(Bloomberg) — The fortunes of India’s shadow lenders have been improving amid early signs Asia’s third-largest economy is rebounding from an unprecedented recession.
Two of four indicators compiled by Bloomberg that reflect the state of shadow banks strengthened last month from October. Shares of such firms that are part of the benchmark S&P BSE 500 index jumped two levels higher. The financiers also trimmed their debt piles, helping a gauge measuring their total outstanding debt burden to improve.
A stronger shadow banking industry, which has been struggling since a crisis in 2018 when a large financier unexpectedly defaulted, is key to helping staunch further trouble in the economy. The lenders provide funds to those that banks can’t reach, including some in the poorest strata. In a sign of its continued concern about the sector, the central bank said Friday that it would introduce risk-based internal audits at large non-bank finance companies.
India already suffered one of the worst contractions among major nations due to pandemic lockdowns. Gross domestic product declined 7.5% last quarter from a year ago. While the big picture remains challenging, that marked improvement from a record 24% contraction the previous quarter.
In November, Prime Minister Narendra Modi’s government increased stimulus steps, which included a one-year moratorium on loans for certain smaller businesses.
Still, global rating companies have stepped up warnings. Moody’s Investors Service last month said bad loans will probably increase at non-bank finance firms once authorities withdraw support handed during the pandemic, while S&P Global Ratings warned that there is more stress ahead for the nation’s financial institutions.
The Bloomberg check-up of the sector’s health also showed that:
Banking system liquidity remained buoyant
Average spreads on the lenders’ AAA rated five-year bonds fell for a second month in November to the lowest level in five years
The scores attached to each of the indicators have been calculated by Bloomberg by normalizing the deviation of the latest value of the indicator from its yearly average. They are assigned on a scale of 1 to 7, with 1 implying weakness and 7 showing strength.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
