That’s what revolutions are made of. The person who lives in there should be concerned about what he sees around him and [asking] can he make a difference.

“If he is not, then it’s sad because this country needs people to allocate some of their enormous wealth to finding ways of mitigating the hardship that people have.”

However, a day after his remarks on Mukesh Ambani's residence in Mumbai, the Tatas disputed the reported attribution to its chairman, saying that the comments were taken out of context and factually incorrect.

“The report is out of context and factually incorrect. Mr Tata's comments on wealth are in the larger context of the growing disparity in the society. The comments seem to have been deliberately sensationalised,” the company said.

Top CEOs – while choosing not to comment on the specific controversy – agreed that the widening disparity needs to be addressed , either through what some call conscious capitalism, or through greater  corporate social responsibility‎.

“I know disparity is high. I think conscious capitalism is a way forward. Corporate have to look at all shareholders and consciously invest in all shareholders,” said FICCI president Harsh Mariwala.

“There are few corporates who have done something in the fields of education and health. I am hopeful that the Corporate India will rise to this occasion. Also, if we can ensure that all sections of society benefit from India's growth, we will have sustainable growth,” said Naina Lal Kidwai, Group General Manager and Country Head, HSBC in India.

RIL has chosen not to comment on the issue. In April this year, Mukesh Ambani had said that the purpose of business cannot solely be profit and entrepreneurs need to have a larger purpose.

Read more at: http://profit.ndtv.com/news/show/ratan-tata-clarifies-comments-on-ambani-home-155683?cp

Real estate adds Rs 1 lakh cr to Delhi's GDP in FY11

Real estate services added over Rs one lakh crore to Delhi's GDP of Rs 2.58 lakh crore in FY11, emerging as top contributors to the city's economy and reflecting the rapid growth and buoyancy in the sector.

The real estate sector, which includes property brokers, home buyers, land owners, property owners and housing finance institutions, contributed 39.69% to the gross state domestic product (GSDP) of the city at current prices, according to latest Delhi Government statistics.

The contribution of the sector has gone up to Rs 1.02 lakh crore in FY11 compared to Rs 35,885 crore in FY05, registering annual compound growth of 19.16% in the last six years.

According to global real estate consultant Jones Lang LaSalle, the sector will witness further growth with most companies operating in the city firming up expansion plans or executing real estate growth plans with upswing in the economy.

Reflecting the buoyancy in the sector, it said overall Delhi and National Capital Region witnessed a net absorption of 1.63 million sq ft of property space (151,755 square metre) in first quarter of the year.

The significant performance by the sector has largely been attributed to increased demand for commercial property by companies for office space and business activities leading to robust rental growth.

"The sector has potential to grow further provided the city government and the Centre relax certain norms for use of land for property development," said Pradeep Jain, chairman of Confederation of Real Estate Developers' Association of India (Credai).

As per Delhi government data, the contribution of the tertiary sector comprising hotels, restaurants, banking, insurance, legal services, real estate at current prices was Rs 2.12 lakh crore in FY11, which is 82.27% of the GSDP.

In FY11, the contribution to GSDP by hotels and restaurants and related trade was estimated at Rs 48,413 crore, which was around 18.71% of the total GSDP of the city.According to figures, share of primary sector comprising agriculture, livestock and forestry to GSDP in FY10 and FY11 has decreased by 0.72% and 0.61% at current prices.

Further, the contribution of secondary sector comprising manufacturing and construction has decreased from 18.45% during the base year FY05 to 17.44% and 17.11% in FY10 and FY11 respectively.

At Rs 2.58 lakh crore, the gross state domestic product of the city went up by an impressive 10.53%, increasing from 10.28% in the previous fiscal. 

Delhi's GSDP in FY10 was Rs 2.18 lakh crore.

As per the statistics, the per capita annual income in the national capital has increased by 7.68% to Rs 95,943 in FY11, which is almost three times the national average.

The per capita income of an average person in FY10 at constant prices was Rs. 89,037, according to a report released by Delhi Chief Minister Sheila Dikshit, who also holds the finance portfolio.

