Connect with us

World

Adani row rocks India’s parliament amid financial contagion fears

Published

on

Adani row rocks India's parliament amid financial contagion fears

Both houses of India’s parliament were adjourned on Friday amid chaotic scenes as some lawmakers demanded an inquiry following the meltdown of shares in billionaire Gautam Adani’s group companies, which some fear could spark wider financial turmoil.

Shares in Adani companies recovered after sharp falls earlier in the day, but the seven listed firms have still lost about half their market value – or more than $100 billion combined – since U.S. short-seller Hindenburg Research last week accused the group of stock manipulation and unsustainable debt.

Adani Group, one of India’s top conglomerates, has rejected the criticism and denied wrongdoing in detailed rebuttals, but that has failed to arrest the unabated fall in its shares.

For Adani, a former school drop-out from Gujarat, the western home state of Indian Prime Minister Narendra Modi, the crisis presents the biggest reputational and business challenge of his life, as his firm struggles to assuage investor concerns.

Advertisement

Credit ratings agency Moody’s warned on Friday the share plunge could hit the group’s ability to raise capital, although peer Fitch saw no immediate impact on its ratings.

“These adverse developments are likely to reduce the group’s ability to raise capital to fund committed capex or refinance maturing debt over the next 1-2 years. We recognise that a portion of the capex is deferrable,” Moody’s said.

Amid fears the turmoil could spill over into the broader financial system, some Indian politicians have called for a wider investigation into the matter, and sources have told Reuters the central bank has asked lenders for details of exposure to the group.

The speakers of both houses of parliament adjourned proceedings on Friday as some lawmakers disrupted business by shouting slogans such as: “We want a joint parliamentary committee (to investigate)” and “Stop looting the poor!”

On Thursday, S&P Dow Jones Indices said it would drop the conglomerate’s flagship Adani Enterprises (ADEL.NS) from widely used sustainability indexes on Feb. 7, which would blunt their appeal for environment-conscious investors.

Advertisement

“Contagion concerns are widening, but still limited to the banking sector,” said Charu Chanana, a market strategist with Saxo Markets in Singapore.

“One of the big risk factors to watch for now is if more indices remove Adani stocks … This can result in foreign outflows as funds sell Adani stocks, further aggravating confidence issues,” Chanana said.

Adani Enterprises shares closed 1.4% higher, after earlier slumping 35% to hit their lowest since March 2021 during trade. That low took its losses to nearly $33.6 billion since last week, for a decline of 70%.

Adani Ports and Special Economic Zone Ltd (APSE.NS) was up 8%, while Adani Transmission Ltd (ADAI.NS) and Adani Green Energy Ltd (ADNA.NS) were both down 10%.

Adani Total Gas Ltd (ADAG.NS), a joint venture with France’s TotalEnergies SE (TTEF.PA), fell 5%. In a statement, TotalEnergies said it had limited exposure to stakes in Adani companies and had not re-evaluated them.

Advertisement

India’s divestment secretary Tuhin Kanta Pandey told Reuters that shareholders and customers of state-run Life Insurance Corp (LIC) (LIFI.NS) should not be concerned about its exposure to Adani group. LIC holds a 4.23% stake in the flagship Adani firm, while its other exposures include a 9.14% stake in Adani Ports and 5.96% in Adani Total Gas.

BIGGEST CHALLENGE

Adani, 60, has in recent years forged partnerships with, and attracted investment from, foreign giants as he pursued global expansion in industries from ports to power.

The market and financial crisis means foreign investors, many already underweight on India as they consider its stock market overpriced, are reducing exposure.

Asked about recent stock market weakness, India’s finance minister Nirmala Sitharaman told Network18 that “one instance, however much talked about globally it may be, I would think is not going to be indicative of how well Indian financial markets are governed.”

Advertisement

In its report, Hindenburg said key listed Adani companies had “substantial debt” and shares in the seven listed firms had a downside of 85% due to what it called sky-high valuations. It also alleged stock manipulation.

The Adani group said the allegation of stock manipulation had “no basis” and stemmed from ignorance of Indian law. It added that over the past decade, group companies have “consistently de-levered”.

