UNSUSTAINABLE FINANCING
Blanket 5% infra provisions to hurt both lenders and project viability: Banks to RBI
Bankers have said the norms be subsumed within new provisioning rules that will require lenders to pre-empt assessment on potential losses. “RBI is also in the process of finalising the expected credit loss (ECL) based provisioning guidelines,” said a senior bank executive. "So, there is a suggestion that these infrastructure norms be subsumed into those.”
Rs 14 lakh-crore shock! Sensex crashes 900 points. Is the smallcap bubble bursting?
Sensex, Nifty, and smallcap index recorded significant falls. Excessive valuations driven by retail investors are a concern. Sebi chairperson warns of froth building in the market due to unsustainable valuations. Overall the market capitalisation of all BSE-listed stocks fell by Rs 14 lakh crore to Rs 372 lakh crore.
Pakistan debt unsustainable, headed towards inevitable default, says report
Pakistan's debt crisis is more severe than anticipated, with the possibility of an inevitable default and a devastating economic spiral. The stock market is already affected, and an immediate IMF bailout is urged. Innovative solutions like debt-for-nature swaps are proposed to address the debt crisis and environmental needs.
LIC ditched these 19 smallcap stocks in Q3. End of the party or just a jittery exit?
Among smallcaps, Kaveri Seed was LIC ownership reducing by about half to 2.66% in Q3. In MOIL, LIC stake fell from 7.42% to 5.46% quarter-on-quarter, shows ACE Equity data.
Supreme Court to hear Sebi, NSDL appeal against SAT's Karvy decision
Market regulator Securities Exchange Board of India (Sebi) and National Securities Depositories Ltd (NSDL) on Wednesday moved the Supreme Court against the Securities Appellate Tribunal’s decision that quashed the market regulator’s orders that restricted lenders, including Axis Bank, HDFC Bank and ICICI Bank, from revoking the shares pledged by Karvy Stock Broking (KSBL).
At third meeting of chief secretaries, Centre cautions against 'freebies'
The Centre has advised state chief secretaries to avoid "freebies" and instead focus on increasing capital expenditure. The advice comes as India heads into a major election year, with five states presenting election promises that could qualify as "freebies." The Centre also emphasized the importance of raising capital expenditure in states to boost economic growth and address social concerns better.
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Cash-strapped Pakistan secures USD 655 ADB package
The ADB approved a financing package for Pakistan under three different loans. Among other components, these include USD 300 million for improving domestic resource mobilisation; USD 275 million for rehabilitating schools damaged by the devastating August 2022 floods; and USD 80 million for enhancing agricultural productivity to improve food security, according to an announcement by the ADB on Wednesday.
India warns of unsustainable financing and its subsequent debt traps at UNSC
At a UN Security Council debate, India cautioned against unsustainable financing leading to debt traps, stressing it hinders peace and development. Emphasizing reforms in financial institutions, India reiterated commitment to Agenda 2030 for Sustainable Development. Urging global cooperation, the diplomat highlighted the necessity of inclusive representation for the Global South.
UK borrowing figures give Hunt some room for tax cuts
Britain's government borrowed less than predicted in the first seven months of the financial year, according to data from the Office for National Statistics (ONS). Government borrowing between April and October totalled 98.3 billion pounds ($122.49 billion), about 22 billion pounds higher than last year but nearly 17 billion pounds less than the Office for Budget Responsibility (OBR) forecast.
Capex hikes may go in the slow lane to trim fiscal deficit
The government will present an interim budget for FY25 in February, leaving the full budget to the next government after elections a few months after that. The final decision will be taken closer to the interim budget, the official told ET.
India warns of dangers of 'hidden agendas' in unviable projects or unsustainable debt
India has warned countries in the Indian Ocean region to be cautious of "hidden agendas" and unsustainable debt in development projects, in an apparent reference to China's "debt trap" diplomacy. Speaking at a meeting of the Indian Ocean Rim Association, India's External Affairs Minister emphasized the importance of maintaining the Indian Ocean as a free and inclusive space.
IMF says private sector needs to shoulder most of climate investment burden
The International Monetary Fund (IMF) has stated that the majority of the $2 trillion in annual climate investments needed by developing countries by 2030 will have to come from the private sector. Governments risk accumulating high debts if they attempt to reach net-zero goals using public funds. The IMF recommends that countries develop carbon pricing schemes to raise revenue and encourage private investments.
Maharashtra Scooters, Blue Star among 10 overbought stocks with RSI above 70
On September 25, Monday, StockEdge identified 20 stocks that were in the overbought zone but exhibited bearish or declining Relative Strength Index (RSI) trends. ETMarkets has selected 10 of these stocks for a closer look.
India to clock GDP growth of 6.5 pc in FY24 despite high crude oil prices: NITI Aayog member Arvind Virmani
The Indian economy is projected to grow at around 6.5% in the current fiscal year, according to Arvind Virmani, a member of NITI Aayog. He also stated that the gross household savings ratio in India has consistently increased. Virmani dismissed claims by some US-based economists that India's economic growth is overstated, noting that they lack an understanding of how GDP is constructed.
