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BSE BROKERS' FORUM (BBF) | MUMBAI, INDIA NOVEMBER 2018 | VOLUME: 7 • ISSUE NO. 8 • `15/-
FORUM VIEWS
OFFICIAL MASCOT LAUNCH
AN INVESTOR
EDUCATION &
AWARENESS
INITIATIVE OF THE
44
BOMBAY STOCK EXCHANGE BROKERS' FORUM (BBF)
BOMBAY STOCK EXCHANGE BROKERS’
GOVERNING BOARD 201
FORUM (BBF) GOVERNING BOARD 2018 - 19
EXECUTIVE COMMITTEE
Uttam Bagri Anurag Bansal Purav Fozdar Harin Mehta Kamlesh D Shroff Lalit Mundra
Chairman Vice-Chairman Secretary Jt. Secretary Treasurer Jt. Treasurer
GOVERNING BOARD MEMBERS
Anjana Anup Arpit Ashok Hemant Hemant Jay
Vijay Shah Gupta Agarwal Ajmera Desai Majethia Toshniwal
Jitendra Kumar Ketan Kishor Kushal Madhavi Mahavir Mehul
Panda Marwadi Kansagra A. Shah Vora Lunawat Patel
Naresh Nirav Nithin Parth Rajiv S. R. Sundara Virender
Rana Gandhi Kamath Nyati Choksey Rajan Mansukhani
Dr. Aditya Srinivas
Dr. Vispi Rusi Bhathena, PhD (h.c.) Chief Operating Officer
Chief Executive Officer & Chief Economist
2 3 FORUM VIEWS - NOVEMBER 2018
NOVEMBER 2018
NOVEMBER CONT
2018 CONTENTS ceo & coo message
05 CEO & COO DESK
30 ANALYSIS OF APEX COURT LANDMARK
JUDGMENT [THE LAW] ON AADHAR ACT
06 BULLS & BEARS: SPECIAL COURTS
UNDER SECURITIES LAWS 31 LATEST UPDATE ON PROVIDENT FUND
ACT PRADHAN MANTRI ROJGAR Dr. Vispi Rusi
PROTSAHAN YOJNA (PMRPY) Bhathena,
PhD (h.c.)
09 MOVING TOWARDS A MULTIPOLAR
Welcome
WORLD: AN OVERVIEW OF ITS 2018 it has already lost 14%. This would make our
32 OPPORTUNITIES FOR FOREIGN PORTFOLIO Balance of Payment position weak as the crude oil
FUNDAMENTAL IMPLICATIONS
INVESTORS (FPI) AT GIFT IFSC prices are going up. The crude has reached 85 $
and it is not surprise that it would reach 100 $ per
11 GETTING TO KNOW
THE S&P BSE 500
to Forum Views magazine.
barrel. This would widen
our current account deficit
32 QUICK FIX OR
PROLONGED PAIN?
INDIAN STOCK MAREKT FACING HEAD WINDS:
The Indian markets are on a roller coaster with the
volatility rising like tidal wave. The Indian markets have
which is currently
stretched at 2.4%.
12 STANDARDIZING
SOFTWARE PRODUCT seen huge selling by the Foreign Institutional Investors. Rising Interest rates
35 SEMINARS & EVENTS CONDUCTED
BY BBF FOR THE PROGRESS OF
STAKEHOLDERS OF CAPITAL MARKETS:
FII selling key reason: FII have sold shares worth Rs.
12000 crores in October 2018 (Just 5 trading sessions) Dr. Aditya Srinivas
scenario: The interest rates
are rising at the global level
with the USA bond yields
14 ASIA-PACIFIC MARKETS
MONTHLY HIGHLIGHTS
AND INSIGHTS
SEPTEMBER - OCTOBER 2018 and totally Rs. 24000 crores from January to October
2018. In September, they have sold shares worth Rs.
more than 3%. This has lead to capital flight from all
the emerging economies to the USA. The
10,000 crores. FII's have sold Rs. 49000 crores of debt hardening of interest rates will also create capital
securities and hence the rupee has also crashed. flight from equity markets to debt markets.
19 COMPLIANCE CALENDAR
NOVEMBER 2018
36 PHILOSOPHY & SELF MANAGEMENT:
DIWALI: LIGHT THE LAMP OF WISDOM Trade War Fears:- The US-China trade war fears have
caused the fall as the USA has put $ 200 billion of tariff
On the BBF Front:
barriers on Chinese USA contributes 23% in the world BBF Representations:
20 REGULATORY
PULSE
37 WELLNESS Q&A:
WEIGHT LOSS
GDP and China contributes 9.3% and hence when they
are in logger heads, it may lead to the slowdown in the
world markets. This is the another reason why the
Date
27-Sep
Topic Represented
To
Working Group on Collateral SEBI, NSE, BSE
markets are in downtrend. (Comments of BBF and ANMI) NSDL, CDSL,
ICCL
22 CIRCULARS
38 HEALING INSTITUTE:
AKASHIC RECORDS The Indian markets are on a
21-Sep Final Report of the Working
group on Collateral
(by BSE, NSE, CDSL, NSDL,
SEBI
roller coaster with the volatility ICCL, BBF, ANMI)
28 CEO 2.0 MANAGING BUSINESS
THROUGH MINDFULNESS 40 ENERGY COSMOS: HARNESSING ANGELS
FOR INNER WELLNESS
rising like tidal wave. The
Indian markets have seen huge
BBF - Investor Education and Awareness Programs:
Date Institutions
6 Sep MIT - World Peace University (Batch 1-2)
selling by the Foreign 7 Sep Mahatma Night Degree College
7-11 Sep LalaLajpatRai College of Commerce
Institutional Investors. and Economics
BSE Brokers’ Forum Steering Committee Printed, Published and Edited by Dr. Vispi Rusi Bhathena, PhD (h.c.) 11-14 Sep MIT - World Peace University
Uttam Bagri (Chairman) & Dr. V. ADITYA SRINIVAS on behalf of BSE BROKERS' FORUM, 14-17 Sep Swami Vivekanand College
printed at KSHITIJ PRINTERS, 49, Parsi Panchayat Road, IL&FS: The ILFS issue where the mutual funds had 17-18 Sep MIT - World Peace University
Anurag Bansal (Vice - Chairman) exposure of Rs. 2500 crores to the debt papers of ILFS - 19-21 Sep Swami Vivekanand College
Ashok Ind. Estate, 1st, Floor, Andheri (East) Mumbai - 400 069.
Purav Fozdar (Secretary) and published from BSE BROKERS' FORUM, 808 A, this lead to panic selling and redemption by some 21-24 Sep Dr. T.K. Tope Arts and Commerce Night Senior
Harin Mehta (Jt. Secretary) P. J. TOWERS, DALAL STREET, FORT, MUMBAI - 400 001. mutual funds. This issue has created confidence crisis College (Batch 1-3)
Kamlesh D Shroff (Treasurer) 25-26 Sep Akbar Peerbhoy College Of Commerce
Editor: Dr. V. ADITYA SRINIVAS and lead to huge selling.
