In January, 73 Indian firms including Power Grid Corp, Adani Power and Videocon Industries raised money from overseas markets.
Indian companies garnered $2.7 billion from overseas markets in January, much lower than $4.46 billion raised in December, according to RBI. They raised over $2.7 billion through external commercial borrowings (ECBs) and foreign currency convertible bonds (FCCBs), showed the Reserve Bank of India data.
In January, 73 Indian firms including Power Grid Corp, Adani Power and Videocon Industries raised money from overseas markets. Five entities mopped up about $1.74 billion through the automatic route - whereby a company can raise as much as $750 million from overseas without prior RBI approval. Meanwhile, under the approval route, five companies raised around $917.69 million through ECBs.
State-owned Power Grid Corp raised $640.50 million in two tranches for its projects, while Videocon Industries garnered $178.5 million for import of capital goods.
Nuclear Power Corp of India raised $250 million for power projects and Adani Ports and SEZ raised $225 million for ports development programme through the automatic route.
Further, Adani Power garnered $150 million for various projects.
Kingfisher Airlines is facing troubled times. If you are booked to fly on of the Kingfisher flights, here is how you can avoid the agony at the airport
I’ve started from a clean slate three times over to write this piece and all because of the same reason, a new development with respect to the airline named above. As I write this, Kingfisher Airlines is suspended from the IATA’s International Clearing House (ICH), Billing and Settlement Plan and Cargo Accounts Settlement System. Early February 2012, it was suspended from the IATA’s International Clearing House and it took the airline about a week or more to get reinstated.
What has happened of late to Kingfisher Airlines?
Let me simplify these operations. The ICH is where airlines settle their bills amongst themselves. So, if Kingfisher Airlines booked you on a trip to the USA using a Kingfisher flight till London and another airline flies you from London to your destination in the USA, Kingfisher Airlines owes money to this airline for the ticket on the other airline. If Kingfisher Airlines does not pay the dues in time, your ticket might be affected by the other carrier who may choose to dishonour your ticket (since it never received a payment for it).
As a fall-out of the suspension in February, Cathay Pacific discontinued its agreement to sell tickets with Kingfisher Airlines. This meant, you could go to Hong Kong on a Kingfisher Airlines ticket, but not go further to China or another Cathay Pacific destination with the same ticket because Cathay did not want to be at risk of not receiving payments for flying passengers booked by Kingfisher Airlines.
The Billing and Settlement Plan is used by agents to book tickets on various airlines using IATA approved systems, and then pay for them in one go to IATA, which further pays all airlines individually. Not having its presence on this platform means you can no longer book Kingfisher Airlines tickets using your next door travel agent, unless, they have a direct relationship with Kingfisher Airlines. After this announcement, I called a few travel agents companies and even the ones next door, who have been unable to book Kingfisher Airlines tickets on their ticketing systems.
Also, the repercussions of its frequent cancellations are many and lead to an unpredictable travel schedule for those booked on the airline. Also, in the wake of the recent events internal to Kingfisher Airlines, it further pruned down its schedule to operate about 200 flights daily.
Here, I try and put together a few suggestions for you if you are in a situation where you have to deal with the airline, to make sure you don’t have to go through the agony at the airport.
What to do if you booked to fly with them domestically?
If you are booked on a domestic flight with Kingfisher Airlines, you should head up to its website and see if your booked flight is a part of the new schedule (as of 5 March 2012) Kingfisher Airlines is operating under as of date. You can find the schedule here: http://www.flykingfisher.com/pdf/Flight_schedule_5March2012.pdf.
Customers will usually be rebooked on a new flight if their earlier flight was cancelled. Sometimes, these schedules will not suit you. For example, if you were booked to go to Jaipur on a 6am flight and now booked on a 6pm flight instead, I hazard a guess this affects your plans materially. You should hear from the airline on email or SMS, or you can go to this page to check the status of your ticket: http://www.flykingfisher.com/plan-book/manage-booking.aspx.
If you are experiencing inconvenience with the flight details, you should call the airline and request for an earlier flight, or better still, accommodate you on another carrier which will be able to bring you to your destination in time. Kingfisher might want to still keep you on its own flights, but if you play hardball, you may be able to get it your way. If you cancel and take your refund, you are basically letting Kingfisher get away with the misery it is putting you in since the onus to buy the new ticket to your destination is on you, and ticket prices may have shot up as the travel date comes closer.
However, if everything goes hunky dory and you are in for a last minute surprise by the airline, the DGCA circular on facilities for cancellation of flights and delay in flights should come to help (http://dgca.nic.in/cars/D3M-M4.pdf). Most of the times, the airline will seek to blame the cancellation on force majeure (events beyond its control), but I don’t see how not being able to fuel their planes or paying their taxes are beyond its control since all this is a part of their day to day activity. While I will not go into all the details of a delayed or cancelled flight for now, if the airline did not inform you up to three hours prior on the delay, they are in the wrong.
What to do if you booked to fly with them internationally?
