BQuick On Sept. 25: Top 10 News Stories In Under 10 Minutes 

This is a roundup of the day’s top stories in brief.

1. Yes Bank Seeks To Extend Rana Kapoor’s Term

The board of private sector lender Yes Bank Ltd. has decided to request the Reserve Bank of India for an extension on Rana Kapoor’s term as the bank’s managing director and chief executive officer.

• The banking regulator in a letter last week had said that Kapoor’s term as MD & CEO of Yes Bank would only extend up to Jan. 31, 2019.
• The board had earlier approved a three-year term for Kapoor, starting September 2018.

A search and selection committee to find a new CEO has been formed.

2. Why IL&FS Picked This Route To Solvency

Insolvent infrastructure finance firm Infrastructure Leasing & Financial Services Ltd. has sought to reorganise its financial affairs under a scheme of arrangement involving itself and 40 group companies. The company has filed an application for such a scheme with the National Company Law Tribunal, it said in a statement today.

• The resolution of IL&FS presents a complex challenge because of its need for capital and debt restructuring and the lack of a specific legal framework.
• IL&FS is a core investment company as per classification of the RBI. That is, a non-banking financial company whose core business is to make investments.
• In RBI parlance, it is better described as a CIC - SI - ND or a Systemically Important Non-Deposit Accepting CIC.
• This classification is important as it determines what route IL&FS can take to resolve its insolvency.

And IL&FS’ 24 direct and 132 indirect subsidiaries only add layers of complexity.

3. Indian Markets Snap Losing Streak; U.S. Stocks Rise

Indian equity benchmarks snapped their worst losing streak of 2018 led by HDFC twins, Kotak Mahindra Bank Ltd. and Infosys Ltd.

• The S&P BSE Sensex Index rose 1 percent or 347 points to 36,652.
• The NSE Nifty 50 Index climbed 0.9 percent or 100 points to 11,067.
• For most part of the day, the benchmarks were highly volatile as Nifty swung 20 times between gains and losses.
• However, the sentiment improved after the LIC Chairman VK Sharma said that LIC will ensure IL&FS doesn't collapse and did not rule out raising stake in the beleaguered company.
• S&P BSE Healthcare Index was the top gainer, while the S&P BSE Realty Index was top loser.

Follow the day’s trading action here.

U.S. stocks struggled for direction after two days of declines, as surging oil prices lifted energy producers while automakers declined.

• The S&P 500 Index was little changed as of 10:40 a.m. in New York; the Nasdaq 100 was little changed.
• The tech-heavy Nasdaq 100 lagged behind other gauges as Facebook Inc. fell after Instagram’s founders said they were leaving the company.
• West Texas Intermediate crude climbed 0.5 percent to $72.47 a barrel, near the highest in almost four years.
• Treasuries fell as the Federal Reserve started its two-day policy meeting.

Get your fix of global markets update here.

4. India Not Attractive For FIIs, BofAML Says

The valuations of Indian equities aren’t compelling enough to attract foreign investors. That’s the word from Sanjay Mookim, India equity strategist at Bank of America Merrill Lynch.

• “The domestic risk off is very likely in India with the elections coming due to which we are cautious on equity markets for a while,” he said.

Here’s why BofAML expects further downside in Indian equities.

Also Read: India Loses Asia’s Best Stock Market Crown

5. Analysts Call For Faster Liquidity Infusion By RBI

With banks borrowing more from the Reserve Bank of India than they have in at least the last two years, market participants feel that the central bank needs to intervene more decisively to calm nerves.

• The liquidity deficit has moved closer to Rs 1.5 lakh crore in recent weeks driven by reasons ranging from advance tax outflows and increased demand during the festive season, to intervention in the currency markets.
• Other factors such as the approaching election season, when demand for currency increases, could mean that liquidity tightness will persist.
• Open Market Operations by the central bank can help contain the domino effects of liquidity tightening in the financial markets, said Bank of America Merrill Lynch in a report on Tuesday.
• The RBI will need to inject $40 billion (about Rs 2.8 lakh crore) by March 2019, the report estimates.

Here’s what analysts and economists are saying.

7. Oyo's $1 Billion Boost

Oyo Hotels is raising $1 billion to fund expansion into China and other global regions.

• Existing investors including SoftBank Vision Fund, Sequoia Capital and Lightspeed Venture Partners have put in $800 million, with commitments for another $200 million, the company said on Tuesday.
• About $600 million of the total will be plowed into China where Oyo began operations only 10 months ago.
• The funding values the startup at $5 billion, according to a person familiar with the matter who asked not to be identified because the matter is private.

Oyo is now India’s most valuable startup after Paytm's parent .

9. Khan Vs Modi = $35 Billion Opportunity Lost?

India and Pakistan’s bitter rivalry is costing them $35 billion worth of annual trade, the World Bank said in a report.

• Someone might want to tell the two countries’ leaders -- both of whom want to boost trade to battle widespread poverty.
• The World Bank called for South Asia, the world’s least economically-integrated region, to start cooperating instead of feuding.
• Trade between India and Pakistan, the region’s two largest economies, could jump to $37 billion from $2 billion if New Delhi and Islamabad tore down artificial barriers, last week’s report found.

Here’s how South Asia’s trade potential is being wasted.

10. U.S. Fed To Stick With Quarterly Hikes?

The Federal Reserve will raise interest rates this week and continue its quarterly drumbeat of 25-basis-point increases straight through to June 2019, according to economists surveyed by Bloomberg.

• That’s a more aggressive pace for hikes over the coming months than Fed watchers anticipated in June, when they predicted the Federal Open Market Committee would skip a move at its December meeting.
• Such a pause won’t come until next September, economists now say.
• In a poll conducted Sept. 18-20, economists expected the upper boundary of the Fed’s target range for the federal funds rate to hit 3 percent in June 2019 and stay there until the fourth quarter, when they saw a third hike for the year.
• That’s a slight step up in pace from the previous survey three months ago when the median estimate was for 2.75 percent in June.

Here’s why economists have fast-tracked their expectations.