And Economics
Lalit Mundra (Jt. Treasurer) Design by: Harshad Gajera | Photographer: Sanjeev Dubey 26 Sep Mahatma Night Junior & Degree College
Rising Crude Oil Prices: Rising crude oil prices will of Arts & Commerce
Write to us: Scan the increase the Current Account Deficit. The CAD has 27 Sep Akbar Peerbhoy College Of Commerce And
increased to 2.4% of GDP and this would make the Economics (Batch 1-2)
We would be happy to hear from you! Follow QR Code
Balance of Payment weak. Indian imports 77% of the 27 Sep Mahatma Night Junior & Degree College
Do send in your suggestions, feedback and comments via us on: to visit our of Arts & Commerce
total crude oil requirement and thus rise in the crude oil
email to: contact@brokersforumofindia.com website 27 Sep Kamladevi College of Arts and Commerce
prices will make the oil pool deficit rise sharply. We Academy (Batch 1-2)
Visit us: www.brokersforumofindia.com 28 Sep
28 Sep MIT - World Peace University
Disclaimer: This magazine is meant for information purposes only and does not constitute any opinion or guidelines or recommendation on any course of action to be followed by the reader(s). It is not intended to be used Rupee has lost its value: FII's aggressive selling has lead 4 Oct Anjuman-I-Islams Allana Institute of
as trading or investment advice by anybody and should not in any way be treated as a recommendation. The information contained in this magazine does not constitute or form part of and should not be construed as, any
offer for purchase or sale of any product or service. While the information in the magazine has been compiled from sources believed to be reliable and in good faith, readers may note that the contents thereof including to the rupee losing its value and it has breached 74 Management Studies
text, graphics, links or other items are provided without warranties of any kind. BSE Brokers' Forum expressly disclaims any warranty as to the accuracy, correctness, reliability, timeliness, merchantability or fitness for (World Investor Week 2018)
any particular purpose, of this magazine. BSE Brokers' Forum shall also not be liable for any damage or loss of any kind, howsoever caused as a result (direct or indirect) of the use of the information or data contained in this levels. This is the worst performance of rupee and in
magazine. Any alteration, transmission, photocopied distribution in part or in whole or reproduction of any form of this magazine or any part thereof without prior consent of BSE Brokers' Forum is prohibited.
4 FORUM VIEWS - NOVEMBER 2018 5 FORUM VIEWS - NOVEMBER 2018
BULLS
Bulls&&
BEARS
Bears BULLS
Bulls&&
BEARS
Bears
Establishment of Special Courts 3 LIX Additional City Civil and Sessions State of
SPECIAL COURTS UNDER Accordingly, a need for special courts was felt to fast-track the
process of bringing the guilty to the book. The legislative intent
Judge, Bengaluru City Karnataka
SECURITIES LAWS behind the legislation, as evidenced from the parliamentary
4 9th Additional Sessions Judge, Gwalior,
Madhya Pradesh
State of
Madhya
debates of the time, was to give teeth to SEBI to allow it to Pradesh
overcome the problem of delays in prosecution. The Securities 5 Court of Sessions Judge and 2nd State of Punjab
Laws (Amendment) Act, 2014inserted Sections 26A to 26E in
By Sumit Agrawal Additional Sessions Judge, S.A.S Nagar
the SEBI Act, for the establishment of Special Courts while 6 Court of Sessions Judge and 2nd Union Territory
Regulatory Lawyer, Ex-Asstt. Legal Advisor, SEBI also providing for the appellate structure. Identical provisions Additional Sessions Judge, Chandigarh of Chandigarh
were also inserted in the Depositories Act, 1996 and the 7 Court of Special Judge, (Sati Niwaran), State of
the Central Government (for Orders made before the 1999
Securities Contract (Regulation) Act, 1956 in the form of Jaipur Rajasthan
A Special Court, to be Amendment), thereby barring the jurisdiction of all other civil
Sections 22C to 22G and 26A to 26E respectively. 8 Special Court for Trial of Economic State of
courts to entertain such appeals. However, this was not the
established or designated by the appellate process for criminal trials. Offences - cum - VIII Additional Telengana
A Special Court, to be established or designated by the Central Metropolitan Sessions Judge Court - cum
Central Government to provide Government to provide speedy trials of the offences under the - XXII Additional Chief Judge, City Civil
Civil and Criminal Action Scheme
speedy trials of the offences Under the SEBI Act, 1992, criminal action is envisaged under SEBI Act, was to consist of a single judge who was to be Court, Hyderabad
appointed by the Central Government with the concurrence of 9
under the SEBI Act, was to Section 24 and Section 11C (6). Sub-section (1) of 24 provides
the Chief Justice of the relevant High Court. Only a person
Courts of Additional Special Judge, Anti- State of
Corruption at Jammu and Srinagar Jammu &
for a maximum prison sentence of 10 years for violation of any
consist of a single judge who provisions of the Act and regulations. Sub-section (2) of the holding the office of a Sessions Judge or an Additional Kashmir
10 Court of Principal District and Sessions State of
was to be appointed by the same section permits the prosecution of any person who does Sessions Judge is qualified for appointment as judge of the
Special Court. Judge, Ahmedabad (Rural) at Ahmedabad Gujarat
not obey the orders of the Adjudicating Officer. Section 11 C
Central Government with the (6) provides for a maximum prison term of one year and fine in
concurrence of the Chief Justice case of non-compliance with the investigating officer’s The concerned High Court, within whose local limits of Discerning the Jurisdiction
directions to produce books or documents etc. or to appear jurisdiction the Special Court lays, has the jurisdiction to The repeated amendments to the provisions dealing with
of the relevant High Court. before him in connection with the investigation under process. entertain appeals and revision petitions as envisaged under criminal action instituted by the Regulator meant that there
Chapters XXIX and XXX of the Code of Criminal Procedure, remained ambiguities in litigator’s minds about the jurisdiction
Introduction Civil action under the SEBI Act can be initiated under Section 1973. It also specified that the prosecutor should have been of the Courts. Further uncertainty ensued when the Delhi High
The Securities and Exchange Board of India (SEBI) (‘the 11, 11B and 12 (3). Section 11 contains wide-ranging practicing as an advocate for seven years or should have held Court and the Bombay High Court took divergent views with
Regulator’) was established by statute in 1992 with the measures that can be adopted by SEBI to protect the interests a post under the government for the same period which regards to the effect of the 2002 amendment regarding the
objective of protecting the interests of investors in securities of investors in securities and to promote the development of required special knowledge of law. The amendment, by way of changing the forum of trials vis-à-vis pending cases and those
and to promote the development of and regulate the securities securities market and to regulate it. Section 11B provides SEBI insertion of Section 26D, also made it clear that the provisions where offences were allegedly committed prior to when the
market. As it became evident that the powers vested in the with the power to issue directions whereas under Section of Code of Criminal Procedure, 1973 were to apply to the amendment came to be enforced.
Regulator under Section 12(3) [suspension or cancellation of 12(3), it can suspend or cancel the registration of the proceedings before such Special Court.
licenses of registered entities], Section 11 [Powers and intermediaries. Following from Panther Fincap and Management v SEBI (2006
Functions] and Section 24 [Criminal Action] of the SEBI Act, SCC OnLine Del 1807),the Delhi High Court in Mahender Singh
Special courts under the provisions have been designated
1992 were not sufficient, the legislature promulgated the Cognisance of Offences by Courts v High Court of Delhi & Anr. (2008 SCC OnLine Del 28)held that
under the following notifications:
Securities Laws (Amendment) Act, 1995 to enable SEBI ‘to Section 26 (1) allows a court to take cognisance of an offence a complaint filed after the amendment, even though related to
• 39th Sessions Court, City Civil Court, Greater Mumbai vide
function more effectively’. if SEBI makes a complaint regarding the same. This section an alleged offence of a period prior to the amendment will have
notification no. S.O. 1060 (E) dated April 21, 2015 to be filed in the Court of Sessions. The Court, differentiating
has been amended thrice since its inception. The first
• Court No. 22, City Civil and Sessions Court, Mumbai vide between revision and appeal, observed that there was no loss
The changes the amendment incorporated have come to amendment enhanced SEBI’s independence by doing away
notification no. S.O. 1618 (E) dated June 17, 2015 of a right for the litigant if the matter was tried by the Session
define the regulatory mechanism in the securities market as with the requirement of the sanction of the Central
Government for SEBI to complaint to the court for it to take • 5th Special Court, Calcutta vide notification no. S.O. 1132 Court as revision only entailed the higher court with the power
we know it today. Chapter VIA, which dealt with Penalties and
cognisance. The next amendment, in 2002 changed the forum (E) dated April 28, 2015 read with notification no. S.O. 3050 to interfere but without vesting a corresponding right in the
Adjudication, provided for imposition of “monetary penalties
of trial by making the offences under the Act triable by a forum (E) dated June 22, 2018 litigant to maintain the same. On the other hand, the Bombay
also in addition to or other than penalties of suspension or
cancellation of certificate of registration which may not be not inferior to the Court of Sessions. This was done keeping in • Principal Judge, City Civil Court, Chennai vide notification High Court in Videocon International &Ors. V SEBI & Ors (2008
appropriate in all cases of default”. The legislature thought it line with the general provisions of the Code of Criminal no. S.O. 1784 (E) dated June 01, 2015 read with SCC OnLine Bom 1281)held that cases filed prior to the 2002
wise to couple the increase in SEBI’s powers with an appellate Procedure as the criminal penalties provided under Section 24 notification no. S.O. 3049 (E) dated June 22, 2018 amendment could not be transferred to the Court of Sessions.
mechanism for its orders. Therefore, under Chapter VIB, an were increased. By the latest amendment to the provision • Notification no. 3997 (E) dated August 16, 2018 It even went on to hold that trial of cases filed after the said
appellate structure was established. came by the Securities Laws (Amendment) Act, 2014, Section designated special courts in the following states: amendment but for offences committed before 2002 would
26(2) was completely omitted. have to be heard by the Metropolitan Judge. It reasoned that
Existing Court Jurisdiction as the amendment to Section 26(2) had to be read in consonance
Under the scheme of securities laws, a violation can be dealt Sr. Special Court
with both civil and criminal consequences. Under Chapter VIA, So, the ‘forum’ of trial under Section 26(2) was first changed to with the amendment to Section 24, which enhanced the
1 Court of IV Additional District Judge - cum State of sentence. Therefore, the amendment to the provision was not
SEBI’s orders could now be challenged before the Securities the Court of Session from the Metropolitan Magistrate (or the - II Additional Metropolitan Sessions Andhra
Appellate Tribunal (SAT), and an appeal from SAT was to lie Judicial Magistrate of the First Class) by the 2002 merely procedural.
Judge, VIshakapatnam Pradesh
with the Supreme Court. Section 20A, inserted by the same amendment, then by the insertion of Section 26A and
2 Court of Sessions Judge and 2nd State of The question before the Supreme Court in SEBI v Classic Credit
amendment, stated that orders passed by SEBI or AO omission of Section 26(2) vide the 2014 amendment, it was
Additional Sessions Judge, Gurgaon Haryana (2017 SCC OnLine SC 961), therefore was how the ‘forum’ of
(Adjudicating Officer) could only be appealed before the SAT or changed to the Special Court from the Court of Session.
6 FORUM VIEWS - NOVEMBER 2018 7 FORUM VIEWS - NOVEMBER 2018
BULLS
Bulls&&
BEARS
Bears INSIGHTS - ECO
INSIGHTS - ECONBUZZ
trial was to be impacted by the amendment- whether the committed prior to it, could only be tried by the Special Court.
amendment would have no impact as the amended provisions MOVING TOWARDS A MULTIPOLAR
had no express or implied retrospective effect, as alleged by
the private parties; or pending proceedings would have to be
The Court held that the provisions mandated expressly the
change of forum was to operate retrospectively and therefore,
WORLD: AN OVERVIEW OF ITS
transferred to the changed ‘forum’, i.e. Special Court. even pending proceedings would necessarily have to be FUNDAMENTAL IMPLICATIONS
transferred to the Special Court. Even for matters where trial
In a detailed judgement supplemented with several had commenced under the unamended provision, after the By Professor Piya Mahtaney
judgements, the Court held that with regards to the 2002 amendments, the trail would move to the changed ‘forum’, i.e.
amendment, Section 26 left no room for any doubt that the to the Sessions Court after the 2002 amendment and to the
Economist / Author
erstwhile ‘forum’ would cease to be the adjudicatory authority Special Court after the 2014 amendment.
and the newly created forum, ‘the Court of Session’ was to The new world order has begun to many in academic fora had even GFC of 2008 both signalled that the world
deal with pending matters as well. The language of the The Court accepted SEBI’s contention that alteration of ‘forum’ manifest, the undercurrents of a subtle anticipated that countries that economy in terms of the emerging
provision, “No court inferior to that of a court of session shall was procedural and it being so, the amendment of the ‘forum’ change that began two decades ago has were shacked by poverty and imperatives and resultant challenges had
try any offence punishable under this Act” made it clear that would operate retrospectively, irrespective of whether the now become discernible. One aspect of underdevelopment during the fifties outgrown the earlier system that had
the erstwhile forum (Metropolitan Magistrate/Judicial offence allegedly committed by the accused, was committed this is the ongoing shift in trade policy would transform themselves within 3 come into existence at a time when
Magistrate of First Class) was divested of its jurisdiction. prior to the amendment. Therefore, the Supreme Court has orientation that the world is currently decades. China’s economic success developing countries were not active
done well to remove all doubts regarding the jurisdiction of the witnessing and probably the most overt added another dimension to globalization participants of the global economy.
