Nipun – Daily News and Market Round-Up

April 4, 2017

Nipun – Daily News and Market Round-Up

Market and Economy

·Sebi allows advisers to transact on client behalf

·Sebi finds some more brokers gained unfair access to NSE systems

·RBI likely to tighten cyber security norms

·Banks’ deposit portfolio hits Rs100 trillion. What next?

·India is moving towards a flawed GST

·Fed hike to have no impact, GST can push Nifty to 13,000: Mark Mobius

·Bond issuance declines 18% in India this year; lowest since 2009: report

·FIs mull options to shift operations to home country

.Govt to further ease visa regime to boost tourism, biz

·Banks eye ‘resolution’ of Rs 1.5L-cr stressed assets

·PFRDA eyes 70 lakh NRIs in West Asia

Market Round-Up

1. Sebi allows advisers to transact on client behalf

In its latest attempt to make processes smooth for Registered Investment Advisors (RIAs), Securities and Exchange Board of India (Sebi) has allowed them to buy and sell mutual funds on behalf of their clients through the stock exchange platform.

RIAs can now effectively use exchanges’ infrastructure to buy and sell mutual funds with asset management companies on behalf of their clients, something that they could not do earlier. Mutual fund distributors were allowed access to the stock exchange platform in October 2013 to transact in MF schemes.

The current circular is specifically for RIAs and assumes importance in light of the changes being proposed within the regulatory framework to facilitate growth of the RIA segment.

Read more at:

2.Sebi finds some more brokers gained unfair access to NSE systems

The Securities and Exchange Board of India (Sebi) will start a fresh inspection of the books of some brokers to examine if they got unfair access to National Stock Exchange of India (NSE) co-location servers for algorithmic trading, said two people aware of the development, including an official with the regulator.

The regulator has decided to conduct this special inspection after it found evidence that as many as 12 brokers might have got unfair access; a whistle-blower had earlier named just three brokers.

This is separate from NSE’s audit of its own algo systems which Sebi ordered after a technical advisory committee found instances of violation of fair access, one of the two persons cited above said. The NSE board has appointed Deloitte India to probe these allegations.

Read more at:

3.RBI likely to tighten cyber security norms

The Reserve Bank of India (RBI) has called a meeting on Monday with all stakeholders involved in the largest data breach in India’s banking system, said two people with direct knowledge of the development.

The meeting will be chaired by a deputy governor of the central bank and will be attended by executives from banks and payment network service providers.

The central bank will ask all lenders to report cyber security issues on a real-time basis, an RBI official, one of the two people cited above, said on condition of anonymity.

Read more at:

4.Banks’ deposit portfolio hits Rs100 trillion. What next?

India’s banking sector is celebrating a new milestone—its deposit portfolio crossed Rs100 trillion on 30 September.

It has been a long wait. The collective deposit base of the banking system in Asia’s third largest and the world’s fastest-growing major economy took five years and seven months to double from Rs50.46 trillion in February 2001.

On previous occasions, the deposit base doubled in a much shorter span. For instance, it had taken three years and 11 months to double from Rs25.04 trillion in March 2007; and four years and four months each to double from Rs12.57 trillion in November 2002 and Rs6.26 trillion in June 1998. Roughly, in the past decade, the deposit portfolio of the Indian banking system has grown five-fold.

Read more at:

5.India is moving towards a flawed GST

There are several reasons why this newspaper has been an enthusiastic supporter of the goods and services tax (GST). It will integrate the Indian market, promote economic efficiency by taxing final consumption rather than intermediate goods, encourage voluntary compliance and create a new architecture for cooperative federalism.

There were two underlying assumptions for a truly successful GST. The new indirect tax would be levied at a single rate (with a few exceptions) so as to reduce distortions based on rent-seeking behaviour. And the tax rate would be low so as to minimize the regressive character of such indirect taxes, including the ones that GST is replacing. India seems to be drifting away from the goal of a single, moderate GST rate.

