25 December 2023 : Important Financial News in India

FINANCE MARKET HEADLINES TODAY
FINANCE MARKET HEADLINES TODAY

Source: Economic Times, “Today’s ePaper”

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Table of Contents

RIL, Disney Ink Non-binding Agreement for Mega Merger 

Reliance Industries Ltd (RIL) and Walt Disney Co have agreed to explore a major merger to establish India’s largest media and entertainment business. This preliminary, non-binding agreement indicates their intention to combine forces, potentially creating a significant player in the Indian market. This development could reshape the media landscape in India, bringing together RIL’s local expertise and Disney’s global presence. The merger, if finalized, could mean more diverse entertainment options for Indian consumers and possibly influence how media content is produced and distributed in the region.

Paytm Fires over 1,000 across Units amid Cost-cutting 

One 97 Communications, the parent company of Paytm, has terminated more than 1,000 employees across various departments. This move is part of a broader strategy to reduce costs and realign the company’s business structure. For Paytm, a major player in India’s financial services sector, these layoffs suggest a shift in business priorities or a response to financial pressures. This could have wider implications for the Indian startup ecosystem, indicating a potential trend of cost optimization and restructuring in the face of economic challenges.

‘Get Lenders Dressing up Loans to Cut Exposure’ 

Alternative investment funds (AIFs) in India are facing new regulatory challenges, particularly concerning the practice of ‘evergreening’ loans by lenders. ‘Evergreening’ refers to the process where banks give new loans to help borrowers pay off old ones, often to avoid classifying these loans as non-performing assets. The Reserve Bank of India (RBI) is being urged to mandate lenders to reduce their reliance on AIFs for this purpose. This situation highlights the complexities in the Indian financial system and the need for stricter regulations to ensure transparency and financial stability.

RBI Cracks Down on Illegal Forex Trading 

The Reserve Bank of India (RBI) is intensifying efforts to combat illegal foreign exchange trading. Collaborating with banks and the government, RBI aims to tighten controls to prevent the misuse of banking channels for unauthorized forex activities. This crackdown reflects RBI’s commitment to maintaining the integrity of India’s financial system and protecting it from illicit operations. It underscores the ongoing challenges in regulating complex financial markets and the importance of robust measures to safeguard economic interests.

Economic Growth to Boost Demand of Corporate India, Says Fitch Ratings 

Fitch Ratings projects that India’s robust economic growth will stimulate corporate demand. This follows a strong corporate performance in 2023, expected to counterbalance slower growth in international markets. It suggests an optimistic business environment in India, potentially leading to greater corporate profitability and investment opportunities.

Buying Genuine Art and Avoiding Frauds 

A Mumbai investment banker lost ₹18 crore to fraudulent art sales, emphasizing the risks in the high-value art market. This incident underscores the importance of due diligence and authenticity verification in art transactions, especially when dealing with high-priced pieces by renowned artists.

Vedanta Okays ₹200-cr Political Contribution 

Vedanta Ltd’s board has approved a ₹200 crore contribution to political parties. This decision comes amidst the company’s efforts to manage a significant bond repayment. It indicates Vedanta’s strategic involvement in the political sphere, possibly to influence policy-making or maintain favorable business conditions.

Gr Noida Housing Project First to be Revived under UP Govt’s New Policy 

Shri Radha Sky Gardens in Greater Noida is the first to benefit from Uttar Pradesh’s new policy for stressed housing projects. This initiative aims to help over 2,000 homebuyers, demonstrating the government’s commitment to address real estate challenges and support homebuyers in distressed projects.

Emotional Gamble of a Hand-Knitted Gift 

This story about Cydney Alvarez knitting two left-handed mittens for her stepmother illustrates the personal and emotional investment in handmade gifts. It highlights the unique challenges and sentimental value associated with creating personalized gifts, especially during holiday seasons.

Big Tech Cos Pause Hiring in India as Slowdown Bites 

Major tech firms in India are slowing their hiring due to economic challenges and global layoffs. This trend indicates a cooling in the Indian tech job market, reflecting broader economic issues and possibly signaling a shift in the industry’s growth trajectory.

PWC Survey Shows Cyber Risks as Top Threat For Organisations 

PwC’s survey reveals that cyber risks are now the top concern for Indian organizations, overtaking other threats. This shift to prioritizing cybersecurity indicates a growing awareness of digital vulnerabilities and the need for robust security measures in the corporate sector.

