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BQuick On Nov. 19: Top 10 Stories In 10 Under Minutes

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This is a roundup of the top stories of the day.

1. Panel To Study Surplus Funds Transfer

The Reserve Bank of India will constitute a committee to examine the central bank’s Economic Capital Framework in the face of government requests for reserves to be transferred to it.

  • The membership and terms of reference of the panel will be jointly determined by the government the RBI, the central bank said in a statement.
  • The board advised RBI to consider a plan to restructure stressed assets of borrowers in the small and medium enterprises with aggregate credit facilities of as much as Rs 25 crore.
  • The board decided to retain Capital to Risk Assets Ratio at 9 percent, and agreed to extend the transition period for implementing the last tranche of 0.625 percent under the Capital Conservation Buffer by one year.
  • With regard to the issue of banks under the Prompt Corrective Action framework, the board decided that the matter will be examined by the Board for Financial Supervision of the RBI.

Read more on the impact of the RBI board’s decisions.

2. RIL In Expansion Mode

Billionaire Mukesh Ambani-owned Reliance Industries Ltd. is considering a plan to boost its oil-refining capacity by about half, people with knowledge of the matter told Bloomberg News.

  • The proposed plant, to come up at the world’s biggest refining complex in Jamnagar, will be able to process as much as 30 million tons of crude a year, the people said asking not to be identified because the discussions are private.
  • Asia’s richest man seeks to cement Reliance’s dominance in the world’s fastest-growing major oil consuming nation as rivals including Saudi Aramco, Abu Dhabi National Oil Co., and Russia’s Rosneft PJSC acquire plants in India.
  • Total SA and Royal Dutch Shell are also expanding into fuel retailing in India.

Here’s how the company’s shares reacted to the news.

3. Carlos Ghosn Arrested

Nissan Motor Co. will remove Carlos Ghosn as chairman after he was arrested in Tokyo for violations of financial law, throwing the auto industry’s largest global alliance into turmoil.

  • Ghosn, a towering figure who saved Nissan from collapse and brought it together with Renault SA and Mitsubishi Motors Corp., was detained on Monday in Tokyo over a suspected breach of Japanese financial laws, Nissan Chief Executive Officer Hiroto Saikawa told reporters in Yokohama, Japan.
  • Ghosn and Director Greg Kelly have been under investigation at Nissan for several months, and the board is set to meet Thursday to remove them both.

Both Ghosn and Kelly were reporting compensation to regulators that was less than the actual amount.

4. Indian Stocks Continue Climb; U.S. Stocks Fall

Indian equity benchmarks ended higher for the third day, registering their longest gaining streak in over a month.

  • The S&P BSE Sensex Index closed 0.9 percent higher at 35,774.
  • The NSE Nifty 50 Index ended at 10,763.40, up 0.76 percent.
  • Both the benchmark indices ended at over one-month highs.
  • Nine out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty FMCG Index's 1.7 percent gain.
  • On the flipside, NSE Nifty PSU Bank Index was the top sectoral loser, down 0.75 percent.

Follow the day’s trading action here.

U.S. stocks were lower, reversing gains from late last week, as investors grew pessimistic about escalating trade tensions between the Trump Administration and China. Treasuries declined, the dollar steadied and gold fell.

  • The S&P 500 Index was down 0.2 percent as of 9:44 a.m. in New York, while the Nasdaq 100 fell 0.8 percent.
  • The Stoxx Europe 600 Index increased 0.3 percent.
  • The U.K.’s FTSE 100 Index climbed 0.7 percent.

Get your fix of global markets action here.

5. Zee Promoters Looking To Seize The Next Trend

Zee Entertainment Enterprises Ltd. promoters’ plan to sell half their stake should be seen as a move to seize the next trend and not become outdated, rather than their intention to exit the business, according to media entrepreneur Ronnie Screwvala.

