Cryptocurrencies remain a 'grey area,' India's finance secretary reiterates - Finbold - Finance in Bold

Justinas
Baltrusaitis 9 hours ago
3 mins read

India’s finance secretary T. V. Somanathan has reiterated that cryptocurrencies in the country are not illegal but must operate within the laid down regulations. 

In an interview with Bloomberg Daybreak: Middle East, Somanathan clarified that investors can still trade in different digital assets despite the country imposing a 30% tax on crypto gains. 

According to the government official, transactions in cryptocurrencies are discouraged, but they will be taxed as speculative transactions and not financial market transactions due to their volatile nature.

However, Somanathan expressed uncertainty on the general crypto regulations outlook stating that the country will not ‘jump the gun,’ but the current focus is on taxation.

“Crypto-assets are currently neither illegal nor are they encouraged. So they’re in a sort of a grey area. They’re not illegal. I mean, it’s not illegal to buy or sell crypto assets in India, and it continues to be not illegal. <…> So it’s being taxed at the same rate as speculative transactions and not at the same rate as financial market transactions,” said Somanathan. 

Following the 30% tax guidelines, there was speculation that the country is in line with legalizing cryptocurrencies. Notably, the directive possibly hints at the country’s future crypto regulation framework after years of speculation. 

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In announcing the tax regulations, India’s Finance Minister Nirmala Sitharaman acknowledged that there has been a ‘phenomenal increase’ in crypto transactions hence the need for a tax regime.

Intention to regulate crypto instead of total ban 

Initially, the government was considering completely banning the crypto sector citing threats to macroeconomic factors and financial stability. Therefore, it can be argued that the directive, like the tax laws, points to the state’s intention to regulate the space instead of a complete ban. 

Overall, institutions like the Reserve Bank of India (RBI through governor Shaktikanta Das) have maintained ‘serious and major’ concerns about cryptocurrencies. 

Somanathan also noted that the country would likely examine international crypto regulations before rolling its own framework. 

As reported by Finbold, India Prime Minister Narendra Modi called for global cooperation and a common approach towards addressing challenges posed by cryptocurrencies.

Modi stressed that no country could individually regulate the crypto sector. Previously, the premier had stated that cryptocurrencies pose a challenge to investors while warning that assets like Bitcoin are a threat to younger generations. 

Watch the full video: Crypto Assets Not Illegal or Encouraged in India: Finance Secretary

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Cryptocurrencies remain a 'grey area,' India's finance secretary reiterates - Finbold - Finance in Bold
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‘Perfect storm’: Citi withdraws buy call on India bonds, after just a day - Mint

Indian bonds are set for a torrid year, with supply rising to record levels while demand wanes. Citigroup Inc. offered a glimpse of the conditions facing the nation’s debt when it withdrew a buy call within a day of recommending purchases. Yields surged the most in almost two years Tuesday after Finance Minister Nirmala Sitharaman unveiled a bigger-than-anticipated borrowing plan without signaling who could buy the paper. 

Citi and other investors had been betting that Sitharaman would unveil a path toward inclusion of Indian debt in global indexes, which would bring foreign inflows. When that didn’t materialize, traders were confronted with reality: India’s government is borrowing unprecedented amounts of money just as its central bank runs out of room to buy more bonds. 

“Bonds in India face a perfect storm," said Arvind Chari, chief investment officer at Quantum Advisors Pvt. 

He pointed to rising global inflation, which is forcing central banks around the world to tighten policy. Then there’s the fact that Indian banks -- the largest purchasers of sovereign paper -- are already overstocked. The Reserve Bank of India halted its quantitative easing program last year.

Signs of stress had appeared even before the budget. Primary dealers rescued multiple auctions in recent weeks, reflecting dwindling demand for sovereign paper.

The 10-year yield may hit 7% in coming months in the absence of any support, according to traders in Mumbai including Harish Agarwal at FirstRand Bank Ltd. The yield rose five basis points to 6.89% on Wednesday, after surging by 14 points on Tuesday.

