28/03/2025

FRIDAY | MAR 28, 2025

18

BIZ & FINANCE

BIZ & FINANCE

UK slashes growth forecast, cuts public spending

India to double investment limit for foreign individuals NEW DELHI: India’s central bank is set to double to 10% a cap on investment by individual foreign investors in listed companies, as it aims to boost capital inflows, according to two senior government officials and documents reviewed by Reuters. Foreign portfolio investors (FPIs), pressured by poor earnings, high valuations and prospects of US tariffs, have pulled more than US$28 billion (RM124 billion) out of Indian stocks since September’s record high in the benchmark NSE Nifty 50. To boost foreign investment, India is widening to all foreign investors benefits it had until now restricted to overseas Indians, while also raising applicable investment limits, the officials said. “It is felt that these proposals may be implemented as early as possible,” the central bank told the government in a letter last week, pointing to disruption in capital inflows among recent developments in the external sector. E-mails seeking comment from the Finance Ministry, the central bank, and the market regulator, the Securities and Exchange Board of India (SEBI), did not get any response. The plans envisage allowing all foreign individual investors to invest a maximum of 10% in a listed company, the document showed. That is up from the 5% holding in an Indian company allowed to overseas Indian citizens by special rules under the Foreign Exchange Management Act (FEMA). “Current foreign exchange management rules only mention non resident Indians (NRIs) and overseas citizens of India (OCIs) under Schedule III,” the second government official said, speaking on condition of anonymity. “We are broadening this to include all individual foreign investors.” The Reserve Bank of India (RBI) will also raise to 24% the combined holding limit for all overseas individual investors in an Indian listed company, from 10% now, the officials added.

LONDON: The UK government halved its 2025 growth forecast on Wednesday as it made billions of pounds of spendings cuts to shore up the public purse in the face of economic headwinds. The Spring Statement spending update came as the Labour government, elected in July after a landslide election win, faces sluggish economic growth and rising borrowing costs. Britain’s economy is expected to grow by just 1% this year, revised down from an estimate of 2% made in late October when Labour presented its inaugural budget. However, the Office for Budget Responsibility, the UK’s spending watchdog, upgraded the country’s growth forecast for the three following years. “Our task is to secure Britain’s future in a world that is changing before our eyes,” Chancellor of the Exchequer Rachel Reeves told Parliament in the highly-anticipated update. Concerns over US tariffs and the war in Ukraine have added to the UK’s economic woes, chipping away the government’s fiscal cushion. “The threat facing our continent was transformed when (Russian President Vladimir) Putin invaded Ukraine,” Reeves said. She added that “the job of a responsible government is not simply to watch this change, this moment requires an active government”. Prime Minister Keir Starmer pledged to hike spending on defence, with the government on Wednesday confirming a £2.2 billion (RM12.4 billion) boost next year. o World is changing before our eyes, says finance minister SAN FRANCISCO: Emarketer on Wednesday forecast that ad revenue at X, formerly Twitter, will grow this year as brands fear retaliation by politically connected owner Elon Musk if they stay away. X’s billionaire owner, the world’s richest person, is a major financial backer of US President Donald Trump, and heads a Department of Government Efficiency that has been slashing the ranks of government employees. “Many advertisers may view spending on X as a cost of doing business in order to mitigate potential legal or financial repercussions,” said Emarketer principal analyst Jasmine Enberg. “But fear is not a sustainable motivator and the situation remains volatile, partly as some consumers’

Reeves walking along Downing Street ahead of presenting the Spring Statement to Parliament. – REUTERSPIC

hike to the minimum wage. The finance minister’s attempts to mend public finances have been constrained by her own fiscal rules and her pledge not to increase taxes. The rules prevent her from borrowing to fund day-to-day spending and call for debt to fall as a share of the gross domestic product by 2029-2030. Mel Stride, finance spokesman for the main opposition Conservatives, said it was a “public humiliation” that Reeves has come close to breaking those rules. – AFP

15% over the next five years, targeting annual savings of around £2 billion. While Labour has highlighted increased funding for housing, the struggling National Health Service and reforms to workers’ rights, it is the spending cuts that have taken the spotlight. The cuts added to criticism piled on Labour after it scrapped a winter-fuel benefit scheme for millions of pensioners last year.

mental budgets, blaming a period of heightened uncertainty in global markets. Outside Parliament on Wednesday, about 200 protestors, many using wheelchairs, chanted “fund welfare not warfare”, noted an AFP journalist. The centre-left government hopes contested cuts to disability welfare payments will help it save billions annually by the end of the decade.

The plan to hike foreign investor limits in Indian listed firms is in the final stages of discussion between the government, the RBI, and SEBI, the officials said. – Reuters H&M first-quarter sales weaker than expected

To avoid deepening the deficit, Reeves has cut disability welfare payments and government depart Fear of Musk to boost X ad revenue: Emarketer Ahead of Wednesday’s update, it also unveiled that it would slash the cost of running the civil service by Higher business tax comes into effect from April, pressuring businesses who are also facing a

was in 2019, according to Emarketer. X has managed to attract advertising from small- and medium-sized businesses that Twitter historically struggled to win over, the analyst said. Meta’s recent decision to ease off on moderating content could be benefitting X, Enberg reasoned. Emarketer forecast that Meta ad revenue will grow slightly more than 11% in the United States this year. “While advertisers still care about brand safety, many are getting a reality check that they may not have as much control over where and how their ads show up as they thought,” Enberg said. “The kind ofcontroversial content that prompted advertisers to flee X is no more acceptable, but there is a sense that it could become unavoidable.”– AFP

discontent toward Musk grows.” Also factored into the expectation that X will have its first year of positive ad growth since 2021 was Meta’s decision to drop or amend content moderation protocols, as the tech giant cozies up to Trump. Industry watchers expect the hateful content that has flourished on X under Musk to also pervade Meta’s platforms as the changes go into effect. Emarketer expects X ad revenue worldwide to grow 16.5% this year, after losing ground annually since Musk bought Twitter for about US$44 billion in late 2022. “X’s ad business is recovering, but it’s too soon to call it a rebound,”Enberg said. The social media platform’s forecasted revenue this year will still be less than it

LONDON: Swedish fast-fashion retailer H&M reported weaker than expected sales for its first quarter yesterday and said sales were up 1% so far in March, in a sign of a slow start to its spring and summer season. H&M reported sales of 55.3 billion Swedish crowns (RM24.4 billion) for the December to February quarter, missing analysts’ mean estimate of 55.9 billion Swedish crowns. “Our sales and earnings in the quarter were somewhat weaker than planned – but the first quarter is the smallest quarter of the year for us in terms of sales and margin, and we are confident going

forward,” CEO Daniel Erver said in a statement. Increased discounting and marketing investments impacted H&M’s profitability in the quarter, the company said, with the operating profit margin falling to 2.2% from 3.9% in the same period a year ago. Erver, leading H&M for just over a year, is trying to turn its fortunes around and has ramped up marketing, spending on pop stars like Charli XCX to model its collections as he tries to make the brand more desirable and better compete against Zara and Shein. – Reuters