NaBFID MD Bats for Reintroduction of S4A for Debt Restructuring 

Rajkiran Rai G, MD of NaBFID, supports reintroducing the S4A scheme for better management of stressed assets in infrastructure finance. This highlights the need for effective financial tools to handle challenging debt situations and suggests a push for more versatile and responsive financial strategies.

No Takers for Rupee Payment for Oil Imports 

India’s initiative to use the rupee for oil imports faces reluctance due to concerns about fund repatriation and high costs. This indicates the difficulties in changing established trade practices and the dominance of traditional currencies like the US dollar in global trade.

FMCG Industry Expects Double-digit Growth in 2024

India’s FMCG sector anticipates double-digit growth in 2024, driven by increased rural demand and favorable market conditions. This optimism suggests a recovery from previous challenges and potential growth opportunities in the consumer goods market.

US Proposes New Online Privacy Safeguards 

The US is strengthening online privacy protections, especially for children. This major regulatory update signifies an enhanced commitment to consumer privacy, potentially leading to stricter data protection standards and more secure online environments for users, particularly minors.

Steel Production in India Grows to 11.7 mt in Nov; Global Output at 145.5 mt 

India’s steel production rose significantly in November, indicating strong industrial activity. This increase in production contributes to India’s growing presence in the global steel industry, highlighting its industrial strength and potential for further growth.

ChatGPT Ends The Year with a Long List of New Competitors 

ChatGPT faces new competition, reflecting the dynamic and rapidly evolving landscape of AI chatbots. This competition signals increased innovation and diversity in the AI field, offering more choices and advancements for users and businesses.

Hedge Funds Increase Bullish Oil Bets for First Time Since Sept 

Hedge funds are showing renewed interest in oil investments due to potential risks affecting global energy supplies. This trend suggests an expectation of rising oil prices and indicates shifting investment strategies in response to global geopolitical developments.

Investment of ₹200 cr for Medicinal Plant Sector of NE Soon: Sonowal 

The Indian government plans a ₹200 crore investment in Northeast India’s medicinal plant sector. This initiative aims to strengthen the market potential and regional development in this area, reflecting a focus on traditional medicine and regional economic growth.

Dalal St may Have Much to Cheer in this Poll Year too, Nifty Could ‘Log 17% Gains’ 

Elections in India, the world’s largest democracy, are significant economic events that also impact the capital markets. This year, there’s an expectation that the Nifty Index may see a substantial 17% gain. Historically, elections can influence investor sentiment and market dynamics, possibly due to anticipated policy changes or economic reforms. A 17% rise in Nifty suggests a bullish outlook for the Indian stock market, reflecting investor confidence in the political and economic future of the country.

Gross FPI Inflows Top ₹3 Lakh Crore in Dec on Global Rush for EM Stocks 

Foreign Portfolio Investment (FPI) inflows into India topped ₹3 lakh crore in December, driven by a global rush for Emerging Market (EM) stocks. This surge indicates strong international investor interest in Indian markets, possibly due to favorable comparisons with other markets or attractive returns. Such substantial inflows can strengthen the Indian stock market, increase liquidity, and potentially lead to higher stock valuations.

Shorting the Dollar Gains Favour After Fed’s Pivot 

After the Federal Reserve hinted at ending its monetary tightening campaign, betting against the US dollar has gained popularity. This strategy, known as ‘shorting the dollar,’ involves speculating that the dollar’s value will decrease. This trend reflects a change in market sentiment towards the dollar, influenced by the Fed’s policies, and could impact currency markets and international trade.

NRIs Park More Forex in India on Yields, Safe Haven Appeal 

Non-resident Indians (NRIs) have increasingly invested in Foreign Currency Non-Resident (FCNR) (B) deposits in India, drawn by its appeal as a safe investment and attractive yields. This trend, boosted by global geopolitical uncertainty, suggests confidence in the Indian economy and its banking system. Increased forex inflows from NRIs can contribute to India’s foreign exchange reserves and economic stability.

Mcap of Three of 10 Most Valued Firms Rises by Over ₹70,000 cr 

The market capitalization of three of India’s ten most valued firms increased by over ₹70,000 crore last week, despite volatile market conditions. This rise, with Reliance Industries leading, indicates robust performance and investor confidence in these top companies, which can influence overall market sentiment and investment patterns.