Focus now shifts to the Reserve Bank of India’s policy meeting next week. Dhaval Kapadia, director for managed portfolios at Morningstar Investment Advisers India, said the RBI may need to re-introduce measures such as open-market purchases to manage yields.

In the six months to September 2021, the RBI bought bonds worth 2.4 trillion rupees through its open-market operations, keeping 10-year yields around an average 6.10%. It halted the support in October. 

Meanwhile the U.S. Federal Reserve is preparing to start raising interest rates.

“Macro risks from a global tightening cycle would be a key concern," said Prabhat Awasthi, country head for India at Nomura Holdings Inc. It “needs to be watched carefully."

 

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Taking Stock | Budget rally continues for second day; Nifty above 17,700; Sensex gains 695 points - Moneycontrol.com

The Budget rally continued on February 2 and the market extended the winning momentum for the third straight session. The Nifty comfortably closed above the 17,700 mark.

The market opened gap-up and remained positive throughout the session to end near the day's high level, supported by the IT, pharma, realty and financial names.

At close, the Sensex was up 695.76 points or 1.18 percent at 59,558.33, and the Nifty was up 203.20 points or 1.16 percent at 17,780.

"The domestic market continued its bull ride tracking budget cues and positive sentiments from global markets. Most sectors remained green while banking and finance stocks contributed most to the gain," said Vinod Nair, Head of Research at Geojit Financial Services.

"Global markets added its gain as strong earnings numbers helped investors digest geopolitical worries. Besides corporate numbers, investors are also awaiting the outcome of OPEC+ meeting and Eurozone inflation numbers for January," he added.

IndusInd Bank, Bajaj Finserv, HCL Technologies, Bajaj Finance and HDFC Life were the top Nifty gainers, while losers included Tech Mahindra, Britannia Industries, UltraTech Cement, Hero MotoCorp and Nestle India.

On the sectoral front, Nifty bank index gained 2 percent and Nifty PSU Bank index added 3.4 percent, while metal, IT, pharma, FMCG indices up 1 percent each.

The broader indices performed in-line with main indices with BSE midcap and smallcap indices rose 1 percent and 1.5 percent, respectively.

Stocks and sectors

On the BSE all the sectoral indices ended in the green with bankex, healthcare, realty, FMCG, and IT indices rose 1-2 percent.

A long build-up was seen in Dr. Lal PathLabs, Vodafone Idea, Can Fin Homes, while a short build-up was seen in Jubilant Foodworks, Chambal Fertilisers and Chemicals and Balkrishna Industries.

Among individual stocks, a volume spike of more than 100 percent was seen in Intellect Design Arena, Jubilant Foodworks and Cummins India.

More than 150 stocks, including Bank of Baroda, Sun Pharma Advanced Research Company, Gravita India, OnMobile Global, hit a 52-week high on the BSE.

Technical View

The Nifty formed a bullish candle on daily scale and has been forming higher highs from the last four sessions.

"Now it has to hold above 17,777 zones, for an upmove towards 17,900 and 18,150 zones, whereas support exists at 17,650 and 17,500 zones," said Chandan Taparia, analyst-derivatives, Motilal Oswal Financial Services.

Outlook for February 3

Ajit Mishra, VP - Research, Religare Broking:

Markets are currently riding high on the back of optimism post the Union Budget. Besides, global recovery and favourable earnings are also adding to the positivity. Amid all, one shouldn’t forget that the Nifty index is still in a trading range and 18,000-18,300 would continue to act as a hurdle.

We feel participants should focus on identifying the sectors and themes which are trading in sync with the index. Among the sectors, banking and financials have the potential to outshine others.

Rupak De, Senior Technical Analyst at LKP Securities: 

Going forward, the Nifty needs to sustain above 17,775-17,800 to witness further rally toward 18,000 and higher over the short term. On the lower end support is seen at 17,700, below which the index may consolidate over the near term.

