A Wishlist for 2010

From one big happy Ambani family to more global takeovers, here’s to a whole new decade of possibilities.

The good thing about 2010—whether one pronounces it ‘twenty ten’ or ‘two thousand and ten’—is that it signals the beginning of a whole new decade of possibilities. The shift of the epicentre of the global economy from the West to India and China will likely be even more pronounced this coming decade, as will be the rise of more Indian conglomerates as global forces to reckon with. As 2010 begins, here’s a random wishlist of things one would love to see this year.

The resumption of global acquisitions by India Inc: After a brief pause in momentum, it would be good to see Indian corporations executing some big takeovers this year. Though there were some really ambitious ones towards the end of the past decade by Tata, and several others by other business groups, among them Suzlon, Bharat Forge and Sun Pharma, the takeover fever had been bitten by the global recession bug from mid-2008 through 2009. But now that the recession is behind us, India Inc would be looking to pick up some attractive targets across sectors. But here’s hoping the global slowdown has taught Indian business the art of being less generous in its global shopping jaunts.

Some concrete moves towards merging public sector banks: Despite several pronouncements by the Finance Ministry on the need for a few large, global-sized banks rather than the several small ones dotting the Indian banking landscape, nothing of consequence has happened. In the meantime, some private sector banks have come together over the past decade and some others have gotten larger in size and scope. But the Indian public sector bank, that ever-dependable repository of public money, trudges on, with trade unions raising the red flag every time the M-word is uttered. Add to that, the views of a section of the Reserve Bank of India that inclusive banking is a greater requirement than merging state-run banks, and the situation appears even more confusing. Hopefully, 2010 will see at least one concrete move by two or more public sector banks to come together to create a bigger bank, capable of standing tall among global peers. Agreed, several global banks are now history thanks to the financial meltdown, but it does not hurt to have a stronger balance sheet.

A ceasefire between the Ambani brothers: Perhaps it is an impossibility given the scale of their differences, but shareholders, the Government and the public at large would be hoping for a cessation of hostilities between the brothers Ambani. Having grabbed headlines for the better part of the past decade with their sabre-rattling on various issues ranging from a family agreement to gas supplies, it would be good to see the two brothers, both of whom have rewarded shareholders despite splitting up, finally announce an open-ended ceasefire, if not a complete end to their hostilities.

Some derivatives trading on BSE: Despite several attempts at reviving its derivatives segment, the Bombay Stock Exchange has not managed to come even remotely close in this aspect to its arch rival, the National Stock Exchange. This has led to a yawning gap between the average daily turnovers of the two exchanges and has seen the once-iconic BSE fall back significantly. With the new, 36-year old Wall Street-returned CEO Madhu Kannan working overtime to bring in a change of culture at Asia’s oldest exchange, BSE members and those following India’s swiftly-changing capital markets would be keenly watching whether 2010 brings a significant upturn in the fortunes of the exchange, driven by recruits from overseas exchanges and shareholding by Deutsche Börse and Singapore Exchange. With 5,000 listed companies and the globally-followed BSE Sensex in its kitty, giving a big push to derivatives trading should be the obvious thing to do for the exchange this year.

l Big-ticket disinvestments: With the UPA Government in its second term, and shorn of the Left breathing down its neck, 2010 should ideally see the Manmohan Singh administration push through some big-ticket disinvestments, given the huge stakes the Government still holds in several listed PSUs and the headroom it therefore enjoys. Finance Minister Pranab Mukherjee is making all the right noises about it, and the market should see some good quality public sector stocks coming into bourses this year. The resultant benefits to social sector schemes and the ballooning post-stimulus fiscal deficit are obvious.

These are the author’s personal views.

acquisitionsAmbaniBSEderivativesdisinvestment