Similarly, the 2014 amendment, with the insertion of Section Special Courts but only time will tell if these Courts will be unravelling of this is the U.S - China trade because of it sheer size and scale and However as the report says,`` in the
26B replaced the jurisdiction of the Sessions Court with the successful in achieving what they were established for to war that was discussed in the previous with it . According to a report by the unfolding global economic environment,
special court. The argument on behalf of the private parties achieve. article. This one attempts to put into World Bank (2011) over the span 2004- in which a number of dynamic emerging
that cases pertaining to change of ‘forum’ ought to be placed in perspective present occurrences in the 2008 the world’s main growth pole were economies are evolving to take their
two different categories: firstly, where the proceedings had global economy in the larger context of a United States, the Euro Area and China. place at the helm of the global economy,
already been instituted and were pending, at the time of Sumit Agrawal is Founder, RegStreet Law profound shift in geopolitics we are By 2025 the number of growth poles will the management of multipolarity
amendment. Secondly, where proceedings were yet to be Advisors, a boutique law firm based in Mumbai. The finding ourselves in the midst of. To increase to include emerging economies demands a reappraisal of three pillars of
instituted, on the date when the amendment became firm’s focus areas are Capital Markets & describe all the important features of the such as, Brazil, India, Indonesia, and the conventional approach to global
Commodities, General Corporate Commercial,
operational. The Court held that this segregation was to be Financial Regulatory Practice, Compliance & changing geopolitical landscape is South Korea along with developed economic governance-link between
clearly and expressly ruled out by the language adopted in the Investigation, Litigation & Dispute Resolution and beyond the scope of this article but the countries of United Kingdom and Japan.’’ economic power concentration and
provision. The court held that there was no ambiguity that after Policy & Advisory Practice. More details can be seen at www.regsla.com most important aspects will be Furthermore developing countries and stability, the North-South axis of capital
andthey can be reached at info@regsla.com
the 2014 amendment, proceedings in respect of offences described. emerging markets accounted for two flows and the centrality of the U.S. dollar
thirds of the world’s $9 trillion of official in the global monetary system.’’
The world economy finds itself in the foreign exchange reserves in 2018.
midst of a fundamental transition to a Denominated in quantitative terms even The world economy
multipolar world by which is meant an as we have witnessed an increasing
increasing importance of developing significance of the developing nations in
finds itself in the midst
countries in terms of its contribution to the global economy the policy related of a fundamental
global trade, GDP and finance. The and strategic implications of this have transition to a
undercurrents of this transition began started unravelling (in a manner that is multipolar world by
over quarter century ago during which discernible) over the last few years.
period 4 important events heralded the Given that the framework ensconcing
which is meant an
arrival of a new world order one where the international financial architecture increasing importance
American predominance in the global was one that was put into place post of developing
economy would find itself confronted by second world war the ability and scope countries in terms of
an increasingly multipolar world. The of its institutional apparatus to address
events are the South East Asian issues that would inevitably arise with an
its contribution to
Economic Crisis of 1997, the U.S increasing degree of multipolarity was global trade, GDP
occupation of Iraq, the Great Financial conspicuously lacking. As the report and finance.
Crash of 2008 and the rapid and says,” In the post-war era, the global
remarkable ascent of China. The crises economic order was built on a Understanding the underpinnings of a
that have occurred over the period complementary set of tacit economic transition to a multipolar world is key to
signalled that the prevalent international and security arrangements between the managing the present risks and possible
financial architecture lagged behind the United States and its core partners, with bouts of volatility. Grasping the
fundamental changes in global economy developing countries playing a peripheral confluence of diverse factors that
one reason of this the inadequate role in formulating their macroeconomic influence a multi polar global economy is
representation of developing countries in policies and establishing economic links clearly not as straightforward as those
international financial institutions, China with an eye toward benefiting from the which steered the course of an economic
and prior to that East Asia’s stupendous growth dynamism in developed order that was predominated by the U.S.
growth a milestone in the annals of countries.’’ Be it the South East crisis However it is erroneous to assume that
development experience because not that occurred during the nineties or the the previous status quo continues to
8 FORUM VIEWS - NOVEMBER 2018 9 FORUM VIEWS - NOVEMBER 2018INSIGHTSINSIGHTS
- ECONBUZZ
- ECONBUZZ INSIGHT
INSIGHTS
prevail or that the adjustments to a new countries which are fairly protectionist. Conclusion
order would happen seamlessly is
erroneous. Equally important as the
Theoretically liberalisation should have
been more reflective of economic
By no means is the changing dynamics
of global growth a recent phenomenon,
GETTING TO KNOW THE
economic realignment that is occurring diversity and the challenges and until the sixteenth century China and S&P BSE 500
globally is the impending reappraisal of constraints of less developed and India accounted for a major part of global
the present security arrangement that developing nations. This was not the GDP. Countries of Europe became an By Mahavir Kaswa
the world’s advanced countries have important driver of economic growth
case and the practice of liberalization Associate Director - Product Management
with and in collaboration with the U.S . was rooted in the one size fits all thereafter until the first half of the
For one the present relevance of NATO approach which runs counter to the twentieth century after which not we see
S&P BSE Indices
which was the security umbrella that inherent principle of liberalism. the resurging resonance of China and the
O
America provided Europe has become a ver the past three to four decades, the Indian equity market Kotak Mahindra 2.27 Telecommunication 1.40
Changing drivers of global economic resonant emergence of India which over
matter of debate after the end of the cold has witnessed significant growth, on account of increasing Bank Ltd Services
growth would inevitably usher in its the next few years along with other
foreign capital flows and participation by domestic Maruti Suzuki India Ltd 1.86 Utilities 3.27
war. Secondly new threats to global wake adjustments in institutions, politics emerging market economies will institutional investors. The expanding depth and breadth has brought Total 36.11 Total 100
security are rearing their head, terrorism and society both within countries and in account for an increasing share of global a stronger demand from market participants for suitable Source: Asia Index Private Limited. Data of as April 30, 2018. Table is provided for illustrative
and its ramifications being a fundamental the context of international affairs. It is consumption, exports and investment. benchmarks. The S&P BSE SENSEX launched in 1986 and was the purposes.
one. Thirdly this profound shift in because these adjustments have lagged Interestingly India and China will as the first and most popular Indian benchmark, followed by the S&P BSE
geopolitics brings with new players that behind the process of economic report says be, “the main flag bearers 100 and S&P BSE 200 in 1989 and 1994, respectively. In 1999, the The S&P BSE 500 is designed to be a
want to have a greater and more transformation that the present situation among the emerging market growth S&P BSE 500 was launched in response to market demand for broad representation of the Indian
strategic role in the new security seems a tricky and somewhat poles in the years ahead. ‘’ broader benchmarks that offer more complete coverage of the Indian equity market, consisting of the 500
alliances. Evidently both China and disconcerting one. Secondly during the equity market. leading companies in terms of total
Russia are contenders for a much more ensuing era in so far as the present tariff market capitalization that are members
decisive role in this context, that said The S&P BSE 500 is designed to be a broad representation of the
war is concerned suffice to say that it Piya Mahtaney completed her second Master’s in Indian equity market, consisting of the 500 leading companies in of the S&P BSE AllCap.
there are other countries which though
would also be damaging for U.S Development Economics from Leicester University terms of total market capitalization that are members of the S&P BSE
not so overtly will also have a significant in England she embarked on a career in journalism Similarly, the S&P BSE 500 offers exposure to all size segments.