Ruchit Jain, Lead Research, 5paisa.com:

If the markets sustain above 17,800, then the index could approach 18,000-18,050 zone in the near term. The Banking space, as expected, is showing outperformance and is leading the momentum on the higher side. Hence, we continue with our optimistic stance on the index and continue with our advice to trade with a positive bias and look for buying opportunities in intraday declines.

The immediate support for Nifty is now placed in the range of 17,675-17,600.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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Buzzing Stocks: Tech Mahindra, Laxmi Organic, Amber Enterprises, and others in news today - Moneycontrol.com

Stocks In the News: Check out the companies making the biggest headlines before the opening bell.

Results on February 2 | HDFC, Adani Green Energy, Dabur India, Aarti Surfactants, Apollo Tyres, Adani Total Gas, Bajaj Consumer Care, Balaji Amines, Balrampur Chini Mills, Blue Star, eClerx Services, Gillette India, Indian Overseas Bank, JK Lakshmi Cement, Jubilant FoodWorks, Mahindra & Mahindra Financial Services, Meghmani Organics, Sandhar Technologies, Shankara Building Products, Suryoday Small Finance Bank, Tata Consumer Products, Timken India, VRL Logistics, Windlas Biotech, Zee Entertainment Enterprises, and Zydus Wellness will release quarterly earnings on February 2.

Tech Mahindra | The company reported higher consolidated profit at Rs 1,378.2 crore in Q3FY22 against Rs 1,340.9 crore in Q2FY22, revenue rose to Rs 11,450.8 crore from Rs 10,881.3 crore QoQ.

Laxmi Organic Industries | The company reported higher consolidated profit at Rs 82.09 crore in Q3FY22 against Rs 45.21 crore in Q3FY21, revenue jumped to Rs 859.87 crore from Rs 435.5 crore YoY.

Amber Enterprises India | The company has entered into the definitive agreements with Pravartaka Tooling Services and acquired 60 percent stake in Pravartaka, which is engage in the business of injection mould tool manufacturing and injection moulding components manufacturing for various industries.

Gujarat Ambuja Exports | The company reported lower consolidated profit at Rs 105.13 crore in Q3FY22 as against Rs 109.62 crore in Q3FY21, revenue rose to Rs 1,238 crore from Rs 1,211.20 crore YoY.

Poonawalla Fincorp | The company reported higher consolidated profit at Rs 96.47 crore in Q3FY22 as against Rs 12.99 crore in Q3FY21, revenue fell to Rs 507.96 crore from Rs 589.33 crore YoY.

Windlas Biotech | The company concluded SAHPRA (South African Health Products Regulatory Authority) inspection audit report for the Plant-IV situated at Dehradun with zero critical observations/ deficiencies, zero major deficiencies and some minor deficiencies.

Imagicaaworld Entertainment | The company will re-open its Park from February 4.

Ceinsys Tech | Chanchal Bhaiyya has tendered his resignation from the post of Chief Financial Officer of the company due to personal reasons.

Anupam Rasayan | The company will acquire 24.96 percent stake in Tanfac Industries from Birla Group Holdings and Others.

Bharat Forge | The company, along with subsidiary Bharat Forge International (BFIL), has acquired an additional 3,66,451 equity shares of Tevva Motors (Jersey), after the conversion of convertible loan note (CLN). As a result, the shareholding of the company increased to 39.71 percent in Tevva.

VIP Industries | The company reported a consolidated profit of Rs 33.47 crore in Q3FY22 against loss of Rs 7 crore in Q3FY21, revenue rose to Rs 397.34 crore from Rs 232.53 crore YoY.

ASM Technologies | The company and Hind High Vacuum formed a joint venture for semiconductor equipment manufacturing.

MMTC | The government approved Tata Steel Long Products as a strategic buyer for privatization of Neelachal Ispat Nigam, a joint venture of 4 CPSEs (MMTC, NMDC, BHEL, MECON) and 2 Odisha government PSUs (OMC and IPICOL).

Virtual Global Education | Board of Directors of the company will consider Rights Issue on February 11.