If you are booked only to fly to a destination where Kingfisher Airlines takes you, go over the same steps as stated above. However, if you are doing much more flying than just Kingfisher, I’d advise you to book your tickets with Kingfisher Airlines and the rest of the flights separately. If you can help it, leave enough time in the midst for eventualities, because if you miss your connections when booked separately, the other airline will not claim responsibility for you.
If you can’t segregate your reservations, please call up the other airline and make sure you talk to them before hand to be sure they will accept you on the flight in spite of the fact that your ticket was sold to you along with a Kingfisher Airlines ticket. If possible, take an email confirmation and keep it with you when you fly.
More importantly, if you had a choice, switch to another carrier which is providing more reliable service to your destination at this point of time, till Kingfisher Airlines can fix up its issues and get back on track.
One final thing, I normally don’t buy trip insurance which seems to be bundled by every travel website or airline website these days. However, under current circumstances, that may be a good idea given the fast changing nature of events with the airline under discussion.
In their attempt to change the world, central bankers and governments have not only distorted the economic fundamentals, they have done something far worse. They have distorted the way investors invest
Investors used to like numbers. To determine where they would invest, they would analyze, deconstruct, dissect and evaluate all sorts of numbers on the economy or on companies. They would take this vast quantity of information and put it into charts, use it to make ratios, and compare it to historical averages. With all of this information they would attempt to predict market movements. All of this has changed. In their attempt to change the world, central bankers and governments have not only distorted the economic fundamentals, they have done something far worse. They have distorted the way investors invest.
Take for example Ms Sun. Ms Sun is an investor in China. Like many other Chinese investors she did not want to invest her money with a bank because of the low interest rates or in the stock market because it is basically a casino. So she chose real estate as a safe alternative. She already owns “seven or eight homes” on the southern island of Hainan and logically was trying to diversify her investments geographically.
Ms Sun is considering investing in a development in the city of Tianjin, south east of Beijing. The project she is considering is called the World. The project is three times the size of New York’s Central Park. It was built to house over 100,000 people. But there is a problem. Only 20 homes are occupied and the developer is in financial trouble.
Most investors in this set of circumstances would run for the door, but not Ms Sun. Instead of being concerned about a price collapse, she is sure that the government will step in and make prices rise. She was “mainly worried about buying at the right time, before the government loosens policy and prices start rising again.”
It is not only Ms Sun who has faith in the Chinese government. This week China reported the slowest inflation in 19 months and industrial production growth near a two-year low. Now such news might indicate a steep fall in economic growth and possibly even a recession, but are economists worried? Not at all. They are in complete agreement with Ms Sun. They look at this slowdown as increasing the prospect for more government stimulus; despite the fact that past government stimulus has created massive bad loans like the World development in Tianjin.
One of the main problems for investors and business people is asymmetry of information. Basically some of the players have more information than others and much of the information is simply not available. So investors and employers rely on signalling. Employers hire employees who signal their competence by more education. Investors invest in companies which signal good future perspectives and higher possibilities of success.
The problem with the recent spate of free money is that it has turned signalling on its head. Whenever Ben Bernanke, Mario Draghi, or the People’s Bank of China announces that they have come up with another weird idea for pumping more money into the economy, it should signal that they are worried about the growth prospects for the economy. A prudent investor might deduce that the economic situation is rather dire and it might be a good time to avoid risk.
But that is not what is happening. Instead of avoiding risk at each announcement, investors are piling into it. Since there is no cost to buying assets that don’t really have a return other than what the greater fool will pay for them, assets like gold or Chinese real estate, the demand for them continues to rise.
Markets are beginning to react to nothing else. There is a strong correlation between the size of the Fed’s balance sheet and the S&P 500. There is an even stronger correlation between the exchange rate of the dollar/euro and the size of the Fed’s balance sheet relative to that of the ECB. The euro rises as the US in effect prints more money and falls as Europe does.
The problem with this uncoordinated global economics experiment is that there are many unintended effects. They have caused a great deal of suffering by lowering returns for those on fixed incomes. They have forced pension funds into ever more risky investments like junk and emerging market bonds. They have exacerbated pension issues that could impact municipalities. Dealing with the financial crisis has saddled the ECB (European Central Bank) and the Federal Reserve with vast piles of potentially impaired collateral. Then there are high oil prices and of course bubbles. But the largest issue is the way that it has warped investors’ perceptions.
In the meantime Ms Sun, China economists, and western investors speculate on when the next stimulus package is going to come. They should rather worry about the real economic consequences the distortions have had on disastrous developments in places like Tianjin, because at some point the flow of free money will have to stop.
(William Gamble is president of Emerging Market Strategies. An international lawyer and economist, he developed his theories beginning with his first hand experience and business dealings in the Russia starting in 1993. Mr Gamble holds two graduate law degrees. He was educated at Institute D'Etudes Politique, Trinity College, University of Miami School of Law, and University of Virginia Darden Graduate School of Business Administration. He was a member of the bar in three states, over four different federal courts and has spoken four languages. Mr Gamble can be contacted at [email protected] or [email protected])