  • A stake divestment triggers a negative perception only in India where control is over-dramatised, according to Screwvala, co-founder of UpGrad. “Today, most growth at scale is going to happen through collaboration and not necessarily on a competitive basis,” he told BloombergQuint in an interview.
  • Subhash Chandra-led Essel Group decided to divest up to 50 percent of its holding to a global strategic partner in Zee Entertainment to help transform the country’s largest broadcaster into a “global media-tech player”.
  • Screwvala said there’s going to be disruption in the Indian media industry where the “winner takes it all” . Other players need to collaborate for the next 10-15 years, he said.

India’s media industry disruption will create a “winner takes it all” market, said Screwvala.

6. Binani Cement Sale Upheld

The Supreme Court approved Binani Cement Ltd.’s sale to UltraTech Cement Ltd. today, upholding the National Company Law Appellate Tribunal’s verdict on the insolvency bids.

  • The two-judge bench headed by Justice RF Nariman quashed Dalmia Bharat’s plea challenging the verdict, saying there was no infirmity in approval granted by the NCLAT, Bloomberg News reported.
  • The appellate tribunal had on Nov 14. approved UltraTech Cement’s plan to acquire debt-laden Binani Cement, holding that the rival bid by Dalmia Group was “discriminatory” to creditors of the stressed cement maker.

Here’s how the companies’ shares reacted to the verdict.

Also Read: GAIL Moves NCLT Seeking Rejection Of ArcelorMittal’s Bid For Essar Steel

7. Bitcoin Tumbles

Cryptocurrencies resumed their slump on Monday, with Bitcoin approaching the $5,000 mark for the first time since October 2017, in the wake of a split of one of the largest major tokens and increased regulatory scrutiny of initial coin offerings.

  • Bitcoin declined as much as 6.1 percent to $5,119, while so-called alternative coins slumped even more, with Ether tumbling as much as 12 percent and Litecoin cratering as much as 13 percent.
  • XRP, the token associated with Ripple, was the lone gainer among major digital currencies.
  • The Bloomberg Galaxy Crypto Index fell as much as 78.4 percent to a one year-low on a closing basis.

Here’s why volatilty has returned to cryptocurrencies.

8. Could High Real Interest Rates Dampen Investment?

India’s Monetary Policy Committee’s two preemptive interest rate hikes, along with the lower-than-expected trend in inflation, have prompted some economists and analysts to question whether real rates in India are too high to support a nascent recovery in investment.

  • The real interest rate, which adjusts the nominal rates for inflation, are an important influence on investment decisions. Some, including MPC member Ravindra Dholakia, feel that India is running real interest rates which are too high.
  • The current high short term rates have raised the cost of borrowing, said Saugata Bhattacharya, chief economist and senior vice president at Axis Bank Ltd.

Alternate measures have also found real interest rates close to this level.

9. LME’s New India Game Plan

The world’s largest setter of metal prices is in talks with Indian companies to set up warehouses in the country as the market regulator seeks a phased transition towards physical settlement of all commodity derivatives.

  • The regulator’s move has created an opportunity for exchanges to launch physical delivery of contracts in India, Matthew Chamberlain, chief executive officer of the London Metal Exchange Ltd., which provides reference rates for trading base metal futures, told BloombergQuint in an interview.

"If they did that, our prices won’t be needed." - Matthew Chamberlain, CEO, LME

  • As of now, cash settlement of commodity contracts is based on LME prices. But once delivery becomes mandatory, they will be based on local prices and also factor in taxes, and freight and warehousing costs.

SEBI has indicated it will look to allow delivery in commodity futures.

10. CBI Vs CBI: Alok Verma Files Reply To CVC Report

Central Bureau of Investigation Director Alok Verma filed his reply in a sealed cover, to the CVC report on the bribery allegations against him. The matter will now be heard in the Supreme Court on Tuesday.

  • Verma had earlier filed a plea challenging the government's order divesting him of his duties and sending him on leave in view of allegations of corruption against him.
  • The top court had adjourned the hearing on Nov. 12, after the Central Vigilance Commission delayed to submit their inquiry report on Verma.
  • The report was submitted in a sealed cover on Monday morning to the three-judge bench, headed by Chief Justice Ranjan Gogoi.

Follow the updates from the case here.

. Read more on Global Economics by BloombergQuint.