The listed Adani firms now have a combined market value of $107.5 billion, versus $218 billion before Hindenburg’s report.

The plunge has forced Adani to cede the crown of Asia’s richest person to Indian rival Mukesh Ambani of Reliance Industries Ltd (RELI.NS), as he has slid to 17th in Forbes’ ranking of the world’s wealthiest people. He had been third, after Elon Musk and Bernard Arnault.

The prices of U.S. dollar bonds issued by group members edged higher on Friday after diving the previous day.

Advertisement

Adani Green’s bonds maturing in September 2024 gained about 7 cents to 69.69 cents, off Thursday’s record low of 60.56 cents. 

World

India stops visa processing in Canada as diplomatic row intensifies

Published

on

By

India stops visa processing in Canada as diplomatic row intensifies

 India on Thursday suspended the issuing of visas in Canada, the service provider said, amid a diplomatic row sparked by Ottowa’s accusation New Delhi was involved in the killing of a Sikh separatist near Vancouver.

“Important notice from Indian mission: Due to operational reasons, with effect from September 21, 2023, Indian visa services have been suspended till further notice,” BLS International posted on their website on Thursday.

Canada’s Prime Minister Justin Trudeau has demanded India treat with “utmost seriousness” allegations that Indian agents played a role in the June murder of Hardeep Singh Nijjar.

The fallout prompted tit-for-tat diplomatic expulsions and a forceful denial from India, which said any suggestion it played a role in Nijjar’s killing was “absurd”.

Advertisement

The suspension of visas comes a day after India’s foreign ministry said it was concerned for the safety of its citizens in Canada because of “politically-condoned hate crimes and criminal violence”.

“Threats have particularly targeted Indian diplomats and sections of the Indian community who oppose the anti-India agenda,” a ministry statement said on Wednesday.

“Indian nationals are therefore advised to avoid travelling to regions and potential venues in Canada that have seen such incidents.”

The advisory did not name specific cities or locations for Indians to avoid.

Nijjar was shot dead by two masked assailants outside the Sikh temple he presided over in Surrey, an outer suburb of Vancouver.

Advertisement

An activist for the creation of a Sikh state known as Khalistan, Nijjar was wanted by Indian authorities for alleged terrorism and conspiracy to commit murder.

He had denied those charges, according to the World Sikh Organisation of Canada, a nonprofit organisation that says it defends the interests of Canadian Sikhs.

The Indian government accuses Ottawa of turning a blind eye to the activities of radical Sikh nationalists who advocate the creation of an independent Sikh state to be carved out of northern India.

Advertisement
Continue Reading

World

US Senate confirms Biden pick as top US military officer

Published

on

By

US Senate confirms Biden pick as top US military officer

 A majority of the US Senate backed US Air Force chief General Charles Q. Brown on Wednesday to be the top US military officer, as lawmakers moved to confirm some of the top senior officers whose promotions have been stalled by a Republican senator’s blockade.

The Senate backed President Joe Biden’s nomination of Brown to be chairman of the Joint Chiefs of Staff by 83 to 11.

Brown is a former fighter pilot who brings command experience in the Pacific to the position at a time of rising tension with China.

He will be only the second Black officer to chair the Joint Chiefs after Colin Powell two decades ago.

Advertisement

The Senate moved ahead with votes on Brown and two other top military officers as Majority Leader Chuck Schumer, a Democrat, used a procedural maneuver to sidestep a blockade by Republican Senator Tommy Tuberville.

Tuberville began blocking confirmations to senior Pentagon posts in March to protest a Defense Department policy enacted last year that provides paid leave and reimburses costs for service members who travel to get an abortion.

Brown and other military officials had said Tuberville’s blockade of hundreds of military promotions could have a far-reaching impact across the armed forces, affecting troops and their families and harming national security.

Defense Secretary Lloyd Austin congratulated Brown on his confirmation, thanked Schumer for bringing the vote and chastised Tuberville for his obstruction. “It is well past time to confirm the over 300 other military nominees,” Austin said in a statement.