interests, by what extent remains to AllCap. The differential voting rights shares class is eligible to be part
role to play in this new phase of global with the Times of India. She was an assistant editor Large-cap stocks accounted for 79% of the total index weight, mid
seen. However at a time when the U.S in Metropolis on Saturday, subsequent to which she of the index, which means that at any point in time, the index will caps 13%, and small caps 8% as of April 30, 2018 (see Exhibit 2).
security simply because of their joined as senior feature writer in Economic Times.
economic recovery is gaining traction, include a fixed number of 500 companies, but the number of stocks in
increasing importance in the global As an economist that reported, analyzed and wrote the index could be greater than or equal to 500.The index Exhibit 2: Size Coverage of the S&P BSE 500
the unfavourable impact of a changing on a wide range of socio-economic issues, writing a
economy. constituents and sectors are weighted in proportion to their float SIZE INDEX WEIGHT (%)
trade policy does not augur well for book about economic development and the
emerging trends of globalisation seemed almost market capitalization. The index is reviewed semiannually in June Large Cap 78.62
In so far as trade policy is concerned politics, certainly not populist politics. On Mid Cap 13.33
inevitable and December.
there are three basic facts that we need the upside though given the changing Small Cap 8.05
The books that she has authored are as follows:
to keep in mind before arriving at any drivers of globalization and this feature In a recently published paper titled “Measuring Indian Equities: The
Source: Asia Index Private Limited. Data of as April 30, 2018. Table is provided for illustrative
• India China and Globalization (2nd ed), Palgrave purposes.
inferences. Firstly as the protectionist could catalyze the beginning of new Macmillan (England), December 2014 S&P BSE 500,” we saw that as of April 30, 2018, the S&P BSE 500
rhetoric gets louder it is important to trading alliances between other • Globalization and Sustainable Economic represented approximately 88% of all BSE - listed companies, with a With coverage of more than 88% of India’s listed equity universe and
Development, Palgrave Macmillan (U.S), August diversified exposure to all sizes and all key economic sectors of India’s
recall that even before it what existed advanced and developing countries and 1st 2013 total market capitalization of INR 1,35,14,943 crores (approximately
was not exactly free trade. For instance between other developing countries. • Institute of South East Asian Studies (Singapore) USD 2 trillion). economy, the S&P BSE 500 seeks to provide comprehensive
Thirdly the shared challenges of published an edition (August 2010) of my book coverage of the Indian equity market.
the WTO negotiations were a repeated
India China and Globalisation. The S&P BSE 500 is diversified across sectors, and no individual
reminder of how terms of trade was sustainable development make it • The first edition of India China and Globalisation DISCLAIMER: The S&P BSE Indices (the “Indices”) are published by Asia Index Private
imperative regardless of ideological bent sector had an excessive overweight in the index in the period Limited (“AIPL”), which is a joint venture among affiliates of S&P Dow Jones Indices LLC
weighted against the interest of the was published by Palgrave Macmillan (England,
2007) studied. As shown in Exhibit 1, the financials sector had the highest (“S&P DJI”) and BSE Limited (“BSE”). Standard & Poor’s® and S&P® are registered
poorer nations. Moreover economic and internal politics prevalent in any trademarks of Standard & Poor’s Financial Services LLC and Dow Jones® is a registered
• Globalisation Con Game or Reality was published weight in the index, with 30%, followed by consumer discretionary at
experience in so far as the impact of country to formulate a framework of co- by Alchemy Publishers, India (2004) 2004. 12.5%. The services sectors, which include financials, information
trademark of Dow Jones Trademark Holdings LLC. BSE® and SENSEX® are registered
trademarks of BSE. These trademarks have been licensed to AIPL.
trade and financial liberalization as operation and collaboration. A beginning • The first book titled Economic Con Game,
technology, and telecommunications services, contributed nearly
Development fact or Fiction was published by
practiced demonstrates that the biggest in this direction was made by the Climate Pelanduk Publications (Malaysia) in 2002. 41% to the total index weight. Also, the combined weight of Past performance of an Index is no guarantee of future results. AIPL, S&P DJI and BSE
(the “AIPL Companies”) make no representation or warranty that investment products
beneficiaries of liberalization are Change agreement constituents that have individual derivative contracts was 87%, based on any Index will accurately track index performance or provide positive
which facilitates risk management of the index. investment returns. The AIPL Companies do not make investment recommendations and
do not sponsor, endorse, sell, promote or manage any investment fund or other
Exhibit 1: Top 10 Stocks and GICS Sector Coverage investment vehicle that seeks to provide an investment return based on the performance
TOP 10 STOCKS GICS SECTORS of any Index. Performance returns for an Index do not reflect payment of charges or fees
INDEX INDEX an investor may pay for investable instruments. AIPL Companies receive compensation
COMPANY NAME SECTOR NAME in connection with licensing Indices to third parties. AIPL Companies. For more
WEIGHT (%) WEIGHT (%)
information on any of Indices please visit http://www.asiaindex.co.in/.
HDFC Bank Ltd 6.28 Consumer 12.54
Housing Development 4.95 Discretionary Mahavir Kaswa is Associate Director, Product Management for equity and strategy
Finance Corp Consumer Staples 9.50 indices in India and its neighboring countries at Asia Index Pvt. Ltd-a joint venture
between S&P Dow Jones Indices and BSE Limited. His objective is to expand the
Reliance Industries Ltd 4.94 Energy 8.26
business in the region through identifying local market trends and ensuring new
ITC Ltd 3.81 Financials 29.96 products and services are aligned to the needs of the local market.
Infosys Ltd 3.62 Health Care 5.00 He has more than 10 years of experience in the capital market industry. Prior to joining
ICICI Bank Ltd 2.90 Industrials 9.04 Asia Index, He worked at BSE Limited where he got an opportunity to work on a variety
Tata Consultancy 2.79 Information Technology 10.06 of indices, including thematic, strategy, and volatility.
Services Ltd Materials 10.33 He has a Master’s of Commerce from Pune University, and is a Chartered Financial
Analyst, USA.
