If there is a morality tale here, it is that debt and death spare no king.
If you are running a sweetmeat shop, will you manage a dairy for milk supply or buy milk from the market? Banks are running a dairy (which has its cost for processing milk), while NBFCs are buying milk from the market, observes Tamal Bandyopadhyay.
Given the dimensions, it is bound to have at least ripple effects across markets. Could ripple turn into cascade? asks Devangshu Datta.
RBI Governor Shaktikanta Das kept the red flag on cryptocurrencies flying, warning that the next financial crisis can be triggered by private cryptocurrencies if such speculative instruments are allowed to grow.
With inflation figures expected to be well within RBI's target, there may be room for further rate cut.
With Deputy Governor Viral Acharya and another member Chetan Ghate voting for a status quo, RBI governor Shaktikanta Das and three others outvoted them for reduction in repo rate to 6.25 per cent from the existing 6.50 per cent.
India is much better placed today to deal with future waves of the pandemic relative to the first wave, RBI deputy governor Michael Patra said.
The rupee declined by 10 paise to close at 79.23 (provisional) against the US dollar on Friday, tracking the strength of the American currency in the overseas market. At the interbank foreign exchange market, the local currency opened at 79.20 and finally ended at 79.23, down 10 paise over its previous close of 79.13. "Gains for the currency were short-lived even after RBI announced forex related measures. "Pound held on to its gains after Boris Johnson said he was quitting as prime minister following a rush of ministerial resignations and calls for him to go," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
The Supreme Court on Thursday asked the Sebi to probe within two months allegations of stock price manipulation by the Adani group and any lapses in regulatory disclosures, and also set up a panel to look into protection of Indian investors after a damning report by a US short seller wiped out more than USD 140 billion of the conglomerate's market value. The top court while directing the setting up of a six-member committee headed by former apex court judge Justice A M Sapre for the assessment of the extant regulatory framework and for making recommendations to strengthen the process said it was appropriate to set up such a panel of experts in order to "protect Indian investors against volatility of the kind which has been witnessed in the recent past". The court-appointed Justice Sapre panel, which will be provided assistance by the Centre and other statutory agencies including the Sebi chairperson, will have to submit its report in a sealed cover within two months, said the bench which comprised Chief Justice D Y Chandrachud and Justices P S Narasimha and J B Pardiwala.
These funds give the wealthy an option to invest in strategies that other equity products like mutual funds and portfolio management services cannot, says Nishant Agarwal.
While rising interest rates and tighter liquidity are giving negative signals for the financial sector, increasing economic activity could mean higher business volumes for lenders. Liquidity in the banking system has moved from Rs 8 trillion surplus into a deficit of Rs 33,000 crore over the 2022 calendar year. By the end of November, bank credit had grown 17.5 per cent YoY (year-on-year).
Before considering reducing the freedom of private investors in the derivatives market, we need to check if the maladies in markets elsewhere exist in India, says Susan Thomas.
Don't be surprised if growth in the second half of the financial year drops below 4%, which is where it was in the year before the pandemic, warns T N Ninan.
The government may have to resort, eventually and however unwillingly, to printing money, abandoned as policy and practice in the 1990, predicts T N Ninan.
The government plans to bring down its stake to 26 per cent in these two banks, which are yet to be identified. This may not come in the way of getting investors for these banks, provided the government is willing to step back rather than run them the way it had been doing for over five decades since these banks were nationalised, points out Tamal Bandyopadhyay.
Benchmark stock indices opened the week on a muted note on Monday, with the Sensex plunging nearly 483 points due to selling in IT, capital goods and banking shares amid losses in global equities. The Sensex tanked 482.61 points or 0.81 per cent to settle at 58,964.57. During the day, it tumbled 552.78 points or 0.92 per cent to 58,894.40. The 50-issue Nifty declined by 109.40 points or 0.62 per cent to finish at 17,674.95 as 29 of its stocks declined.
SBI Research has projected the Indian economy to grow at 7.5 per cent in 2022-23, an upward revision of 20 basis points from its earlier estimate. As per official data, the economy grew by 8.7 per cent in FY22, net adding Rs 11.8 lakh crore in the year to Rs 147 lakh crore, the report said, adding this was however only 1.5 per cent higher than the pre-pandemic year of FY20. "Given the high inflation and the subsequent upcoming rate hikes, we believe that real GDP will incrementally increase by Rs 11.1 lakh crore in FY23. "This still translates into a real GDP growth of 7.5 per cent for FY23, up by 20 basis points over our previous forecast," SBI chief economist Soumyakanti Ghosh said in a note on Thursday.
If you are buying a bond to cater to your regular income needs, check the interest distribution schedule.
