OPINION, P6 INTERNATIONAL, P8 SANDEEP PAREKH Some Sebi regulations must be revisited to avoid over-regulation EDITORIAL UNDESIRABLE FEELING STRENGTHENING DIGITAL PUSH Some gains made under Sagarmala, but the overall progress has been sporadic Doubt about spam accounts could scuttle Twitter deal, says Musk 6G to be a reality by end of the decade, says PM CHENNAI/KOCHI, WEDNESDAY, MAY 18, 2022 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XLIII NO. 316, 18 PAGES, `10.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 54,318.47 ▲ 1,344.63 NIFTY: 16,259.30 ▲ 417 NIKKEI 225: 26,659.75 ▲ 112.70 HANG SENG: 20602.52 ▲ 652.31 `/$: 77.57 ▼ 0.12 `/€: 81.25 ▼ 0.19 BRENT: $114.97 ▲ $0.73 GOLD: `50,460 ▲ `389 IN THE NEWS Govt asks Infosys to fix glitches in GST portal THE ISSUE of technical glitches at government’s tax portals has resurfaced, putting service provider Infosys on the spot. With snags in the goods and services tax network (GSTN), the Central Board of Indirect Taxes and Customs (CBIC) on Tuesday directed the IT company to find an “early resolution”, reports fe Bureau in New Delhi. Indian economy likely to grow 12-13% in Q1: Icra RATING AGENCY Icra on Tuesday projected real GDP growth of 12-13% in the first quarter of FY23, citing an improvement in its business activity monitor reading and favourable base effect, reports fe Bureau in New Delhi. Airtel Q4 profit zooms to `2,008 cr on Arpu gains TELECOM MAJOR Bharti Airtel on Tuesday reported a net profit of `2,008 crore for the March quarter, a 142% jump quarter-on-quarter, surpassing Street estimates, reports fe Bureau in New Delhi. Special Features AT 15.08% IN APRIL WPI inflation hits 30-yr high Signals retail price pressures may not have peaked yet, rate hike near-certain in June BANIKINKAR PATTANAYAK New Delhi, May 17 Inflation (% change, y-o-y) 18 WPI 15 12 9 10.74 WHOLESALE PRICE INFLATION hit 15.08% inApril,the highest since September 1991, official data showed on Tuesday. The wholesale price index (WPI) grew at double digit rates for the 13th month in a row. ThelatestWPIprintstrengthensthe notion that retail inflation trajectory may not be on a downward slope yet. Data released last Thursday showed inflationbasedonconsumerpriceindex scalingan8-yearhighof7.79%inApril, on a broad-based rise in price pressures across food,fuel and core segments. Analysts have been attributing the sustained high WPI inflation partly to an unfavourable base, but the upward movement formore than ayearsignals inherent,sticky price pressures. GloomierdemandoutlookinCovidhit China and a moderation in the pace of global commodity price rise could, however, offset the risks to the WPI inflation emanating from aweakening rupee in May, analysts said. Nevertheless,anysubstantialmoderationofWPI in May is unlikely, although it is set to drop below 15%,they added. 6 CPI LIC’s first day listing at over 8% discount dampens investor sentiment ■ Personal Finance, P7 Cross-border trade made a seamless affair EximPe helps SMEs make cross-border payments and adhere to regulations through a digital process ■ eFE, P7 7.79 3 4.23 0 April 2021 (% change, y-o-y) 12 WPI food 9 4.6 6 3 0 1.96 April 2022 8.38 8.35 CPI Food -3 -6 April 2021 April 2022 Source: MoSPI/DPIIT Given the sustained rise in costs of raw materials and intermediate goods (these products dominate the WPI), producers in a largernumberof sectors maybe forced to pass on the increase in prices to consumers, despite relative slacknessinaggregateprivatedemand. Continued on Page 13 Markets shrug off inflation worries,gallop 2.54% Experts said the easing Covid-19 related restrictions in China helped perk up the sentiment YOOSEF KP Mumbai, May 17 SHRUGGING OFFINFLATION woes, the equity markets rallied smartly on Tuesday with the Sensex putting on 1,344.63 points and racing all the way up to 54,318.47 at close. The broader Nifty too surged 417 points, or 2.54%, to end the session at 16,259.30. Investor wealth appreciated by `12 trillion. The breadth of the rally, with the Nifty Midcap and Smallcapindicesgaining2.7% and 3.4%, respectively, was somewhatsurprisinggiventhe April wholesale inflation print of 15%. Tuesday’s gainwas the best in a single-dayfor both gauges since February 15, a day on which the rupee closed at a recordlowof77.57againstthe dollar. Experts said the easing Covid-19 related restrictions in China helped perk up the sentiment. The Indian markets have Sensex 54,500 54,000 Intra-day, May 17 53,284.31 54,318.47 53,500 53,000 52,500 Prev close: 52,973.84 Open Close Nifty50 Intra-day, May 17 16400 16200 15,930.50 16,259.30 16000 15800 15600 Prev close: 15,842.30 Open Close been remarkably resilient despite heavy selling by Foreign Portfolio Investors (FPIs). Between January and now, they have sold $20.1 billion worth of equities including $282.65 million on Tuesday. Since October, they have pulled out $25.7 billion. Domestic institutions have been big buyers as have retail investors. On Tuesday, local domestic institutional investors bought sharesworth $295.8 million, provisional data on exchanges showed. Continued on Page 2 ■ Tuesday’s gain was the best in a single-day for both gauges since February 15 ■ Indian markets resilient despite heavy selling by FPIs `/$ Intra-day, May 17 Inverted scale 77.50 77.57 77.57 Open LIFE INSURANCE