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In Mumbai, a stock breeder who built his firm into a multi-billion dollar financial giant has one thing in mind: Donald Trump's tweets
Raamdeo Agrawal says he's doing part of the collateral damage of US President's statements on Twitter, but not those on trade. No, which annoys the co-CEO of Motilal Oswal Financial Services Ltd. – and harming its investments – is something completely different: Trump's renewed hostility to Iran, his prayers to the OPEC countries, and his "We are 70 to 80% dependent oil imports and Mr. Trump is not helping, "said Agrawal in an interview with the firm's office building. in the center of Mumbai. "Every day, he tweets in one way or another."
Trump canceled a nuclear deal with Iran in May and urged his allies to end all Iranian oil imports in November. This has pushed the price of Brent crude oil to about $ 80 a barrel on supply reduction forecasts. Then, the US president began using means such as Twitter to put pressure on oil exporting countries to reduce prices by increasing production.
Only this week, Brent jumped – then backed away – after Trump threatened Iranian President Hassan Rouhani
Iran produced 3.8 million barrels of crude per day, China and China. India being its main export markets. Countries such as India have to choose between irritating Trump by ignoring the US requirements of not buying Iranian oil or abandoning the savings on shipping costs and long credit periods that He obtained $ 9 billion worth of crude oil purchased from the Islamic Republic. March
According to Agrawal, oil could rise to $ 100 per barrel if the United States were able to reduce Iran's exports to zero. "I think it will not happen and it's only posture," he added.
Read: Trump or Cheap Iran Oil: Dilemma Facing India
Higher crude price on the economy and markets of India. India is the fastest growing oil user in the world, about three quarters of its crude oil coming from abroad. The country imports some 220.4 million tons a year.
Higher crude prices fuel inflation and, as the central bank is required to keep retail prices within a range, interest rates rise, weighing on economic growth. also weakens the rupee, pushing global funds to sell Indian assets. It is a vicious circle: it further depreciates the currency, increasing the price of crude in terms of rupee. The Indian currency hit a new low of 69.1275 for a dollar on Friday. Many analysts expect it to fall beyond 70.
Then there is the stock market of $ 2.1 trillion and the impact on specific sectors such as oil refining, which is the main concern of Agrawal. "I am refining companies in India, but I care about them because I have a 10% allocation in my portfolio," he said.
Agrawal began his career as a sub-broker on the Bombay Stock Exchange in 1987, piling up inside a lobby and shouting orders under the open outcry system. He has worked with his partner Motilal Oswal to build a $ 1.7 billion company whose shares have returned an average of 17% per year since its IPO in 2007. Motilal Oswal Asset Management focuses its investments in the value of small and mid-caps.
India's benchmark stock index has risen 8% since the beginning of the year, exceeding the previous record of January, one of the best performances of the major countries Asian. But the rally is pulled by fewer stocks, with only about half of the 30 Sensex companies trading above their 200-day moving average price.
While Agrawal remains a long-term bullish on Indian stocks, he says he's not trying. He would not be surprised if he was assaulted by outside forces, including the US president.
"I do not know how many tweets are yet to come," he said about Trump. "Every day, he wants a new excitement."
– With the help of Saket Sundria
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