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SIGNIFICANT GAPS IN HIRING 2 DIRECTORS AT PTC ARM: KPMG
A report by KPMG has pointed to “significant gaps” in the hiring of director
finance and director operations at PTC Financial Services and has questioned the
selection process.
* Sidhartha
* TNN
* March 24, 2022, 08:15 IST
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NEW DELHI: A report by KPMG has pointed to “significant gaps” in the hiring of
director finance and director operations at PTC Financial Services and has
questioned the selection process.
The firm has shared a draft report to PTC, the parent of PTC Financial Services,
where three independent directors had resigned a few months ago, alleging lapses
in corporate governance. At the heart of the controversy are accusations around
PTC Financial Services MD & CEO Pawan Singh blocking the appointment of NTPC
executive Ratnesh as director finance.
The KPMG report has, however, questioned the entire process to select the two
key management personnel, and noted that the NBFC chose to ignore industry
practice from the beginning. It said Singh’s suggestion to look for individuals
from the market were not accepted and alleged that the entire process was
carried out in a “hushed manner with unwarranted secrecy and speed”, with no age
relaxation made even for internal candidates. PTC acting CMD Rajib Mishra didn’t
respond to a questionnaire. The report said there was absence of arm’s length
between the group and the NBFC, despite notices from the RBI as a senior PTC
executive was involved with the process.
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Last year, PTC CMD Dipak Amitabh had resigned from the company, citing personal
reasons. Further, it said the review of documents and the absence of certain
papers related to evaluation of candidates suggested there were gaps due to the
lack of any quantitative evaluation and scoring checklist. It sought to
exonerate Singh from the accusations, saying that no remarks were provided to
the board or the HR department, and the MD seemed to be unaware about the
scoring and appraisal of the ability of the candidates.
Based on discussions with Singh, KPMG seems to have concluded that the selection
was done without the consent of the reporting manager. It has also said that the
appointment of the two directors was to be done on an “absorption basis”. But
the NTPC executive came to join PFS on a lien from his parent organisation and
subsequently went back due to the controversy surrounding his appointment.
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FINANCIAL SERVICES
* 3 hrs ago
OIL PRICE RISE, FED RATE HIKE FEARS DRIVE SENSEX, NIFTY LOWER
* 3 hrs ago
AT $14.5 BILLION, INDIA SEES LARGEST OUTFLOWS IN 2022 TILL DATE: WHAT THIS
MEANS FOR THE RUPEE
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* IMPOSSIBLE TO BUILD PROFITABLE BUSINESS VIA GOOGLE, FACEBOOK ADS:
POLICYBAZAAR CEO
Sarbvir Singh, chief executive officer of PolicyBazaar, in this week's
FinTech Diary, said that it is impossible for companies to build a profitable
business by acquiring customers through Google and Facebook or digital
marketing, and it "can only be a topping on top of your main business," he
said. Singh reasoned that his company's model is able to manage its customer
acquisition cost is because 80% of their transaction cost happens through
people who come directly to the website to buy the product. This, Singh said,
is because the company put out many advertisements on television done over
the last 10-12 years. In FY21, the annual number of visits on PolicyBazaar
website was 126.5 million, Singh said, adding that the company's health and
motor insurance products are helping it build a large renewal book. PB
Fintech, the parent company of PolicyBazaar, is the first InsurTech to be
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OIL PRICE RISE, FED RATE HIKE FEARS DRIVE SENSEX, NIFTY LOWER
"The market now lacks direction and is moving up or down on a daily basis
responding to news regarding crude price, FPI flows and speculation on what the
Fed might do in the coming policy meeting. Nifty is likely to move in the
17,000-17,500 range in the short run," said VK Vijayakumar, Chief Investment
Strategist at Geojit Financial Services.
* Amit Mudgill
* ETMarkets.com
Click Here to Read This Story
*
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NEW DELHI: Domestic stocks took a beating in Thursday's trade as a surge in
global crude oil prices and prospects of the US Fed raising interest rate by 50
basis points in May policy meet added to the already fragile investor sentiment
that is dented by the ongoing Russia-Ukraine war.
