Author Archives: Naresh Kumar

Now Buy Jewellery on Interest-Free EMI

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Purchasing jewellery for a big occasion could mean pouring out one’s hard-earned savings but to make it notionally less burdensome, Candere.com, an online jewellery retailer, has come to the rescue of jewellery lovers.

Candere.com offers easy EMI on diamond jewellery to its consumers without charging any interest, or additional cost over and above the price of the jewellery. The entire deal is between the jeweller and the buyer, without any involvement of the bank.

So now one can own a piece of bespoke, captivating diamond jewellery and also save money on their purchase. When ordering precious diamond jewellery on Candere.com, the customer can book it with a part payment and then pay the rest with easy EMI (Equated Monthly Instalments) over a period of time, without paying any additional cost in the form of interest.

"We came up with the EMI idea to reach out to these significant concerns regarding jewellery purchase and make diamond jewellery affordable for consumers. Jewellery is not less than an investment, since it is meant for a lifetime," said Rupesh Jain, CEO of Candere, a jewellery start-up headquartered in Mumbai.

There is an understanding between the customer and the merchant to pay the remaining sum over a period of either six months or nine months, as per customers’ convenience and affordability. Since there is no interest involved, there is price protection, which means that a piece of jewellery is booked on a fixed amount – its site-price – and the rest is paid with not a penny more. It makes complete sense when people are worried about buying the best designs within a restrained budget. It allows people to fulfil their dreams and also gift precious jewellery to their loved ones.

Considering a consistent fluctuation in prices of gold and unstable market scenarios, this is a brilliant idea that Candere has come up with, which is working really well. It gives greater flexibility to the customer to buy expensive jewellery and not limit to smaller diamonds and lower price tags. Since the introduction of easy EMI by Candere, more and more people are now buying, wearing and even gifting beautiful diamond jewellery. Diamond is not a far-fetched commodity anymore; it is for one and all.

Defying age old norms about buying jewellery only from high-end stores, more and more buyers are now turning towards online purchase options. Not only that, buying expensive items like gadgets, bridal trousseau, electronics, fine jewellery through digital marketplaces has become as easy as a few clicks. Candere came up with the idea of EMI to address primary concerns of jewellery buyers, such as – hesitation to buy expensive jewellery pieces, due to concern of the cost factor – especially wedding related purchases. Since there are humongous expenses involved during a wedding, many families have to put a restrain over certain areas, which is where wedding jewellery comes under spotlight.

India Business Confidence on Decline in Last 3 Months

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Indian business sentiment fell for the first time in three months in March 2016 as companies faced lower demand amid rising input prices on the back of the weak rupee, though political atmosphere remained stable after the release of JNU student leaders.

The MNI India Business Sentiment Indicator, a gauge of current sentiment among BSE-listed companies, fell to 62.7 in March from 63.5 in February. The decline in sentiment was led solely by manufacturing firms, offsetting last month’s rise in confidence. In contrast, sentiment among construction companies rose significantly and service sector companies were also more optimistic about overall business conditions.

In spite of March’s decline, confidence picked up a little over the first quarter of 2016 as a whole. After gradually declining throughout last year, the MNI India Business Sentiment Indicator averaged 62.7 in the three months to March, up slightly from 61.3 in the December quarter.

In contrast with last month, fewer companies reported an increase in both new orders and export orders, and they were also less bullish on future demand. Nevertheless, companies expanded production and the expectations measure for new orders remained elevated at 68.2.

While politics ruled high in February over the JNU row when JNUSU leader Kanhaiya Kumar’s arrest on sedition charges turned highly volatile with many student protests across the country, their release made the month of March more or less politicall stable.

Minus politics, many firms faced higher prices for their inputs, with the Input Prices Indicator increasing 5.7% on the month to the highest since July 2015. Consequently, companies raised the prices they charged and expected them to increase further in the coming three months in anticipation of higher prices for raw materials.

Another factor that added to companies’ outlays was the depreciation of the rupee. Companies lamented that its weakness made their imports more expensive. The indicator measuring the Effect of the Rupee Exchange Rate fell further into contraction to 46.3 from 48.4 in February, the lowest since June 2015.

Commenting on the latest survey, Chief Economist of MNI Indicators Philip Uglow said, "The decline in confidence in March was relatively modest and sentiment is still up from the recent trough in December. Importantly most key measures in the survey have stabilised and turned upwards in recent months following the trend decline that has been in place since September 2014."

"It looks increasingly likely that the RBI will cut official interest rates at its April meeting. Note, though, that input prices as well as prices charged have been trending higher recently, which will likely limit the extent of monetary easing."

[tags, india business climate, india investment climate, politics, unrest, indicators, rupee value, impact, india business confidence,jnu row impact,]

[category, finance]

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Ancient Extinct Human Species DNA Still Present in Melanesian Residents: Study

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Scientists were surprised to find fragments of DNA of extinct human species in 35 people living in islands off New Guinea in Melanesian tribes.

The DNA was traceable to two early human species: Denisovans, whose remains were found in Siberia, and Neandertals, first discovered in Germany.

D. Andrew Merriwether, a molecular anthropologist at Binghamton University, collected the modern-day blood samples used in the study about 15 years ago in Melanesia. This is the first time full genomes from those samples have been sequenced.

"Substantial amounts of Neandertal and Denisovan DNA can now be robustly identified in the genomes of present-day Melanesians, allowing new insights into human evolutionary history," said a team of international anthropologists who studied the DNA and compared it with ancient DNA samples. "As genome-scale data from worldwide populations continues to accumulate, a nearly complete catalog of surviving archaic lineages may soon be within reach."

