This is a roundup of the day’s top stories in brief.
1. India Tightens More Norms To Curb China’s Influence
India is stepping up its curbs on Chinese activity in the country, adding extra scrutiny for visas and reviewing Beijing’s links with local universities, as relations between the two nations continue to nose-dive.
- India’s Ministry of External Affairs has been told that visas for Chinese businessmen, academics, industry experts, and advocacy groups will need prior security clearance, said senior officials who asked not to be identified, citing rules for speaking to the media.
- The measures are similar to those that have long been employed with Pakistan, India’s neighbor and arch-rival, they said.
- The activities of India universities with tie-ups to Chinese institutions are likely to be drastically scaled down, one official said.
Officials say these institutions are being used to influence policymakers, political parties and corporates alike.
2. Future Group Scampers As It Stares At Default
Future Retail Ltd. is in talks with banks to help fund a missed interest payment before a deadline Friday.
- The company failed to pay $14 million of interest due July 22 on its 5.6% 2025 dollar notes, and is in a 30-day grace period that expires Friday.
- If payment were not made within the grace period, it would constitute a default -- the first by an Indian company on a dollar security since March.
- Adding to signs of strains in the broader conglomerate, another Future Group unit said it has defaulted on a rupee note interest payment.
Future’s cash crunch has been exacerbated by the Covid-19 pandemic and lockdown.
3. Hope For India’s Troubled Real Estate Market
India’s diaspora offers hope to the nation’s beleaguered real estate market in a pandemic-marred year.
- Home sales struggled to overcome multiple setbacks with sales in top eight cities falling to its lowest in a decade.
- While not many Indians are buying, developers have seen a spike in enquiries and demand from non-resident Indians in the ongoing financial year.
- Developers say a weaker rupee, return of several Indians from Middle East and lower interest rates for housing loans are some of the triggers.
As many as 40,000 NRIs could be looking to purchase assets in India. More details here.
4. Nifty Ekes Out Weekly Gain, U.S. Stocks Near Record Highs
Indian equity markets ended off the highest point of the day but managed to eke out a weekly advance, aided by positive global cues.
- The S&P BSE Sensex ended 0.56% higher at 38,434 while the NSE Nifty 50 index ended at 11,376; up 0.57%.
- Both the indices ended higher in four out of the five trading sessions this week.
- Among the sectoral indices, the Nifty Bank ended with gains of 1.4% while the index housing its state-run counterparts ended 1.8% higher.
- The smallcaps outperformed in today's session with the index ending 1% higher. The midcap index was in-line with the benchmarks, ending 0.5% higher.
- Max Healthcare Institute Ltd. made its stock market debut closing 5% higher at Rs 112 apiece.
Follow the day’s trading action here.
U.S. stocks fluctuated near all-time highs as traders awaited economic data.
- The S&P 500 was poised for its fourth straight weekly advance - the longest winning streak this year.
- Industrial, financial and technology companies led gains in the benchmark gauge on Friday, while commodity shares retreated.
- Business activity expanded in August at the strongest pace since early last year as faster growth at manufacturers spilled over to service providers, indicating the recovery is broadening.
Get your fix of global market update here.
5. Outgoing MPC Member Questions India’s Inflation Data
An outgoing member of India’s monetary policy committee raised concerns over the inflation data released by the government statistical office for the months when the country was under a lockdown.
- The data, according to Ravindra Dholakia, was contrary to other indicators which suggest a fall in inflation rather than the rise suggested by the data released by the statistical office.
- Dholakia said he has “strong reservations in accepting the implicit inflation numbers for April and May announced by the NSO”.
- He argued that the data is not in sync with other indicators available.
- Dholakia raised a second concern related to the weight given to different commodities in the inflation index.
Read in detail Dholakia’s concerns and why those may be skewing inflation data.
6. NCLT To Hear Anil Ambani Bankruptcy Case
An Indian court has agreed to hear a petition by the nation’s largest lender seeking to initiate personal bankruptcy against tycoon Anil Ambani after the former billionaire failed to repay debt.
