BQuick On Sept. 4: Top 10 News Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. SEBI Panel May Suggest Easing Ownership Rules For Foreign Funds
Amid concerns over tighter foreign fund ownership rules, a panel set up by the market regulator may suggest easing the norms, according to three people with direct knowledge of the matter.
- The committee, in a draft circulated among members last week, suggested addressing some of the concerns of asset managers, said the first of the three people quoted above requesting anonymity.
- The panel, headed HR Khan, former deputy governor of the Reserve Bank of India, is scheduled to meet tomorrow and has invited representation from Asset Managers Roundtable in India, the person said.
- A SEBI spokesperson, in an emailed response said, it’s yet to get recommendations from the committee.
Here are the panel’s draft recommendations.
2. Rupee Fall Stokes Rate Hike Fears
The Indian rupee fell further on Tuesday and took bond prices down with it, as investors worried about the inflationary impact of a weaker currency.
- The rupee closed at a record low of Rs 71.57 against the dollar, down 0.5 percent compared to Monday’s close.
- The rupee has fallen 2 percent in the last five days alone. This is, however, not out of line with peer currencies like the Indonesian rupiah, which has also seen a 2 percent depreciation.
- But the fall, first seen as a healthy correction, is now leading to fear of higher interest rates.
- That showed up in the bond yields which rose to a 4-year high of 8.042 percent.
- The risk of imported inflation is keeping bond investors edgy, said Tushar Arora, senior economist at HDFC Bank Ltd.
Here’s more on the India’s currency pain.
3. Indian Markets Continue Losing Spree; U.S. Stocks Flat
India's Sensex fell for a fifth day in a row, posting its longest losing streak since May 21, as losses in consumer goods and banking shares outpaced gains in information technology stocks.
- S&P BSE Sensex Index fell 0.4 percent or 155 points to 38,158.
- NSE Nifty 50 Index dropped 0.5 percent or 62 points to 11,520.
- Seventeen of 19 sector gauges compiled by BSE ended lower.
- S&P BSE Basic Materials was the worst sectoral performer while the S&P BSE IT index was the top gainer.
Follow the day's trading action here.
U.S. stocks pared losses after a gauge of U.S. manufacturing hit a 14-year high, bolstering confidence in the world’s largest economy.
- The S&P 500 was little changed after falling as much as 0.5 percent.
- The dollar climbed as trade tensions persisted and emerging markets remained under pressure.
- West Texas Intermediate crude climbed 1.9 percent to $71.15 a barrel.
Get your fix of global markets action here.
4. Consumer Stocks’ Valuations Are Hard To Digest
Analysts don’t expect an upside in consumer stocks, most of which have given double-digit returns this year and trade close to record valuations.
- NSE Nifty FMCG Index, which has gained nearly 20 percent this year, is the best sectoral performer after the NSE Nifty IT Index’s close to 35 percent surge.
- Valuations are two standard deviations—a measure of volatility—higher than the mean, only for the second time in history, Bloomberg data showed.
Here’s why consumer stocks are so expensive now.
5. Lockheed To Make F-16 Wings In India
Lockheed Martin Corp. said it will make wings for its F-16 warplane in India as the U.S. defense giant seeks to win the world’s largest fighter jet contract from the South Asian nation.
- The wings will be manufactured at an India facility in partnership with Tata Advanced Systems Ltd.
- The jointly-managed facility will be based in Hyderabad and would form part of a planned F-16 manufacturing facility if India selects Lockheed’s jet for an outstanding 110-aircraft contract.
- The decision comes days ahead of a visit to India by U.S. Secretary of Defense James Mattis and Secretary of State Mike Pompeo.
Here’s more on the $15 billion warplane contract.
6. Arvind’s Trying A New Look—Will It Work?
One of India’s oldest textile companies, Arvind Ltd., is undergoing a dramatic makeover. So much so that in as less as five years, almost all the looms it owns and runs, in its two manufacturing facilities in Naroda and Santej in Gujarat, will be divested to partners.
- That means almost all of the textiles manufactured—about 250 million meters—will be contract manufactured by partners, processed by Arvind and converted to apparel.
- This will be done in phases and will consume 30-40 percent of the firm's textile production in two years.
In Naroda, we have given away all our looms to our partners and they are part of our value chain. So, we are becoming asset light. We will continue doing it and have started it here (Santej) also.Sanjay Lalbhai, Chairman and MD, Arvind
Here’s more on Arvind’s ambitions.
7. Justice Gogoi Gets CJI Dipak Misra’s Nod
Chief Justice of India Dipak Misra, in a letter to the government, recommended Justice Ranjan Gogoi’s name as his successor.
- If the recommendation is cleared by the central government, Justice Gogoi will be administered the oath of office on Oct. 3.
- Speculation surrounding Justice Gogoi’s appointment as the next CJI emerged following the unprecedented press conference of four senior-most judges in January this year.
- Justice Gogoi had said his actions were a “discharge of debt to the nation”.
- He is the senior-most judge in the top court after CJI Misra.
Find out more about the man likely to head India’s apex court.
8. Urjit Patel: Fighting Ghosts Of The Past And The Future
Urjit Patel’s agenda for the third year of his tenure will include ensuring the country’s hard-earned macroeconomic stability isn’t frittered away in an election year and persisting with a thorough clean-up of the banking sector, writes Ira Dugal.
- Patel won’t have the luxury of focusing on the banking sector alone.
- The immediate focus is the Indian currency.
- As Patel enters his third year, the demonetisation story appears to be behind him.
Here’s what to expect from Patel’s third year.
9. India’s Sputtering EV Ambition Needs Direction
India, which has had a wobbly start to its electric vehicle journey, is planning a national policy to push battery-powered transport as the industry awaits clarity.
- Discussion papers will be unveiled at a summit on Sept. 7-8 to seek comments, said Amitabh Kant, the chief executive officer of NITI Aayog.
- India seeks to turn 30 percent of vehicles battery-powered by 2030 to cut oil import bill and improve air quality.
- The government is yet to frame a road map for electric transport and charging infrastructure.
- To add to the complications, policymakers have been contradicting each other.
Here’s more on India’s electric mobility confusion.
10. Google At 20
We are losing our minds to Google. After 20 years, Google’s products have become integrated into our everyday lives, altering the very structure of our cognitive architecture, and our minds have expanded out into cyberspace as a consequence, writes Benjamin Curtis.
- Using Google’s services has become second nature. Our cognitive integration with Google is a reality.
- Our minds literally lie partly on Google’s servers.
- Mental privacy and the ability to think freely are both eroded.
Here’s more on how Google is linked to personal identity, mind, neuroscience, and ethics.