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Indian government bonds may be added to a global index next year, triggering passive inflows of about $30 billion that will help the country to finance its current account and fiscal deficits, according to Goldman Sachs Group Inc.

The nation’s sovereign bonds may be added to JPMorgan’s GBI-EM Global Diversified bond index with an initial 10% weightage, analysts Danny Suwanapruti and Santanu Sengupta wrote in a note to clients. India’s $1 trillion sovereign bond market is one of the biggest among emerging markets not to be part of any global index.

Goldman’s optimism comes even as the index inclusion has largely gone on the back burner after New Delhi desisted from making any tax changes for foreigners that would have helped Indian bonds settlement on international clearing platforms like Euroclear. The analysts wrote that both Chinese and Indonesian government bonds though not Euroclearable are part of the JPMorgan index.

“Adding India, which is a large, deep and high-yielding market, would help to diversify as well as boost the average yield of the overall index,” the analysts wrote. “Such a move would be beneficial to various stakeholders, including EM investors and the Indian government.”

Account openings for foreigners are still cumbersome in India but can be addressed by a longer lead time for inclusion, according to the note. The country has also made some progress on operational issues, like posting margin requirements and extended settlement timings, the analysts wrote.

Government bond yields fell sharply and the rupee notched up hefty gains on Wednesday as a steep decline in crude oil prices over the last few days eased concerns over high domestic inflation and India’s trade deficit, dealers said.

A decline in domestic headline retail inflation to a five-month low in July also bolstered the appetite for bonds, dealers said.

Yield on the 10-year benchmark 6.54 per cent 2032 paper was last at 7.21 per cent, 8 basis points lower than previous close.

Bond prices and yields move inversely. A decline of one basis point on the 10-year bond yield corresponds to a rise in price of around 7 paise.

At 10:00 am IST, the rupee was at 79.29 per US dollar as against 79.66 at previous close.

Bond and currency markets resumed trading on Wednesday after an extended weekend break as markets were shut on Monday and Tuesday for Independence Day and Parsi New Year, respectively.

Brent crude futures plummeted around 3 per cent on Tuesday, dropping to 6-month lows, as concerns over slowing global economic growth reduced demand for the commodity.

The most active Brent crude contract rose marginally on Wednesday, trading 0.1 per cent higher at $92.47 per barrel by 0035 GMT, Reuters reported.

From a 14-year high of around $140 per barrel in March, crude oil prices have cooled significantly, easing the pressure on India’s import bill and inflation.

“Rupee has opened on a stronger note today following a more than 5 percent decline in crude oil prices over the long weekend and the current risk on sentiment leading to a rally in US and Indian equities but expect some pressure on rupee from a weakening yuan,” Mecklai Financial Services wrote.

India's inflation based on the Wholesale Price Index (WPI) declined to 13.93 percent in July, according to data released by the commerce ministry on August 16.

The WPI inflation was 15.18 percent in June, down from an over three-decade high of 16.63 percent in May.

In July 2021, WPI inflation stood at 11.57 percent.

Another month of double-digit increase in wholesale prices in July means WPI inflation has remained above the 10-percent mark for 16 months in a row.

The fall in WPI inflation in July was driven by lower food prices, with food inflation dropping to 9.41 percent, down 300 basis points from June.

ndia and the US have done more than any other nation in the fight global against COVID-19, the White House's top health official has said, as he highlighted the massive efforts by the two countries to vaccinate their people along with supporting and donating to other nations to tackle the pandemic.

Dr Ashish Jha, the White House Coronavirus Response Coordinator, said he had a lot of time in the last two and a half years thinking about and working on the pandemic.

"I can't think of two nations that have done more to vaccinate and protect their own populations, and to donate and support and vaccinate and protect the world than India and the United States, Jha said in his remarks at a reception hosted by India's Ambassador to the US, Taranjit Singh Sandhu, at the India House to celebrate 75th anniversary of independence.

So it is in that light that I think we look at an evening like tonight, where Indians and Indian Americans and Americans come together to celebrate what I think is a monumental occasion, Jha said. He said it was "an incredible honor and pleasure" to celebrate 75 years of India's independence, democracy and the Indian-American friendship.

As a proud Indian-American, I am grateful for the words that our President Joe Biden used, who reminded us that the three or three and a half million of us who are Indian Americans, the vibrant Indian American community has made America more innovative, more inclusive, and a stronger nation, he said. Jha said India and the US are the world's two most consequential democracies.

"High frequency price data suggest that headline inflation is likely to remain around July levels in August...We expect headline inflation to remain above 6% until February 2023, and core CPI inflation to remain sticky at a shade under 6% in the remaining months of FY2023," Nomura economists Sonal Varma and Aurodeep Nandi said in a note.