At 9.25 am, the BSE Sensex was trading 251.60 points, or 0.44 per cent, lower at
57,433.22. Nifty50 was quoting at 17,169.75, down 75.90 points or 0.44 per cent.
"The market now lacks direction and is moving up or down on a daily basis
responding to news regarding crude price, FPI flows and speculation on what the
Fed might do in the coming policy meeting. Nifty is likely to move in the
17,000-17,500 range in the short run," said VK Vijayakumar, Chief Investment
Strategist at Geojit Financial Services.
Among Sensex names, Kotak Mahindra Bank, Titan, ICICI Bank, HDFC Bank, Bajaj
Finance and IndusInd Bank declined up to 3.4 per cent. Dr Reddy's Labs, ITC,
M&M, TCS, Tata Steel and NTPC added up to 1.8 per cent.
ICICI Bank declined 1.44 per cent to Rs 707.85 even as the RBI allowed SBI
Mutual Fund and other entities in the SBI group to together hold up to 9.99 per
cent stake in ICICI Bank.
Sun Pharmaceutical, meanwhile, was almost flat at Rs 899.65 despite the
drugmaker suggesting signing of a $485 million settlement with two plaintiff
groups regarding Ranbaxy generic drug application antitrust litigation.
Among other stock-specific moves, shares of ZEE Entertainment surged 10 per cent
as Invesco Developing Markets Fund (Invesco) decided to withdraw its requisition
notice, which sought the removal of MD and CEO Punit Goenka from the board of
ZEE.
Ruchi Soya stock lost 1.97 per cent to Rs 879.80. The follow-on public offering
(FPO) of Ruchi Soya Industries, which is owned by Baba Ramdev-led Patanjali
Ayurved, opens for public subscription today.
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Financial Services
Why is Sensex falling
Sensex today
ruchi soya industries
Oil prices
Nifty today
Fed rate hike fears
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AT $14.5 BILLION, INDIA SEES LARGEST OUTFLOWS IN 2022 TILL DATE: WHAT THIS MEANS
FOR THE RUPEE
Other EMs that have witnessed portfolio outflows include South Africa and
Poland, but in both countries it was led by debt outflows.
* Sunainaa Chadha
* TIMESOFINDIA.COM
Click Here to Read This Story
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NEW DELHI: With monetary tightening by global central banks, India is far from
being 'immune' to immune in the current episode of 'taper'. In 2022 till date,
India has seen the largest portfolio outflows among the key Emerging Markets
(EMs), shows data from brokerage Nirmal Bang Institutional Equities Research.
India has seen the sharpest outflows in 2022 till date led by equity outflows:
India has witnessed $14.5 billion of total outflows in 2022 till date, of which
a whopping $14 billion was equity outflows. Other EMs that have witnessed
portfolio outflows include South Africa and Poland, but in both countries it was
led by debt outflows.
South Korea has witnessed equity outflows worth $6.8bn but this was more than
offset by debt inflows.
So, what is driving foreign portfolio investors out of India?
"Equity market valuations in India remain stretched and above all developed
markets and emerging markets. This may have led to significant outflows
from Indian equities when compared to other EMs. Indian yield spreads with the
US are comparable with Indonesia, and above most EMs, except Brazil, Mexico and
Russia, suggesting that the debt market may be relatively fairly valued.
However, the debt market is unlikely to attract flows in the near term given the
headwinds ranging from elevated crude oil prices amid heightened geopolitical
uncertainty, tightening by the US Federal Reserve and relatively low real rates
in India," said the brokerage.
Past episodes of liquidity tightening have seen higher debt outflows:
Past episodes of liquidity tightening by global central banks in FY14 (2013) and
FY19 (2018) had led to higher outflows from the debt market vs. the equity
market in India. In contrast, the current tapering has seen higher equity
outflows akin to the 2008 global financial crisis. In fact, equity outflows by
FPIs in FY22 at $18.4 billion have far surpassed equity outflows witnessed in
FY09 (2008 GFC) at $10.3billion.
