Global energy infrastructure requires Investments of $36 trillion by 2050

Global investments into the energy infrastructure space estimated at $36 trillion representing 0.6 per cent of the cumulative GDP over the next few decades will provide a huge opportunity for the private sector to scale up new technologies and meet the emerging challenge of climate change. 

The private sector will need to look at the opportunities, Dr Ernest Moniz, Secretary, US Department of Energy said “They need to focus on the opportunities rather than the limits as they explore initiatives in clean energy transformation”. He was speaking at a Conference on “Financing Renewable and Energy Efficient Technologies” organized by the Confederation of Indian Industry in partnership with Energy Cooperation Programme (ECP) coinciding with the Indo-US Energy Dialogue. 

Emphasising on the critical role of financial support, Moniz said, “Clean energy financing is being elevated through multilateral agencies in the US till private capital moves off the sidelines.” This support is critical for Clean Energy to gain momentum. Echoing a similar train of thought, Mr Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, said, “subsidies need to be explicit and it is important to distinguish between subsidy and finance. RE projects need to have a revenue model that can be financed and then we can bend over backwards to ease the regulatory restriction to address the externalities in renewable energy financing.” 

Highlighting two key trends in the course of his address, Dr Moniz said, “The notion that the Clean Technology Revolution remains a distant goal is changing as cost reductions in clean technologies (photovoltaic, LED and wind) continue to advance at a rapid pace. A shift in the public attitude towards the need for prudent action to pursue the Clean Energy Agenda is also being witnessed. This is important to address the risks of climate change.” 

Speaking on the Progress the role of renewable energy, Mr Banmali Agrawala, member, CII National Council and CEO & President, GE South Asia, said, “India as a country has made substantial progress in the area of renewable energy and energy efficiency. Today installed renewable energy capacity at 30 GW accounts for 13 per cent of the fuel mix and is about 5-6 per cent in energy terms. To further strengthen the entire base of renewable energy in the country, there is a need to move from capacity addition to energy and explore solutions in the area of grid integration, energy storage and energy efficiency on the demand side. 

Funds also need to be provided to the manufacturing sector to enable them to innovate new technologies”. 

Stressing the importance of financing, he said, “Financing is the core of renewable energy and energy efficiency. While the market has responded well to the commercial interventions that have been put in place, financial institutions in the country need to respond more aggressively and should be willing to go that extra step.”

WPI Inflation eases to nine-months low, core inflation upticks marginally

Inflation figure for December 2013 revised upwards to 6.4% from 6.16% reported earlier 

The Wholesale Price Index (WPI) based inflation declined to nine-month low of 4.68% in February 2014 from 5.05% in January 2014, while the inflation reading in February 2014 was also second lowest in last 52-months. The inflation rate eased for third straight month in February 2014, while consistent correction in vegetables prices mainly contributed to the overall decline in inflation. 

The inflation for primary articles further eased to 6.3% in February 2014 from 6.8% in January 2014 and 34-months high of 15.3% in November 2013. The inflation for fuel and power group also dipped from 10% in January 2014 to 8.8% in February 2014, while the inflation for manufactured products was flat at 2.8% in February 2014. 

As per the major commodity group wise inflation, the decline in inflation for vegetables, ‘egg, meat & fish', spices, flowers, crude petroleum, coal, mineral oils, sugar, tea, cotton shirts, automotives etc helped the inflation to ease in February 2014. On the other hand, the inflation for milk, fruits, oilseeds, paper & paper products and chemical products showed an increase in February 2014 from January 2014 level. 

The inflation for food items (food articles and food products) eased to 5.6% in February 2014 from 6.2% in January 2014. Meanwhile, the inflation for non-food items (all commodities excluding food items) also eased to 4.4% in February 2014 from 4.6% in January 2014. The core inflation (manufactured products excluding foods products) inched up slightly to 3.15% in February 2014 from 3.04% in January 2014. 

The contribution of primary articles to the overall inflation eased to 35.4% (at 167 bps to 4.68% inflation) in February 2014 from 35.6% (at 181 bps of 5.05%) in January 2014. The contribution of fuel product group dipped from 33.5% (170 bps) in January 2014 to 31.6% (149 bps) in January 2014, while that of manufactured products increased from 30.9% (156 bps) to 33% (156 bps) in February 2014. 