Assume that the rupee will trend lower over the next 10 years as India increases overseas sovereign exposures, and your long-term asset allocation should be geared to deal with this trend, suggests Devangshu Datta
The central government is on track to meet its fiscal deficit target of 6.4 per cent of the GDP for 2022-23 on the back of strong growth in revenue collections, the World Bank said in its India Development Update on Tuesday. High nominal GDP growth in the first quarter supported strong growth in revenue collection, especially Goods and Services Tax (GST), despite tax cuts on fuel. Notwithstanding an increase in spending due to expanded fertilizer subsidies and food subsidies for vulnerable households in response to the commodity price shock, the government is on track to meet its FY22/23 fiscal deficit target of 6.4 per cent of GDP and the general government deficit is projected to decline to 9.6 per cent from 10.3 per cent in FY21/22 and 13.3 per cent in FY20/21.
In the context of market integrity, the IRAI and RBI should go over the minutes of the LIC and SBI board meetings when the decisions to invest in Adani equity or debt were taken, notes Jaimini Bhagwati, former World Bank treasury professional.
The Reserve Bank's rate-setting panel will start its 3-day deliberations on Wednesday amid expectations of yet another rate hike of 50 basis points to check high inflation, in line with similar actions taken by other major central banks, including the US Fed. Based on the recommendations of the Monetary Policy Committee (MPC), the RBI had effected 50 basis points increase in repo rate each in June and August after raising the short-term lending rate by 40 basis points in an off-cycle decision in May. The MPC, headed by RBI Governor Shaktikanta Das, is scheduled to meet during September 28-30.
Many emerging economies have witnessed a flight of foreign portfolio capital and their currencies have slumped against the dollar.
India's external debt stood at $554.5 billion at end-June, recording a decrease of $3.9 billion over its level at the end of March 2020, the RBI said on Wednesday. Further, the external debt to GDP ratio increased to 21.8 per cent at June-end 2020 from 20.6 per cent as on March 31.
China's debt is dangerously high at close to three times its GDP, with the ratio having nearly doubled in recent years, observes T N Ninan.
According to a senior police officer of the Thane police, Hasnain had borrowed around Rs 67 lakh from his close kin on various occasions under the pretext of doing business.
'A strong foreign exchange reserve is the best safety net against global spillovers.'
India's current account slipped into a deficit of $9.6 billion or 1.3 per cent of GDP in the September quarter, the Reserve Bank said on Friday. The current account, which records the value of exports and imports of both goods and services along with international transfers of capital, was in a surplus mode both in the quarter-ago and year-ago periods. India's current account surplus had stood at $6.6 billion or 0.9 per cent of GDP in the April-June 2021 quarter, while in the year-ago period (Q2FY22), the surplus had stood at $15.3 billion or 2.4 per cent of the GDP, the data said.
'... as has been happening in the last three weeks, then the foreign exchange reserves will not be comfortable to ensure that the rupee does not fall drastically.'
RBI Governor Shaktikanta Das has assured Finance Minister Nirmala Sitharaman that the Rs 12.05-trillion gross borrowing programme for FY22 will go through smoothly.
'It's hard to call whether the Indian markets will go through a time or price correction.' 'There could be a swift 5 to 10 per cent fall in the market in the next two months or there could be a gradual fall and six months sideway movement.' 'Eventually, I think there will be a bit of both.'
Three-four big gem and jewellery firms are showing financial weaknesses and might find it tough to withstand shocks
'Higher than expected inflation in the US or the European Union, faster than expected tightening by the major central banks, break out of a war in Europe, and withdrawal of portfolio equities from the emerging markets are factors which can result in equity market corrections.'
Armed with necessary macro and micro growth drivers, India is on its way to becoming the fastest growing major economy in the world, a finance ministry report said. Rapid vaccination and teeming festivities will push India's ongoing recovery resulting in narrowing of demand-supply mismatches and greater employment opportunities, as per the monthly Economic Review prepared by the ministry.
India's current account deficit is expected to deteriorate in the current fiscal on account of costlier imports and tepid merchandise exports, according to the Finance Ministry's monthly economic review. The review released on Thursday by the ministry also said that global headwinds would continue to pose a downside risk to growth as crude oil and edibles, which have driven inflation in India, remain major imported components in the consumption basket. For the present, it said, "their global prices have softened, as fears of recession have dampened prices somewhat. This would weaken inflationary pressures in India and rein in inflation."
However, the RBI is still not in a mood to issue an OMO calendar, which was the expectation in some sections of the market.
'Long-term retail investors should not worry about these sharp dips and jumps if they have chosen their stocks wisely.' 'Short-term volatility is a given and a rise and fall of two-three per cent should not worry them.'
Indian corporate giants, Reliance Industries and Tatas are looking at the option of raising finances through the Japanese Depository Receipts route, a top Japanese minister said in Mumbai on Wednesday.
Non-banking finance companies face renewed asset quality and liquidity risks amid a second wave of COVID-19, Fitch Ratings said on Thursday. These challenges are likely to increase if recent restrictions to contain the pandemic are expanded or prolonged, leading to greater economic and operational disruption, it added. The rating agency further said that an increase in the rate of infections and broadening of social distancing restrictions pose downside risks to its 12.8 per cent growth projection for the current fiscal.
The latest attachment order was issued by the central probe agency against Ms PD Agroprocessors Pvt Ltd, one the defaulters at the bourse.
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