Why is Nomura upbeat about Indian tyre industry? Apollo Tyres, Ceat & Balkrishna on its radar

    Global research firm believes that the Indian tyre industry is witnessing a phase of cyclical uptick in demand.

    The industry fundamentals are in a better shape now due to the demand and high utilization as well, analysts at the firm wrote in their report.

    It sees 8 percent volume CAGR over FY18-21.

    The segment is a good play on the back of healthy growth outlook, pricing discipline, and benign commodity prices, which will support margins.

    Further, the benign commodity prices could also lead to 20-25% EBITDA CAGR over FY18-21.

    Nomura expects strong demand scenario to keep utilization healthy.

    Among stocks, it has initiated coverage on Apollo Tyres with a target at Rs 288, along with Ceat and Balkrishna Industries.

    On Ceat, it neutral with a target at Rs 1,346. In case of Balkrishna Industries, it is also neutral with a target at Rs 1,008.


    Prudential already has a large footprint in China — the challenge is to grow that, says its CEO

    Jason Alden | Bloomberg via Getty Images

    China is committed to opening up its insurance sector just as it’s indicated, but it will be on its own time, said Mike Wells, Prudential Group CEO on Tuesday.

    “Beijing is saying they have a plan for greater opening, and I think like everything in China the time frame is misaligned with U.S. time frames,” Wells told CNBC at the Singapore FinTech Festival.

    “You’re not going to succeed across Asia if you’re not successful in China,” Wells said.

    Prudential, Britain’s largest insurer, has been expanding into China for years. Prudential has a 50-50 joint venture with Chinese conglomerate Citic.

    “We have licenses in about 70 percent of the economic footprint now with China, so our biggest challenge is growing into that footprint quickly,” Wells said.

    China said this year it would accelerate a plan to lift the foreign ownership restriction in life insurance companies to 51 percent and eventually fully scrap the restriction.

    “I think China’s not looking for a flood of foreign models, insurers and management teams in the market but they are saying ‘We want the expertise, the products, the capabilities,'” he said.

    Since August, there have been media reports that China’s most valuable insurer Ping An Insurance Group is looking to buy Prudential’s Asian business.

    Last month, Prudential’s Asia chief executive, Nic Nicandrou, said the insurer had not received any offer for the regional business.

    Asked about the Ping An deal, Wells said he was unable to comment on mergers and acquisitions, but that Prudential now has its hands full spinning off its U.K. business.

    “It’s not off the table but … our days are pretty full right now,” Wells said.