Brexit And It's Importance

One of the major global events that are expected to have a big impact on markets is the Brexit. Here is all you need to know about the campaign and why it is important. ‘Brexit’ stands for ‘British Exit’ and it refers to the possibility of Britain withdrawing from the European Union (EU).

The campaign is centered on ending the central control by Brussels and giving Britain the freedom to manage its own affairs. The United Kingdom will hold the referendum on June 23 to decide whether Britain should exit the EU. A referendum is a vote in which everyone of voting age in a country is asked to give their opinion on a political proposal. The participants are asked to either approve or reject it, generally with a ‘yes’ or ‘no’. Whichever side receives more than half of all the votes cast, wins.

If Britain exits the EU, it could impact the economy. While the long term impact of this move has not been estimated, in the short run, it could trigger flight of capital from Britain, compound its current account deficit problems, weaken the pound and increase inflation. The flight of capital could lead to the dollar strengthening in the short term. The exit of Britain could embolden political parties in the opposition in other EU countries to ask for a similar vote to exit the EU. This could have a cascading impact on global financial markets.

If the global financial markets are affected by the Brexit, Indian markets are unlikely to be insulated. For Indian companies operating in Europe especially in UK, there could be a fair bit of uncertainty with the pound expected to weaken. The bigger problem will be a likely selloff in emerging markets, which India is part of, mainly on account of a strength in the dollar and aversion to riskier assets. Let’s hope for a beneficial result of referendum.

World in September

In the history of the world, September seems to be an important month. From developing nations to developed nations, most of the changes in the past and present occurred in the month of September. In 2014, many events took place in the emerging countries of the world. India, Europe, and USA all three countries saw major changes. Let us look in the past events and changes in this year.

It was September 2001, when Islamic Terrorist group attacked upon the United States in New York and Washington. Two towers of World Trade Centers were attacked and US Pentagon was attacked. Many people died in the attacks. Few years later, on September 15, 2008, Lehman Brothers Holdings Inc. was filed under Bankruptcy. As the fourth largest investment bank of US, this crime led to 2007-08 financial crises in the world. Last year in 2013, India GDP fell down to a lower rate and currency exchange rate touched the highest point-making rupee weakest in history.

Year 2014 brought out many other changes in Indian History. After completing 100 days in office, Prime Minister Narendra Modi visits Japan for five days. Both the countries build Special Strategic Global Partnerships. Modi statement of “No red tape, but red carpet” was signs of investment from foreign countries. After that, Australian Prime Minister visits India for Nuclear deal. In mid of the month, Chinese President visit India for trade relations between both countries. MoU was signed for building Smart cities, SEZs, Chinese Development Bank, and manufacturing goods in India. Soon after some days, PM launches “Make in India” campaign to attract businesses from around the world to invest and manufacture in India.

In the end of the month, PM visit US to attend UN General Assembly council, to address Indians in USA, and to meet US President Barack Obama. Modi speech in Madison Square made him most searched person on Google and Tweets on Twitter. Both countries agreed to help each other in Defence and India to import technology from USA. These were some changes in India in September, which will drive India’s growth largely.  

On 24 September 2014, India became the first country in the world to reach the Mars orbit in its first attempt. The Mars Orbiter Mission was launched by ISRO. The total cost of the mission was approximately $70 Million and it is the cheapest inter-planetary mission ever to be undertaken since Martian exploration began. In corporate world, Alibaba IPO breaks the record of becoming the largest company in e-commerce sector by market share. Its value reaches $230 Billion after IPO in month of September.

After some peace talks between Israel and Palestine, Russia and Ukraine, tensions start between UK and Scotland. Scottish Independence referendum on Scottish Independence in September was another important day in history. The decision of Scotland to remain in Great Britain not only saved UK but some other countries like Tibet, India, China, and Pakistan. If the results turned out to be opposite then there might be chances of voting in for Kashmir and Tibet.

In September 2014, ISIS members began attacks on journalists from different countries, forcing US and EU forces to launch air strikes. These strikes are still in process. The 2014 Hong Kong protests also known as Umbrella movement, began in the same month. The cause behind the protest is that Chinese Central government decision on electoral reform regarding future Hong Kong chief executive and Legislative Council elections. The protests are still going and there are no negotiations between the protestors and the government. In Business news, all light was on Apple new iPhone and watch. However, there may be more things going around or took place in between years in same month but these are some, which remains in light and make it a big month in the history of the world.