Eicher Motors | Royal Enfield sold 58,838 motorcycles in January 2022, down 15 percent compared to 68,887 motorcycles sold in January 21.

Adani Ports & Special Economic Zone | The company reported lower consolidated profit at Rs 1,478.76 crore in Q3FY22 against Rs 1,576.53 crore in Q3FY21, revenue increased to Rs 3,797.10 crore from Rs 3,746.49 crore YoY.

Procter & Gamble Hygiene & Health Care | The company reported profit at Rs 212.06 crore in Q2FY22 against Rs 250.62 crore in Q2FY21, revenue rose to Rs 1,092.98 crore from Rs 1,018.44 crore YoY.

Indian Hotels | The company reported consolidated profit at Rs 95.96 crore in Q3FY22 against loss of Rs 133.22 crore in Q3FY21, revenue jumped to Rs 1,111.22 crore from Rs 559.86 crore YoY.

Sona BLW Precision Forgings | The company reported higher consolidated profit at Rs 86.44 crore in Q3FY22 against Rs 83.48 crore in Q3FY21, revenue rose to Rs 494.15 crore from Rs 489.29 crore YoY.

Triveni Turbine | The company reported higher consolidated profit at Rs 35.67 crore in Q3FY22 against Rs 27.54 crore in Q3FY21, revenue rose to Rs 225.15 crore from Rs 173.56 crore YoY.

Moneycontrol News

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Tata Motors Post Highest Monthly Sales Ever In January 2022 - GaadiWaadi.com

Picture credit - Virat

Tata Motors recorded 40,777 units in January 2022 and endured its highest SUV monthly sales too as both Nexon and Punch crossed 10,000 units each

Tata Motors ended the calendar year 2021 on a high as it recorded its highest quarterly and monthly sales in a decade while outselling Hyundai for the second position in the overall manufacturers’ monthly sales table in December 2021. The company also registered a total of 3,31,182 units as against 1,70,151 units in 2020 with YoY volume growth of 94.6 per cent.

In addition, despite the health crisis and semiconductor issues, Tata endured its highest tally in a single calendar year in 2021 since the passenger vehicle business unit of Tata was formed. Tata also finished third in the overall sales table as it beat Mahindra & Mahindra by nearly 1.30 lakh units and ended up behind the leaders Maruti Suzuki and Hyundai.

Picking up where it left off, Tata got one better on its December 2021 record and garnered a cumulative domestic tally of 40,777 units in January 2022 – the new highest monthly sales since its inception. With Nexon and Punch contributing a major tally, Tata registered 28,108 units of SUV sales last month – another highest as far as SUV sales are concerned.

The good reception of Nexon EV and Tigor EV led to Tata managing its highest ever electric vehicle sales ever as well as 2,892 units were sold. Both Punch and Nexon crossed 10,000 unit sales in the first month of the calendar year 2022 while more than 3,000 units of CNG vehicles were recorded too. Tata introduced the Tiago CNG and Tigor CNG on January 19, 2022.

In the first month of their launch, the CNG penetration stood at 42 per cent in the overall sales achieved. Due to the increasing sales, the Pune production facility recorded its highest monthly roll out since 2007 last month while the Ranjangaon factory recorded its highest monthly production ever to top off the month on an all-time high.

Tata recently announced a new standalone EV subsidiary known as Tata Passenger Electric Mobility Limited (TPEML) with an investment of Rs. 15,000 crore and it will be responsible for bringing as many as ten new electric vehicles over the next five years. Reports indicate that a midsize SUV coupe based on Nexon in ICE and EV form, and the resurrection of Sierra nameplate as an EV are of high possibility.

In January 2022, Tata also introduced the Dark Edition Safari. Along the course of this year, the company is expected to launch more CNG variants and the longer-range Nexon EV with a larger battery pack is also waiting in the pipeline.

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IndusInd Bank sheds 3% as MD admits to procedural lapses in MFI lending - Economic Times

NEW DELHI – Shares of IndusInd Bank lost 3 per cent in early trade despite the private lender reporting a 49 per cent jump in December quarter net profit to Rs 1,241.55 crore as the bank admitted to procedural lapses in microlending earlier in the year.

