SC lifts ban on cryptocurrency trading. India services PMI hits seven-year high of 57.5 in February. Telcos to be allowed to defer payment of future spectrum auctions. Fed cuts rates by half a percentage point to combat coronavirus slowdown.
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Light at the End of the Tunnel
The Supreme Court of India today overturned the RBI's 2018 circular which barred trading in cryptocurrency.
In an April 2018 circular, the RBI had barred banks and other financial institutions from facilitating “any service in relation to virtual currencies”.
Since then, multiple startups engaged in cryptocurrency trading in India have shut shop.
The SC has overruled the RBI's circular on the grounds of disproportionality, following a petition by a group, including the trade body Internet and Mobile Association of India, which had challenged the Central Bank’s circular, in part, arguing that India should look at most other nations that are not only allowing cryptocurrency trading, but have moved to launch their own virtual currencies. [ToI]
A Pleasant Change
The IHS Markit India Services PMI increased to a seven-year high of 57.5 in February 2020 vs 55.5 in the previous month, augmented by a recovery in foreign demand and solid business confidence. [BS]
Yesterday, the Reserve Bank said it is closely monitoring the global and domestic situation regarding the impact of the coronavirus outbreak and assured markets that it was ready to take necessary action to contain spillovers to financial markets.
"The Reserve Bank of India is monitoring global and domestic developments closely and continuously and stands ready to take appropriate actions to ensure orderly functioning of financial markets, maintain market confidence and preserve financial stability," it said.
The RBI statement comes a day after the US Federal Reserve made similar assurances to try to pacify fears.
Meanwhile, the Government has issued a travel advisory, suspending all regular visas and e-visas granted on or before March 3rd to nationals of Italy, Iran, South Korea, Japan who have not yet entered India. [Livemint]
You can read the RBI’s entire statement here.
Three is Company
Today, on Day 3 of the bidding process, the IPO of SBI Cards and Payment Services got fully subscribed. Despite a weak market, the issue has been subscribed 13.26 times so far.
The issue will close for qualified institutional buyers (QIBs) today and for retail investors and HNIs on Thursday. [ET Markets]
The National Company Law Appellate Tribunal (NCLAT) has asked the Competition Commission of India (CCI) to initiate again a probe against ecommerce giant Flipkart for alleged misuse of its dominant position.
Earlier, the CCI had absolved Flipkart of unfair practices, saying "it does not appear that any one player in the market is commanding any dominant position at this stage of evolution of market".
The appellate tribunal, however, set aside the earlier order and directed the CCI to investigate the allegations. The NCLAT said that the All India Online Vendors Association (AIOVA) has successfully made its case against Flipkart. [Livemint]
Brief Respite from Tragedy
On Wednesday, the Government said mobile service providers could defer future spectrum auction payments.
“Considering the stress in the sector, the Government has given an option to the Telecom Service Providers (TSPs) to defer payment of the spectrum auction instalments dues for 2020-21 and 2021-22, either for one or both years,” Minister of State for Communications Sanjay Dhotre informed the Lok Sabha.
This could provide some amount of relief to the Telecom Industry, which has been reeling under the effects of mounting debt and dues, facing increased tariffs and potential closure altogether. [BS]
A new report by US-based think tank Global Financial Integrity (GFI) has some sour news for India. India reportedly has the third-highest trade-related illicit financial flow among 135 countries. $83.5bn escapes the Government's tax net owing to trade-based money laundering tactics in 2017.
According to the report, the five countries with the largest identified value gaps were China at $457.7bn, followed by Mexico at $85.3bn, India at $83.5bn, Russia at $74.8bn and Poland at $66.3bn. [Moneycontrol]
Desperate Times, Desperate Measures
The Federal Reserve has announced an emergency rate cut – its first since December 2008 – of half a percentage point in response to the growing economic threat from the coronavirus.
“The coronavirus poses evolving risks to economic activity,” the Fed said in a statement. “In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate.”
At a news conference later, Chairman Jerome Powell said the Fed took action after officials saw the coronavirus was having a material impact on the economic outlook. [CNBC]
A Whole New World
Denmark’s Novo Nordisk is the world’s biggest insulin maker. Now, it is eyeing a potential multibillion-dollar market that has largely eluded the pharmaceutical industry: obesity.
Doctors are convinced lifestyle changes, not drugs, are an adept answer to obesity. Despite those hurdles, Novo Nordisk says it has persuaded some big employers to cover its drug, Saxenda, in their customised medical plans.
Saxdena was approved in 2014 and can cost $1,000 a month in the US. Analysts forecast that its US sales would top $250m by 2020. Last year, sales were nearly twice that figure.
The market itself is huge. Research says almost half of all Americans would qualify for weight-loss drugs. But these drugs are a tough sell, considering doctors’ reluctance to endorse them and their record in causing side effects like nausea, diarrhea and headaches. [WSJ]
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