Larsen & Toubro Ltd 2.71 Real Estate 0.65
10 FORUM VIEWS - NOVEMBER 2018 11 FORUM VIEWS - NOVEMBER 2018TECH-SPEAK
TECH-SPEAK TECH-SPEAK
TECH-SPEAK
resources at their disposal to • What is the vendor’s stability? Seek In truth, both standards and
STANDARDIZING SOFTWARE implement the changes and train staff. out companies that have longevity standardization aim for the same goal,
PRODUCT This results in smaller companies
bringing in outside consultants to help
and customer satisfaction in the
imaging and document
which is to enable a consistent base for
reuse. The comparative merits of the
make the changeover. These smaller manipulation market and can two approaches, however, should be
companies will bear more of a financial ensure continued product considered within the context of why
By Jayesh Shah burden than larger ones in this area. development and support. companies and consumers frequently
Promoter, Prism Cybersoft Private Limited • What is their support policy? Does choose to standardize on one
Employee Concerns: Standardization the vendor have a support team i m p l e m e n t a t i o n . Fr a n k l y,
The idea of a single standardized • Comprehensive maintenance Despite numerous advantages of puts a lot of emphasis on the sameness that is committed to your success standardization is often the only option
software product is not typically the program - When you buy a standardization, it has also got its and repetition; this shows that the and available to answer your given the limits of a universal
way companies purchase and deploy maintenance package tied to an disadvantages with equal measures. employees are expected to do the questions? technology standard.
licenses from a software vendor. enterprise license the updates and same repetitively that may end up • Is the vendor able to work with you
Organizational departments make this upgrades cover the product Uniqueness Lost : This is because if an being tiresome and boring to the to meet your specific product Prism Software Pvt Ltd provides a
nearly impossible because Division A regardless of how many groups are organization builds its customer base workers themselves. Put in other requirements? comprehensive backoffice solutions
utilizing it. This not only saves on customers that value its unique words, standardization would deny the • Does the vendor work with partners for Equity, Currency and Commodities
may not know what Division B is using
money but also value time for the products; standardization of its employees a chance to learn new that are established and reputable? markets and help you identify
for their applications. As a result
developers upgrading the products would mean that the skills. additional cost savings for your
companies end up buying multiple • Does the vendor offer a solution
software offerings that provide the applications. They only need to business would lose some of its former that can meet the multiple needs organizations.
know one product. customer base. To paraphrase, standards are good
same functionality. And the bottom line across your organization so you can
• Reliable and responsive support - because multiple products do things in
result is that the company pays several benefit from an enterprise licensing
You form a relationship with the Not Globally Accepted: The method of the same general way, thus making
times for product, maintenance, and model?
support team who understands calculation, viewing financial software them replaceable for one another and
license fees. • Does the vendor offer enterprise
your requirements across the products differ globally and company thus more direct competitors.
to company. This makes difficult to do Standardization, however, is bad, licensing discounts?
Standardization also brings innovation, organization and can better respond
to your needs. business as various financial because it favors one vendor or Jayesh Shah holds B.S. and M.S. in Computer
first because it provides structured statements and reports may have to be configuration to the exclusion of Today every organization is looking at Engineering from University of Bridgeport, USA. He
methods and reliable data that save • Enterprise licensing -Save money
regenerated. The business would lose others, locking consumers into that how they can save money while has more than 25 years of experience in field of IT.
by taking advantage of high -
time in the innovation process and, its responsiveness. This is due to the vendor and limiting competition. increasing their efficiency and He promoted Prism in 1996 and as its MD and CEO
volume discounts. Leverage one provides Vision, Direction and also takes care of
second, because it makes it easier to fact that when an organization expands productivity. Now is the time to re- Strategic Affairs, Marketing and Commercials.
product for multiple purposes
disseminate groundbreaking ideas and to new markets mostly in foreign Here are a few guidelines to evaluate your current technology Prism has recently been awarded by STPI & CeBIT
across departments. The more
knowledge about leading edge markets, standardization may turn consider when you evaluate providers and identify the redundant INDIA for Best IT Exhibitor of ‘Make in India’ Pavilion
licenses that are used throughout at CeBIT India 2014.
techniques. against the firm. vendors: solutions that you can standardize.
the company the greater the price
discount.
Standardizing on one vendor for Standards Manipulation: There is a
specific software provides downside to the flexibility that
organizations with several advantages:
Standardization also particular standardized product allows
brings innovation, companies can utilize only the methods
• Organizational knowledge base first because it they wish to, allowing the financial
product to show only desired results.
and skill set - Multiple projects can provides structured This can lead to revenue or profit
be easily and more quickly
implemented by using a common
methods and reliable manipulation, can be used to hide
code base. data that save time financial problems in the company and
can even encourage fraud. For
• Transferable development or in the innovation example, changing the method of
integration code - You can process and, inventory valuation can bring more
maximize ROI with one vendor’s
tools or applications by taking second, because it income into the current year's profit
and loss statement, making the
advantage of the code for multiple makes it easier to company appear more profitable than it
projects. disseminate really is.
• In-house “think tank” - Having
multiple developers familiar with
groundbreaking Increased Costs: A small company
one code base enables faster ideas and knowledge would be impacted by a adoption of
implementation and promotes about leading edge standard product in the same way a
collaboration on new project larger one would. However, small
requirements.
techniques. businesses do not have as many
12 FORUM VIEWS - NOVEMBER 2018 13 FORUM VIEWS - NOVEMBER 2018GLOBALGLOBAL
INSIGHTS
INSIGHTS GLOBALGLOBAL
INSIGHTS
INSIGHTS
CREDIT RISK TRENDS FOR ASIA
ASIA-PACIFIC MARKETS The Credit Landscape Using Probability of Default (PD) Fundamentals in Asia
aaa to a- bbb+ to bbb- bb+ to bb- b+ to b- ccc+ and below
MONTHLY HIGHLIGHTS Sector Australia China Hong Kong India Indonesia Japan Malaysia New Zealand Philippines Singapore South Korea Taiwan Thailand Asia Average
AND INSIGHTS
