Morning Scan: All the big stories to get you started for the day

A round-up of top newspaper stories to keep you ahead of others

1. Market regulator to start trade settlement in one hour by early 2024

The Securities and Exchange Board of India (SEBI) plans to launch one-hour trade settlement by early next year, chairperson Madhabi Puri Buch has said. The regulator is aiming to implement the one-hour settlement cycle by March, while instantaneous trade settlement could come into effect by the end of next year.

Why it’s important: Currently, the transfer takes place the day following the trade. In one-hour settlement, shares will be credited to an account within an hour. Many countries still have longer settlement cycles.

2. Projections of retail inflation to guide monetary policy, says Reserve Bank governor

Monetary policy measures are taken with future projections of inflation and growth, rather than past data, Reserve Bank of India (RBI) governor Shaktikanta Das said. The recent inflation numbers would weigh less than what the central bank expects to be in the medium term, he said. Inflation would moderate from this month, the governor said.

Why it’s important: The tighter monetary policy seemed to be working till June but has surged unexpectedly since then on significantly higher food prices. It remains to be seen whether talking down inflation by policymakers work in the short term.

3. India’s market capitalisation hits record $3.75 lakh crore on September 4

India’s market capitalisation has reached a new record of $3.75 trillion on September 4, driven by domestic and foreign inflows as well as a slew of new listings. Indian equities are ranked fifth in the world by market capitalisation, behind the United States, China, Japan, and Hong Kong, according to Bloomberg data. India’s market cap increased 71 percent in the past five years without a commensurate rise in earning.

Why it’s important: India has seen a remarkable rise in market cap, outpacing peers. The lag in increased earnings can be attributed to new listings that add to the market cap without existing investors gaining.

4. Reserve Bank turns scanner on share purchase by foreign-owned companies

Multiple foreign-owned or controlled companies are being scrutinised by the RBI for alleged violation of forex rules. The firms have received notices from the banking regulator inquiring whether they would want to settle the case. If firms don’t settle, the central bank can take penal action.

Why it’s important: Foreign-owned firms typically invest in start-ups, where there is often uncertainty over performance. Investors tend to stagger the total consideration payment depending on fulfilling various targets. The latest development could drive a spanner into the established process.

5. Six of eight tax haven firms investing in Adani Group close shop

Six of the eight Bermuda and Mauritius-based public market funds alleged to have been used by people with ties to the Adani Group for buying shares of the conglomerate’s listed companies have been shut, according to regulatory filings seen by Mint. Recent reports have alleged that people with ties to the Adani family secretly held significant stakes in group entities in possible violation of law on maximum ownership by promoters in listed entities through some of these funds.

Why it’s important: The shuttering of these firms would pose a challenge for the market regulator in figuring out the ultimate beneficiaries of these investment vehicles.

6. World needs to co-operate to counter cyber threats, says finance minister

Global cooperation is essential to tackle cryptocurrencies and other threats emanating from the cyber space, finance minister Nirmala Sitharaman has said, outlining a topic that is set to be a key Indian focus at a G20 summit in New Delhi later this weekend. Cryptocurrencies are an example of how the world cannot have a responsible financial ecosystem without regulation, she said.

Why it’s important: Crypto assets has been a thorny issue in India. The central bank has voiced concerns on cryptocurrencies multiple times. India has called for a global framework to oversee crypto assets.

7. Tata-owned Voltas aims for spot in top three consumer companies

Voltas, the Tata-owned firm best known for ACs and refrigerators, is looking to transform itself into one of India’s top three consumer durable brands. It’s being recrafted with increased capital allocation, faster decision making and strengthened leadership, chairman Noel Tata said.

Why it’s important: Voltas has an enviable brand reputation but has been slow in capitalising on it. An expanded product line and aggressive marketing could change that.

8. Cipla and Torrent may have to divest 15 brands in pharma buyout deal

As there is a market buzz of Cipla promoters exiting the business through a stake sale and Torrent Pharmaceuticals leading the race to acquire its rival, an analysis has revealed that if the deal were to go through, both firms might need to divest as many as 15 brands to comply with rules set by the Competition Commission of India (CCI).

Why it’s important: Although 15 may appear to be a high number, a significant portion of these products may lack significance as the biggest potential merger and acquisition (M&A) in India’s pharma sector approaches climax.

9. Festive supply boost propels e-way bills to record 9.4 million in August

E-permits for goods shipped within and across states shot up to a record 93.4 million in August, pointing to brisk economic activity that could boost GST revenue collections in September. The high frequency indicator aligns with August manufacturing PMI data suggesting strong demand and output growth. The previous highest e-way bill generation of 90.9 million was in March, which resulted in the highest ever GST revenue collection of Rs 1.87 lakh crore in April.

Why it’s important: The sharply higher e-way bill generation points to businesses pushing supplies to the market as the festive season kicks in.

10. President’s G20 dinner invitation sparks debate on India vs Bharat

President Droupadi Murmu’s invitation to G20 leaders for an official dinner on September 9 referring to her as the President of Bharat has sparked a sharp exchange between the ruling Bharatiya Janata Party (BJP) and the political opposition over whether there was a move to change the country’s name from India to Bharat.

Why it’s important: The Constitution already describes our country as India that is Bharat. The latest debate over changing the country’s name could be an instance of political posturing ahead of the crucial election season that culminates in the 2024 parliamentary polls.