Crypto ban looms, Crazy tech valuations, Netflix scores and other news
Business news and insights to jump start your day
“You shouldn’t focus on why you can’t do something, which is what most people do. You should focus on why perhaps you can, and be one of the exceptions.”
- Steve Case
Good morning! 😀
Here are the main stories for today:
Crypto ban looms
Draft e-commerce policy to rein in players
Stripe - most valuable private startup in the US
Let’s get started…
📈 How did the markets fare
BSE Sensex - 50,395.08 | -0.78% ⬇
NSE Nifty - 14,929.50 | -0.67% ⬇
10-Yr Bond Yield - 6.201% |-0.031 ⬇
S&P 500 - 3,968.94 | +0.65% ⬆
USD/INR - ₹ 72.47 | -0.42% ⬇
21% annual return on a bond? That is what struggling cement manufacturer Kesoram Industries is planning to offer as it desperately seeks to raise funds. As the high rate of return implies, the junk-rated bond will be highly risky with the company having defaulted on debt last year.
Hyderabad-based precision engineering company MTAR Technologies made a stellar market debut on Monday with shares rising 88% over its IPO price.
📰 What's happening around us
Cryptocurrency
Finance Minister Nirmala Sitharaman’s comments earlier this month might have made cryptocurrency holders in India optimistic about the future of digital currencies in the country but according to a senior government official, a law banning cryptocurrencies is incoming.
The proposed bill will be one of the strictest policies against cryptocurrencies in the world and would criminalise possession, issuance, mining, trading and transferring crypto-assets, according to the Reuters report. Even China, who banned mining and trading, still allows possession of cryptos. The bill would reportedly give holders up to six months to sell their crypto-assets after which penalties will apply.
Proponents for the ban would argue that cryptocurrencies are a purely speculative asset with no intrinsic value and so investors in India need to be protected. Another cause of concern is the anonymous nature of transactions in cryptocurrencies which can lead to funding criminal activities. It can also be used by citizens to bypass the capital controls in India and take more money out of the country than what is permissible.
But despite the risks associated with them, they are going mainstream globally with more institutions hopping on board. The biggest cryptocurrency, Bitcoin, quadrupled in value last year and then doubled again this year. Many are calling it the future of money and a digital alternative to gold. But it looks like Indians won’t be able to participate in its wild journey much longer.
E-commerce
After social media and OTT platforms, e-tailers in India are set to face new regulations with the new e-commerce policy around the corner. The Indian government is in the final stages of formulating an e-commerce policy and the draft policy throws light on what is in store.
Here are some of the major points in the draft e-commerce policy prepared by the Department for Promotion of Industry and Internal Trade (DPIIT):
The big players like Amazon and Flipkart may have increased compliance requirements in comparison to smaller ones.
The policy will be applicable to e-commerce platforms and their associates and related parties. The government will—from time to time—notify which parties fall under the definition of associates and related parties.
E-commerce players will be required to ensure transparency and treat sellers equally on their platforms. They should not use algorithms to prioritise any seller.
Information collected by the platforms should not be used to obtain market advantage against the sellers.
To curb predatory discounting, e-commerce firms cannot directly or indirectly influence the price of the goods or services sold on their platform
For products fulfilled end-to-end by the e-commerce entity, the liability for counterfeit products shall fall on both the e-commerce platform and the seller.
For years, offline retailers have been calling for regulation of the big e-commerce players who they claim were indulging in unfair trade practices and flouting rules. The proposed e-commerce rules will bring increased scrutiny on the e-commerce firms (especially the biggies), and could increase costs and slow down expansion plans.
Tech
With massive liquidity sloshing around in the world economy, investors are increasingly willing to chuck obscene amounts of money at tech companies that show promise, taking their valuations to dizzying heights. The latest one to capitalise on the phenomenon is payments processor Stripe, whose valuation has tripled over the past year to $95 billion after the latest funding round to make it the most valuable private startup in the US.
Stripe competes with PayPal and Square, selling software that enables its business customers to accept online payments. More than 50 companies that each process more than $1 billion annually are its customers, with some of the big names being Amazon, Uber, Salesforce.com and Lyft. 2020 was a massive year for the company thanks to the surge in online shopping.
While Stripe started Indian operations in 2016, it hasn’t made much inroads in the country’s booming payments sector. But after the latest fundraise, the company is looking to invest heavily to expand its global payments and treasury network across Europe and Asia with Indian businesses also set to benefit.
🎯 News Bites
Wholesale inflation in India has jumped to the highest in more than two years led by a rise in fuel and food prices. The Wholesale Price Index (WPI)-based inflation rate surged to 4.17% in February compared to 2.03% in the previous month.
In a move aimed at faster settlement of cheques, the Reserve Bank of India has asked banks to implement the image-based Cheque Truncation System (CTS) in all branches by September 30, 2021. CTS is in use since 2010 and presently covers around 1,50,000 branches.
More and more European countries are joining the list of countries halting the use of the AstraZeneca vaccine after several nations reported possible serious side-effects. The World Health Organisation (WHO) still maintains it’s fine and urged countries not to pause Covid vaccinations. But WHO hasn’t really covered itself in glory over the past year, with many criticising its handling of the pandemic.
With Saudi Arabia opting to restrict output to keep prices high, India has turned to the US for oil supplies. While Iraq continued to be the top oil seller to India, the US overtook Saudi Arabia as India’s second-biggest oil supplier in February.
Concerned about the influence of Jack Ma’s Alibaba over public opinion, Beijing wants Alibaba group to offload some of its media companies like the South China Morning Post (SCMP), which is the leading English-language newspaper in Hong Kong. Alibaba has a major stake in Twitter-like Weibo and Youku, one of China’s biggest streaming services, as well as other online and print news outlets.
With 35 nominations for the 93rd Academy Awards, Netflix is already the winner among streaming platforms and Hollywood studios. ‘Mank’, a black-and-white drama about 1930’s Hollywood led the pack with 10 nominations.
That's it for today. We’ll be back tomorrow!
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