Consumer Discretionary bb+ bb+ bbb- bb- bb bbb+ bb bb+ b+ a- bbb- bb bb- bb
Consumer Staples bb bb- bbb bbb- bb bbb bbb- bbb- bbb bbb- bbb- bb+ bbb-
Energy bbb bbb bbb+ bbb- bbb- bbb- bb bb bb- bb bbb a bb+ bb+
Financials bbb- bb+ bbb- bbb- bbb- bb+ bbb bbb- bbb- bb+ bb+ bb+ bb+ bb+
Healthcare bb bbb- bbb bb bb bbb- bb bb bb+ bb bb- bb+ bb+
Industrials bbb- bbb- bbb bb- bb bbb bb bb+ bbb- bbb- bb+ bb- b+ bb
Information Technology bbb- bb bb+ bbb bbb- bbb- b+ bb bbb bb+ b bb
Materials bb+ bb+ bb bb bb bbb bbb bb bb bbb- bbb- bb+ bbb- bb
Telecommunication Services bbb- bb+ a- b+ bb+ a- bb bbb- bb- bb bbb b+ bb bbb+
Utilities bbb+ bb+ bbb+ bb bbb bbb bbb bb+ bb+ bb bbb+ bb+ bb bb+
Country Average bbb- bb+ bbb bb bb bbb bb+ bb+ bb+ bb+ bbb- bb+ bb bb+
We are seeing some changes in credit quality from year-on-year comparisons:
• Australia country average (bbb- to bb+); with deterioration in Utilities (-1 notch); Materials (-2 notches) and Information Technology (-1
notch)
• China Consumer Discretionary, Energy, Healthcare, Materials and Utilities all fell by -1 notch
• New Zealand country average (-1 notch); mainly due to changes in Energy (-1 notch)
• Singapore industrials (-2 notches)
• Consumer Discretionary, Energy, Financials, Telecommunications, and Utilities; with 3-5 countries indicating more than one notch
deteriorations
Key findings: Source: S&P Global Market Intelligence fundamental-based PD model, PD Model Fundamentals™. Lowercase nomenclature is used to differentiate S&P Global Market
Intelligence’s PD Model Fundamental™ scores from the credit ratings issued by S&P Global Ratings. Credit ratings are prepared by S&P Global Ratings services, which is
Ÿ Credit Risk Trends For Asia analytically and editorially independent from any other analytical group at S&P Global. Data as of September 2018. Charts and graphs are for illustrative purposes only
Ÿ M&A Activity By Country, Sector
Ÿ Initial Public Offerings
Ÿ Private Equity Investments And Buyouts CREDIT RISK TRENDS FOR ASIA
Ÿ Venture Capital Investments Market Signal Probability of Default Trends in Developed Asia
Ÿ Global Covered Bond Insights Q3 2018 3.50%
Ÿ Credit Ratings Actions Australia
3.00%
Ÿ Market Attributes: Index Dashboard Hong Kong
2.50%
Disclaimer: Copyright © 2018 by S&P Global Market Intelligence, a division of S&P Global Inc. All rights reserved. Japan
2.00%
These materials have been prepared solely for information purposes based upon information generally available to the public and from sources believed to be South Korea
1.50%
reliable. No content (including index data, ratings, credit-related analyses and data, research, model, software or other application or output therefrom) or any part
New Zealand
thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without 1.00%
the prior written permission of S&P Global Market Intelligence or its affiliates (collectively, S&P Global). The Content shall not be used for any unlawful or Singapore
unauthorized purposes. S&P Global and any third-party providers, (collectively S&P Global Parties) do not guarantee the accuracy, completeness, timeliness or 0.50%
availability of the Content. S&P Global Parties are not responsible for any errors or omissions, regardless of the cause, for the results obtained from the use of the Asia Median
0.00%
Content. THE CONTENT IS PROVIDED ON “AS IS” BASIS. S&P GLOBAL PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT 7 7 8 8 8
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v-1 c-1 -18 -18 r-1 r-1
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y-1 -18 -18 g-1 -18
NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS Sep Oc No De Jan Feb Ma Ap Ma Jun Jul Au Sep
OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE
CONFIGURATION. In no event shall S&P Global Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or Source: S&P Global Market Intelligence equity volatility-based PD Model Market Signals™ benchmarks as of August 2018. Charts and graphs are for illustrative purposes only
consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by
negligence) in connection with any use of the Content even if advised of the possibility of such damages. Market Signal Probability of Default Trends in Developing Asia
6.00%
S&P Global Market Intelligence’s opinions, quotes and credit-related and other analyses are statements of opinion as of the date they are expressed and not China
statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any
security. S&P Global Market Intelligence assumes no obligation to update the Content following publication in any form or format. The Content should not be relied 5.00% India
on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and
other business decisions. S&P Global Market Intelligence does not act as a fiduciary or an investment advisor except where registered as such. S&P Global keeps Indonesia
4.00%
certain activities of its divisions separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain Malaysia
divisions of S&P Global may have information that is not available to other S&P Global divisions. S&P Global has established policies and procedures to maintain
3.00% Philippines
the confidentiality of certain non-public information received in connection with each analytical process.
S&P Global Ratings does not contribute to or participate in the creation of credit scores generated by S&P Global Market Intelligence. Lowercase nomenclature is 2.00% Taiwan
used to differentiate S&P Global Market Intelligence PD credit model scores from the credit ratings issued by S&P Global Ratings. Thailand
S&P Global may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P Global 1.00% Vietnam
reserves the right to disseminate its opinions and analyses. S&P Global's public ratings and analyses are made available on its Web sites,
www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through 0.00% Asia Median
other means, including via S&P Global publications and third-party redistributors. Additional information about our ratings fees is available at
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y -18 -18 -18 -18 -18
www.standardandpoors.com/usratingsfees. Sep Oc No
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g
Sep
Source: S&P Global Market Intelligence equity volatility-based PD Model Market Signals™ benchmarks as of September 2018. Charts and graphs are for illustrative purposes only
Contact Information: If you have any questions relating to the content featured in the publication, please contact MI-APAC-Marketing@spglobal.com
14 FORUM VIEWS - NOVEMBER 2018 15 FORUM VIEWS - NOVEMBER 2018GLOBALGLOBAL
INSIGHTS
INSIGHTS GLOBALGLOBAL
INSIGHTS
INSIGHTS
M&A ACTIVITY IN ASIA PACIFIC: SELECTED COUNTRIES INITIAL PUBLIC OFFERINGS BY COUNTRY
In September 2018, China and Japan have the most active markets with largest monthly deal values amounting to US$ 23.9 Bn and US$ 15.6 Bn In September 2018, China, Japan and India topped the region’s IPO count. Likewise, China, Japan and South Korea raised the highest dollar value proceeds. In
respectively. In terms of YOY change, Vietnam has seen a significant 340% increase in M&A deal count with a remarkable 95% growth in deal value. terms of YOY change, although China has seen a 49% decline in IPO count, it was still able to show a 101% increase in IPO value. Indonesia has seen the highest
Although Indonesia has seen a 10% decline in deal count, its deal value growth has seen a significant 471% increase. growth in IPO deal count and value.