Unlike past episodes of liquidly tightening equity outflows have dominated
"Equity outflows generally tend to bounce back quickly, also pulling up the
rupee, particularly going by the experience of the 2008 global financial crisis"
noted the report.
How will the end of global liquidity injection affect the Indian rupee?
Data from Nirmal Bang shows that i past episodes of monetary tightening by
global central banks, the rupee was prone to significant depreciation pressure.
In the taper tantrum of 2013 the rupee depreciated by 20% between March and
August. In 2018 global financial crisis, the rupee depreciated by 14% between
March and October.
One of the primary reasons for the rupee coming under pressure at times of
global liquidity tightening is the rise in rupee sensitivity to portfolio
outflows over the past decade. Since the announcement of taper by the US Federal
Reserve in November 2021, USD-INR’s correlation with portfolio flows has largely
been in line with the correlation seen since 2013, albeit marginally lower.
According to the brokerage, there are several factors keeping the rupee
volatile, which range from the end of quantitative easing (QE) by major global
central banks, geopolitical tensions and spike in crude oil prices, rise in
non-oil, non-gold imports and the return of the current account deficit (CAD),
an
elevated fiscal deficit and inflationary pressures. Despite these headwinds, it
doesn't expect the rupee to go into a tailspin unlike past episodes of
‘tapering’ ‘oil shocks’ or ‘elevated twin deficits’ because of the following
factors:
1 Relatively low FPI exposure in the Indian debt market: FPI outflows from the
Indian debt market have been limited as FPIs’ exposure in the debt market was
already at multi-year low and has fallen only at the margin in recent months.
Limited outflows from the debt market have somewhat cushioned the depreciation
pressure on the rupee.
2. Availability of alternative sources of crude oil: Elevated crude oil prices
are unlikely to sustain for long due to enhanced production, including from US
shale producers. Despite sanctions on Russia, India may resort to purchase of
discounted Russian crude oil, putting in place alternate payment mechanisms.
3 Strong services exports, bolstered by pandemic-driven digitisation and
reduction in fuel subsidies: The pandemic-driven acceleration in digitisation
has boosted software exports from India, pushing up the invisibles
surplus’(services exports + remittances) as a share of the trade
deficit.Petroleum subsidies have declined with elimination of diesel and petrol
subsidies since FY14.
4 Inflation targeting regime in India and low inflation differentials with
developed markets
5 High level of forex reserves and willingness on the part of the RBI to sell
USD to mitigate fx volatility: India’s FX reserves currently stand at
$622 billion, more than double the level when compared to the 2008 global
financial crisis and the taper tantrum in 2013
It maintains its FY23 USD-INR forecast at 77/USD, down from an average of 75 in
FY22.
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FDI INFLOW TO INDIA DECLINES TO $74.01 BILLION IN 2021
To promote FDI, the Government has put in place an investor-friendly policy,
wherein most sectors except certain strategically important sectors are open for
100 per cent FDI under the automatic route. Further, the policy on FDI is
reviewed on an ongoing basis, to ensure that India remains attractive and
investor-friendly destination, the minister said.
* ANI
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Total foreign direct investment (FDI) inflow to India declined to $74.01 billion
in the calendar year 2021, which is 15 per cent lower from $87.55 billion
recorded in the previous year, the Ministry of Commerce & Industry said on
Wednesday.
The FDI inflow includes equity inflow, equity capital of unincorporated bodies,
re-invested earnings and other capital.
"FDI is largely a matter of commercial business decisions and FDI inflow depends
on a host of factors such as availability of natural resource, market size,
infrastructure, political and general investment climate as well as
macro-economic stability and investment decision of foreign investors. In
calendar year 2021, the FDI inflow decreased by 15 per cent as compared to
calendar year 2020," Minister of State in the Ministry of Commerce and Industry
Som Parkash said in a written reply in the Lok Sabha.
To promote FDI, the Government has put in place an investor-friendly policy,
wherein most sectors except certain strategically important sectors are open for
100 per cent FDI under the automatic route. Further, the policy on FDI is
reviewed on an ongoing basis, to ensure that India remains attractive and
investor-friendly destination, the minister said.