Old Pension Scheme could put severe strain on states' finances': RBI
According to an article in the Reserve Bank of India's September bulletin, states that revert to the Old Pension Scheme (OPS) could face "unsustainable" fiscal stress. The article states that the cumulative fiscal burden of OPS could be 4.5 times higher than that of the National Pension Scheme (NPS), with an additional burden of 0.9% of GDP annually by 2060. The authors highlight that while OPS may be more attractive to employees, it puts a significant financial burden on the government, unlike NPS, which aims to ensure good pensions while reducing the budgetary burden.
States reverting to old pension scheme fiscally unsustainable: RBI paper
While terming the move as a "major step backwards", the article - authored by Rachit Solanki, Somnath Sharma, R K Sinha, S R Behera and Atri Mukherjee - said that the cumulative fiscal burden in the case of the OPS could be as high as 4.5 times that of the New Pension Scheme. The views expressed in the research paper are not that of the RBI.
IRFC, HCL Technologies among 10 overbought stocks with RSI above 70
On September 14, Thursday, StockEdge identified over 40 stocks in the overbought zone, and ETMarkets selected 10 of them for a closer look, providing insights for potential investors
5 themes Prateek Agrawal is bullish on from midcap space
Now we are seeing strong inflows from everywhere and which means we are seeing one space after the other follow up and there is some amount of rotation which is going on.
World leaders, activists in Paris seek financial response to climate emergency, poverty
A two-day summit focusing on the global financial system's role in tackling poverty and climate change issues has begun in Paris. There are concerns that the summit will not meet expectations, and participants are expected to back a tax on greenhouse gas emissions from international shipping, and debt restructuring and cancellation.
Time for a great reset of global finance for developing countries
For developing countries, global finance has virtually disappeared when they need to spend more on education, health and food security. As a result, climate financing has become an unaffordable luxury.
CEA asks finance industry to observe self-restraint, not to indulge in predatory practices
Chief Economic Advisor V Anantha Nageswaran on Wednesday asked the finance industry to observe self-restraint and stop predatory practices, misselling of products and data misuse. The academic-turned-advisor said regulations can only work to an extent to stop robberies, but crime can be curtailed only when the robber chooses to reform.
Hot Stocks: Brokerages on LIC Housing, Bharti Airtel, IOC, Bank of Baroda and PVR
Brokerage firms CLSA, Jefferies, and Morgan Stanley have issued their latest ratings on LIC Housing Finance, Bank of Baroda, PVR, Indian Oil Corporation (IOC), and Bharti Airtel. CLSA has maintained a buy rating on LIC Housing Finance, Bank of Baroda, and PVR, with target prices of Rs 550, Rs 225, and Rs 2015, respectively. Jefferies has retained its hold rating on IOC, while Morgan Stanley has continued its overweight stance on Bharti Airtel, with a target price of Rs 860.
FM Sitharaman to join her French, Japanese counterparts to announce Sri Lanka debt restructuring process
Finance ministers of Japan, India and France will join Sri Lanka in announcing its debt-restructuring negotiation process at the annual Spring meetings of the World Bank and International Monetary Fund in Washington. The International Monetary Fund had previously made Sri Lanka's debt restructuring a prerequisite for granting the country’s $2.9bn bailout. Sri Lankan President Ranil Wickremesinghe, also the island nation's finance minister, will join his French and Japanese counterparts alongside Indian Finance Minister Nirmala Sitharaman during the press briefing.
UN SG calls on G20 finance ministers meeting in India to be bold in efforts to reform multilateral development banks
Modi added that even the financial viability of many countries is threatened by unsustainable debt levels. The meeting is spread over three sessions, covering issues such as strengthening multilateral development banks to address shared global challenges of the 21st century, financing for resilient, inclusive and sustainable 'cities of tomorrow', and leveraging Digital Public Infrastructure (DPI) for advancing financial inclusion and productivity gains.
PM Modi urges G20 to focus on world's most vulnerable
Addressing the G20 finance ministers and central bank governors at their first meeting under India's presidency in the Karnataka capital, PM Modi said on Friday that the grouping must focus on the world's most vulnerable with an inclusive agenda to win back global confidence.
Economically stressed China stops funding big projects in Africa
In Africa, Chinese bank financing for infrastructure projects under BRI fell from $11 billion in 2017 to $3.3 billion in 2020, said a report by Baker Mckenzie, an international law firm.
RBI flags states' rising subsidies, says will hinder spending on development
The central bank has said that the rising expenditure on non-merit subsidies may raise the share of committed expenditure in states' spending. This is likely to constrain the fiscal space available to states for developmental and capital spending, the Reserve Bank of India said in its Financial Stability Report, December 2022.
Sandip Sabharwal on why Bajaj Finance, Fortis valuations are unsustainable
“In order to sustain the valuations, Bajaj Finance will have to start growing at 30-50% and keep on growing at that rate for the next five-seven years.”
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