CORPORATION (LIC) made a weak debut on the bourses on Tuesday as the shares dropped 7.8% to `875.45 at the close of trading.LIC had listed at `867.20,a discount of 8.6%overtheissuepriceof`949afterasuccessful initial public offeringwhich fetched `20,557 crore to the government. Theinsurer'ssharesmadeaday'shighof`920 on the BSE and the day’s lowwas `860.10 on the BSE.Theuncertaintyinthemarketswasthemain reasonforthedecline,LICsaid.MRKumar,chairman,LIC,said,"Wewerenotexpectingabiglisting asmarketswerejittery.It(stockprice)willpickup aswegoalong."Hefurtheraddedthatpolicyholderswhohavemissedoutonallotmentduringthe initialshare salewill pick up the shares now. As of Tuesday's closing, LIC is now the fifth largest company based on market capitalisation of`5.53trillion,aheadofHindustanUnileverand others. Its market capitalisation lags behind Reliance Industries (`17.12 trillion),TCS (`12.6 trillion), HDFC Bank (`7.2 trillion), and Infosys (`6.3 trillion), according to data available on exchanges. LIC of India 77.71 77.85 RUCHIT PUROHIT Mumbai, May 17 Continued on Page 2 77.64 77.65 77.78 LIC makes weak market debut, stock falls 7.8% Previous close: 77.45 Close Rupee recovers from record lows to end 11 p up Full report on Page 9 930 910 Intra-day on BSE (`), May 17 875.45 890 870 850 867.20 Open Close 11 ENTITIES APPLIED FOR LICENCE Bansal’s Navi among 6 bank applicants rejected by RBI Navi may appeal against rejection ofbank licence FE BUREAU Mumbai, May 17 LIC’s weak debut roils retail investors 15.08 DIIs, RETAIL INVESTORS BIG BUYERS THE RESERVE BANK of India hasrejectedtheapplicationsof six entities aspiring to getting licences for universal banks andsmallfinancebanks(SFBs). These include the applications oftheSachinBansal-promoted Chaitanya India Fin Credit and UAE Exchange and Financial Services, both for setting up universal banks. The applications of The Repatriates Cooperative Finance and Development Bank (REPCO Bank), Pankaj Vaish for universal banks and applicationsbyVSoftTechnologiesandCalicutCityServiceCooperative Bank, for SFBs, have also been turned down. The RBI said on Tuesday it has received 11 applications foron-tap licence foruniversal banks and SFBs. “The examination of six applications has now been completed as per the procedure laid down under these ■ The RBI said on Tuesday it has received 11 applications for ontap licence for universal banks and SFBs ■ The guidelines for ‘on-tap’ licensing of universal banks and SFBs in the private sector, were issued on August 1, 2016, and December 5, 2019 guidelines. The remaining applications are under examination,” the central bank said in a statement. The guidelines for ‘on-tap’ licensingofuniversalbanksand SFBs in the private sector,were issued on August 1, 2016, and NAVI TECHNOLOGIES, which owns and operates Chaitanya India Fin Sachin Bansal Credit, said on Tuesdaythat it would engage with the RBI to understand the reasons behind the rejection of its application for an on-tap universal banking licence Full report on Page 9 December5,2019,respectively. As per the guidelines, the applications are referred to a standing external advisory committee (SEAC) set up by the RBI. Continued on Page 2 SEBI PLANS DIRECTIVE TO IMPROVE SURVEILLANCE No WFH for financial intermediaries ■ The asset MALINI BHUPTA Mumbai, May 17 THE SECURITIES AND Exchange Board of India (Sebi) is planning to ask financial intermediaries to bring their full strength of employees back to office. The pandemicforced work from home, it is felt,has impacted surveillance measures that were put in place to check insider trading and front-running. The matter got urgency after two fund houses found themselves in the middle of a front-running storm in less than a week. The market regulator has been tightening compliance norms for mutual funds over the last few years. In October 2020, Sebi came out with a diktatthatallthoseinvolvedin investment decisions should management industry had strongly protested when Sebi announced its decision to enforce the call recording rules WFH has impacted surveillance measures thatwere put in place to check insider trading and front-running mandatorilyhave all theircalls recordedduring markethours. This measure has lost some of its impact as work from home became the norm during the pandemic. The markets regulator has also been tightening compliance norms for mutual funds over the last few years The asset management industry had strongly protested when Sebi announced its decision to enforce the call recording rules. With two mutual fund housesfacingchargesoffrontrunning,the industry may not be able to hide behind the garb of privacy on this rule,it is felt. While industry experts say that front-running is very common in most dealing rooms,it is hard to establish as employees have become smarter and now don't use accounts of friends and families. Given that demat accounts are available on hire for such front-running activities, Sebi has found a way to crack down even on these seemingly unrelated entities. People in the know say that Sebi has deployed sophisticated technology tools and algorithms that can help it identify patterns to establish front-running,even if the parties are distinctly unrelated. Continued on Page 2 CHENNAI/KOCHI
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