These tribes have been there for at least 48,000 years but remained aloof and in isolation from the rest of the human race.

Earlier studies have revealed some genetic overlap of about 2 percent between Neandertals and non-African populations, and little or no Neandertal and Denisovan ancestry among Africans.

This new research suggests Neandertals and modern human ancestors intersected at least three times. It also found an overlap of between 1.9 and 3.4 percent in the genetic codes of Denisovans and modern-day Melanesians.

Skepticism about the new findings is entirely appropriate, said Merriwether, who specializes in reconstructing the past using samples from contemporary populations and ancient DNA from the archaeological record.

"Ancient DNA is always damaged and broken into small pieces," he explained. "You only need one molecule of modern DNA to outperform all the ancient DNA."

The human genome contains about 3 billion "letters".

Studies like this one may enable scientists to answer big questions about human migrations and evolution thousands of years ago.

The finding of the study were published in the journal Science.

[tags, ancient dna, melanesian tribes, denisovans, neandertal dna sample, living neandertal dna, mutant dna]

D. Andrew Merriwether, Binghamton University.

Handling volatile capital flows–the Indian experience

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BY POONAM GUPTAADD COMMENT

Capital flows to emerging economies are considered to be volatile. Influenced as much by global liquidity and risk aversion as by economic conditions in receiving countries, capital flows move in a synchronous fashion across emerging economies. There are periods of rapid capital inflows, fueling credit booms and asset price inflation; followed by reversals when exchange rates depreciate, equity prices decline, financial volatility increases, and GDP growth and investment slows down. These periods of extreme flows have unintended financial and real implications for the recipient countries. Central banks typically react with a mix of policies to cushion their impacts, ranging from managing the exchange rate and liquidity, to using reserves, monetary policy and macroprudential tools, and calibrating the pace of capital account openness. Overtime, along with the underlying characteristics of the emerging market economies and their available policy space, this policy mix has evolved too.

Wary of excessive exchange rate volatility emerging market economies have traditionally tended to either peg their exchange rates or maintain defacto managed floats. Unable to raise external debt in domestic currency, emerging markets have typically held debts denominated in foreign currency, with exchange rate depreciation resulting in adverse balance sheet effects. A customary response to capital flows has been to manage the impact on exchange rate through procyclical monetary policy– loosening the monetary policy during periods of rapid capital inflows and high economic growth (to resist exchange rates appreciation) and tightening it during the reversals of flows and economic slowdowns (to moderate the extent of exchange rate depreciation).

However much has changed in emerging countries policy landscape in the last one and a half decade. After a series of high profile currency crises in the mid-1990s-early 2000s, many countries have moved from pegged exchange rate regimes to floating ones. They maintain less negative foreign currency positions, and have built a larger stock of reserves. An increasing number of central banks now operate under an inflation targeting framework, affording them a more definitive mandate to pursue monetary policy geared toward domestic policy imperatives. As a result countries now tolerate greater exchange rate volatility, while using their reserves when warranted; monetary policy is more countercyclical than before; and the use of macroprudential tools has become a more pervasive element of their policy mix.

My recent paper Capital flows and Central Banking-The Indian experience reviews India’s experience with handling capital flows, putting it in context with the experience of other emerging markets. It establishes three stylized facts.

  • First, India has increasingly become more financially integrated with the rest of the world. The pattern of capital flows it receives mirrors those in other emerging economies, pointing to the importance of common factors in driving capital flows to India. In the post liberalization period since the early 1990s, capital flows to India have evolved in three phases—a first phase from the early 1990s-early 2000s, during which capital flows increased steadily but remained modest compared to the size of the economy or monetary aggregates; a second phase of “surge” from the early 2000s-2007, when inflows increased rapidly, outpacing GDP and monetary aggregates; and a third period of volatility, starting in 2008 when capital flows reversed in the post Lehman Brother collapse period and again in 2013 during the taper tantrum and remained volatile. [1]
  • The policy mix that India has deployed has evolved in sync with the capital flow cycle and is consistent with the trends observed in other large emerging economies. Its exchange rate, which was largely pegged to the US dollar until the early 1990s, is increasingly more market determined. Just like in other emerging countries, India has built a large buffer of external reserves, and for the most part has used it to modulate excessive fluctuations in the exchange rate. While monetary policy focused on price stability during the first phase, it was also conditioned by the pace of capital inflows in later phases–money supply increased during the capital flow surge and was tightened during the stop episodes. Additionally macro prudential measures have been used countercyclically, e.g. they were strengthened during the surge to limit excessive risk taking and deter asset price inflation.
  • Particularly interesting is the countercyclical liberalization of capital account. Contrary to a common perception, India has steadily liberalized its capital account since 1991; while the pace of incremental liberalization has been conditioned by the capital flow cycle. The pace of liberalization of inflows slowed during the capital surge episode of 2003-2007, while outflows were liberalized rapidly. Inflows were then liberalized vigorously during the reversal of capital in 2008-09 and in 2013.

While the capital flows to emerging markets are expected to remain volatile in the years ahead, their policy mix is likely to evolve further. Specifically for India, the move to an inflation targeting framework will likely reinforce the domestic orientation in monetary policy; whereas due to a progressively liberalized capital account over the last two and a half decades, further scope to manage the pace of capital account liberalization seems limited. Going forward, reserve management and macroprudential measures are likely to play a larger role in responding to capital flow cycles; even as the markets, economy and policy makers develop greater tolerance for inevitable market determined adjustments in exchange rate.