BQuick On Sept. 28: Top 10 News Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. India Cuts Planned Market Borrowings For This Year
The government on Friday said that it would borrow lesser than earlier planned in the second half of the current financial year, in order to ensure that bond markets remain calm and liquidity remains comfortable. It also assured the markets that it intends to stay within its fiscal deficit target of 3.3 percent set for the current year.
- The government intends to borrow Rs 2.47 lakh crore from the markets in the October-March period. This compares to Rs 2.88 lakh crore in the first half.
- Based on the total budgeted gross borrowing of Rs 6.06 lakh crore, the government would have needed to borrow close to Rs 3.2 lakh crore.
- The borrowing program will mean an average weekly borrowing amount of Rs 11,000 crore spread across 21 auctions.
Here’s more on how the government plans to borrow.
2. Bandhan Bank Gets Punished
One of India’s youngest lenders Bandhan Bank Ltd. has just received a strong rap on the knuckles from the Reserve Bank of India.
- The central bank has placed restrictions on Bandhan as it failed to lower promoter holding to meet the cap prescribed by the regulator.
- The Reserve Bank of India stopped Bandhan Bank from opening new branches unless it seeks the regulator’s approval each time, the microlender-turned-universal bank informed exchanges.
- The RBI also froze the remuneration to Managing Director and Chief Executive Officer Chandra Shekhar Ghosh at the current level till further notice.
With this, the RBI has sent a clear message to Kotak Mahindra Bank as well.
3. KKR, Blackstone Eye Shriram Group Stake
KKR & Co. and Blackstone Group LP are among suitors that have expressed interest in acquiring a stake in Shriram Group, the Indian finance conglomerate backed by billionaire Ajay Piramal, people with knowledge of the matter said.
- The two private equity firms have each held preliminary talks in recent months about buying stakes in Chennai-based Shriram Group owned by Piramal Enterprises Ltd., TPG and an employee trust.
- An investment could total about $3 billion, the people said, asking not to be identified because the information is private.
- A deal would require group holding company Shriram Capital Ltd. to first finalize plans for a three-way merger with its publicly traded arms, Shriram Transport Finance Co. and Shriram City Union Finance Ltd.
4. Viral Whatsapp Message Sends Infibeam Into Free Fall
India’s Infibeam Avenues Ltd. lost 71 percent of its market value on a single day after a WhatsApp message circulating among traders raised concerns about the e-commerce company’s accounting practices.
- Speculation mounted before a shareholder meeting on Saturday after a message attributed to brokerage Equirus Securities Pvt. began circulating on WhatsApp, said Bhavin Mehta, an analyst at Dolat Capital Market Ltd.
- The message was sent a few months ago by an Equirus analyst to some clients and resurfaced on the messaging platform Thursday, people familiar with the matter said, asking not to be identified as they aren’t authorized to speak on the issue.
Infibeam has clarified that there are no pending announcements that may impact its share price.
5. Indian Markets Fall For Third Day; U.S. Stocks Slump
Indian equity benchmarks fell for third day in a row paced by losses in Larsen & Toubro, Yes Bank, Maruti Suzuki, Bharti Airtel and Tata Steel.
- The S&P BSE Sensex fell 0.27 percent or 97 points to 36,227
- The NSE Nifty 50 Index declined 0.4 percent or 47 points to 10,930.
- On monthly basis, the benchmarks posted their worst decline since February 2016. This is also the worst September for Indian markets since the Lehman Brothers crisis of 2008.
Follow the day’s trading action here.
U.S. stocks slumped toward the end of what is shaping up to be the best quarter in five years, while the dollar advanced with Treasuries as investors kept an eye on political drama in Washington. Italy’s budget proposal rattled the nation’s financial assets, weighing on European equities.
- The S&P 500 rose 0.2 percent at 9:31 a.m. in New York. The measure has rallied almost 7 percent in the third quarter.
- The Nasdaq indexes fell at least 0.1 percent, while small caps were little changed.
- The Stoxx Europe 600 Index dipped 0.8 percent, the biggest decrease in more than three weeks.
Get your fix of global markets update here.
6. The IL&FS Rescue Act
Conversations around a possible rescue of strained Infrastructure Leasing & Financial Services Ltd. have narrowed down to a handful of large investors, with a number of domestic institutions deciding to stay away from an upcoming rights issue of the firm.
