Comment: Indian market a prize for last one standing

FOR adventurous foreign investors, India can often seem to have a heart of darkness. Much of this has to do with the Indian government’s “will they, won’t they” attitude to easing restrictions on foreign ownership.

Erikka Askeland

Not to mention its creaking bureau­cracy and the government’s opaque approach to meddling in India’s stock markets – for those with the time, read prior issues of The Scotsman and sister title Scotland on Sunday for the painfully drawn-out saga of Cairn
Energy’s sale of a majority stake in its Indian subsidiary last year.

Delhi has been making noises for years that it will increase the cap on foreign investment in life insurance companies to 49 per cent from the current 26 per cent.

There is even a bill supposedly being passed into legislation to do this. But new Aviva boss Mark Wilson – who took over from the ill-fated but highly-paid Andrew Moss – seems to have tired of the waiting game. If his hints are right, he will join an exodus that includes New York Life, which exited its joint venture with Max India last year, while in January ING sold its stake in its insurance partnership back to bedfellow Exide Batteries.

In addition to the cap on ownership, the market has underperformed. Yet for David Nish – chief executive at Standard Life, which launched its JV in India in 2000, the same year as Aviva – things are looking rosy.

Both its life assurance and asset management businesses – joint ventures with Housing Development Finance Corporation (HDFC) – are
enjoying strong market share and pleasing growth.

Sure, he is probably tired of waiting for the Indian government to stop dithering, but he is loathe to stir up trouble and say it. He has mastered the right tones in his communications with the often-excitable Indian press; last month a writer at the Economic Times likened Nish to one of the villagers in Aesop’s The Boy Who Cried Wolf, who eventually stop getting excited by words and look for actions instead. Nish told her that: “The day parliament approves [the bill], I will get excited.”

Eventually, Standard Life reckons on floating its life JV. And while to do so now is technically possible, it is not desirable – because Nish would have to reduce the insurer’s stake in HDFC Life. That is not an option because he reckons there is a massive opportunity for the one who sticks it out.

Austerity Britain is far from ‘brave new world’

Zero-hour contracts and Sir Stelios Haji‑Ioannou’s move into EasyFood are disparate items on the surface, but they do show how hand-to-mouth existence has become for many in austerity Britain, writes Martin Flanagan.

And perhaps they both, in their own ways, support Bank of England Governor Mark Carney’s decision to link upward movements in interest rates to a reduction in unemployment.

The rules of the game for many households to survive are changing before our eyes, with people prepared to accept completely sporadic employment with virtually no job security under zero-hour contracts, while Stelios spots a possible business niche to undercut already discounter-brand supermarkets, such as Aldi and Lidl, on basic food products.

It may not be a return to Victorian Britain, but it is far from brave new world either.