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

A round-up of the biggest articles from newspapers

June 29, 2022 / 07:34 AM IST

Akash Ambani takes over as chairman of Reliance Jio

Mukesh Ambani, chairman of Reliance Industries, has stepped down from the board of Reliance Jio Infocomm, the group’s telecom arm. His eldest son Akash, 30, has replaced the 65-year-old patriarch as the chairman of the wireless unit. Mukesh Ambani will continue to be chairman of Jio Platforms, the company that owns all digital assets including Reliance Jio Infocomm.

Why it’s important: Akash Ambani’s elevation as chairman at a Reliance company is the first indication of the succession planning underway at India’s most valuable company.

 

GST Council favours raising rates, removing exemptions to boost revenue

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The GST Council has approved in principle to hike tax rates of some goods and services and withdraw tax exemptions on several mass consumption items, apart from making a series of changes to the GST registration and refund process. The council on the final day of its meeting will look into the demand from states to extend GST compensation beyond June.

Why it’s important: The government has been looking at ways to boost revenues in the face of a precarious fiscal situation. Higher taxes, however, could mute demand in a high inflation scenario.

 

Rupee plunges to new low despite multiple interventions by Reserve Bank

The rupee dropped by 48 paise to hit an all-time low of 78.85 against the dollar despite efforts by the central bank to check the slide. It opened lower at 78.53 and touched a new low of 78.85 against its previous close of 78.34.

Why it’s important: Intervention by the central bank in spot, forwards and futures has failed to arrest the rupee’s slide sue to amid inflation worries, widening deficits and the overall risk-off mood. Expect the rupee to decline even further in the coming days.

 

Twitter India given last opportunity to follow IT rules

The central government has told Twitter India that it has one last opportunity to comply with IT rules by July 4, or risk losing immunity as an intermediary. The warning follows Twitter’s failures to act on content takedown notices, the electronics ministry said.

Why it’s important: This is not the first time that Twitter is under government fire. Such conflicts are likely to rise as social media platforms become avenues to shape public opinion.

 

Walgreens withdraws Boots sale offer, Reliance to look for other opportunities

American retail firm Walgreens Boots Alliance has said it would retain its pharma retail business Boots UK, abandoning the entire sale process. The company did not comment specifically on the offer made by Mukesh Ambani-owned Reliance Industries, which had made a bid for the company last month.

Why it’s important: Walgreens cited current market volatility that makes financing difficult as the main reason for withdrawing the offer. Reliance will have to look at other opportunities to expand overseas.

 

Probe panel finds lack of safety systems behind electric two-wheeler fires

Electric two-wheelers involved in recent fire incidents did not even have basic safety systems, an expert panel has found. The expert committee found there was no venting mechanism for overheated cells to release energy and that the battery management system was seriously deficient.

Why it’s important: Companies in the rush to get early to the expanding market are neglecting safety rules, damaging demand, and jeopardizing India’s electric transition. The government must put in place detailed guidelines to ensure safety and heavily penalize those violating norms.

 

Exporters see orders dip by 10-20 percent as recession fears grow

The likelihood of a recession in the US and the European Union has stoked fears among Indian exporters, who have begun seeing a decline in orders. Exporters, especially of leather and textiles, anticipate a 10 to 20 percent decline in volumes in 2022-23 compared with the previous financial year.

Why it’s important: India’s export growth is critical at a time when imports have surged due to higher crude oil and fertilizer bills. The country’s trade deficit is increasing, which is a worrying trend.

 

Singapore tribunal rejects Future Group’s plea to end arbitration

The Singapore International Arbitration Centre has rejected a Future Group plea seeking termination of arbitration proceedings on grounds that India’s antitrust regulator kept its approval for the Amazon-Future partnership in abeyance. SIAC will continue with arbitration proceedings after Future Group proposed to sell its retail, wholesale, and logistics assets to Reliance Industries for Rs 247.13 billion. Reliance has called off the deal after Future Retail’s creditors rejected the proposal.

Why it’s important: India’s rapidly expanding retail e-commerce space is at the heart of the legal conflict. Reliance has already taken control of about 950 Future stores this year.

 

State-run banks seek stretching of holding limit for bonds as yields harden

Treasury officers of some state-owned banks have asked the Reserve Bank of India to provide dispensations regarding bond holdings. They want a further increase in the limits for held-to-maturity portfolios for government bonds as well as permission to amortize marked-to-market losses incurred on bond holdings in the current fiscal quarter.

Why it’s important: Leeway on amortization will provide banks room to spread treasury losses throughout the year. The development comes after a sharp rise in government bond yields in the ongoing quarter following successive hikes of benchmark interest rates.

 

Pallonji Mistry, patriarch of Shapoorji Pallonji group, dies at 93

Although Pallonji Mistry, who passed away at the age of 93, wasn’t the founder of the 157-year-old Shapoorji Pallonji Group, he was responsible for the group’s explosive growth under his watch. Pallonji Mistry was considered one of the world’s most secretive billionaires and was worth over $10 billion in 2012.

Why it’s important: The Shapoorji Pallonji group, overburdened with debt and underperforming businesses, faces a challenging future. This is not the legacy Pallonji Mistry would have liked to leave behind.
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first published: Jun 29, 2022 07:34 am
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