Delhi has a population of 1.67 crore, according to the latest Census.

On a monthly basis an average Delhiite earned Rs 7,995.25 in FY11 against the national average of Rs 3,000 as per the advance and quick estimates based on constant prices, which reflects data factoring in inflation.

However, on the current prices, without factoring in inflation, the per capita income of Delhi worked out to Rs 1.35 lakh as compared to national average of Rs 54,527.

In FY10, the per capita income of the city at current prices was Rs 1.17 lakh and it occupied the third position after Goa and Chandigarh, where the per capita income was Rs 1.32 lakh and Rs 1.20 lakh respectively.

$10 billion investment fund discussions attract major investors

From: Russia

Representatives of major global investors worth more than $2 trillion met with Russian Prime Minister Vladimir Putin, ahead of the launch of a $10 billion Russian investment fund at the St Petersburg International Economic Forum.

The fund, which will see the state commit $2 billion per year over five years, and co finance up to 20% of the cost of development projects, will be headed by former Icon Private Equity president Kirill Dmitriev.  Speaking with RT Business at the meeting Dmitriev said the plan of the fund was to attract up to $90 billion of international funding to Russia on a long term basis.

“Our goal is to attract $50 to 90 billion of co-investments from the leading funds in next 5 years. I think that it’s really important for them to get a good rate of return in Russia and in this way they will keep investing. And today the confidence that was given to investors by Prime Minister Putin is a catalyst that will help to significantly increase the investment inflow into the Russian economy.” 

The plan for the fund was announced earlier this year by Russian President Dmitry Medvedev, who is promoting moving the Russian economy away from its dependence on commodity, particularly energy exports.

Amongst other major investors, senior figures from Goldman Sachs, Blackstone, Abu Dhabi Investment Authority, Kuwait Investment Authority, China Investment Authority, Permira and Caisses des Depots attended the discussions. With Russia generally seen as a higher risk investment destination, it warrants higher premiums and is considerably more volatile than senior economic figures would like.

Bader Mohamed Al-Sa’ad, Managing Director of the Kuwait Investment Authority, said that he thought the move by the government to create the fund would encourage more conservative longer term, investors to an economy that he saw on the frontier of growth.   

“We think that Russia has all the factors and all the capabilities to be a frontier in the growth market.  For us in KIA, we have something like $600 million investment, and I think this invitation to join the direct investment fund will give us the opportunity to increase our direct investment.  We think that there is a lot of interesting companies – there is interesting sectors in Russia.  This will give us the opportunity, and the confidence, because we think the government would commit $10 billion – this is a unique concept in the private equity investment.  This is probably for us, a conservative long term investor, it will give us the comfort to join the Russian government jointly at the same terms to be investors in the Russian economy.”

Laurent Vigier, Director of European and International Affairs, at Caisse des Dépôts Group said he thought the proposals could play a key part in broadening the perception of investing in Russia.

“What you see is that Russia is not only an economy based only on gas or oil.  Russia has a very educated population, very smart people, and there are many sectors of interest.  We have seen in the agribusiness, in the pharmaceutical industry, in the aeronautics and the infrastructure, there are many opportunities in Russia.  We have to change our view on this country it is a diverse economy it is a major partner, and for Europe and for France, this is certainly something we have to factor in.”

Vigier added that the proposal by the government to commit large scale funding to attractive private and institutional investors from around the world had received a positive reception.

“I think that all the participants at this meeting were very impressed by the dedication of the Russian government to promote long term investment in the development of the Russian economy.  The Russian economy appears certainly to be the next big thing on the global investment map.  We have to seize these opportunities and it’s a bold movement by the Russian government.  This new scheme is very innovative.” 

At the meeting the investors discussed Russian economic strategy and its investment climate with the Prime Minister, as well as particular investment interests.  Spokesman Dmitry Peskov indicated that no formal commitments had been made but ahead of the meeting the head of VEB, the state development bank (Vneshekonombank), Vladimir Dmitriev indicated one group, unspecified had already indicated it would look at allocate $1 billion to the fund.

Thanks to RT News