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Upgraded National Pension Scheme to Beat Inflation, Chinese Gene-Editing Experiment Comes Under Scrutiny et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Dec 29, 2018 2:34 PM 3 min read
Editorial

Latest upgrade to the National Pension Scheme to beat inflation, Chinese gene-editing experiment Crispr-Cas9 comes under scrutiny,  Recovery of Indian banks improve after implementation of IBC.

 

Now to today's Top Business Stories through our End Of Day Wrap Up:

 

Upgraded National Pension Scheme to Beat Inflation, Chinese Gene-Editing Experiment Comes Under Scrutiny et al. 

RBI

RBI opposes dilution of bank capital norms; might consider revision of existing prudential regulations. Recovery of Indian banks improved in 2017-18 after the implementation of IBC, as per the Trends and Progress Report released by the Central Bank.

 

The What: In light of the “Report on Trend and Progress of Banking in India 2017-18” released on Friday, the RBI opposed the relaxation of rules around risk weights and capital requirement for Indian banks. The Central Bank warned that relaxing the current risk-adjusted capital norms could hit the economy at a time when defaults are high and provisions low, as per a Livemint report.

 

Perspective: At present, the capital adequacy norms for Indian banks are higher than those recommended under Basel.

 

What else: RBI also suggested that it intends to issue revised prudential regulations, including guidelines on exposure and investment norms, risk management framework and select elements of Basel III capital framework to All India Financial Institutions—investment and development institutions that are crucial to the economy.

 

Also this: For the 701 cases admitted under the National Company Law Tribunals (NCLT), and claims admitted on 21 accounts for an amount of INR9,900cr, the recovery has been INR4,900cr, indicating a haircut of about 50%.

 

Also, some nice fresh stuff (what we call "data") from the RBI: Click links to access: 

 

Report on Trend and Progress of Banking in India 2017-18 
Statistical Tables Relating to Banks in India: 2017-18

 

 

MONEY

Latest upgrade to the National Pension Scheme (NPS) allows for higher equity exposure.

 

Update: The recent changes to NPS has increased the maximum permitted allocation to equity to 75% (from 50% prior) up to 50 years of age. From 51 years onwards, the maximum equity allocation allowed will keep reducing by 2.5% per annum, to a maximum of 50% at the age of 60.

 

Perspective: Historically equities have been known to beat inflation over long periods.

 

TESLA

Larry Ellison and Kathleen Wilson-Thompson join Tesla as independent Directors.

 

The What: Tesla has added Kathleen Wilson-Thompson, Human Resources Lead at Walgreens Boots Alliance, and Larry Ellison, founder of Oracle, to its Board of Directors.

 

Zoom Out: In September, the Securities and Exchange Commission had asked Tesla to add two independent board members and an independent chairman to settle a securities fraud lawsuit brought against the company and its Chief Executive, Elon Musk after Musk had tweeted about taking the company private. Tesla’s stock rose c. 6% to $334 on Friday after the announcement.

 

Some Perspective: However it is worth noting here that both appointees are close alliances of Musk, which defeats the SEC's order of appointing two independent board members who could bring an "objective" viewpoint to the Board.

 

GENE

Chinese gene-editing experiment Crispr-Cas9 comes under scrutiny for lack of adequate regulation and oversight in the country.

 

The What: As per a WSJ report, Crispr-Cas9, a Chinese gene-editing trial has allegedly lost touch with patients whose DNA was altered. This has sparked worldwide concern regarding lack of adequate regulation and oversight in the country.

 

Up Close: Crispr claims to correct intractable diseases by rewriting a person’s DNA. But it isn’t a foolproof technology yet and can cause changes in genes other than the ones sought, some even surfacing years later. This warrants the need to follow up with patients in the long term.

 Upgraded National Pension Scheme to Beat Inflation, Chinese Gene-Editing Experiment Comes Under Scrutiny et al.

GEOPOLITICS

President Donald Trump threatens to shut down the southern border if Democrats don’t fund the border wall between US and Mexico.

 

Also this: Trump also threatened to cut off all US aid to Honduras, Guatemala and El Salvador, three central American countries where gang violence has forced many to seek asylum to US.

 

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