Biden’s nomination of Brown, which was announced in May, followed his appointment of Austin as the first Black US secretary of defense, the top civilian position at the Pentagon.

Advertisement

Brown’s confirmation means Black Americans hold the top two positions at the Pentagon for the first time, a major milestone for an institution that is diverse in its lower ranks but largely white and male at the top.

Schumer also cleared the way for Senate votes on Biden’s nomination of General Randy George to become chief of staff of the Army, and General Eric Smith to become the next commandant of the Marine Corps.

Schumer’s procedural motion did not address hundreds of other military promotions still being delayed by Tuberville’s action.

The Senate’s approval of military promotions is usually smooth. Tuberville’s hold cannot prevent the Democratic-majority Senate from voting on any promotion, but it can drastically slow the process.

Advertisement
Continue Reading

World

Trump says if elected again he will send troops to US-Mexico border

Published

on

By

Trump says if elected again he will send troops to US-Mexico border

Former US President Donald Trump said on Wednesday that if elected again he would shift resources from federal law enforcement agencies and send thousands of overseas-based troops to the US-Mexico border.

Speaking to supporters in Iowa, where the Republican Party’s first nominating contest for the November 2024 election will be held in January, Trump also promised to expand on a travel ban that barred people from several countries with majority Muslim populations during his 2017-2021 presidency.

Calling record illegal US-Mexico border crossings under President Joe Biden an “invasion,” Trump sought to place blame for the problem on the current administration. Biden, a Democrat, is running for re-election and could have a rematch election against the Republican front-runner Trump.

“Upon my inauguration I will immediately terminate every open borders policy of the Biden administration,” Trump said at a rally in Dubuque. “I’ll make clear that we must use any and all resources needed to stop the invasion, including moving thousands of troops currently stationed overseas.”

Advertisement

Trump provided few specifics, including on exactly how he planned to expand on any ban imposed on Muslim-majority countries. It was unclear if Trump would face any legal hurdles to implementing such measures.

The Biden administration has defended its border policies, saying it is using the tools available, while calling on Congress to pass laws to fix a broken system. Most people seeking to cross the southern US border come from Central American countries.

Trump’s rivals have stepped up their rhetoric on immigration in recent weeks, promising tough action on crossings at the US-Mexico border in a sign of the importance of the issue to Republican primary voters.

About one in six Republicans consider immigration as the most pressing issue facing the country, making it the third most important issue to them after the economy and crime, a Reuters/Ipsos poll this month showed.

Last week, Florida Governor Ron DeSantis said in an interview with CBS’s Norah O’Donnell that if elected president he would send the military to the border and authorize the use of deadly force against members of drug cartels.

Advertisement

DeSantis is Trump’s top rival but remains some 40 percentage points behind him in opinion polls.

The Dubuque rally was one of two afternoon stops for Trump in Iowa on Wednesday. His campaign is scheduling a series of visits to the state in the coming weeks, as he seeks to fend off a push there by his primary rivals, some of whom have spent considerably more time and money in Iowa.

Trump was the only major candidate to skip the annual Faith and Freedom Coalition banquet in Des Moines over the weekend, missing a chance to connect with evangelicals, a critical voting bloc in the state.

His visit on Wednesday came as he confronted fresh criticism from conservatives for his stance on abortion, triggered by his Sunday appearance on NBC’s “Meet the Press,” in which he declined to commit to national restrictions on the procedure and called DeSantis’ signing of a six-week ban a “terrible mistake.”

Iowa Governor Kim Reynolds, who is popular in her state, and DeSantis were among the Republicans to blast Trump’s remarks.

Advertisement

Trump told the crowd in Dubuque that they needed to “follow their heart” on abortion but warned that Republicans needed to “learn how to talk” about legislation in a way that doesn’t turn off voters. He said it was important to carve out exceptions for any ban for instances of rape, incest and the mother’s life.

“Without the exceptions, it is very difficult to win elections. We would probably lose the majorities in 2024 without the exceptions and perhaps the presidency itself,” he said.

Continue Reading

Trending

Copyright © GLOBAL TIMES PAKISTAN