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Franklin Templeton Mutual Fund Shuts Down Six of Its Open-Ended Debt Funds

Professor of Financial Economics and Part-time Value Investor, Transfin.
Apr 24, 2020 1:11 PM 5 min read
Editorial

Franklin Templeton Mutual Fund shuts down six of its open-ended debt funds. Amazon launches new programme in India enlisting local shops and retailers as sellers. Why kirana stores are the new darlings of big companies suddenly. WhatsApp Pay reportedly agrees to comply with all rules by May. Is RIL's Mukesh Amabani considering India's answer to Alibaba by building a super-app? US House approves $484bn relief package for small businesses and hospitals. Indian parliamentary panel endorses proposal to allow companies with up to 300 workers to sack people without Government nod. Coronavirus drug reportedly fails first trial. US accuses China of destroying coronavirus samples.

 

 

FRANKLIN TEMPLETON

Franklin Templeton Mutual Fund shuts down six of its open-ended debt funds.

Templeton Run

Franklin Templeton Mutual Fund has decided to shut six of its open-ended debt funds, effective April 23rd, citing lack of liquidity in the debt market and unprecedented redemptions in these yield-oriented schemes in the wake of the coronavirus outbreak and the subsequent slump in the Indian economy.

 

The six yield-oriented schemes in which investments have been stopped are India Low Duration Fund, Dynamic Accrual Fund, Credit Risk Fund, Short Term Income Plan, Ultra Short Bond Fund and Income Opportunities Fund

 

Together these managed assets worth ₹26,000cr ($3,453m). [Moneycontrol]

 

Meanwhile, mutual fund industry body Association of Mutual Funds in India (AMFI) assured investors that majority of Fixed Income Mutual Funds AUM is invested in superior credit quality securities and schemes that have appropriate liquidity to ensure normal operations. [Moneycontrol]

 

Ripples of Worry

The closure of funds has fueled worries of a renewed wave of withdrawals from similar products and that Indian credit markets could be pushed back into turmoil just as they were starting to show some signs of improvement. [Bloomberg via ET Wealth]

 

SMALL BUSINESSES

Amazon launches new programme in India enlisting local shops and retailers as sellers.

A Tree Needs Roots

Amazon has launched “Local Shops on Amazon”, an initiative to enable small shops and retailers of any size and across categories to sell their goods online through the e-tailer.

 

The programme has been announced after a pilot that involved over 5,000 local shops and retailers in 100 tier-1 and tier-2 cities. Amazon will invest ₹10cr ($1.3m) to immediately expand its pilot. For now, the initiative will be limited to essential products and further expansion will take place after the lockdown is lifted. [Entrackr]

 

Why kirana stores are suddenly the new darlings of big companies.

Kirana Craze

It's not difficult to see why Amazon wants to target small shops in India. Kirana stores were once throught to be an endangered species with the advent of supermarkets and online grocery platforms. But consumers continue to rely on local stores, of which there are almost 8m in India. Especially of late amid the nationwide lockdown.

 

They have now become the unlikely darlings of multi-billion-dollar companies like Reliance, Facebook and Walmart-backed Flipkart, all of whom are rushing to partner with as many kirana stores as possible. [Livemint]

 

TECH

WhatsApp Pay reportedly agrees to comply with all rules by May.

Pay by May?

As per an ET report, WhatsApp has agreed to comply with all local rules mandated by the RBI and National Payments Corporation of India by May for a full-fledged rollout of its payments service WhatsApp Pay.

 

As for whether this compliance would include data localisation and other norms mandated last year by regulators, and which stalled WhatsApp Pay’s rollout for two years, more details are awaited. [ET Internet]

 

Is RIL's Mukesh Ambani considering India's answer to Alibaba by building a super-app?

One App to Rule Them All

RIL's Mukesh Ambani's deal with Facebook has everybody talking. One question on many people's minds - is Asia's richest man aiming to build a super-app for India, in a bid to become the country's answer to China's Alibaba? If that's the case, then he he'd be treading a road that was taken before - and led to nowhere. Here's a piece on why an all-in-one app might not work in a country like India. [Business Insider]

 

Extra Crunch

Missed the big news surrounding the Facebook-Reliance deal and talks to build a super-app? Here's an explainer for you. [TRANSFIN.]

 

VIRAL IMPACT

US House approves $484bn relief package for small businesses and hospitals.

Emergency Kit

The US House of Representatives has passed a $484bn bill that provides aid to small businesses and hospitals. The measure has already been passed in the Senate, where it won bipartisan support, and has been championed by the White House. It replenishes two depleted small business-relief programs, offers additional assistance to hospitals and funds an expansion of testing capacity nationwide. [WSJ ]

 

Indian parliamentary panel endorses proposal to allow companies with up to 300 workers to sack people without Government nod.

Reform and Friction

In a move that could signify readiness for labour reforms but also conflict with workers’ unions, an Indian parliamentary standing committee yesterday supported the idea of allowing companies with up to 300 workers to fire people or close down units without prior approval of the Government. This a threefold increase from the current threshold.

 

Such a change was first proposed by the Union Government in 2014 but it left it to states to implement the proposals by amending the Industrial Dispute Act. [Livemint]

 

A CURE FOR CORONA

Coronavirus drug reportedly fails first trial.

The Cure Next Door

Around the world, more than 40 teams of scientists are working around the clock to develop a vaccine for the coronavirus. Weeks into the pandemic’s lethal spread around the world, the prospects of mustering a vaccine cure – which, if successful on time and mass-produced and easily available, would be a gamechanger in the world’s fight against this virus – are a welcome allure.

 

One such drug that many banked their hopes on was remdesivir, which was being researched upon by US firm Gilead Sciences. However, the first clinical trials of the drug reportedly failed in combating COVID-19. Draft documents of the trial were published online by the World Health Organisation – before being deleted after the international organisation clarified that the report had been mistakenly uploaded. [BBC News]

 

Extra Crunch

Scientists are racing against a time to develop a COVID-19 vaccine. Here’s an explainer about what’s at stake and what history tells us about vaccine development. [TRANSFIN.]

 

US accuses China of destroying coronavirus samples.

Taking the Dragon to Task

In order to build a cure against a virus, you need to know everything you can about that virus. And this has become another thorn in Sino-American relations. US Secretary of State Mike Pompeo has accused China of destroying early samples of the coronavirus and not sharing samples with the outside world, “making it impossible to track the disease’s evolution”.

 

"Frankly we are still trying to get an actual sample of the virus (from China). They have given us the breakdown of it," Pompeo said on Thursday. He also blamed China’s lack of transparency in the early days of the epidemic for the current pandemic, in which the US is by far the worst affected country. [SCMP]

FIN.

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