Indian lenders wait for government orders on Russian banks
Banks in India will wait for orders from the central government on whether to stop dealing with Russian lenders after the Western nations moved to isolate some of them from SWIFT (Society for Worldwide Interbank Financial Telecommunication), the global financial markets platform. The government hasn’t given any instructions on blocking the banks and it will be business as usual till it does.
Why it’s important: SWIFT is a secure messaging system that ensures cross-border payments for international trade. It’s unlikely India will ban cross-border trade with Russia since it abstained from voting against it over the Ukraine crisis at the UN Security Council. The Western sanctions are unlikely to impact trade flows between India and Russia.
Economic advisor says India has good cushion of forex reserves
While the crisis over Russia invading Ukraine will have an impact on India’s current account balance, the local currency will be mostly range-bound since the country has ample foreign exchange reserves at $633 billion to provide a good cushion, chief economic adviser V Anantha Nageswaran said in an interview. The cure for high oil prices would be high oil prices because it would shrink demand and ensure more supply into the market as producers raise output.
Why it’s important: The war in Ukraine has driven crude oil close to $100 per barrel, fueling inflation in India and across the globe. India’s inflation trajectory and economic growth would depend on how long the crude prices remain high and the peak it attains.
Future shutters Biz Bazaar stores as Reliance plans takeover
After missing lease payments to Reliance Industries, Future Retail closed most of its Big Bazaar supermarkets from February 25. Reliance intends to reopen most of the 200 Future stores as Reliance supermarkets in the next week. It is taking stock, rebranding, and transferring 30,000 Future Retail and Future Lifestyle employees on to the rolls of its manpower and staffing firm Reliance SMSL.
Why it’s important: It is a significant development on the fate of Future Retail that has happened outside courtrooms and tribunals. Future Retail has received termination notices for many stores due to outstanding dues and will no longer have access to those shop premises, it said in regulatory filings.
Amazon to move against changes in lease structures at Future Retail
Amazon is planning to approach the Delhi High Court and the National Company Law Appellate Tribunal against the change in the lease structure of the stores of Future Retail and the role of the company's independent directors in it. The lease agreements were changed 12-15 months ago, allowing Reliance to become the lessee and sub-lease the location to Future Retail.
Why it’s important: Reliance Industries has seized control over some 300 supermarkets of the Future Group. It has been closing the stores in the past few days over non-payment of rents.
Investigators to probe unlawful gains in National Stock Exchange case
The continuing probe into suspected corporate misgovernance at the National Stock Exchange will check for unlawful gains made by individuals or entities. The income tax department, which conducted searches earlier in February, is trying to pinpoint the ultimate beneficiaries of an alleged information leak.
Why it’s important: There could be regulatory action to recover unjust gains made by individuals or entities from the governance lapses at NSE. The corporate affairs ministry would act on alleged violations of the companies’ law for reference on the matter from any agency. No agency has done so yet, but that could change in the coming days.
Stock markets await news on next SEBI chief
Stock market observers are waiting for news on the appointment of a new chairman of the market regulator. The tenure of Ajay Tyagi, chairman of the Securities and Exchange Board of India, ends on February 28. He is eligible for an extension. The delay has happened although the central government had started the process to find a replacement four months ago.
Why it’s important: Whether the market regulator gets a new chief or if the present chief gets an extension, the top executive faces a tough challenge as investigations over misgovernance at the National Stock Exchange, India’s top bourse by trading volumes, continue. The regulator has to work on restoring trust in NSE.
Electronic device makers protest mandatory testing plan
Manufacturers of mobile phones, personal computers, laptops, tablets, etc., have unanimously opposed a suggestion by the joint parliamentary committee that the proposed Data Protection Authority should regulate the monitoring, testing and certification of hardware devices, although India’s telecom services firms favour the move.
Why it’s important: Telecom equipment is currently scrutinised for safety and security by the Telecom Engineering Centre, an arm of the department of telecommunications. Operators hold that other hardware devices like mobile phones, where data breaches are easier, should be subjected to similar scrutiny by an appropriate authority. This would, however, raise compliance costs for hardware companies.
Business school placements see rise in pay offers, international jobs
International job offers have touched pre-pandemic levels at premier business schools in India, even as fresh graduates are being offered higher pay packets. Consulting firms are leading the race in headhunting.
Why it’s important: The coronavirus pandemic has led to an unprecedented surge in digitization across the world. As geographical locations are less important in such an emerging scenario, international offers, particularly for technological roles, have risen after an increase in related openings.
Tata Motors cements pole position in SUV segment despite chip shortage
Although sales of most passenger vehicles have been impacted due to a shortage of semiconductor chips, Tata Motors seems to have bucked the trend. It has sold more sport utility vehicles in the local market in the past four months than any other automaker. Tata Motors’ SUV sales jumped to 96,833 units from October to January, from 37,242 units in the same period in 2021. Its market share in the SUV segment stood at 22 percent in the three months to December compared with the fourth fiscal quarter of 2020-21.
Why it’s important: Tata Motors have been grabbing market share in the recent past based on its latest offering across segments, but mostly due to SUV models. It overtook Hyundai Motor India, maker of popular SUV models, a few months back.
India Inc repairs balance sheets, but smaller firms hit hard on higher input costs
Around 26.9 percent of companies listed on the BSE posted losses in the December quarter, down from 27 percent in the preceding three months and 49 percent in the June 2000 quarter, according to a Mint analysis of 2,540 companies. However, aggregate profits of smaller companies with sales less than Rs 10 billion fell 16 percent sequentially against as much as 111 percent in the three months to September 2021.Why it’s important: Business recovery from the stringent lockdowns due to the Covid-19 pandemic seems to be uneven in India, following global trends. The data suggest that a broad-based corporate recovery will take more time. The situation is likely to be worse in the informal sector, which has many small firms.