The regular has now decided to further ease norms for mutual funds to take derivative exposures. SEBI issues modified rules under which SEBI will allow mutual funds to also write call options under specific conditions. Funds other than index funds and ETFs will be permitted to write covered calls, which entails selling a call option where the fund already has a cash market exposure. The short call option will have to be marked to market on a daily basis by the fund. However, the upper limit curbs on a stock-specific level will still continue in terms of notional level, and that will remain a handicap.

In a bid to ease the pressure on the rupee, the RBI has decided to make rupee borrowings simpler. RBI announced new External Commercial Borrowing (ECB) norms under which all entities will be permitted to raise funds from the global market through the automatic route and there would be no sectoral curbs up to $750 million. Apart from improving the ease of doing business, this move is also likely to shore up the INR. All entities eligible to receive FDI will be eligible for ECB borrowings under the automatic route. This will be specifically useful at a time when the rupee is under pressure from outflows.

There is a new twist to the SBI NCLT sage with reference to Essar bad loans. SBI plans to auction Essar NPAs to the tune of Rs.15,000 crore and has already invited expressions of interest (EOI) from NBFCs and ARCs to take over this loan chunk at an appropriate price. SBI has however set the reserve price at Rs.9588 crore, which is above 60% of the value of loans outstanding. Generally, loan deals in the past have happened at a higher hair cut. SBI’s NCLT recovery for these assets is estimated at Rs.11,300 crore. This amount has discounted at an IRR of 18% to arrive at the current reserve price.

Jet Airways stock cracks as Etihad deal runs into fresh trouble. The stock of Jet Airways crashed by more than 8% after Etihad agreed to hike its stake in Jet at a price of Rs.170/share, nearly 50% lower than the current market price. As per the terms of the restructuring, Bloomberg reports that SBI had agreed to restructure the $1.2 billion debt of Jet if both Etihad and Jet were willing to cough up nearly $450 million of funds. However, with Etihad willing to add stake only at Rs.170, it will either mean that Etihad will contribute a much lower amount or Goyal may have to hive off a larger stake.

Ecommerce curbs could reduce volumes by $46 billion as per PWC report. According to the PWC report, the recent restrictions placed on large global players like Amazon and Wal-Mart could reduce the total volume by $46 billion between now and 2022. The government had taken some protectionist measures to protect the interests of the domestic retail players. Global ecommerce players cannot sell through their owned companies or on exclusive platforms. The idea of the ecommerce restrictions was that the space was already being dominated by global players like Wal-Mart, Amazon and Alibaba. The government apprehension is that if these global players with deep pockets are given a free hand, then it may force most of the domestic ecommerce start ups to either shut down or sell out.

There may be some discouraging news on the trade war front. The US trade representative, Robert Lighthizer, has hinted at limited progress on talks with China during the current trade truce. During the Summit in Argentina, China and the US had agreed to declare a truce for 3 months to give themselves time to renegotiate the trade agreements. The comments are expected to temper market enthusiasm, as per a report. Global markets across the US, Europe and China were hoping for an early rapprochement between the US and China so that the world GDP growth does not get impacted in a big way.