The deadly Islamist militant strike on India’s financial nerve center clouded the future of Asia’s third-largest economy at a time when it already faces a significant slowdown, analysts said.
Gunmen stormed luxury hotels, including the iconic Taj Mahal Palace, a landmark restaurant and the main train station, killing at least 195 people in a brazen attack that paralysed Mumbai for 60 hours.
The murderous rampage, which Indians are calling their own Sept. 11, was clearly intended to “destabilize markets and scare off tourists,” said Nikhilesh Bhattacharyya, an economist at Moody’s Economy.com.
PHOTO: AP
The attack — which also saw the gunmen single out Americans, Britons and Israelis — “signifies an attack by extremists on India’s economic success and its closer and warmer economic and diplomatic ties with the West,” said Deepak Lalwani, India director at London’s Astaire and Partners.
And the timing of the attack, the most devastating of a string this year, was “abysmal” from an Indian economic viewpoint, he said.
The stock market was down 55 percent this year, banks are facing a huge fund outflow due to the global financial crisis, the rupee is at record lows and growth has slowed significantly amid a widening global recession.
“There has been a continuing attempt to undermine India’s economy over the past four or five years and this [attack] is part of it,” said Ajai Sahni, head of the New Delhi-based Institute for Conflict Management.
The images of gunbattles between militants and commandoes “flashed around the world are not going to be helpful,” said a Singapore banker on condition of anonymity.
“The effect on investor sentiment and tourism will be pronounced,” he said.
Indian Finance Minister Palaniappan Chidambaram conceded the attacks could have a “negative” short-term impact but insisted the economy would “overcome” it.
“Investor sentiment will be affected. But within a few weeks or months it will recover,” he said. India remains “an attractive investment destination.”
He expected growth of at least 7 percent for this year to March after three years of at least 9 percent expansion. However, economists forecast growth as low as 6 percent this year and 4 percent for next year.
In the immediate aftermath, the attacks will scare away tourists and business travelers, analysts say.
“The singling out of American, British and Israelis as hostages indicates a new and worrying action by terrorists as this indicates an international agenda being fought on Indian soil,” Lalwani said.
“The impact on tourism will be horrible. People will be scared, worried,” said Vijay Prakash, manager of a posh Mumbai restaurant.
Foreign investors would “likely be worried about the safety of their employees and establishments,” said Rajeev Malik, economist at Australia’s Macquarie Research.
But in the longer term, as long as there are no major follow-up attacks, the impact should recede, analysts said.
The “negative effects of the current attacks on tourism, investor confidence, rupee and equities will probably turn out to be temporary,” Malik said.
Also “what the Islamist terrorist movement has been able to demonstrate in the past few years there is no place you can that is completely safe,” said security expert Robert Ayers at London’s Chatham House, an international affairs think tank.
“If people made inward investments based on the fear of terrorist attacks, there would be no investments … in all sorts of the places,” he said.
However, Sahni said: “If we keep seeing attacks of this magnitude, perceptions of India’s security are going to shift and it will impact directly on investment decisions.”
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the