The contribution of food item (food articles and food products) to inflation eased from 34.3% (174 bps) in January 2014 to 32.9% (156 bps) in February 2014, while that of non-food items (all commodities excluding food items) increased from 66% (335 bps) in February 2014 to 67.3% (318 bps) in February 2014. 

The inflation figure for December 2013 has been revised upwards to 6.4% from 6.16% reported earlier, while that for January 2014 has been retained unchanged at 5.05%.

Rupee close steady

At 61.19/20 per dollar 

The Indian rupee closed unchanged on Friday (14 March 2014) at 61.19/20 per dollar, recovering from one-week lows compared to its Thursday's close of 61.17/18, as FIIs continued strong buying in the share and debt markets. Thus, it offset global concerns about military tensions in Ukraine and China's economy.

Big losses for US stocks at Wall Street

Indian ADRs end strictly lower led by technology and banking ADRs 

U.S. stocks ended Thursday, 13 March 2014 with the worst declines in more than five weeks at Wall Street. The major averages finished the Thursday session near their lows after renewed concerns surrounding the situation in Ukraine, combined with more warnings signs from China. The jitters related to China are tied up in economic and financial risk, whereas, the concerns over Ukraine are tied up in geopolitical risk that has the potential to become a global economic problem. 

The Dow Jones Industrial Average dropped 231.19 points, or 1.4%, to 16,108.89, falling for the fourth consecutive day. The Nasdaq Composite shed 62.91 points, or 1.5%, at 4,260.42. The S&P 500 closed 21.86 points, or 1.2%, lower at 1,846.34 and erased modest gains for the year. 

All thirty Dow components ended lower for the day. Equity indices began the session with modest gains, but the early strength was short-lived. Nine out of ten economic sectors ended lower led by technology and industrials sectors. 

The Russian troop occupation of Ukraine is a growing concern among many traders and investors. U.S. and European Union leaders are threatening to impose economic and diplomatic sanctions on Russia. 

In overnight developments, there was another downbeat economic report coming out of China on Thursday. China's industrial output rose by 8.6%, year-on-year, in the January and February period. That's lower than the 9.5% rise that was expected and down from a rise of 9.7% in December. Traders and investors are also a bit concerned about China's credit and financial system, given the recent bond default by a Chinese corporation—the first one ever.
U.S. economic data released Thursday included the weekly jobless claims report, import and export price indexes, manufacturing and trade inventories, and retail sales. The data had only a marginal impact on market prices. 

Retail sales increased 0.3% in February after declining a downwardly revised 0.6% (from -0.4%) in January. The consensus expected retail sales to increase 0.2%. Sales increased in-line with the 0.2% increase in aggregate earnings that were reported in the February employment report. 

The initial claims level fell to 315,000 for the week ending 8 March 2014 from an upwardly revised 324,000 (from 323,000) for the week ending 1 March 2014. The consensus expected the initial claims level to increase to 329,000. The DOL reported that there were no special factors that drove the initial claims level to its lowest point since November 2013.
Separately, total business inventories increased 0.4% in January after increasing an unrevised 0.5% in December while the consensus expected an increase of 0.3%. Total inventories consist of manufacturers, merchant wholesalers, and retailers. The important takeaway from the report was that the inventory gain may not have been planned. Total business sales fell 0.9% in January after declining 0.1% in December. That sharp drop in spending caused an overstock situation as more goods than expected were left on shelves.
The Treasury Budget for February showed a deficit of $193.50 billion, which followed the prior month's deficit of $203.50 billion. The consensus expected the deficit to hit $195.00 billion. 

Bullion prices ended in a mixed mode on Thursday, 13 March 2014 at Comex. Gold futures on Thursday settled with a modest gain, as a pullback in U.S. equities helped provide some investment appeal for the precious metal. The U.S. dollar index fell to a 4.5-month low overnight, which also is an underlying bullish factor for the precious metals. 

Gold for April delivery rose $1.90, or 0.1%, to settle at $1,372.40 an ounce on the Comex division of the New York Mercantile Exchange. Prices tallied their four-straight session gain and held their ground at a six-month closing high. Earlier, prices for the yellow metal earlier had dropped to as low as $1,364.90 when U.S. equities traded higher on the back of a fall in weekly U.S. jobless claims and a rise in monthly retail sales. May silver continued its descent, closing 16 cents, or 0.8%, lower at $21.20 an ounce. 