- A two-member panel of the National Company Law Tribunal, in Mumbai has appointed a bankruptcy administrator to verify a claim by State Bank of India, or SBI, that Ambani offered about $160 million of personal guarantees while seeking loans in 2016 for his now insolvent Reliance Communications Ltd. and Reliance Infratel Ltd., according to an order on the court’s website.
- The tribunal can admit Ambani into bankruptcy process or reject the case based on the report.
- The ruling is the most high-profile insolvency case against a founder who pledged to pay loans on behalf of their companies.
And it could set precedent for future lawsuits.
7. RBI Governor Says Loan Restructuring Will Help Revive Economy
New measures to allow Indian lenders to restructure loans will provide a “durable” resolution for cash-strapped businesses and help revive the economy, according to the central bank’s chief.
- “On one hand health of banks is very important and on the other hand businesses are under a lot of stress due to covid,” Reserve Bank of India Governor Shaktikanta Das Das said in an interview with CNBC-Awaaz on Friday.
- The plan has replaced a blanket loan moratorium that’s due to expire later this month, he said.
- Das said the moratorium was a “temporary solution” for lockdown and not a permanent fix.
Das also said banks will be able to extend or provide a new moratorium to borrowers under the new plan.
8. The Man With The Toughest Job In Indian Finance
Late in the evening of March 5, Prashant Kumar took an unexpected call from his boss at State Bank of India. He was offered the job of rescuing the country’s most troubled private-sector bank, and -- if he accepted -- told to report for work at 8 a.m. the following morning.
- Kumar had little hesitation in accepting the position of chief executive officer of Yes Bank Ltd., the lender that was teetering on the edge of insolvency before being bailed out that month at a cost of $1.3 billion.
- The only concern came from his wife, who Kumar says was “shocked” that he had resigned from his safe post at the government-controlled SBI, where he was chief financial officer.
- Another failure of a financial institution would have been “catastrophic,” Kumar said of Yes Bank’s rescue, which came following the collapse of two shadow lenders.
Confidence of people, customers and even employees was shaken. The bank had a large stressed book. It was a very different challenge than handling money at SBI.Prashant Kumar, CEO, Yes Bank
Here’s how Kumar is restoring faith at Yes Bank and what lies ahead.
9. GST Compensation Conundrum: Between A Rock And A Hard Place
What is way the forward with respect to the centre’s obligation to compensate the states in respect to GST. Mukesh Butani and Tarun Jain lay out the options.
- The assured compensation was predicated on the assumption that states would be able to secure growth.
- The Covid-induced crisis has merely worsened the situation.
- The response shaped now must institute itself as a crisis-resolution benchmark for times to come.
Here’s what the GST Council should do when it meets next on Aug. 27.
10. Covid-19: India Cases Cross 29 Lakh
The Covid-19 infection rate shows no signs of abating as the highly contagious pathogen spreads rapidly in the world’s second-most populous nation after it eased containment measures to revive the economy.
- India added nearly 69,000 new cases in the last 24 hours, taking the total tally to over 29 lakh in the Asia's third-largest economy.
- This includes nearly 55,000 deaths and over 21.5 lakh patients who have recovered.
- India’s weekly new cases spike is the highest in the world.
- On average, India added 63,000 daily Covid-19 cases ahead of U.S. that added 47,000 cases over the last one week.
Track all Covid-19 related news and updates in India, here.
Globally, cases crossed 27.7 million with deaths passing 79,00,000.
- Europe is grappling with a resurgence of coronavirus infections, with little appetite among top officials to resort to stringent restrictions that helped control the spread earlier this year.
- A flareup of cases in Japan may be peaking, a government adviser said.
- South Korea’s latest wave of infections has spread almost nationwide. Argentina reported record daily cases.
- In the U.S., the outbreak in southern states is slowing and deaths should start to fall next week, said the head of the Centers for Disease Control and Prevention.
Follow the global spread of the virus here.
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