"Changes are made in the policy after having consultations with stakeholders
including apex industry chambers, associations, representatives of
industries/groups and other organizations. The government has recently
undertaken a number of reforms across sectors. In the recent past, reforms in
the FDI policy have been undertaken in sectors such as Insurance, Petroleum &
Natural Gas, Telecom etc," the minister added.
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MOTILAL OSWAL MUTUAL FUND TO PAUSE SIPS INTO INTERNATIONAL FUNDS
Motilal Oswal MF will pause existing systematic investment plan (SIPs) and
systematic transfer plan (STPs) into three of its international funds beginning
April 1, 2022.
* Prashant Mahesh
* ET Bureau
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Motilal Oswal MF will pause existing systematic investment plan (SIPs) and
systematic transfer plan (STPs) into three of its international funds beginning
April 1, 2022. This move comes in as the RBI has not yet increased overseas
investment limits for mutual funds.
“There is no point in collecting money when you cannot deploy it,” says
Harshvardhan Roongta, Chief Financial Planner, Roongta Securities. The money
collected through SIPs in the last couple of months could not be deployed by
such schemes due to restrictions and ended up lying as cash in the portfolio. In
the case of index funds this will lead to a tracking error and subsequent
underperformance.
All fund houses, as advised by industry body Association of Mutual Funds of
India (AMFI) had stopped accepting lumpsum investments into schemes that
investoverseas as the industry had reached close to its overall limit of $ 7
billion. Mutual fund schemes investing in overseas ETFs continue accepting
investor money as this category has a separate limit of $1 billion, which is yet
to be breached.
In January, Motilal Oswal Mutual fund had stopped accepting lump sum investments
into three of its international funds namely Motilal Oswal S&P 500 Index Fund,
Motilal Oswal Nasdaq Fund of Funds (FoF), and Motilal Oswal EAFE Top 100 Select
Index Fund.
“Motilal Oswal Mutual Fund along with the rest of the industry, continues to
engage with the regulators to increase these limits. As there is little clarity
on when and by how much these limits would be raised, we have to take further
steps to meet these regulatory criteria,” said the fund house in a note to
investors. The existing mandates will remain in the system and will be
automatically activated again when the schemes start taking fresh investments.
The existing mandates will remain active in the system and will be automatically
activated again when the schemes start taking fresh investments.
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GREEN FUNDRAISE BY INDIAN FIRMS MAY RISE 50% TO $15 BILLION THIS YEAR
Around $15 trillion has been focused in the ESG space, and more investment
opportunities will be pursued in the next two years. This opens an opportunity
for not just companies in the green businesses but also traditional industries
like cement and steel that commit to reducing the environmental impact of their
businesses. Globally, large ESG funds had assets of $35 trillion in 2021.
* ETBFSI
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Around $15 trillion has been focused in the ESG space, and more investment
opportunities will be pursued in the next two years. This opens an opportunity
for not just companies in the green businesses but also traditional industries
like cement and steel that commit to reducing the environmental impact of their
businesses. Globally, large ESG funds had assets of $35 trillion in 2021.
As climate change awareness rises and the Ukraine war drives the need to
diversify energy sources, ESG investments and fundraising are set to rise.
Bank of America expects global environmental, social and governance (ESG) bond
issuances to jump to $1.2-1.4 trillion in 2022, up from $900 billion in 2021.
Also read: All you need to know about green deposits
ESG bond issuance from India could bring in $15 billion in 2022, which is almost
50% more than the $10 billion raised in 2021.
Around $15 trillion has been focused in the ESG space, and more investment
opportunities will be pursued in the next two years. This opens an opportunity
for not just companies in the green businesses but also traditional industries
like cement and steel that commit to reducing the environmental impact of their
businesses.
According to Bank of America, globally large ESG funds had assets of $35
trillion in 2021. This is likely to go up to $50 trillion by 2025.
Many Indian firms are already eligible to float ESG bonds as almost all top 100
companies have published sustainability reports with firm commitments and goals.