The scrip fell to Rs 876.55 against Rs 903.55 at the previous close on the National Stock Exchange.

Earlier in the quarter, the bank faced allegations of loan ever-greening in the microfinance business it carries out through Bharat Financial Inclusion, a wholly-owned subsidiary.

An internal committee has already submitted its report on the same. An external consultant will likely submit the final report in two weeks.

The internal report is as per management guidance, but there may be procedural lapses for any particular transaction related to MFIs, Sumant Kathpalia, Managing Director and Chief Executive Officer, IndusInd Bank was quoted by ET as saying.

While the bank increased loans to small and mid-sized corporates, it slowed disbursements to the microfinance sector.

The bank expanded loans 10 per cent to Rs 2.29 lakh crore in the quarter under review as it extended credit to companies and individuals in tandem with the reopening of the economy.

Other income was at Rs 1,877 crore, an increase of 14% year-on-year. Core Fee income grew by 9% to Rs 1,519 crores.

Deposits increased 19 per cent y-o-y to Rs 2.84 lakh crore during the three months. The share of low-cost current and savings account deposits formed 42 per cent of total deposits.

Asset quality showed signs of improvements, with the bad loan ratios contracting by 9-29 basis points from the preceding quarter.

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Govt approves Tata Steel’s bid to acquire 93.71% equity in Neelachal Ispat - The Indian Express

The government on Monday approved the highest bid of Tata Steel Long Products Limited for acquiring 93.71 per cent equity in Neelachal Ispat Nigam Ltd (NINL), held by joint venture partners of four CPSEs and two Odisha government companies, at an enterprise value of Rs 12,100 crore. NINL has an integrated steel plant with a capacity of 1.1 MT, at Kalinganagar, Odisha.

The Central government does not hold any stake in NINL directly, which has accumulated losses and a negative net worth. NINL is a joint venture of 4 CPSEs, — MMTC, NMDC, BHEL, MECON — and 2 Odisha government-owned companies OMC and IPICOL.

An alternative mechanism, comprising Transport minister Nitin Gadkari, Finance Minister Nirmala Sitharaman, and Commerce & Industry Minister Piyush Goyal, has approved the bid, Union finance ministry said in a statement. The company has been running in huge losses and its plant is closed since April 2020.

“The company has huge debt and liabilities exceeding Rs. 6,600 crores as on 31.3.2021, including overdues of promoters (Rs 4,116 crore), banks (Rs 1,741 crore), other creditors and employees. The company has negative net worth of Rs 3,487 crore and accumulated losses of Rs 4,228 crore as of 31.3.2021,” the government said.

Tata Steel Long Products was chosen as the highest bidder, defeating JSW Steel and a consortium of Jindal Steel & Power Limited and Nalwa Steel and Power Ltd. The reserve price for the bid was approved at at Rs 5616.97 crore. The money raise through stake sale will go towards funding company liabilities and to the selling shareholders. This is second large privatisation deal post sale of Air India to Tata Group.

“This is the first instance of privatisation of a public sector steel manufacturing enterprise in India. The success of the transaction is a win-win situation for all. The biggest advantage of privatisation will be to the local economy of the region as the strategic buyer will be able to revive a closed plant, bring in modern technology, best managerial practices and make infusion of fresh capital, which will help in augmenting the capacity of the plant,” the government said.

On the request of the Boards of selling shareholder PSEs and on concurrence by Odisha government, the Cabinet Committee on Economic Affairs had given ‘in-principle’ approval to strategic disinvestment of NINL in January 2020, the government said. The Department of Disinvestment & Public Asset Management said the transaction was made through an open-market, competitive bidding process.

The government will issue Letter of Intent to Tata Steel Long Products, and thereafter sign a share purchase agreement. At this stage, 10 per cent of the bid amount shall be paid by the successful bidder into the escrow account. The government had provided access to virtual data room of the company to the bidders for conducting due diligence.

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