Crude oil futures finished back above $98 a barrel at Nymex on Thursday, 13 March 2014, finding support after three sessions of losses and on uncertainty surrounding Ukraine, though another round of weak Chinese data kept a lid on any gains. Crude oil for April delivery rose 21 cents, or 0.2%, to end at $98.20 a barrel on Nymex. 

Indian ADRs ended lower on Thursday. In the IT space, Infosys shed 2.7% at $54.50 and Wipro declined 2.83% at $13.03. In the banking space, ICICI Bank fell 2.79% at $40.38 and HDFC Bank was down 0.5% at $37.54. In the other sectors, Tata Motors slipped 1.9% at $32.48 and Dr Reddy's Laboratories was down 0.33% at $44.63. 

Participation was below average with 678 million shares changing hands at the NYSE floor.
Tomorrow, February PPI will be released at 8:30 ET while the preliminary reading of the Michigan Sentiment Survey for March will cross the wires at 9:55 ET.

Asia Pacific Market: Stocks slide on China economy slowdown, ahead of Crimea referendum

Asia Pacific share market drifted down on Friday, 14 March 2014, as risk aversion selloff flared across the region on concerns about China's economic growth coupled with escalating tensions in the Ukraine. The MSCI Asia Pacific Index dropped 1.9%. 

Investment rationale turned bearish amidst heightening concern about the outlook for the China economy after at least four investment banks cut their growth forecasts on the region's biggest economy. 

Bank of America Corp., UBS AG, JPMorgan Chase & Co. and Nomura Holdings Inc. lowered forecasts for China's 2014 economic expansion after reports yesterday showed factory output rose in January and February at the slowest pace since the global financial crisis, while retail sales grew at the slowest rate for the period since 2004. 

National Bureau of Statistics of China said on Thursday that factory production rose 8.6% in the January-February period from a year earlier. Retail sales advanced 11.8%, while fixed-asset investment excluding rural households was up 17.9%. The Thursday data releases confirm that the slowdown seen at the end of 2013 has extended into this year and suggest it is deepening. 

At the same time, Premier Li Keqiang signaled that China's leaders are "not preoccupied" with hitting the official 7.5% economic growth target. Risk sentiments weakened further after PREMIER Li Keqiang signaled on Thursday that his government will not ride to the rescue of every troubled investment, by saying some loan defaults are “hard to avoid” in what he called a challenging economic environment. But Li, speaking at a news conference on the final day of the annual session of China's top legislature, hinted at some tolerance for slower economic expansion this year in order to push reforms aimed at providing longer-term and more sustainable growth, as long as enough new jobs are created. The GDP growth target is around 7.5%. ‘Around' means there is some flexibility and we have some tolerance,” Li said, adding that the lower limit on growth must ensure job creation. China wants to create 10 million new jobs in 2014 and Li has said that the economy must grow 7.2% annually to do that. Some 13 million new jobs were created last year, when the economy grew 7.7%. 

Selling pressure intensified further on caution ahead of a public referendum in Crimea on Sunday to decide whether to break away from Ukraine and become part of Russia. The Black Sea region of Crimea votes on whether to leave Ukraine and rejoin Russia on March 16, with the U.S. and Germany stepping up pressure on Moscow over their support for the secession.
U.S. Secretary of State John Kerry said serious steps would be imposed by the U.S. and Europe if the referendum on Crimea joining Russia takes place on Sunday as planned. 

Market sentiments also under pressure after the release of disappointing U.K. trade balance data. Official data showed that the U.K. trade deficit widened to 9.79 billion pound in January, from 7.66 billion pound in December, whose figure was revised up from a previously estimated deficit of 7.7 billion pound. 

Meanwhile, investors were eyeing upcoming U.S. data due later in the day, after upbeat economic reports on Thursday eased concerns over the strength of the nation's economic recovery. On Thursday, the Commerce Department reported that retail sales rose 0.3% in February, ending two months of declines, while Core retail sales, which exclude automobile sales, also rose 0.2% last month, ahead of expectations for a 0.3% rise. Separately, the Department of Labor said the number of people filing new claims for unemployment benefits fell by 9,000 to a three month low of 315,000 last week, from the previous week's revised total of 324,000. 

Among Asian bourses, Japanese share market stumbled the most in the region, as investors flew away from riskier stocks, particularly export related companies, amidst concerns about China's economic growth coupled with escalating tensions in the Ukraine. Meanwhile, hardening of yen against major currencies intensified selling in the local shares. The benchmark Nikkei-225 index tanked 3.3% to 14327.66, while the Topix index of all first-section shares retreated 3.22% at 1164.70. 

Japanese exporter shares, especially those with close China links, declined sharply, with TDK topped a list of battered exporters, losing 4.5%. Komatsu fell 3.6% and Daikin Industries lost 3.9%.Toyota dropped 3% to 5,551 yen in Tokyo. Honda Motor Co. (7267), which gets about 83% of sales from overseas, decreased 3.1% to 3,607 yen. Sony Corp. (6758), the maker of Bravia televisions and PlayStation game consoles, sank 4.2% to 1,761 yen. 

The minutes of the Feb. 17-18 policy meeting released on Friday, indicating many of the Bank of Japan's nine board members decided unanimously to double the scale of the two programs to help boost bank lending and extend the application period for these facilities by one year. 

"Many members said that the bank had been stating that, implementing quantitative and qualitative monetary easing, it would examine both upside and downside risks to economic activity and prices, and make adjustments as appropriate," the minutes said. "These members continued that the revisions discussed at this meeting should not be taken as such 'adjustments' to achieving the price stability target of 2% as expected. 

The minutes for the February meeting also showed that the board agreed that the moderate recovery trend will continue, weathering an expected slump in domestic demand after the April sales tax hike. "A few members expressed the view that future economic developments depended on whether an increase in exports and business fixed investment could offset the reversal decline in private consumption following the consumption tax hike," the minutes said. "One of these members added that, in the event of a decline in household and business sentiment, it was necessary to closely monitor whether this would bring about a self-fulfilling economic downturn through a contraction in consumption and investment activities." Some board members said exports have been weak because some sectors have had to respond to strong domestic demand. "These members continued that exports might gain momentum in the April-June quarter of 2014, at which time domestic demand was projected to experience a reversal decline following the consumption tax hike," the minute said. 

In Australia, Australian stock market closed sharp lower as investors flew away from riskier stocks, particularly commodity linked companies, on lingering concerns about weakness in the Chinese economy and tensions in Ukraine. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each were down 1.5% to finish at 5329.40 and 5347.10, respectively. 

Material was the worst-performing sector, down 2.4%, as the base metal prices fell up to 1.4% on the London Metal Exchange on Thursday with copper and aluminium leading the declines. Resources giant BHP Billiton tanked 2% to A$35.66, while Rio Tinto, Australia's biggest iron ore miner, dropped 2.5% to A$61.50 and third force in iron ore, Fortescue Metals Group, dropped 2.7% to A$4.98. 

Shares of Australian financial companies were also down. Commonwealth Bank of Australia declined 0.9% to A$75.25, Westpac Banking Corp 1.8% to A$33.65, National Australia Bank 1.2% to A$34.33 and ANZ Banking Group 1.1% to A$31.87. 

Lend Lease shares fell 1.6% to A$11.32 following a fire at its $6 billion Barangaroo development in Sydney. It is likely the property group has insurance but the fire, which covered Sydney's central business district in smoke, will cause delays. 

Shares in Leighton Holdings gained 3.1% to A$21.37, following the increase of a takeover offer from Hochtief, which raised its conditional bid to A$22.50%. 

In China, Mainland China stock market finished weaker, after at least four investment banks cut their growth forecasts on the Asia's biggest economy. The Shanghai Composite Index dropped 0.73% to 2004.34. 

Among SSE sectors, 9/10 sectors of the SSE index declined, with energy sector dropped the most amongst the SSE sectoral peers, down 1.5%, followed by healthcare down 1.1%, consumer staples down 1.1%, industrials down 1%, utilities down 1%, financials down 0.8%, telecommunication services down 0.5%, information technology down 0.4% and materials down 0.1%. 

In Hong Kong, HK market declined for third consecutive day, amid mounting concern about the outlook for the China economy after at least four investment banks cut their growth forecasts on the region's biggest economy. The Hang Seng Index ended down 216.59 points to 21,539. 