Read more at:

6. Fed hike to have no impact, GST can push Nifty to 13,000: Mark Mobius

Global investment guru Mark Mobius does not see an encore of the taper tantrum of 2013 on the domestic market if the US Fed walks its talk on rate hikes in December.

He also said GST implementation coupled with the ongoing reforms will radically change the domestic economy and can propel Nifty towards the 13,000-mark by the middle of 2017.

Regarding Fed’s expected rate hike, he sought to dispel fears of the market being impacted by a foreign funds flight.

“I don’t think there will be any major impact on India this time around. Domestic investors are becoming more important to the Indian market now.

Read more at:

7.Bond issuance declines 18% in India this year; lowest since 2009: report

Primary bond offerings from Indian issuers totaled $35.6 billion in the first nine months of 2016, down 18% in proceeds compared to the same period last year, and witnessed the lowest first 9 months period since 2009, when proceeds reached $24.5 billion, according to a report by Thomson Reuters.

Indian companies that issued in US dollar-denominated bonds generated $6 billion, a 20.3% decline in proceeds from over a year ago. In July, the Export Import Bank of India raised $999.3 million from its 10-year US-dollar denominated bond offering, said the report The deal is the biggest bond offering from an Indian issuer for the first 9 months of 2016.

Read more at:

8.FIs mull options to shift operations to home country

Debt and F&O focused funds will continue to operate from Mauritius

With treaty benefits for equity investment ending from April 2017, many foreign funds routing their investment to India through Mauritius are considering to wind up their operation from the tax haven.

Several large global funds like Fidelity, Morgan Stanley, Goldman Sachs, BNP Paribas and Deutsche group are said to be exploring the option to invest in Indian equity market from their home countries post 2017 April when the treaty benefits come to an end.

According to industry experts, foreign investors operating from Mauritius are now doing cost-benefit analysis and weighing options to shift their operation to home country as treaty benefit on capital gains are no longer there for equity investment from the tax heaven.

Read more at:

9.Govt to further ease visa regime to boost tourism, biz

Government on Sunday said it is planning to further relax the visa regime “shortly” to attract more tourists and businesses to the country.

“We plan to further liberalise our visa regime for tourism, business as well as other areas shortly,” External Affairs Minister Sushma Swaraj said at the valedictory session of the Global Investors Meet in Indore.

She said visa was one of the areas of concern for foreigners and Indians living abroad.

The minister said the government has already taken steps to address these concerns.

In November 2014, government launched the e-visa scheme for over 100 countries. It was extended to 37 more countries this year, taking the total number to 150.

Read more at:

10. Banks eye ‘resolution’ of Rs 1.5L-cr stressed assets

Enthused by speedy recovery of loans worth $2.5 billion by three lenders including ICICI Bank within days of mega $13-billion Essar deal, banks are now looking at resolution of stressed assets totalling Rs 1.25-1.50 lakh crore (nearly $20 billion) in coming months.

Having broadly completed the first two stages of ‘recognising’ the stressed assets and of ‘reserving’ or provisioning for such loans in their accounts, the banks are now betting big on ‘resolution’ part of what is being billed by some top bankers as ‘3Rs’ formula to recover their dues.

With the Essar deal coming in as a major catalyst, the banks are prioritising the resolution process by focussing on helping in sale of businesses by corporate borrowers and by converting debt into equity at operating profit-generating companies, according to some top bankers.

Read more at:

11. PFRDA eyes 70 lakh NRIs in West Asia

NPS funds gave annual return of 10% in last three years

Pension fund regulator PFRDA is eyeing 70 lakh Indians working in West Asia, as it makes a major push to expand the subscriber base of New Pension System (NPS) run by it.

NPS is a voluntary contribution of funds for a sustained period of time (till the age of 60 years) to enable a person draw pension after s/he attains 60 years of age. Subscribers are required to make a minimum payment of Rs 500 to open an NPS account.

Until now, the Pension Fund Development and Regulatory Authority (PFRDA) had mostly focused on targetting resident Indians. It never undertook any campaign to publicise its products among Indian expats. But the pension regulator is now broadening its focus.

Read more at:

Comments are closed.