1. Shaktikanta Das to Helm Reserve Bank
Former economic affairs secretary Shaktikanta Das was named the 25th governor of the Reserve Bank of India to succeed Urjit Patel, who quit abruptly on Monday, 10 December, amid a bitter dispute over the regulator’s autonomy. The appointment means that the central bank will once again be headed by a former Indian Administrative Services (IAS) officer. Patel, who had said he was resigning for personal reasons, and his predecessor Raghuram Rajan are economists.
The government began the selection process soon after Patel’s resignation. It was expedited as the government didn’t want the post to remain vacant at a crucial juncture. The appointment will be for three years. He is likely to join at the earliest, sources told ET.
(Source: The Economic Times)
2. WhatsApp with Payment Business, Reserve Bank Asks Centre & NPCI
The Reserve Bank of India has sought the opinion of the central government and payments body NPCI on concerns raised by American messaging app — WhatsApp — over the delay in approving its proposed payment business, said a top official.
A senior official at the ministry of electronics and information technology (MeitY) confirmed receipt of the RBI letter sent last week and told ET, “Whatever concerns we had with WhatsApp Payments, we have outlined them in our previous communication to NPCI and RBI.”
MeitY has previously expressed concern on whether WhatsApp’s payment service is complying with the central bank’s stipulation to store data exclusively within the country as well as issues such as the lack of two-factor authentication and the sharing of data with its parent, social network Facebook.
(Source: The Economic Times)
3. Flipkart to Invest in Furniture, Groceries; Claims to Be a Market Leader in E-Commerce
Walmart-controlled online retailer Flipkart has transaction growth of more than 80% in some months as e-commerce is booming again in the country, and the company plans to push newer categories such as furniture and groceries over the next three years.
In an interview with Mint on Tuesday, 11 December, Flipkart CEO Kalyan Krishnamurthy said that the online retailer is at least “twice the size” of its nearest competitor, implying Amazon. Amazon India chief Amit Agarwal had in a recent interview dismissed those claims, saying that Amazon did not have time to focus on “unsubstantiated claims.”
Krishnamurthy also indicated that Flipkart may either partner with a video content firm or build out its own content offering, as part of Flipkart’s broader loyalty programme, which was launched a few months ago.
(Source: Livemint)
4. India’s FTAs with ASEAN, Japan and Korea Have Widened Trade Deficit: Study
India’s three free trade agreements with the ASEAN, Japan and South Korea have not turned out to be favourable for the country as these resulted in growing deficits in merchandise trade, according to a study published by think-tank Third World Network.
“When the analysis of the three existing Comprehensive Economic Partnership Agreements (CEPA) show that the balance sheet is heavily loaded against India, there is no reason to hope that the Regional Comprehensive Economic Partnership (RCEP), which includes 16 countries, will be any different for the country,” said Biswajit Dhar, author of the report titled ‘India’s CEPAs with ASEAN, Japan and Korea’, at a discussion on Tuesday, 11 December.
(Source: The Hindu Business Line)
5. Mutual Funds, Insurers Cushion Market from Urjit Patel’s Shock Exit, BJP Loss
Buying by mutual funds and insurance companies in key index heavyweights helped Indian benchmarks recover from the initial slide triggered by surprise resignation of Urjit Patel and trends showing that the ruling Bharatiya Janata Party has lost power in at least two key states.
That even offset selling by overseas investors. Foreign institutional investors net sold Rs 2,421 crore worth of stocks today, the highest since 11 October, according to data on the website of National Securities Depository Ltd. Domestic institutional investors pumped in Rs 2,256 crore, the most since 29 October.
So far this month, overseas investors have bought Rs 6,184 crore worth of shares, while domestic counterparts sold Rs 156.76 crore.
(Source: BloombergQuint)
6. Rupee Gains Amplify Dollar Returns of Indian Market
India Inc’s dollar returns since the beginning of the year have improved since the rupee started rising from the October lows but the return in rupee terms continues to outpace gains in greenback given the dollar’s outperformance till October.
An ETIG analysis shows that shares of most big companies of India Inc have risen in dollar terms since 9 October due to the rupee’s gains. The Nifty’s rupee returns have lagged the dollar returns in the two months. But since January 1, Nifty returns in rupee terms are still better than dollar returns. For instance, the Nifty has returned 1% since 1 January, while the dollar returns have been a negative 10.4%.
ET tracked the dollar and rupee returns of the Nifty and the major companies in its edition dated November 26 and showed how important dollar returns are given that foreign institutional investors own 44% of the Nifty free float.
(Source: The Economic Times)
7. India to Add 10GW of Renewable Power in FY20: ICRA
India will add 10GW of renewable energy generation capacity in FY20, a note from ratings and research agency ICRA said on Tuesday, 11 December. The comparable figure for FY19 is 9GW.
In its note, ICRA maintained a year-end stable outlook for the domestic renewable energy sector due to large-sized capacity addition particularly in the wind and solar power segments, driven by policy support from central and state governments as well as the significantly improved tariff competitiveness of wind and solar power vis-a-vis conventional power sources.
Sabyasachi Majumdar, group head – corporate ratings, ICRA, said: “The project awards by the central nodal agencies and state distribution utilities in CY2017 and CY2018 (YTD) provide a reasonably healthy visibility for RE capacity addition in FY2019 and FY2020 with expected addition of about 9GW in FY2019 and about 10GW in FY2020.”
(Source: Livemint)
8. Govt Should Consider 100% FDI in Multi-Brand Retail Trade: CII Report
The government should consider permitting 100 per cent foreign direct investment (FDI) in multi-brand retail trade and further improve ease of doing business for the sector to promote growth in the segment, industry body CII said in a report on Tuesday, 11 December. These suggestions are part of a national retail policy released by CII. It was jointly prepared by the industry chamber and AT Kearney.
The report said that to overcome the barriers and enable a smooth growth and harmonious coexistence of traditional and modern retail, the government needs to adopt a single cohesive national retail policy, which adequately addresses all the concern areas.
The policy has suggested several steps, including strengthening labour laws by regularising policies around part-time labour to ensure greater participation of women in the workforce; and review of food safety policies to update archaic laws governing stocking limits, weights and measures, labelling, and taxes on expired food items.
(Source: The Financial Express)
9. Election Years Bring Bonanza for Street
Election years have been fruitful for stock investors in the past. Out of seven general elections in the last three decades, markets have risen five times during the election year. For instance, in 2014, the Sensex gained 18% in the six months prior to elections and 16% in the six months after the event.
Similarly, in 2009, the index gained 30% in the six month period before elections and 23% six months after the elections. Analysts said investors tend to be optimistic before the event as the markets expect the best outcome in the elections.
The markets fell only once in the six-month period before the elections in 1996. The uncertainty about the market’s performance has been higher in the one-month period before and after the elections.
(Source: The Economic Times)
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