Did You Opt for the New Tax Regime by Mistake? 

This snippet warns salaried taxpayers about the new tax regime, which has become the default option. It’s crucial for employees to provide proof of tax-saving investments to their companies. The new tax regime might affect individual financial planning and tax liabilities, making it essential to understand its implications and make informed choices.

Wall Street Loves to Guess, but Nobody Knows What the Market Will Do in 2024 

Wall Street strategists often make forecasts for stock market performance, but their accuracy is questionable. Their predictions for 2023, for instance, were off the mark. This highlights the inherent unpredictability of the stock market and the risks of relying heavily on such forecasts for investment decisions. Investors should be cautious about basing their strategies solely on these projections.

China’s Curbs on Video Games Echo in Markets Worldwide 

China’s new restrictions on video game spending have significantly impacted global stock markets. For example, Prosus NV, with a major stake in Tencent Holdings, experienced a 20% drop in Amsterdam, losing about $17.1 billion in market value. This is due to China’s regulatory changes impacting Tencent. Similarly, Naspers, Prosus’ South African parent company, also saw a significant drop in its stock value. This situation exemplifies how regulatory actions in one country, especially a major market like China, can have far-reaching effects on international financial markets.

As Markets Shake and Stir, NPS Investors Opt for Bond of Trust 

Investors in India’s National Pension Scheme (NPS) are increasingly favoring government securities over equities. This shift is driven by a combination of factors, including volatile market conditions, steep equity valuations, and rising interest rates. Such a trend toward safer, lower-risk investments like government bonds is common during times of economic uncertainty. It indicates a more cautious approach by investors seeking stability and predictability in their retirement funds.

How will the Proposed ASBA-like Facility Change Stock Trading? 

The Securities and Exchange Board of India (Sebi) plans to introduce a new stock trade settlement mechanism, akin to the Application Supported by Blocked Amount (ASBA) used in IPO applications. This system ensures funds are only transferred from an applicant’s account upon successful IPO allotment. Implementing a similar mechanism for stock trading could streamline processes and enhance the security of transactions, potentially making stock trading more efficient and less risky for investors.

US-led Alliance Securing Sea Routes Gives Shippers Confidence to Resume Suez Voyage 

The establishment of Operation Prosperity Guardian (OPG), a US-led multinational security initiative, has restored confidence in the safety of the Suez Canal route. This development led shipping giant AP Moller-Maersk to resume its voyages through the canal. The move signifies a significant step toward resolving the Red Sea crisis and highlights the importance of international cooperation in securing critical global trade routes.

Forget the Top 5, These Stocks Were the Biggest Movers in the S&P 500 in 2023 

The S&P 500 saw notable fluctuations among its top 50 companies in 2023, with the highest level of variance in a decade. This suggests that, apart from the dominant top five firms, other leading companies are experiencing significant changes in their market standings. It reflects the dynamic nature of the market and the potential for companies outside the top tier to make substantial gains or losses.

NPS Scorecard 

The National Pension System (NPS) in India not only aids in saving tax but also offers various investment options managed by ten fund managers. The performance of these managers is crucial for investors, as it directly impacts their retirement savings. The provided table allows investors to compare and assess the performance of these managers, enabling them to make informed decisions regarding their pension investments. This comparative data is essential for ensuring transparency and aiding investors in choosing the best option for their retirement savings.

Increasing Exports, Reducing Imports New Way Ahead for Patriotism: Gadkari 

Nitin Gadkari, Union Minister, emphasized that enhancing exports and minimizing imports is the contemporary form of patriotism and “swadeshi” (self-reliance). He suggests that India achieving independence from importing petrol and diesel would signify a new era of freedom. This perspective advocates for strengthening the domestic economy by promoting local production and reducing dependency on foreign goods. It implies a strategic shift towards self-sufficiency, aiming to bolster India’s economic resilience and global trade balance.

New Import System for Laptops, PCs likely to be Taken Up with US 

India plans to discuss its new authorization system for importing personal computers, laptops, and other IT hardware with the United States at the upcoming India-US Trade Policy Forum (TPF). This new system likely aims to regulate and possibly streamline the import process of these products. The discussion with the US indicates the importance of bilateral cooperation in trade policies and the potential impact of these regulations on international trade relations, especially in the technology sector.