Among the HK 50 blue chips, 38 fell and 8 rose, with 4 stocks remaining unchanged. New World Development Co was down 14% to HK$8.27 on whammy of rights issue, while CITIC Pacific rose 4.9% to HK$11.68 on talks that the conglomerate looks for a up to HK$8.8bn 5-year loan with 13 banks, making themselves the biggest blue-chip loser and gainer. 

New World sank 14% to HK$8.27, while New World China (00917) surged 29% to HK$6.63 after its parent announced plan to take it private at HK$6.8 per share. 

Tencent plunged 4% to HK$564 after regulator's call to a halt of Tencent's virtual credit card products. The stock has dropped for three consecutive days. It has slid 12.7% from its all-time high of HK$646 on 7 March. 

The Office of the Commissioner of Insurance on Friday said total gross premiums of the Hong Kong insurance industry in 2013 amounted to HK$290.7 billion, an increase of 13.9% over 2012. Gross and net premiums of general insurance business recorded a growth of 7.1% to HK$42.1 billion and 8% to HK$29.2 billion compared with 2012. Overall underwriting profit also recorded an increase from HK$2.2 billion in 2012 to HK$3 billion in 2013. 

Revenue premiums of Individual Life and Annuity (Non-Linked) business and Individual Life and Annuity (Linked) business rose 18.4% to HK$173.3 billion and by 9.5% to HK$54.7 billion. Contributions of Retirement Scheme business grew 2.3% to HK$17.1 billion. New office premiums (excluding Retirement Scheme business) of long term business for 2013 climbed 18.9% to HK$92.6 billion compared with 2012. Both Individual Life and Annuity (Non-Linked) and Individual Life and Annuity (Linked) business recorded premium growth, with the former rose 21% to HK$73.0 billion and the latter grew 11.7% to HK$19.1 billion in terms of new office premiums. 

In Indonesia, shares in the Jakarta market surged sharply today, after main opposition PDI-P party named Jakarta's hugely popular governor, Joko Widodo, as its candidate for this year's presidential election. The Indonesian benchmark Jakarta Composite Index jumped 3.23% to 4878.54, extending its advance from an Aug. 27 low to 23%. That's above the 20% level that marks the common definition of a bull market. 

Bank Indonesia held its benchmark reference rate unchanged at 7.50%, as widely expected, because pressures over the inflation rate and the rupiah have eased. The decision came after market close on Thursday. 

In India, strong intraday rebound in late trade took the key benchmark indices to positive zone from negative zone. The market sentiment was boosted after the data showed that inflation based on the wholesale price index (WPI) eased to a nine-month low last month.
The barometer index, the S&P BSE Sensex, was provisionally up 22.55 points or 0.1%, up about 225 points from the day's low and off close to 55 points from the day's high. Among the 30 Sensex shares, 15 declined and rest rose. Bhel (up 2.73%), Tata Steel (up 1.68%), and Tata Motors (up 1.61%) edged higher from the Sensex pack. 

Indian index heavyweight Reliance Industries (RIL) and ITC, both, reversed intraday losses. Shares of L&T scaled 52-week high and L&T Finance Holdings slumped after the offer for sale of shares of L&T Finance Holdings by L&T was oversubscribed. Among auto stocks, M&M scaled record high. 

Indian economy can grow an annual 5.2% in the quarter to end-March on higher farm output growth, the chairman of the Prime Minister's Economic Advisory Council said today, 14 March 2014. C. Rangarajan also said he expects the economic growth to pick up to 5.5% to 6% in the fiscal year that begins on 1 April 2014. Inflation based on the wholesale price index (WPI) eased to a nine-month low of 4.68% in February 2014, from 5.05% in January 2014 and 7.28% during the corresponding month of the previous year, data released by the government today, 14 March 2014, showed. Build up inflation rate in the financial year so far was 5.17% compared to a buildup rate of 6.15% in the corresponding period of the previous year. The government revised upwards the rate of WPI inflation for December 2013 to 6.4%, from 6.16% reported on 15 January 2014. 

Elsewhere in the Asia Pacific region, Taiwan's Taiex index dropped 0.69%. South Korea's KOSPI index fell 0.75%. New Zealand's NZX50 declined 0.64%. Malaysia's KLSE Composite declined 0.76%. Singapore's Straits Times index fell 0.25%. Indonesia's Jakarta Composite Index jumped 3.23%.