Also read: Green energy funds see big inflows as Ukraine invasion sparks fears
Flow in ETFs
Investors added over $886 million to some of the biggest exchange-traded funds
that invest in clean energy as the US and Europe took steps to cut dependence on
Russian fossil fuels.
Shifting to green energy is fundamental to the European Union’s climate plans,
and Russia’s invasion of Ukraine compelled the bloc to speed up its timetable
for adding wind and solar power to help substitute for Russian supplies by 2027.
An American plan to ban oil imports from Russia sent solar-power stocks surging.
Flurry of investments
Energy experts say the war could indeed catapult renewable energy to
stratospheric levels and put Europe on track to meet its carbon emissions
targets, but in the short term it could force electricity blackouts, factory
shutdowns and capricious energy prices.
Amid the flurry of government announcements, investors added about $500 million
to two funds that track the S&P Global Clean Energy Index, the London-listed
iShares Global Clean Energy UCITS ETF and the American equivalent iShares Global
Clean Energy ETF. Some of the funds’ biggest holdings include wind-turbine giant
Vestas Wind Systems A/S and solar-power equipment maker Enphase Energy Inc.
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SEBI PROBING INVESTMENT BANKERS FOR ALLEGED INSIDER TRADING
Investment bankers are privy to price sensitive information such as pricing in
share sales or deals by companies. Sources said Sebi is checking whether these
bankers passed on information to their relatives.
* Pavan Burugula
* ET Bureau
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Mumbai: The Securities and Exchange Board of India (Sebi) is investigating
investment bankers for alleged violation of insider trading rules. The capital
markets regulator has come across various instances where close relatives of
these bankers traded in shares of companies, whose share sales were being
handled by these dealmakers, said people with direct knowledge of the matter.
At least two leading domestic investment banks are learnt to have received
queries from Sebi in this matter.
An email sent to Sebi remained unanswered.
Investment bankers are privy to price sensitive information such as pricing in
share sales or deals by companies. Sources said Sebi is checking whether these
bankers passed on information to their relatives.
"There have been cases where immediate relatives or associates of the investment
bankers traded in the stocks days before a deal announcement by the company,"
said a person with direct knowledge of the matter. "In the older surveillance
system, they often escaped the radar, but the new artificial intelligence (AI)
based surveillance systems of Sebi have capability of capturing such indirect
insider trading also."
Till recently, Sebi largely relied on the surveillance alerts received from
stock exchanges along with the regulatory filings made by the companies. In such
a system, it was difficult to track the transactions done by related parties of
investment bankers. Primarily, the surveillance used focus on promoters and
management with direct knowledge of the confidential information. But now,
Sebi's improved technology is able to map connections like trades done by
related people.
A senior securities market lawyer, who has handled such cases, said Sebi is
increasingly going by 'preponderance of probability' in insider trading cases
these days. This broadly means the regulator is considering the likelihood of
relatives or associates benefitting from unpublished price sensitive
information.
"In such a scenario, Sebi may conclude that it is more probable that the
banker's brother purchased shares of the company based on information received
from the banker," the lawyer said.
"Sebi has been taking a very conservative view of such transactions and even if
they find minor anomalies, they are widening the scope of investigation to find
patterns."
Investment banks are required to maintain a database containing information
about officials who are aware of the information. The capital markets regulator
observed lapses in the database maintenance at both the banks, said the people
cited above.
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SENSEX TUMBLES 304 PTS ON PROFIT-BOOKING; NIFTY SLIPS BELOW 17,250
The 30-share pack Sensex declined 304.48 points or 0.53 per cent to close at
57,684.82. Its broader peer NSE Nifty fell 69.85 points or 0.40 per cent to
17,245.65.
* Shubham Raj
* ETMarkets.com
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NEW DELHI: Thanks to profit-booking following yesterday’s gains, benchmark
indices closed with cuts on Wednesday, amid prospects of steep interest rate
hikes in western nations and the ongoing war in Europe.
Investors were cautious as the market recovered all losses that it sustained due
to the outbreak of war and now the countdown of the earnings season has begun.
