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Samsung, Hyundai Motor lead R&D spending despite lower earnings

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Seoul, June 23 (IANS) Research and development (R&D) expenditures by major South Korean companies hit an all-time high last year despite their falling sales amid an economic slowdown, data showed on Sunday.

The country’s top 1,000 companies made investments of 72.5 trillion won ($52.12 billion) combined in 2023, up 8.7 per cent from a year earlier, according to the data from the Ministry of Trade, Industry and Energy and the Korea Institute for Advancement of Technology.

It was the largest ever amount, it showed, reports Yonhap news agency.

The increase came despite their sales falling 2.8 per cent on-year to 1,642 trillion won, and the proportion of corporate R&D investment out of sales rose 4.4 per cent in 2023 from the previous year’s 3.9 per cent.

Tech giant Samsung invested the largest amount in R&D last year with 23.9 trillion won, which was up 14.4 per cent on-year and accounted for 32.9 per cent of the total investment by South Korean companies.

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Leading carmaker Hyundai Motor came next with 3.7 trillion won, which marked 15.6 per cent on-year growth. R&D spending by chip behemoth SK hynix fell 10 per cent year-on-year to 3.6 trillion won.

Home appliances giant LG Electronics increased its R&D expenditure by 10 per cent to 3.3 trillion won, and Samsung Display Co. spent 2.8 trillion won on R&D last year, up 12 per cent on-year.

Kia Corp. was the fifth-largest R&D investor last year with 2.2 trillion won, the data showed.

Of the 1,000 companies, 171 were large conglomerates and 491 were second-tier mid-sized companies. The remaining 338 firms were mid- and small-sized companies.

“The number of mid-sized companies that were among the top 1,000 major R&D investing companies has risen over the past years. The government will extend support for companies to increase investment for innovation,” a ministry official said.

–IANS

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India’s defence exports record over 30-fold quantum leap in last 10 years

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New Delhi, July 14 (IANS) India’s defence exports have recorded a 30-fold quantum leap over the last 10 years from a mere Rs 686 crore in the financial year 2013-14 to a record Rs 21,083 crore in FY 2023-24, reflecting the global acceptability of Indian defence products and technologies.

With exports reaching more than 85 countries across Southeast Asia, the Middle East, Africa and Latin America, India’s defence industry has shown its capability of design and development to the world, with around 100 firms exporting defence products at present, a senior official said.

To give a push to defence exports, the Government has taken a number of policy initiatives like ‘Make in India’ and rolled out economic reforms over the last 10 years. Export procedures have been simplified and made industry-friendly with end-to-end online export authorisation curtailing delays and bringing Ease of Doing Business, he added.

Further, the Atmanirbhar Bharat initiatives have helped the country by encouraging indigenous design, development and manufacture of defence equipment in the country, thereby reducing dependence on imports in the long run.

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A significant development has been the emergence of the private sector as a supplier of defence equipment with companies such as Larsen & Toubro, Tata Advanced Systems, and Bharat Forge emerging as major players.

Of the total value of production in 2023-24, about 79.2 per cent has been contributed by DPSUs/other PSUs and 20.8 per cent by the private sector. The official data shows that in terms of absolute value, both DPSUs/PSUs and the private sector have recorded steady growth in defence production.

India’s export basket of defence products includes missiles, radars, naval systems, helicopters, and surveillance equipment.

India has made substantial progress in the indigenous production of advanced naval systems that also cater to the export market. Advanced platforms like the INS Vikrant aircraft carrier highlight the achievement in this segment. Fast-attack naval craft, offshore patrol vessels, and various maritime weapon systems are other products that are being exported. The export of BrahMos supersonic cruise missiles, developed jointly with Russia, has been another major achievement, with countries like the Philippines purchasing the system recently.

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–IANS

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Market outlook: Q1 results, FII inflow, monsoon updates key factors next week

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Mumbai, July 14 (IANS) The Indian equity market experienced one of the best weeks of 2024, with the Nifty and Sensex reaching all-time highs of 24,592.20 and 80,893.51, respectively, before closing at 24,502.15 and 80,519.34.

This marked gains of 0.73 per cent for the Nifty and 0.65 per cent for the Sensex. Both benchmark indices extended their winning streak for a sixth consecutive week.

It is the first time ever that the nifty closed above 24,500.

On the other side, small-cap and mid-cap stocks underperformed compared to large-cap. However, several PSU stocks posted staller gains during last week.

The outlook of the market will be guided by several domestic and international factors next week.

On the domestic front, upcoming budget-related announcements, Q1 Fy25 results, monsoon updates and foreign institutional investments (FIIs) inflows will catch investors’ eyes in the week ahead.

On the global front, China will be a significant focus. The country is scheduled to announce its GDP and Index of Industrial Production (IIP). Additionally, there is speculation about a major economic stimulus announcement, which could keep the metal sector in the spotlight.

