Indian authorities have vowed to support financial markets rocked by growing concerns of defaults by shadow banks.
The government is to provide adequate liquidity to mutual funds and non-bank financial companies, Indian Minister of Finance Arun Jaitley said yesterday.
His tweet followed a rare joint weekend statement from the central bank and capital markets regulator assuring investors they were monitoring the situation, and would take necessary steps.
Analysts are warning that India’s shadow banking sector could face a cash crunch after key lender Infrastructure Leasing & Financial Services Ltd (IL&FS) missed debt payments and rattled investors on Friday last week.
Policymakers are already battling with surging bad loans at banks, a plunging currency and volatile stocks as foreign investors pull money from emerging markets.
Some analysts expect the Reserve Bank of India (RBI) to conduct more open market bond purchases to add liquidity to the market and calm investors, while others see a special refinance window for non-banking finance companies and mutual funds.
“It is more of calming nerves in the financial markets that things won’t go into a spiral,” ICICI Securities Primary Dealership executive vice president Kuldeepsinh Jagtap said. “For example, if tighter rupee liquidity leads to disruption in money market rates, the RBI might provide adequate liquidity ensuring smooth functioning of markets.”
Turmoil in India’s non-bank finance companies has deepened in the past few weeks, with troubled lender IL&FS disclosing further missed debt payments on Friday last week.
The company, which has been categorized as a “systemically important” non-banking financial firm by the RBI has total debt of US$12.6 billion.
Of that, 61 percent is in the form of loans from financial institutions, indicating its woes could spread to other shadow banks in Asia’s third-largest economy.
Already a few mutual funds have been selling short-term debt instruments issued by non-bank finance companies, including those funding India’s housing sector.
That sell-off is being partially blamed for Friday last week’s crash on India’s stock market, which the capital market regulator is reviewing.
The Securities and Exchange Board of India is looking into whether brokers and investors colluded during the sharp sell-off and subsequent recovery in financial shares, people with knowledge of the matter said.
The slide even prompted the nation’s largest commercial bank, State Bank of India, to say that the default by IL&FS was not India’s Lehman Brothers moment.
The market yesterday extended losses, with the benchmark equity index down 1 percent as of 1pm in Mumbai.
“The RBI will wait to gauge the situation, but [the] most likely option in the current environment is to inject additional liquidity into the system,” Mumbai-based Mirae Asset Global Investment head of fixed income Mahendra Jajoo said. “They can also give additional line of credit to non-bank finance companies and to the mutual funds.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained