Page 31 - Artha

Sector in Focus

Organization’s (FAO) Food inflation to decline slowly, and Similarly, the WTO projects a shipments, underscoring However, the corporate bond Additionally, navigating the This re-evaluation aims to enhancing transparency and
Price Index has been slowly the rate reductions are recovery in world worries that slowing overseas Outlook in commodities such as Easing market’s proportion of GDP listed debt securities remains tailor the disclosure investor protection,
increasing over the past six projected to gather pace next merchandise trade volume economies will complicate food and energy looms remains modest, especially cumbersome, impacting requirements to reduce promoting sustainable finance,
months following declines year. For 2024, the Fed eyes with growth of 2.6 per cent in policymakers' efforts to wind large due to ongoing when compared to other market depth. Empasis on complexity and resource and leveraging technology, the
over much of 2023. The index only one rate cut in the 2024 and 3.3 per cent in back on stimulus. Weak Looking ahead, the outlook geopolitical events. Asian markets. The volume of simplifying these procedures burdens while ensuring that reforms aim to create a
inched up to 120.8 in July second half of the year. 2025, following a significant exports are particularly for global economy hinges corporate bond issuers rose for issuers can enhance essential information for conducive environment for
2024 as compared to 117.7 in decline of -1.2 per cent in worrisome for Japanese significantly on geopolitical Furthermore, logistical Financial sector to 40 lakh crore at the end of accessibility and encourage investors is adequately robust market growth. The
the beginning of the year in Easing of inflationary The cost-push inflation in 2023. policymakers who are banking stability and effective disruptions, such as those FY2022, a significant increase capital formation. Unlisted provided. Moreover, adjusting goal is to build a financial
January. Indices for cereals, pressures have prompted Japan prompted its central on external demand to help international cooperation arising from conflicts in the from 11 lakh crore at the end debentures and green the threshold for classification ecosystem that supports
among the friend-shoring
vegetable oils and dairy major central banks to initiate bank to increase rates for the Among key global economies, counter weak domestic countries. Middle East affecting sea of FY2012. financing face challenges due as a “high-value debt listed economic expansion, attracts
shipments between Europe
products led to the price rise. interest rate cuts, shifting second time in about 17 years exports from the UK, China, consumption. Regulations for to undefined targets and entity” from Rs 500 crores to diverse investors, and fosters
With the inflation print falling The food and beverage price their focus towards bolstering to 0.25 per cent in its July and the US have In 2024 and 2025, inflation is and Asia, pose additional incentives, hampering Rs 1,000 crores could long-term sustainability and
risks to trade stability. Rising
faster than expected in most index released by IMF, too, their economic growth meeting. demonstrated notable Meanwhile, the European expected to gradually abate, protectionism also remains engagement. Clear guidelines streamline compliance efforts resilience in India's financial
regions, in the midst of shows an uptrend. trajectory. Meanwhile, central banks in improvements, contrasting Union's export sector has allowing real incomes to a persistent threat that and incentives would for smaller issuers while markets.
unwinding supply-side issues Most central banks including some advanced countries, with lacklustre performance faced challenges due to grow again in advanced could undermine the stimulate sustainability. maintaining transparency and
and restrictive monetary Among selected countries, the US Fed have maintained a including the ECB, Canada, seen in the Eurozone and declining energy prices, and economies. Choosing an broader recovery in global Double-digit investor protection standards.
policy, the IMF expects global inflation in the US remained pause in their interest rates in Switzerland Sweden and Bank Japan. Both the latter further exacerbating appropriate pace of interest trade through 2024 and
inflation to decline steadily on the upper side of the recent meetings to allow the of England have begun to ease economies are grappling with economic pressures. rate cuts will also be 2025. The promotion of sustainable
from 6.8 per cent in 2023 to target band, averaging 3.2 per impact of hikes done so far to their rate cycles, leading to an subdued demand. Exports challenging for central finance is also a key focus
5.9 per cent in 2024 and 4.5 cent in the second quarter of work through the system. improvement in the global from Japan were dragged banks. In summary, while there are area. Establishing clear green
per cent in 2025. The Fund the current year. demand and growth outlook. down by China-bound chip signs of economic resilience Growth The Indian financial markets, financing guidelines, including
expects the advanced Moreover, the US Fed The adverse trade and potential growth, face significant challenges specific environmental
economies to return to their indicated that it expects environment that prevailed navigating the intricate hindering their potential. performance targets, and
inflation targets sooner than in 2023 is expected to interplay of geopolitical Regulatory complexities lead instituting penalties for
the emerging market and Global Exports Growth (y-o-y%) ameliorate somewhat this dynamics, trade policies, and to redundant disclosure Recommendations for greenwashing practices are