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Other global factors to watch include the speech by the US Federal Reserve Chairman, US retail sales figures, and macroeconomic data from Japan. These developments are likely to influence market movements and investor sentiment.

Vinod Nair, Head of Research of Geojit Financial Services said: “We expect stock-specific moves to gain traction due to the ongoing earnings season; indeed, IT will be in the limelight due to the good start to the earnings and outlook.”

Arvinder Singh Nanda, Senior Vice President of Master Capital Services, said that on the daily chart analysis, Nifty has exhibited a breakout from the psychological resistance level of 24,500, indicating that the bullish trend is likely to continue into the next week.

“Despite this positive trend, buying on dips is expected to provide resilience to the market. However, strong upward movements may attract profit booking, making a sustained rally challenging,” Nanda added.

–IANS

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Indian realty sector saw over Rs 5,327 cr investment from domestic investors in April-June

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New Delhi, July 14 (IANS) Keeping up with the growth momentum in the Indian real estate industry, the domestic investors pumped in around $638 million (more than Rs 5,327 crore) in the real estate sector in the second quarter this year, from $127 million in the same period last year.

According to data from leading real estate consultant Vestian, institutional investments in the real estate sector surged 96 per cent in the April-June period to $3.1 billion, from $1.6 billion in the same period last year.

“The Indian real estate sector garnered significant investments in the second quarter of 2024, dominated by foreign investors as the looming uncertainty over the major economies of the world has faded away,” said Shrinivas Rao, CEO, Vestian.

According to the firm, foreign investors had the highest share of 71 per cent of the total investments in Q2 2024.

Industrial and warehousing sector reported a single large deal worth $1.5 billion, accounting for 48 per cent of the total investments received in Q2.

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According to a latest Hurun report, with real estate companies worth $36 billion in 2024, India is accelerating to become the real estate capital of Asia.

Residential sales in India are expected to grow 10-12 per cent in FY2024-25, according to the ‘2024 GROHE-Hurun India Real Estate 100’ report.

India is projected to add 200,000 km of national highways by 2037, fostering the growth of micro cities and further value addition by India’s real estate sector, he added.

–IANS

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'FPI community to play key role in positioning India as 3rd largest economy'

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New Delhi, July 13 (IANS) The net foreign portfolio investor (FPI) inflows turned green this month, both in the equity and debt segment, and as India enters ‘Amritkaal’, the FPI community will play a major role in positioning it as the third largest economy in the world, market experts said on Saturday.

There was a total net inflow of Rs 2,82,338 crore for both equity and debt in FY24.

According to market watchers, the reason for a quick rebound in the capital markets can be attributed to the positive sentiments, a stable government’s assurance on continuity of reforms, tepid US Fed rates, and strong domestic demand.

“The recent announcements in IFSC Gift City for wide participation for foreign and Indian investors has also diverted the international players to allocate a substantial portion of their global portfolio to India markets,” said Manoj Purohit, Partner and leader, FS Tax, Tax and Regulatory Services, BDO India.

In the first week of this month, FPIs infused Rs 7,962 crore in equity while their debt investments in the same period stood at Rs 6,304 crore.

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All eyes are on the budget proposals to be tabled on July 23 which will hopefully announce path-breaking reforms providing India a golden opportunity against the other emerging global markets. “As India enters ‘Amritkaal’, the FPI community will play a major role for the nation to position as the third-largest economy in the world,” said Purohit.

–IANS

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Robust sovereign credit rating agencies need of the hour: Amitabh Kant

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New Delhi, July 13 (IANS) As India embarks on its journey to become ‘Viksit Bharat’ by 2047, it’s important that we have appropriate credit ratings and call out global agencies for biases and lack of transparency for not objectively assessing India’s strong economic fundamentals, G20 Sherpa and former NITI Aayog CEO, Amitabh Kant, said on Saturday.

Addressing the CareEdge Ratings ‘Conversations 2024’ conference in Pune, he said the notion that developing countries offer more risky investments is not solely based on objective financial metrics but is significantly influenced by subjective assessment.

Kant stressed the need for promoting home-grown credit ratings agencies, saying that appropriate sovereign credit ratings are actually a very critical issue that impacts not only India but also the entire emerging economies.

Hailing India’s high growth rate of around 8.2 per cent, he stressed that future growth will come from cutting-edge areas.

According to Najib Shah, Chairman, CareEdge, the world is moving away from domination by a single superpower, a single currency and moving towards a more balanced and complex system that’s emerging and evolving.

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“Such an environment also has implications for the financial situation. Destructive competition between the US and China has ushered in a new era of competing geopolitics and economies. The role of the credit rating agency will be important here for acting in a transparent, competitive, professional manner,” Shah told the gathering.

At the event, Gulshan Malik, Deputy Managing Director, State Bank of India (SBI) said the banking sector in India is adequately capitalised as well as ready to fund the next phase of growth which is very critical.

–IANS

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