Metal stocks saw buying while autos saw selling.
The 30-share pack Sensex declined 304.48 points or 0.53 per cent to close at
57,684.82. Its broader peer NSE Nifty fell 69.85 points or 0.40 per cent to
17,245.65.
“Volatility is back due to inflationary pressures triggered by supply
constraints. While consistently rising input cost and fall in demand due to
surge in covid cases in parts of the world, war and high commodity prices are
impacting earnings growth which can lead to downgrade in outlook," said Vinod
Nair, Head of Research at Geojit Financial Services.
> It’s prudent to stick with the sectors or themes which are doing well but
> avoid going overboard.Ajit Mishra, Religare Broking
Market at a glance:
* Indian Hotels jumped over 3% after it launched QIP
* HDFC fell over 2% despite recording highest ever retail loans in a year
* India VIX, barometer of future volatility, rose 3% to 24.75
* Jindal Saw jumped 2% after reports of bagging order worth Rs 9,300 cr
* Paytm fell further 4% to hit fresh all-time lows
Among the bluechip names, Divi’s Labs was the biggest gainer, rising 2.51 per
cent. Hindalco Industries, Tata Steel, Dr Reddy’s Labs, UPL, ITC, JSW Steel and
Power Grid were other major gainers.
Kotak Mahindra Bank was the top loser in the Nifty pack, falling 2.61 per cent.
HDFC, Britannia Industries, Bharti Airtel, Sun Pharma, Maruti Suzuki and Bajaj
Auto were other names that ended in the red.
Broader market indices ended mixed, but outperformed their headline peers. Nifty
Smallcap fell 0.21 per cent and Nifty Midcap added 0.55 per cent. Nifty 500, the
broadest index on NSE, ended down 0.20 per cent.
City Union Bank, Tata Communications, Indian Hotels, Indian Energy Exchange,
Alok Industries and Infibeam Avenues were top gainers from mid and smallcap
indices. Chambal Fertilizers, TV18 Broadcast, Gujarat Narmada Fertilizers, Dhani
Services, ICICI Securities and SRF were major losers from broader market space.
Sectoral matrix on NSE was mixed. Nifty Auto was the top loser, down 1.04 per
cent, followed by Nifty Financial Services. Nifty Metal was the top gainer,
rising 1.21 per cent. Nifty Pharma and Nifty Media also managed to close with
gains.
Market breadth was in favour of losers as 1,463 stocks ended in the green, while
1,935 names settled with cuts. As many as 126 securities hit 52-week highs,
mostly from the smallcap space. Meanwhile, 30 names hit 52-week lows, mostly
from the microcap space. About 291 stocks hit upper circuit limits and 274 lower
circuit limits.
European markets were trading mixed. London-based FTSE climbed 0.21 per cent
while Paris and Frankfurt declined 0.22 per cent and 0.26 per cent,
respectively. In Asia, barring Indonesia, all markets closed with gains.
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HC REJECTS PLEA AGAINST DISINVESTMENT
The Madras High Court has rejected a PIL plea challenging the amendments made in
the Finance Act and LIC Act, which enabled the central government to disinvest
its stakes in the Life Insurance Corporation of India.
* PTI
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The Madras High Court has rejected a PIL plea challenging the amendments made in
the Finance Act and LIC Act, which enabled the central government to disinvest
its stakes in the Life Insurance Corporation of India. The first bench of Chief
Justice M N Bhandari and Justice D Bharatha Chakravarthy was dismissing the
petition from L Ponnammal, a policy-holder with the insurance behemoth who
contended that the subject matter would not fall within the definition of Money
Bill. The amendments were introduced by the Money Bill under Article 110 of the
Constitution, though the same did not fall within the said category, she added.
"There is no constitutional illegality in the Parliament having amended the Life
Insurance Corporation (LIC) Act by way of a Money Bill for floating an Initial
Public Offering (IPO) and parting with its shareholding in the corporation to
raise Rs 65,000 crore to Rs 70,000 crore initially to the Consolidated Fund of
India," the bench said.