India's consumer inflation dipped to 6.71% in July, helped by a slower increase in food and fuel prices. The year-on-year figure, published on Aug. 12 by the National Statistics Office, was marginally lower than the 6.78% forecast by economists in a Reuters poll, but it remained above the central bank's tolerance band for a seventh month in a row.

The Reserve Bank of India aims to maintain inflation at 4.00% in the medium term, with a tolerance range of 200 basis points on either side.

"The outlook on food inflation still faces uncertainties given the uneven rainfall. For the first two weeks of August prices of vegetables, cereals (rice and wheat) and pulses are tracking higher. Rice sowing has been impacted by deficient rainfall in key producer states," said Gaura Sen Gupta, India economist at IDFC First Bank.

Even as inflation eases, economists believe the RBI's monetary policy committee will continue to hike policy rates though the quantum of such moves may come down as compared to the previous three actions.

The MPC has raised key policy rate by 140 basis points to 5.40% since May as stubborn inflation continues to remain a major concern. The next policy decision of is due on Sep. 30 with most market participants expecting another hike.

While Nomura and IDFC First Bank expect the RBI to hike repo rate by another 60 bps to 6.00%, Barclays eyes another 50 bps rise in interest rates over the next two meetings. Meanwhile, Nomura sees inflation to average 6.8% in this fiscal, IDFC First Bank sees it at 6.5%, below central bank's 6.7% prediction.

"We expect the RBI to deliver two 25 bps rate hikes each at the September and December meetings, taking the repo rate to 5.90%. However, if global commodity prices continue to decline, we note the risk that the bank does not raise rates in

December," Rahul Bajoria, chief India economist at Barclays said.

The inflation trajectory for India is expected to be benign and CPI numbers for March 2023 could be even lower than 5 per cent, due to signs of softening crude oil prices which can cool off inflationary concerns further locally, an SBI Ecowrap report said.

"We are in a paradoxical situation where inflation trajectory may not have a cascading effect on runaway exchange rate dynamics as sentiments in South China Sea could steer the patchy global sentiments. Also, inflation numbers in US are likely to head lower, though core might remain elevated," the report added.

On Friday, data by Ministry of Statistics and Programme Implementation showed that the CPI inflation moderated to 5-months low to 6.71 per cent in July due to easing of food inflation, while, core CPI also moderated to 10-months low to 5.79 per cent in July.

"Our slicing of CPI inflation into Supply/Demand CPI and Neutral indicates that supply side factors which were responsible for 65 per cent of CPI inflation in May now stands at 58 per cent, mainly owing to easing of global supply disruptions. Demand factors' contribution has reached 40 per cent.

"Though, the overall CPI inflation eased from April to June, among the states, but there are many bigger states, whose inflation continue to be above 7 per cent in July 2022. Among the 23 states, there are 15 states whose inflation is above 6 per cent (21

states in April) and 8 states with inflation rate of below 6 per cent," it said.

Telangana clocked the highest inflation rate of 8.58 per cent in July, compared to 10.05 per cent in June. Further, Telangana's rural inflation is above the urban inflation.

Internationally, the inflation in the US has also moderated which increases expectations that US Fed will go slow on rate hikes. But, going by the past precedents, Fed can still aggressively raise rates. In the short run, the dollar will appreciate due to falling US inflation and Fed's hawkish stance, it added.

On the rupee front, in the short run, the dollar will appreciate due to falling US inflation and Fed's hawkish stance. There will be flight to safety and the FII flows will be driven by sentiments. The appreciation of the US dollar can feed into imported inflation pressures in India leading to slower correction in CPI reading, and that remains as an upside risk, the report said.

Masayoshi Son has now lost more than $4 billion on a series of side deals he set up at SoftBank Group Corp. to boost his compensation, a painful blow triggered by the broad downturn in the technology market.

The Japanese billionaire took the unusual step of establishing personal stakes in a series of SoftBank ventures in recent years, a mixing of company and executive interests that drew the ire of investors. Son holds 17.25% of a vehicle set up under SoftBank’s Vision Fund 2 for its unlisted holdings, as well as 17.25% of a unit within its Latin America fund, which also invests in startups. He has a 33% stake in SB Northstar, a vehicle set up at the company to trade stocks and derivatives.

Son has racked up a deficit of $2.1 billion from his Vision Fund 2 interest, and $205 million at the Latam fund, according to disclosures for the June quarter. His cumulative loss at SB Northstar is 274.6 billion yen ($2 billion). The amount Son owes SoftBank from his interests in Vision Fund 2 and the Latam fund rose about $1.9 billion in the last quarter.

“It is controversial for a business leader to mix his personal financial interests with corporate responsibilities,” said Marvin Lo, an analyst with Bloomberg Intelligence. “But Son explained before that he wanted to use co-investment to provide financial benefits to managers, similar to venture capital firm partners getting a 20% to 30% performance fees, but with a downside too.”