- At a meeting with three large shareholders of IL&FS on Friday, the banking regulator has asked for ways to arrest defaults at the infrastructure financiers.
- According to people in the know, senior officials from the central bank has met with representatives at IL&FS, Life Insurance Corporation of India, Orix Corporation and Abu Dhabi Investment Authority.
- LIC Chairman VK Sharma has said that it is not ruling out options like a rights issue or capital infusion. He added that about Rs 70,000 crore can be recovered just by selling assets.
7. Is India Targetting The Right Imports?
The government on Wednesday announced a decision to increase customs duty on 19 items to help bring down India’s current account deficit.
- Most of the items where duties have been hiked are consumer goods, which have a relatively low share in India’s total imports.
- The total share of the 19 commodities chosen by the government is between 2.5-3 percent, say economists.
- The higher duties could help in the short term but are not a long term fix for the current account deficit, wrote Pranjul Bhandari, chief India economist at HSBC.
8. Supreme Court Allows All Women To Enter Sabarimala Temple
In a 4:1 verdict, Supreme Court granted women, of all age groups, entry into Kerala's Sabarimala temple, breaking the temple's age-old tradition of restricting menstruating women from entering its premises.
- The five-judge bench headed by CJI Dipak Misra with Justices RF Nariman, AM Khanwilkar, DY Chandrachud and Indu Malhotra pronounced the verdict, with Malhotra dissenting.
- CJI Dipak Misra said that a woman is not inferior to a man and patriarchy cannot be permitted to trump over faith
The Supreme Court today also refused to interfere with the arrest of five rights activists by the Maharashtra Police in connection with the Koregaon-Bhima violence case and declined to appoint a Special Investigation Team to probe their arrest.
- A three-judge bench headed by Chief Justice of India Dipak Misra, in a 2:1 verdict, refused the plea seeking the immediate release of the activists.
- The bench also extended the house arrest of the activists by four weeks.
9. Zebpay Shuts Down Bitcoin Exchange
One of India’s largest cryptocurrency exchanges is downing its shutters nearly five months after the Reserve Bank of India’s virtual ban on digital currencies crippled its business.
- Zebpay said in a blogpost that it’s closing its exchange business. “Starting Friday 4 pm, we are cancelling all unexecuted crypto-to-crypto orders and will be crediting the coins or tokens back to the users’ wallets,” it said, adding that no new orders will be accepted until further notice.
- “The curb on bank accounts has crippled our, and our customer’s, ability to transact business meaningfully. At this point, we’re unable to find a reasonable way to conduct the cryptocurrency exchange business,” Zebpay wrote.
- The shutting down of the exchange, is the first major setback after RBI’s crackdown which barred regulated entities that includes banks, non-banking financial companies, payment banks and mobile wallets from dealing in virtual currencies.
The Supreme Court is yet to rule on the future of cryptocurrencies in India.
10. Elon Musk Facing Ouster
The Securities and Exchange Commission is seeking a monetary fine and will ask a judge to bar Tesla chief Elon Musk from serving as an officer or director of a public company, the agency said in a lawsuit filed in New York.
- Musk misled investors by claiming falsely that he had lined up funding for the transaction, the suit alleged.
- SEC officers also spelled out Musk's carelessness and erratic behaviour—from threatening to “burn” short-sellers who targeted Tesla stock to seeking to amuse his girlfriend, the pop singer Grimes, by weaving in a “marijuana culture” reference to his go-private bid.
- Tesla Inc.’s board has backed Musk but the news has unnerved investors who are already worried about the company's ability to turn around profits.
...And Here’s Your Fix Of Aadhaar For The Day
Aadhaar: Supreme Court Saves The Baby, Drains The Bath Water
The 1,448-page judgment restored the sanctity of the original concept of Aadhaar as an instrument of authenticating identity to ensure delivery of goods, subsidies, and services to the entitled beneficiary. Along the way, it raised pertinent issues, censured overreach and righted many wrongs that had crept in, writes Shankkar Aiyar, the author of ‘Aadhaar: A Biometric History’.
- The judgment is a reminder that the individual is the sovereign, the principal; and the government, is but, the agent.
- Justice Chandrachud’s minority view, of judicial review of a Lok Sabha Speaker’s decisions, does merit attention and a reasoned debate.
- The answer to ‘will the government legislate to allow the merger of Aadhaar’s silos to draw profiles?’ depends on ‘can the government legislate?’