Farm Sector Indices Planned to Lift Agri Productivity 

India is developing special farm sector indices to enhance agricultural productivity and incomes. This initiative follows the unsuccessful attempt to reform the sector through now-withdrawn farm laws. These indices will likely serve as tools for targeted policy interventions, aiding in the efficient allocation of resources and informed decision-making in the agricultural sector. The focus on improving agri productivity signifies an effort to modernize agriculture and increase the economic well-being of farmers.

Many Steps taken to Control Prices of Food Items: Goyal 

Piyush Goyal, Food and Consumer Affairs Minister, stated that the government has implemented various measures to control retail prices of food items. These actions aim to manage inflation while supporting India’s economic growth. This balancing act between controlling prices and fostering economic development is crucial to ensure both the affordability of essential commodities for citizens and the overall health of the economy.

India Reassess Proposed Trade Pact with B’desh 

India is reconsidering its proposed trade agreement with Bangladesh, wary of Bangladesh’s interest in joining the China-led Regional Comprehensive Economic Partnership (RCEP). There’s concern about Chinese goods entering India indirectly through Bangladesh. This reassessment reflects India’s cautious approach towards trade agreements, especially considering potential impacts on its economy and trade dynamics with neighboring countries and larger economic blocs like the RCEP.

OML Focuses on New Overseas Markets to Boost Revenue Growth 

OML Entertainment is aggressively expanding into new international markets to increase its revenue. Led by CEO Gunjan Arya, the company is diversifying by growing its artist management roster and developing content for top streaming platforms. This strategy indicates OML’s ambition to enhance its global presence and capitalize on the increasing demand for diverse entertainment options, potentially leading to significant revenue growth.

Passenger Vehicle Dispatches May Slip in Dec 

There’s an estimated sharp decline in passenger vehicle dispatches to dealers in December, suggesting a slowdown in sales in Asia’s third-largest auto market. This decrease indicates that the automotive sector might be facing challenges, possibly due to economic factors or changing consumer preferences, impacting overall market dynamics.

Rentals in Prime Micro-markets Surge on Rising Demand for Larger Homes 

Rental costs in key residential areas of major Indian cities have risen by up to 35% in 2023. This surge is attributed to the return of corporate employees to office work after the Covid-19 pandemic, leading to increased demand for larger homes in metro cities. This trend reflects a shift in housing preferences post-pandemic and indicates a robust real estate market in these prime locations.

Hiring at Top Cos Remains on Track in ’24 

Major companies like L&T, Tata Steel, PepsiCo, Airtel, and ITC are maintaining their hiring plans for 2024. This sustained recruitment, driven by expansion, is a positive sign for the job market, suggesting robust business growth and a potential uptick in employment opportunities in various sectors.

Office Leasing Sees the Return of Large Deals in Top Cities, Thanks to Tech & BFSI Players 

India’s office market is experiencing a resurgence in large leasing deals, particularly in top cities, driven by demand from global in-house centers of multinational companies and banks. This demand, fueled by the need for local engineering and technology talent, signifies a recovery in the commercial real estate sector and reflects the growing importance of India as a hub for global business operations.

Covid Cases Rising, But New Strain Not Behind the Surge 

India has seen a rise in Covid-19 cases, but the increase is not attributed to a new strain named “JN.1”. The active cases have reached 3,742, according to government data. This development suggests a need for continued vigilance and public health measures, even as the world adapts to living with Covid-19.

Vivo India Alleges ‘Harassment’ After Recent Arrests of its Executives by ED 

Vivo India has accused government authorities of harassment following the arrests of three senior executives, including the interim CEO and CFO, by the Enforcement Directorate in a money-laundering probe. This situation highlights the ongoing tensions between the Indian government and foreign corporations, particularly in the technology sector, and could have implications for foreign investment and business operations in India.

HOP Eyes Sales Boost, Looks to Launch e-Bike 

HOP Electric is aiming to triple its annual sales in 2024 and plans to launch an electric motorcycle comparable to entry-level conventional bikes. Founder & CTO Rahil Gupta’s strategy indicates a push to capitalize on the growing demand for electric vehicles, positioning the company to potentially capture a significant market share in this emerging sector.

75k Meesho Sellers See Double-digit Growth 

Approximately 75,000 sellers on Meesho, an e-commerce platform, have experienced double-digit growth, with over 20,000 seeing a tenfold increase in business. This growth showcases Meesho’s impact on small and medium-sized businesses and its successful strategy in the competitive e-commerce market.

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