A representative for SoftBank said it is more accurate to call the figures for Son linked to the Vision Fund 2 and Latam fund as “net payable” to the company rather than losses. There is no deadline for repayment and the value of his positions could improve in the future. For SB Northstar, Son has already deposited cash and other assets so his remaining deficit is 222.8 billion yen. The founder would pay his share of any “unfunded repayment obligations” at the end of the fund’s life, which runs 12 years with a two-year extension.

Son has deposited 8.9 million of his own shares as collateral for Vision Fund 2, and another 2.2 million shares as collateral for the LatAm fund, the company said in its disclosures. The stock will only be released once the receivables are settled.

Son’s net worth stood at $12.1 billion after Thursday’s close, after adjusting for his deficit from his interests in Vision Fund 2 and Latam fund, according to calculations by Bloomberg Billionaires Index.

SoftBank announced a record $23.4 billion loss for the June quarter on Monday, a staggering sum driven by the declining value of portfolio companies such as Coupang Inc., SenseTime Group Ltd. and DoorDash Inc. Son pledged to implement sweeping cost cuts at his conglomerate to shore up its finances, along with a more measured pace of investments.

Son is also selling off assets to raise cash and bolster his balance sheet. SoftBank expects to post a gain of more than $34 billion from selling a chunk of its stake in Alibaba Group Holding Ltd., his most valuable asset. He also said SoftBank has begun talks to sell Fortress Investment Group, the asset manager he acquired for $3.3 billion in 2017.

SoftBank shares rose about 7% Friday in Tokyo trading after the Alibaba disclosure.

Compensation has long been a problematic issue at SoftBank. Japanese companies pay some of the lowest executive salaries in the world, in part because leaders tend to work their way up slowly from within. Son himself has kept his pay at 100 million yen, now roughly $740,000 -- a rounding error in the US where CEOs routinely make more than $100 million.

But SoftBank’s parsimonious pay led to problems as Son repositioned his telecom company into the world’s largest technology investor. He hadn’t set up the kind of deal-by-deal “carry,” or profit sharing, that startup investors typically get, leading to a near-constant stream of defections.

Most recently, two more managing partners are leaving the Vision Fund, bringing the number of top level departures from the organization to at least 10 since March of 2020. Rajeev Misra, the long-time head of the Vision Fund, is giving up most of his titles and responsibilities as he starts his own investment fund.

To boost compensation, SoftBank increasingly allowed executives to cut side deals by which they benefit personally alongside the company’s activities. Misra, for example, borrowed $463.5 million from SoftBank to invest in T-Mobile US Inc., the telecom firm that bought SoftBank’s Sprint Corp. in 2020. Marcelo Claure, the now-departed chief operating officer, also borrowed $515 million, according to company filings.

Son led the way in cutting deals for himself. In 2020, he revealed that he would take a one-third share of SB Northstar, which was set up to buy stocks like Amazon.com Inc. and to trade highly leveraged derivatives.

Analysts and fund managers complained to Son at the time that the structure would lead to corporate governance concerns. Son denied there was a conflict of interest and described it as remuneration for his investment expertise. Other fund managers charge fees, he said, a person familiar with the matter said at the time. Son added that SoftBank’s board cleared the structure in a vote from which he recused himself, the person said.

Son’s expertise has not worked out well since. He unveiled the original $100 billion Vision Fund with the idea of backing the world’s startups, then followed it up with a smaller second Vision Fund. But the unprecedented bet on fledgling companies backfired with missteps like WeWork Inc. and then a sharp downturn in valuations.

Vision Fund 2 reported a 1.32 trillion yen unrealized valuation loss in the second quarter, led by declines at WeWork and AutoStore Holdings Ltd. The LatAm funds had a loss of 325 billion yen.

Son’s interests in Vision Fund 2 and the Latam fund were structured so the billionaire didn’t pay cash up front for his 17.25% stakes. Son is obligated to pay 3% on the “unpaid equity acquisition amount” until repayment, interest that has been wrapped into his liabilities.

“The investment company losses hurt (no one wants to lose a billion dollars) but not as much as the valuation loss in his Softbank shares which are down 50% from the all-time high,” said Kirk Boodry of Redex Research who publishes on SmartKarma. “That is a $22 billion decline.”

In a press conference after earnings this week, Son was somber and said he bore responsibility for the company’s mistakes.

“We really believed we could do it and we had our heads in the clouds,” Son said. “Of course, the market was bad, there was a war, and there was the coronavirus. We can point to a lot of reasons, but these are all excuses. We have to self-reflect about the fact that if we’d been more selective and had invested more properly, it wouldn’t come to this.”