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Zurich Insurance bets on India with $487 mln stake

Zurich Insurance bets on India with $487 mln stake

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Zurich Insurance bets on India with $487 mln stake

Zurich Insurance Group (ZURN.S) will buy a 51% stake in Kotak Mahindra Bank’s (KTKM.NS) general insurance arm for about 40.51 billion rupees ($487 million), giving the European insurance giant a foothold in India’s fast-growing insurance market.

The news, which was confirmed by the companies on Thursday and Reuters first reported in June, will be the largest investment by a global insurer in an Indian non-life insurer. It boosted Kotak shares as much as 2% to 1,758.65 rupees.

“This development is just a matter of getting access to India, one of the key growth markets,” said Emkay Global analyst Avinash Singh. “To start from scratch, it would have taken much longer to build a brand visibility.”

“While Kotak General is not among the top players in the sector, the Kotak brand as such will give Zurich a good headstart,” he added.

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Kotak General Insurance competes with larger rivals HDFC ERGO and Bajaj Allianz, which also count foreign insurers as investors.

Asia’s third-largest economy in 2021 relaxed the cap for overseas investment in the insurance sector, allowing acquisition of majority stakes of up to 74% against 49% permitted earlier.

More than 30 companies operate in India’s general insurance market, where annual premium collections grew 11% to reach $26.7 billion in 2021-22, helped by rising financial literacy and income levels, according to a CareEdge Ratings report.

The deal comes as Kotak Mahindra Bank said last month the central bank approved the appointment of veteran international banker Ashok Vaswani as the bank’s chief executive officer after founder and billionaire Uday Kotak announced plans to step down.

Zurich Insurance’s stake purchase will give Kotak General Insurance a post-money valuation of about 79.43 billion rupees ($954.53 million), according to an exchange filing.

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Zurich Insurance Co, a unit of one of Europe’s largest insurers, will buy an additional 19% stake in Kotak General Insurance within three years, the companies said.

The deal is subject to regulatory approval from India’s central bank, insurance regulator, and antitrust regulator, the statement said. 

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Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

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Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

 A notable Chinese company has expressed keen interest in expanding its investment in Pakistan, in yet another sign of investor confidence boost in the leadership of Prime Minister Shehbaz Sharif.

A delegation from Chinese firm MCC Tongsin Resources led by its Chairman Wang Jaichen called on PM Shehbaz here on Friday.

The premier invited the Chinese company to invest in Pakistan’s mining sector and manufacturing of export goods.

Shehbaz assured the delegation that his government would extend all-out facilitation to the company from minerals exploration and processing to the export of goods.

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The PM instructed the relevant federal ministers and officers to continue consultation with the Chinese firm, taking the Balochistan chief minister, provincial departments and stakeholders on board.

The delegates reposed trust in PM Shehbaz’s leadership, and expressed keen interest in enhancing their investment in Pakistan’s mining and minerals sectors.

The delegation briefed Prime Minister Shehbaz about the construction of a mineral park in Pakistan and their future investment plans.

The premier welcomed the Chinese firm and highlighted the priority steps by his government to promote foreign investment in Pakistan.

He said that being a time-tested friend, China supported Pakistan in every difficult hour for which the Pakistani nation was grateful to the leadership and people of China.

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Federal ministers Ahad Khan Cheema, Dr Musaddik Malik, Rana Tanveer Hussain, Jam Kamal Khan and relevant senior officers attended the meeting.

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Govt jacks up power price by Rs1.47 per unit

Govt jacks up power price by Rs1.47 per unit

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Govt jacks up power price by Rs1.47 per unit

The government on Friday increased the electricity tariff by Rs1.47 per unit.

According to Nepra sources, the collection from consumers will take place in August, September, and October.

The electricity companies had requested the funds as part of the third quarter adjustment for 2023-2024, seeking Rs 31.34 billion under capacity charges.

Sources said that Rs5.57 billion were requested for operation and maintenance costs, and Rs12.38 billion were requested for the transmission and distribution impact under monthly fuel cost adjustment.

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Previously, Nepra had completed the hearing on the electricity companies’ request under the quarterly adjustment.

Nepra approved the Power Division’s request, allowing an increase of Rs 1.45 per unit in electricity prices.

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Hong Kong allows China’s digital yuan to be used in local shops

Hong Kong allows China’s digital yuan to be used in local shops

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Hong Kong allows China's digital yuan to be used in local shops

Hong Kong will allow mainland China’s pilot digital currency to be used in shops in the city, the head of its de facto central bank said on Friday, marking a step forward for Beijing’s efforts to internationalise the yuan amid rising geopolitical tensions.

The programme, backed by Beijing, will allow mainland Chinese and Hong Kong residents to open digital yuan wallets via a mobile app developed by China’s central bank and will permit them to make payments in retail shops and some online stores in Hong Kong and in mainland China.

Transactions using e-CNY, predominantly for domestic retail payments in China, hit 1.8 trillion yuan ($249.27 billion) as of end of June 2023, with 120 million digital wallets opened, according to the latest disclosure from China’s central bank.

Using the wallet, users can make payments at over 10 million merchants in 17 provinces and cities in the mainland.

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Each wallet used in the city will be subject to a balance limit of 10,000 yuan, with single transactions and daily payments capped at 2,000 yuan and 5,000 yuan, respectively, officials from the Hong Kong Monetary Authority said.

Peer-to-peer transfers will not be allowed at the moment, according to the HKMA.

“By expanding the e-CNY pilot in Hong Kong .. users may now top up their wallets anytime, anywhere without having to open a mainland bank account, thereby facilitating merchant payments in the mainland by Hong Kong residents,” HKMA Chief Eddie Yue said.

Currently, users of other digital yuan wallets such as those operated by Ant Group and Tencent can make payments in the city.

Industrial and Commercial Bank of China, Bank of China Ltd, China Construction Bank Corp and Bank of Communications Co have been selected as e-CNY wallet operators.

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The yuan’s use in global finance remains low, though it has shown steady increases.

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