Citigroup to shutter retail banking operations in 13 countries including India

Citigroup announced on April 15 that it will shutter retail banking operations in 13 countries including India and China.

The American multinational investment bank and financial services company has said that it will exit consumer/retail operations in 13 countries across Asia and Europe.

The 13 nations Citibank (the largest foreign bank in India) will pull out from are Australia, Bahrain, China, India, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand, and Vietnam.

Notably, Citigroup’s Institutional Clients Group will continue to serve clients in the markets where it is ending consumer operations.

ALSO READ: Citibank to seek buyer for India retail business; consumer biz exit not to impact existing customers, employees

Commenting on the move that will allow Citi to direct investments and resources to businesses where it has greater scale and growth potential, Citigroup CEO Jane Fraser said: “Citigroup lacked the scale to properly compete in the 13 markets it is leaving.”

“As a result of the ongoing refresh of our strategy, we have decided that we are going to double down on wealth. We will operate our consumer banking franchise in Asia and EMEA solely from four wealth centres — Singapore, Hong Kong, the UAE and London. This positions us to capture the strong growth and attractive returns the wealth management business offers through these important hubs,”  Fraser stated.

“While the other 13 markets have excellent businesses, we don’t have the scale we need to compete. We believe our capital, investment dollars, and other resources are better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia. We will continue to update you on strategic decisions as we make them while we work to increase the returns we deliver to our shareholders,” she added.

Rupee zooms 58 paise to settle at 74.35 against US dollar

The rupee strengthened by 58 paise to end at 74.35 (provisional) against the US dollar on Friday, supported by positive domestic equities amid improving risk appetite.

At the interbank forex market, the local unit opened at 74.76 against the greenback and witnessed an intra-day high of 74.28 and a low of 74.76.

It finally ended at 74.35 against the American currency, registering a rise of 58 paise over its previous closing.

On Thursday, the rupee had settled at 74.93 against the American currency.

“Indian Rupee gained strength amid weakness in dollar and rise in risk appetite in the domestic markets,” said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

Mukadam further noted that dollar dipped on extended decline in US treasury yields.

“US treasury yields fell as US Federal Reserve policy-makers signaled that central bank is not in hurry to reduce its support,” he said.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.09 percent to 91.59.

According to Mukadam, further gains for the local unit were prevented on surge in crude oil prices and on concern that rising COVID-19 cases in India and lockdown restriction in some states may hurt economic recovery.

Meanwhile, Brent crude futures, the global oil benchmark, rose 0.40 percent to $67.21 per barrel.

On the domestic equity market front, the BSE Sensex ended 28.35 points or 0.06 percent higher at 48,832.03, while the broader NSE Nifty advanced 36.40 points or 0.25 percent to 14,617.85.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 979.70 crore on Thursday, according to exchange data.

Gross absorption of Grade A office space touches 4.3 million sq ft; declines by half in Q1 2021: Colliers

The total Grade A gross absorption for the top six Indian cities stood at 4.3 million square feet in the first quarter of 2021, a decline of 49.8 percent YoY, as per the latest Colliers-FICCI report titled The Future Workplace: Resolving Uncertainty- Charting the Future of Offices in India.

Colliers forecasts 2021 total net absorption to be around 20 million square feet, in line with that of 2020 as occupiers continue to focus on their CRE portfolio optimisation.

On the supply front, Colliers recorded 6.9 million sq ft of new commercial offices in Q1 2021, a decline of 48.1 percent YOY.

Colliers believes that demand in 2021 will be driven by mainly technology (IT-BPM), and engineering and manufacturing sectors.

The net office absorption in 2020 across the top six Indian cities was 20.6 million square feet, a decline of 42.8 percent YoY. Technology firms remained the major demand drivers, with about 45 percent of the demand from large occupiers in recently completed projects offering better wellness and hygiene standards.

“We believe demand in 2021 to be driven by mainly technology (IT-BPM), and engineering and manufacturing sectors. With demand likely to increase substantially for services in artificial intelligence, machine learning and robotics, we believe that technology companies will expand their office portfolio over the next three years as Indian talent is being considered favourably for high-end R&D activities,” said Arpit Mehrotra, Managing Director, Office Services (South India) at Colliers.

Flexible workspace operators to lease about 3 million square feet in 2021

As of the end of February 2021, the total flexible workspace stock stood at 30 million square feet, across the top six Indian cities out of which Bengaluru, Hyderabad and Mumbai accounted for the bulk. During 2021, Colliers forecasts that flexible workspace operators will lease around 3 million square feet (279,000 square meters), similar to 2020.

However, in 2022, they expect a pick-up in demand for well-located, high quality and efficient flexible workspaces, resulting in their occupying 5.4 percent of the total commercial office portfolio in India.

During 2020, institutional investments worth Rs 35,835 crore were recorded despite a muted activity during Q2 2020. Investors continue to be bullish on the Indian real estate sector and asset classes such as offices, data centres and warehouses are receiving increasing interest.

During 2020, 46 percent of the total inflows accounting for Rs 15,450 crore were in the office market, signifying investors’ unwavering confidence in the commercial office asset class despite India’s continuing work from home scenario.