No. of Deals and Value by Country (September’18) No. of IPOs and Value by Country (September’18)
Country No. of Deals Value of Deals ($USDmm)
Country No. of Deals Value of Deals ($USDmm)
China 20 8,060.20
China 308 23,905.80 Japan 12 938.5
Australia 121 15,556.50 India 11 94.6
Japan 116 5,002.80 South Korea 9 351.7
India 104 2,215.70 Australia 7 85
South Korea 45 2,609.30 Hong Kong 7 91.5
Vietnam 30 114.3 Vietnam 5 6.6
Malaysia 26 1,134.20 Indonesia 3 24.1
Hong Kong 25 2,391.30 Key Threshold (No. of Deals) Key Threshold (No. of IPOs)
Singapore 2 17.5
Singapore 21 747.3 0 - 15
Thailand 2 8 0
Thailand 19 455.4 >15 - 62 Malaysia 1 1.5 >0 - 4
Indonesia 17 2,398.00 >62 - 123 New Zealand 0 0 >4 - 8
New Zealand 15 473 Philippines 0 0
Philippines 8 195.3 >123 - 185 >8 - 12
>185 - 246 Taiwan 0 0
Taiwan 5 63.4 >12 - 16
>246 - 308 No. of IPOs and Value YTD Activity (18’ vs. 17’) >16 - 20
No. of Deals and Value YTD Activity (18’ vs. 17’) No. of deals Value of IPOs ($USDmm)
No. of deals Value of Deals ($USDmm) 18 YTD 17 YTD YoY Growth 18 YTD 17 YTD YoY Growth
18 YTD 17 YTD YoY Growth 18 YTD 17 YTD YoY Growth Jan 1, 2018 - Jan 1, 2017 - YoY Comparison Jan 1, 2018 - Jan 1, 2017 - YoY Comparison
Jan 1, 2018 - Jan 1, 2017 - YoY Comparison Jan 1, 2018 - Jan 1, 2017 - YoY Comparison Sep 30, 2018 Sep 30, 2017 Through Sep 30, 2018 Sep 30, 2017 Through
Sep 30, 2018 Sep 30, 2017 Through Sep 30, 2018 Sep 30, 2017 Through Sep 30, 2018 Sep 30, 2018
Sep 30, 2018 Sep 30, 2018 China 158 310 -49% 48,725 24,201 101%
China 3,015 2,591 16% 202,070 189,831 6% Japan 64 46 39% 4,361 2,062 111%
Australia 1,182 835 42% 81,357 38,323 112% India 136 78 74% 3,759 2,089 80%
Japan 1,242 871 43% 48,422 28,292 71% South Korea 45 40 13% 1,593 5,288 -70%
India 1,066 740 44% 53,845 23,975 125% Australia 58 49 18% 1,068 1,053 1%
South Korea 746 680 10% 33,930 27,080 25% Hong Kong 82 55 49% 1,580 1,381 14%
Vietnam 383 87 340% 2,937 12,656 95% Vietnam 33 30 10% 1,949 56 3406%
Malaysia 312 287 9% 4,640 35,974 -63% Indonesia 37 18 106% 996 274 263%
Hong Kong 341 318 7% 28,790 38,399 -20% Singapore 24 15 60% 695 2,032 -66%
Singapore 276 244 13% 11,900 1,504 -69% Thailand 11 13 -15% 430 1,339 -68%
Thailand 213 186 15% 20,663 7,457 177% Malaysia 20 17 18% 208 1,776 -88%
Source: S&P Global Market Intelligence as of October 1, 2018. Figures
Indonesia 128 143 -10% 10,092 901 471% New Zealand 1 1 0% 11 137 -92% Source: S&P Global Market Intelligence as of October 1, 2018. Figures
are based on M&A announcement dates. Includes both closed and
New Zealand 192 129 49% 4,354 1,769 383% Philippines 1 3 -67% 152 342 -55% are based on public offerings offer date. Includes all closed transactions.
pending transactions as well as those without transaction values. Charts
Philippines 83 58 43% 102,421 1,800 5591% Taiwan 1 3 -67% 13 349 -96% Tables are provided for illustrative purposes.
are provided for illustrative purposes. Total
Taiwan 89 69 29% 6,435 3,181 102% 671 678 -1% 65,542 42,379 55%
Total 9,268 7,238 28% 611,855 411,142 49%
PRIVATE EQUITY INVESTMENTS & BUYOUTS: SELECTED COUNTRIES
M&A ACTIVITY IN ASIA PACIFIC: SELECTED SECTORS In September 2018, China has the highest number of PE deal count. Japan generated the highest PE deal value amounting US$ 7.5 Bn, followed by China’s US$
YTD September 2018, YOY change, Healthcare topped the industries with 140% deal value growth, together with an 18% increase in deal count. Industrials 2.9 Bn.
came with the second highest deal value growth showing a 74% increase, however its overall M&A activity has declined by 1%. No. of Deals and Value by Country (September’18)
Country No. of Deals Value of Deals ($USDmm)
No. of Deals YTD Activity (18’ vs. 17’) Value of Deals (USDmm) YTD Activity (18’ vs. 17’) China 54 2,927.80
No. of deals No. of deals India 29 2,769.50
Japan 22 7,505.70
'18 YTD '17YTD YoY Growth '18 YTD '17 YTD YoY Growth South Korea 20 345.7
Australia 8 82.1
Sector Jan 1, 2018 - Jan 1, 2017 - YoY Comparison Sector Jan 1, 2018 - Jan 1, 2017 - YoY Comparison New Zealand 4 3.2
Sep 30, 2018 Sep 30, 2018 Through Sep 30, 2018 Sep 30, 2018 Through Hong Kong 1 0
Indonesia 1 24
Sep 30, 2018 Sep 30, 2018 Malaysia 1 3.6
Key Threshold (No. of Deals)
0
Industrials 1467 1475 -1% Industrials 158,105 91,121 74% Singapore 1 2.9
>1 - 11
Taiwan 1 0
Discretionary 1170 1201 -3% Real Estate 85,132 131,767 -35% Vietnam 1 33 >11 - 22
Philippines 0 0 >22 - 32
IT 1075 1090 -1% Materials 51,035 45,313 13% Thailand 0 0 >32 - 43
Real Estate 849 959 -11% Discretionary 48,095 52,683 -9% No. of Deals and Value YTD Activity (18’ vs. 17’) >43 - 54
Materials 721 702 3% Utilities 39,084 23,483 66% No. of deals Value of Deals ($USDmm)
18 YTD 17 YTD YoY Growth 18 YTD 17 YTD YoY Growth
Healthcare 601 508 18% IT 33,970 44,494 -24% Jan 1, 2018 - Jan 1, 2017 - YoY Comparison Jan 1, 2018 - Jan 1, 2017 - YoY Comparison
Sep 30, 2018 Sep 30, 2017 Through Sep 30, 2018 Sep 30, 2017 Through
Financials 514 599 -14% Teleco. Services 31,629 33,040 -4% Sep 30, 2018 Sep 30, 2018
China 665 242 175% 56,825 19,151 197%
Teleco. Services 512 484 6% Energy 30,582 21,145 45% India 219 128 71% 8,136 3,303 146%
Staples 484 459 5% Healthcare 27,217 11,351 140% Japan 219 149 47% 9,171 2,677 243%
South Korea 155 103 50% 7,921 6,226 27%
Utilities 289 249 16% Financials 26,032 30,387 -14% Australia 74 50 48% 12,065 12,909 -7%
Energy Staples New Zealand 10 8 25% 191 1,356 -86%
176 136 29% 22,297 18,817 18%
Hong Kong 11 15 -27% 2,011 12,558 -84%
NSD 1410 1296 9% NSD 58,677 46,916 25% Indonesia 4 5 -20% 67 1 4483%
Malaysia 6 8 -25% 184 18 947%
Total 9268 9158 1% Total 611,855 550,516 11% Singapore 30 25 20% 2,531 22,174 -89%
Taiwan 7 2 250% 2,285 55 4059% Source: S&P Global Market Intelligence as of October 1, 2018. Figures
Source: S&P Global Market Intelligence as of October 1, 2018. Figures are based on M&A announcement dates. Includes closed and Vietnam 19 13 46% 958 314 205% are based on M&A announcement dates. Includes both closed and
pending transactions as well as those without transaction values. NSD - No Sector Disclosed. Tables are provided for illustrative Philippines 1 2 -50% 28 380 -93% pending transactions as well as those without transaction values. Tables
purposes. Data sorted by no. of deals and by transaction value from highest (darkest green) to lowest (lightest green). Thailand 2 2 0% 54 1 4721% are provided for illustrative purposes.
Total 1,422 752 89% 102,427 81,124 26%
16 FORUM VIEWS - NOVEMBER 2018 17 FORUM VIEWS - NOVEMBER 2018You can also read
