Daily News Mail - News of 05/04/2015

Talks on over a BRICS rating agency

• After successful moves to form the Asian Infrastructure Investment Bank (AIIB), China, along with experts from the Brazil, Russia, India and South Africa, is holding talks to form a BRICS rating agency that will break the monopoly of the Big Three — Fitch, Moody’s and Standard & Poor’s (S&P).
• Russia’s Sputnik, its own rating agency and China’s Dagong rating agency are at the heart of the talks for creating a new independent agency.
• The demand for a parallel rating agency escalated after Western agencies downgraded the creditworthiness of Moscow following the crisis in Ukraine.
• The lowering of Russia’s credit ratings by three Western rating agencies was politically motivated.
• While arriving at a country’s credit rating, the U.S.-based rating agencies applied the criteria of political system, per capita GDP, independence of a country’s central bank, economic system and the level of market privatisation, as well as the right to issue international currency reserves.
• “They are all ideological criteria and have nothing to do with a central government’s ability to generate revenues and its ability to repay debts. If one uses these standards to assess credit risks of the United States, one may come to the conclusion that the U.S. economy would never default, because they can repay their debts by printing more money. It is obvious that these criteria are unfair,” said the president of Dagong.

The Big three Credit Agencies - Fitch, Moody and Standards & Poors (S&P)

• They control approximately 95% of the ratings business.
• All of them are headquartered in U.S.
• Moody's Investors Service provides international financial research on bonds issued by commercial and government entities.
• S&P publishes financial research and analysis on stocks and bonds. S&P is known for its stock market indices such as the U.S.-based S&P 500, the Canadian S&P/TSX, and the Australian S&P/ASX 200.
• The credit rating is a financial indicator to potential investors of debt securities such as bonds. These are assigned by credit rating agencies such as Moody's, Standard & Poor's and Fitch Ratings to have letter designations (such as AAA, B, CC) which represent the quality of a bond. teMoody's assigns bond credit ratings of Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C, with WR and NR as withdrawn and not rad.Standard & Poor's and Fitch assign bond credit ratings of AAA, AA, A, BBB, BB, B, CCC, CC, C, D.
• They have rated India as 'BBB-' in credit rating tier, while U.K. and Australia in AAA and U.S. in AA+.

Total Lunar Eclipse Enthrals Sky Gazers

• Total lunar eclipse seen on April 4 which was visible from all over India.
• A lunar eclipse occurs when the earth comes in between the sun and the moon, casting a shadow on the moon. 
• Total lunar eclipse - when earth completely blocks the moon.

Full lunar eclipse on April 4

Xuerui knocks out Saina

• India’s Saina Nehwal will lose her world No. 1 ranking after her gallant fight against Olympic champion Li Xuerui ended in heartbreak in the semifinals of the Malaysia Open Super Series Premier badminton tournament here on Saturday.
• World No. 1 Saina squandered a one-game advantage as world No. 3 Xuerui won a gruelling semifinal 13-21, 21-17, 22-20 in an hour and eight minutes.
• Saina once again failed to come good against Xuerui, who has now beaten the Indian nine times in 11 meetings.
• The Indian became the world No. 1 after winning the India Open last week and a last-four finish here will give her 7,700 points.
• In the men’s section, world No. 1 Chen Long and his illustrious compatriot Lin Dan will clash in the final..