Between 2018 and 2020, commercial office assets accounted for over 55 percent of the total investments in Indian real estate, showing the high appetite of investors. The top six Indian cities saw an average annual supply of over 35 million square feet between 2018 and 2020 with the majority being snapped up by institutional investors.

The survey points out that over the next five years workplaces are expected to revolve around the following three themes as enterprises strive to maintain a corporate culture that attracts and retains top talent.

Place: Portfolio optimisation will likely be the over-arching theme in 2021 and 2022 as occupiers explore strategies to optimise an efficient corporate real estate portfolio that looks at having multiple offices closer to the employees’ residences rather than consolidating in distant locations.

Space: Occupiers are likely to transition from fixed space in workplaces to evolving spaces, according to the needs of the enterprise at different times with a focus on health and wellness of their employees.

Pace: Occupiers are accelerating technology adoption in the workplace to make better collaboration and efficiency possible, as well as boost overall productivity and pace of work. Environmental sustainability and reducing carbon footprint will also drive occupiers’ choice of offices.

“The future workplace is going to be the catalyst for growth & innovation. The functionality of workplace is going to shift from ‘place of work’ to ‘place where people meet, and ideas generate.’ It is the collaboration of design and technology which will drive the future workplace,” said Ashish Puri, Director, Interior Design Services (India), at Colliers.

While sustainability has always been an agenda driven by climate change, investments in environmental, social and governance (ESG) have gained momentum in the past few years. Colliers recommends green technologies that can be used in commercial office buildings by developers and occupiers.

“As India enters the second wave of the pandemic in India, Colliers’ survey shows that two main aspects respondents miss as they work remotely is their relationship with colleagues in office, and the separation of home and office dimensions. We believe that the workplace while essential, is likely to significantly shift over the next five years. Offices are likely to become places for collaboration, rather than simply workspaces, with most occupiers choosing a hybrid model of working where employees go to the office only a few days a week,” said Siddhart Goel, senior director and head, Research at Colliers India.

Taking Stock | Sensex, Nifty end flat, COVID-19 continues to weigh on sentiment

Benchmark indices the Sensex and the Nifty ended flat on April 16 as investors remained cautious due to a surge in COVID-19 cases that offset positive global sentiment and a normal monsoon forecast.

India’s South West Monsoon for 2021 is expected to be normal at 98 percent of the long-period average, the India Meteorological Department said on April 16.

Global markets and most other Asian peers logged gains on the strong US and Chinese economic data. Positive global sentiment spilled into the Indian market as the equity barometer the Sensex rose 286 points intraday.

However, the 30-share pack remained volatile and eventually settled with a nominal gain of 28 points, or 0.06 percent, at 48,832.03. The Nifty shut shop at 14,617.85, up 36 points, or 0.25 percent.

Action was seen in the broader market as the BSE midcap and smallcap indices closed 1.17 percent and 1.05 percent higher.

For the week, the Sensex and the Nifty fell about 1.5 percent each.

Spiralling coronavirus infections continue to haunt market participants, with India now reporting more than 2 lakh fresh cases a day.

State governments have announced fresh restrictions and hopes of stronger economic recovery in FY22 appear to be at risk.

“Strong positive cues from the global market lent optimism to the Indian market leading to robust recovery though volatility and underperformance were noticed at the end of the day due to concerns over lockdown,” Vinod Nair, Head of Research at Geojit Financial Services said.

Analysts believe the market will stabilise and witness gains when COVID-19 cases begin to decline.

“As soon as India is able to show a drop in infection rate, due to lockdown and vaccination, market performance will improve,” said Nair.

Sectors and stocks

The Nifty PSU bank (down 0.59 percent), bank (down 0.42 percent), realty (down 0.45 percent), private bank (down 0.35 percent) and financial services (down 0.16 percent) ended in the red.

On the other hand, the Nifty Pharma (up 1.90 percent), media (up 1.87 percent), IT (up 1.21 percent) and auto (up 1.21 percent) logged healthy gains.

As many as 156 stocks, including Wipro, Cipla, Coforge, Dabur, Navin Fluorine International, Procter & Gamble Hygiene & Health Care, Laurus Labs and Hindalco hit their 52-week highs on BSE.

Hindustan Copper, Magma Fincorp, Adani Transmission, Tata Steel Long Products and Nureca were among more than 250 stocks to hit their upper circuits on BSE.

Technical view

The Nifty formed a Doji candle on the daily scale and a hammer pattern on the weekly scale, which indicates that declines were being bought but follow-up was missing at higher zones.

Chandan Taparia, Vice President and Derivatives Analyst, Motilal Oswal Financial Services, is of the view that the Nifty has to continue to hold above 14,500 for an up move towards 14,700 and 14,850, while on the downside, support exists at 14,350 and 14,250.

“India VIX fell by 2.33 percent from 20.89 to 20.40 levels. India VIX needs to hold below 20 zones to again attract a bullish stance in the market,” said Taparia.

Rohit Singre, Senior Technical Analyst, LKP Securities, said the Nifty has taken strong resistance from 14,700, which will be an immediate hurdle for the coming week as well followed by 14,800. Supports are still placed at 14,500-14,400, he said.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source: https://www.moneycontrol.com/news/business/citigroup-to-shutter-retail-banking-operations-in-13-countries-including-india-6774521.html