developing economies. Core 10.0 year and next, providing a inflation management will be requirements, burdening enhancing the listing and proposed measures to
inflation, on the other hand, is boost to goods trade in paramount for sustaining issuers and complicating delisting framework for debt encourage greater
projected to decline more 5.0 4.0 1.5 2024 and 2025. global economic health in compliance efforts. This securities include establishing participation in green bonds
gradually. 0.0 -0.3 Nevertheless, persistent the coming years. inefficiency undermines a mandatory three-year and sustainable investments.
geopolitical tensions and Policymakers must remain I ndia currently stands as the offering a diversified market agility and investor minimum listing period to These initiatives align with
fastest growing major
Despite the softening of -5.0 -4.5 -3.0 policy uncertainties may vigilant and adaptive to economy in the world with a investment landscape. As confidence, essential for prevent premature delisting, global sustainability goals and
these initiatives take root and
inflationary pressures, global -10.0 curtail the extent of trade mitigate risks and seize projected GDP growth of 8 evolve, their positive impacts robust functioning. implementing a three-year aim to attract both domestic
recovery. While many
food prices remain elevated economies are likely to see opportunities in an per cent for the fiscal year on economic growth are Harmonizing regulations is cooling-off period for relisting and international investors
increasingly interconnected
owing to geopolitical conflicts, -15.0 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 stronger export growth as global economy. 2024-25, as stated by the CII expected to become crucial to streamline to maintain market stability, interested in environmentally
extreme weather conditions, external demand picks up, President, Mr Sanjiv Puri in a increasingly evident across Regulatory frameworks are processes as it reduces and applying consistent responsible investments.
high input costs and increased US Eurozone UK (rhs) Japan (rhs) China the spectre of price spikes recent interview. This various sectors of the FINANCIAL MARKETS crucial to mitigate this risk ambiguity and enhances Intercreditor Agreement
demand the world over. The optimism stems from the economy. REQUIRE REGULATORY and promote sustainable market efficiency, fostering a protections post-delisting. Technological advancements
UN Food and Agriculture Source: National Sources FRAMEWORKS TO economic growth. conducive environment for Additionally, broadening are poised to play a pivotal
previous year’s robust MITIGATE RISK AND
performance where the actual FOSTER SUSTAINABLE growth. Inadequate SARFAESI Act applicability to role in market development. It
GDP figures surpassed all GROWTH These regulations mandate transparency and investor all debt securities will is crucial to establish a
geopolitical tensions. estimates. capital adequacy ratios, education in the debt market improve investor protection. centralized data repository
liquidity requirements, and hinder the trust of the public Standardized delisting for corporate bonds to
Financial markets play a vital stress testing, thereby and hence their engagement procedures, enhanced improve transparency and
While global economic The recent interim budget
growth has slowed and took on the Viksit Bharat role by allocating resources mitigating systemic risks and is compromised. It is disclosure requirements, and facilitate price discovery.
external demand weakened theme, with the government and creating liquidity for maintaining financial stability. important to enhance a review of call and put Enhancing infrastructure for
initially, signs of a trade striving to make India a businesses and entrepreneurs. Regulatory initiatives transparency and educational option restrictions will electronic settlement systems
In recent years, global trade recovery are becoming developed economy by 2047. They act as intermediaries for promoting financial initiatives as it will promote further ensure transparency for unlisted debt securities
lenders and borrowers to get
technology (fintech)
has faced a convergence of evident. According to the IMF, The budget emphasised a return for excess funds. innovations have gained market liquidity and attract and equity. could further streamline
challenges known collectively world trade growth is strengthening the financial However, these markets prominence in India. SEBI and broader participation from transactions and enhance
as the "poly-crisis". This forecasted to rebound from sector to make are prone to volatility, RBI have introduced the public. Enhancing disclosure norms is market efficiency.
includes disruptions from the 0.3 per cent in 2023 to 3.0 savings and fraud, and systematic frameworks for digital another crucial aspect of the
COVID-19 pandemic, supply per cent in 2024, further investment risks without payments, blockchain reform agenda. There is a Overall, these
chain interruptions, and accelerating to 3.3 per cent in options more appropriate technology, and peer-to-peer proposal to refine the recommendations underscore
heightened trade policy 2025. efficient, regulations. lending, aiming to enhance expansive disclosure a comprehensive approach to
uncertainties driven by efficiency, reduce transaction requirements under SEBI reforming the Indian financial
markets. By addressing
regulations for issuers of
Mr Nilesh Shah, Chair, CII National Committee on Financial Markets and costs, and expand financial unlisted 'specified securities'. regulatory complexities,
Managing Director, Kotak Mahindra Asset Management Company Ltd inclusion.

30 ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY 31
QUARTERLY JOURNAL OF ECONOMICS
QUARTERLY JOURNAL OF ECONOMICS
AUGUST 2024 AUGUST 2024