Monday, September 4, 2017

Gold spurts on North Korea tension; India credit growth slows; The rise of Snappcar

1 Gold spurts on North Korea tension (Siddesh Suresh Mayenkar in Gulf News) Gold prices spiked more than one per cent on Monday to its highest level in a year as risk averse investors sought refuge in the safe haven metal amid geopolitical tensions triggered by North Korea, which tested a hydrogen bomb on Saturday.

International spot gold prices hit a high of $1,334.33an ounce, the highest level since September of last year, before trading 0.68 per cent higher at $1,334.19.

“Safe haven assets are back in demand, following the announcement that North Korea had tested their most powerful nuclear bomb yet,” said Hussain Syed, Chief Market Strategist at FXTM. Comex Gold for December delivery was up 0.64 per cent higher at $1,338.90 an ounce. The Swiss Franc and the yen, which are also seen as safe haven assets, gained.

Gold has been a beneficiary of geopolitical tensions between the US and North Korea, even as the dollar has become weaker. The yellow metal has gained 16 per cent since the start of the year.


2 India credit growth slows (Khaleej Times) The credit growth of Indian banks slowed down to 8.1 per cent in 2016-17 from 10.9 per cent in the previous year, though the aggregate deposits improved on account of massive flow of funds after demonetisation, a Dun and Bradstreet report has said.

"The credit growth of all scheduled commercial banks slowed down from 10.9 per cent in 2015-16 to 8.1 per cent in 2016-17. The growth in aggregate deposits, on the other hand improved from 9.3 per cent in 2015-16 to 15.9 per cent in 2016-17, largely on account of a massive flow of funds into the banking system after the demonetisation of November 2016," the report noted.

It said that the banks' non-performing assets (NPAs) continued to display the highest level of stressed advances. "The gross non-performing advances [GNPA] of banks rose to 9.6 per cent in March, 2017 from 7.5 per cent in March, 2016. The net NPA ratio of banks stood at 5.5 per cent in March 2017," the report said.

"At present, the Indian banking sector is going through a critical phase. The credit growth has remained subdued, particularly in the case of public sector banks. Increase in stressed assets has affected the profitability of banks and therefore, deteriorating asset quality means a major challenge for the banking industry," Manish Sinha, managing director for India at Dun and Bradstreet, said.

The Indian banking sector has lately grappled with various challenges, including degradation in asset quality and a sharp slowdown in credit off take. The report highlights that an improvement in India's macroeconomic fundamentals, the underlying potential in terms of a largely under-banked population and the digital push by the government can be leveraged to help the sector turn the tide in the coming years.


3 The rise of Snappcar (Senay Boztas in The Guardian) He calls it “Airbnb for cars”, and if Victor van Tol is right, people sharing their vehicles could mean a Europe with 5m fewer of them in five years.

In 2011, Dutchmen van Tol and Pascal Ontijd launched Snappcar, a technology platform for car owners to rent their vehicles. The vision was a profitable startup, with economic, social and ecological impact.

“The 250m cars in Europe are used on average an hour a day,” says van Tol, chief executive of the Utrecht-based firm. “If a very small percentage of people start sharing, you can make a huge impact in bringing people together, cars not needing to be produced and saving money for owners and renters.”

He is, he says, 10% of the way to his goal of 500,000 cars shared, with operations in the Netherlands, Denmark, Sweden and Germany, 400,000 renter members and 45,000 vehicles on offer – all insured through Allianz.

Car manufacturers and rental firms are convinced such sharing could be one of the ways we drive in future: Europe’s largest car hire company Europcar took a 20% stake in Snappcar in June as part of a strategy to become a “global mobility solutions leader”.

Snappcar has also just completed an asset purchase of Germany’s number two peer-to-peer car sharing firm Tamyca – bringing it closer to challenging European market leader Drivy – and aims to expand to 20 European metropolitan areas, including the UK.

Like Airbnb breaking down the traditional hotel monopoly, van Tol thinks peer-to-peer car sharing gives more power to consumers and to owners: renters can pay less for an older car, for instance, while owners can (with full insurance cover) recoup part of their car costs.


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