FTX Surpasses Bankruptcy Financial Needs; RBI Plans CBDC Pilots; PhonePe Leads UPI Market Share, and more
Major financial movements include FTX’s impressive recovery, RBI’s new pilot programs for CBDC, and PhonePe dominating the UPI transaction space amidst varied global and domestic economic developments.
FTX Surpasses Financial Needs for Bankruptcy Settlement
FTX, the cryptocurrency exchange, has gathered over $16.3 billion, far surpassing the $11 billion required to settle its bankruptcy debts. This remarkable financial recovery means FTX can pay full debts plus interest to creditors — a rare event in U.S. bankruptcies where creditors usually see minimal returns. This comes after a substantial increase in crypto values and asset sales.
Source: Bloomberg
Indian Govt Bond Yields Climb to 7.12% Amid Profit Booking
Indian government bond yields rose to 7.12%, reversing a downtrend that had seen yields fall to their lowest since April 10. The increase follows a period of profit booking by traders and a recent government buyback of bonds worth ₹400 billion, injecting liquidity into the market. This upward movement comes as investors and analysts eagerly anticipate the upcoming April inflation data.
Source: Business Standard
RBI Eyes CBDC Pilots for Commercial Papers and Certificates of Deposits
RBI Governor Shaktikanta Das announced plans for CBDC pilot programs in the wholesale market involving commercial papers and certificates of deposits. The e-rupee’s retail transaction volume has reached one million daily, while its offline use and programmability are set to boost adoption. Permanent transaction deletion will enhance privacy, making it comparable to cash.
Source: PTI
PhonePe Dominates UPI with 49% Market Share in April
PhonePe leads the UPI transaction space, securing nearly half the market with 49% share in April, according to NPCI data. The company processed 6.5 billion out of 13.3 billion total UPI transactions, amounting to a staggering Rs 10 trillion. Maintaining this position for over 40 months, PhonePe outperforms Google Pay and Paytm, which hold second and third places respectively.
Source: FE Bureau
India Cuts Toy Imports by 78%, Exports Barely Grow
India’s efforts to reduce toy imports through higher duties and strict regulations have been successful, slashing imports from $304.1 million in FY19 to $64.9 million in FY24. Despite these measures, exports saw only a slight increase from $129.6 million to $152.34 million. The government’s strategy dramatically cut cheap imports, particularly from China, but the export sector remains stagnant.
Source: Mukesh Jagota, FE Bureau
Startups Concerned as DoT Considers Early End to R&D Scheme
Startups benefiting from the Digital Communication Innovation Square (DCIS) scheme are anxious as the Department of Telecommunications (DoT) contemplates its premature closure. Despite being a critical aid for research and development in the telecom sector, the scheme faces potential discontinuation. Many startups, reliant on this funding for developing innovative telecom solutions, have yet to receive 20–40% of their promised grants.
Source: Jatin Grover, Financial Express
Asian Markets Witness Modest Outflows Amid Rising U.S. Treasury Yields
April saw key Asian markets like Taiwan, India, and Indonesia experiencing a net foreign outflow of $2.54 billion, the most significant since November 2023. This was influenced by rising U.S. Treasury yields, geopolitical tensions, and higher oil prices, despite a strong first quarter with $18.57 billion in inflows. South Korea and the Philippines, however, enjoyed net inflows.
Source: Reuters
Indian Banks Challenge RBI’s New Loan Provision Rules
Indian lenders, led by the Indian Banks Association, plan to contest the RBI’s recent proposal to increase provision requirements for infrastructure project loans. This move, aimed at tightening lending norms, could hike interest rates by 1–1.5% for under-construction projects, potentially affecting sectors like renewable energy the most. The deadline for feedback on these proposed rules is June 15.
Source: Reuters
Foreign Investors Retreat from India’s Financial and IT Sectors in April
April saw foreign investors pulling out of Indian financial and IT sectors, with sales reaching 86.71 billion rupees. This shift reflects concerns over U.S. rate cuts delays. Despite these outflows, domestic purchases kept the Nifty 50 and Sensex stable, with gains over 1%. The financial sector, despite outflows, rose by 4.06%, while IT stocks struggled, falling by 4.86%.
Source: Reuters
India’s Small Malls Become Ghost Towns Amid E-Commerce Surge
In 2023, India witnessed a rise in “ghost malls” as small shopping centres faced a 238% increase in vacancy rates, despite the overall expansion of shopping spaces. Shifting consumer preferences towards online shopping and larger malls have contributed to a spike in underperforming retail assets, resulting in significant economic implications for small retailers.
Source: Reuters
Rural India Drives Consumer Goods Growth, Surpassing Urban Demand
In Q1 2024, India’s rural areas recorded a 7.6% increase in consumer goods sales, outstripping urban growth for the first time in over a year, according to NielsenIQ. This surge is primarily fueled by personal and home care products, despite overall economic challenges and increased competition in urban markets.
Source: Reuters
Indian Stock Market Faces Downturn Amid Election-Driven Volatility
Indian stocks closed lower with the Nifty 50 and BSE Sensex down amid heightened volatility, reaching a 15-month high due to the ongoing national elections. Sectors such as financials and autos suffered notable declines, while state-run banks also faced challenges. Conversely, consumer stocks saw gains boosted by strong earnings reports.
Source: Reuters