Rejecting the petitioner's contention, the bench said that a challenge to the
Finance Act of 2021, through which the LIC Act was amended, could not be
accepted in the absence of a challenge to a certificate issued by the Lok Sabha
Speaker classifying the Finance Bill 2021 as a Money Bill.
The Speaker's decision should be treated as final as per Article 110(3) of the
Constitution, unless a judicial review of it had been prayed for. The issues
related to payment or withdrawal of money either from the Consolidated Fund or
Contingency Fund of India would fall under the definition of Money Bill and if
any question arises as to whether a Bill was a Money Bill or not, the decision
of the Lok Sabha Speaker would be final as per Article 110(3) of the
Constitution.
The present case is not one where an allegation of constitutional fraud has been
made. "Even otherwise, we do not find constitutional bar or illegality in the
Act of 2021. It is more so when the Parliament, endowed with plenary powers, had
passed the Bill and the Standing Committee on budget had approved it after
scrutiny and due diligence," the Bench said.
"In any case, the petitioner, who is a policyholder having a policy worth Rs
50,000 is questioning the receipt of money approximately in the range of Rs
65,000 crore to 70,000 crore into the Consolidated Fund of India on account of
the IPO. The intrusion or inference to the implementation of a public interest
policy by way of legislation should be eschewed as it directly impacts the
economic growth of the country and interference therein may have far reaching
consequences because the money is to be used for the development of the
country," the bench said and dismissed the PIL.
LIC had, on February 13, filed the draft red herring prospectus (DRHP) for LIC
IPO. SEBI had earlier given the approval to the draft papers, paving the way for
the share sale.
The government was expecting to garner over Rs 60,000 crore by selling about
31.6 crore or 5 per cent shares in the life insurance firm to meet the curtailed
disinvestment target of Rs 78,000 crore in the current fiscal.
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RUPEE WEAKENS BY 13 PAISE VS US DOLLAR AS FED TURNS MORE HAWKISH
“The two culprits for the risk-off sentiment are a hawkish Fed and oil prices up
due to war. Rupee should move within a range of 76.20 to 76.60. Exporters are
getting yet another opportunity to sell while importers have to wait for better
levels,” Finrex Treasury Advisors Head of Treasury Anil Kumar Bhansali said.
* Bhaskar Dutta
* ETMarkets.com
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NEW DELHI – The rupee and government bonds took a beating on Tuesday as fear of
overseas investment outflows strengthened after US Fed Chair Jerome Powell said
that the central bank could hike rates by 50 basis points on multiple occasions,
if needed, to combat inflation.
A continued rise in global crude oil prices, which exerts upward pressure on
domestic inflation and the current account deficit, also hit market sentiment.
The partially convertible rupee opened at 76.28/$1 as against 76.15/$1 at the
previous close. The Indian currency, which was last at 76.38/$1, moved in a band
of 76.28-76.38/$1 so far in the day.
The 10-year government bond yield was last trading 5 basis points higher at 6.83
per cent. Bond prices and yields move inversely.
Last week, the US Fed raised interest rates for the first time in four years but
the rupee held firm against the dollar as Powell’s optimistic view on global
growth buoyed risk appetite globally.
With his latest statements posing a risk to global economic prospects,
especially when coupled with the surge in commodity prices because of the
Ukraine war, appetite for emerging market currencies such as the rupee waned.
“The two culprits for the risk-off sentiment are a hawkish Fed and oil prices up
due to war. Rupee should move within a range of 76.20 to 76.60. Exporters are
getting yet another opportunity to sell while importers have to wait for better
levels,” Finrex Treasury Advisors Head of Treasury Anil Kumar Bhansali said.
“I still have a feeling that by March 31st importers will get an opportunity to
hedge their payables. For today's cash imports wait for 76.20/$1 and exports
around 76.50/$1.”
The West Texas Intermediate (WTI) crude oil contract for April delivery added
$7.42 or 7.1 per cent, to settle at $112.12 per barrel. Brent crude for May
delivery increased $7.69 or 7.1 per cent, to close at $115.62 a barrel.
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