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Market roundup | Investors could plough $3 trillion into China by 2025

LiveMint logoLiveMint 18-07-2017 Livemint

China has opened a path for transformation of its financial markets that could see it match the US in size and lure more than $3 trillion in capital from abroad by 2025, according to a study by Citigroup Inc. While the country’s initial efforts to internationalize its currency hit a bump in 2015, policymakers have shifted tack to focus on developing domestic financial markets rather than opening up the capital account, Citigroup analysts led by Liu Li-Gang, chief China economist for the bank in Hong Kong, wrote in a note.

Steps like the bond and stock “connects” with Hong Kong represent this new approach, they wrote. China’s nominal gross domestic product, which is unadjusted for inflation, will reach $28 trillion by 2025 compared with $26 trillion for the US based on anticipated growth rates and a gradual appreciation of the yuan to 5 per dollar from 6.8 now, predicts the team. “In years to come, 2017 could be viewed as a tipping point for global asset allocation,” wrote Liu and his colleagues. Bloomberg

Rural road construction on fast track

Edelweiss Research says in a report on the construction sector that 47,359km of roads were constructed in fiscal year 2017 (FY17) under the Pradhan Mantri Gram Sadak Yojana (PMGSY).

This is the highest pace of construction activity in rural roads in the past seven years. Daily rural road construction, which was around 73km during FY11-14, jumped to ~100km during FY14-16 and ~130km in FY17. And the target for FY18 is an ambitious 57,000km of roads under PMGSY.

Uttar Pradesh leads in electricity consumption

Electricity consumption in Uttar Pradesh has increased 16% so far this fiscal year, the fastest growth in any state, shows data compiled by Elara Securities (India) Pvt. Ltd. Telangana and Himachal Pradesh are the only two other states that saw double-digit growth in electricity usage.

Uttar Pradesh is estimated to constitute 10% of the Indian market. In the month of June, electricity usage in the state increased 15%.

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