Alleged fraudulent transactions uncovered at Punjab National Bank undermine the firm’s capital position; RBI launches investigation into “increasing incidence of frauds”
After a week in which stock-trading abruptly algos decided that rising yields are irrelevant at worst, and at best positive for equities, the correlation has again flipped overnight sending Asian shares lower and European share erasing earlier gains as bonds fell around the globe, with the 2Y Treasury yield rising 3bps to 2.23% - highest since September 2008 - and the 10Y briefly as high as 2.93%... ... ahead of this week's "monster issuance" of $258 billion in TSY bills and notes... ... which in turn has sent the recently beaten down dollar higher for the third day in a row... ... and pushed S&P futures sharply lower for the second consecutive day, as the VIX is above over 21 as of 6am ET. Europe’s main bourses saw a steady start as lower domestic currencies helped their cause, although early gains were quickly faded amid declines in auto and banking, but weakness across Asia where Tokyo and South Korea saw drops more than 1%, meant MSCI’s 47-country world share index was 0.2 percent in the red. European equities trimmed initial gains (Eurostoxx 50 flat) to trade with little in the way of firm direction ahead of the US return to market. The FSTE 100 lagged peers (-0.4%) after disappointing earnings from index heavyweights HSBC (-4%) and BHP Billiton (-4%), dampening sentiment for UK stocks and the former leading to underperformance in the financial sector. Other individual movers include Hikma Pharmaceuticals (+9%) after appointing their new CEO, Fidessa (+21.4%) are also seen higher after reports that Swiss-listed Temenos (-6.8%) are to make an offer for the Co., while Intercontinental Hotels (-3.9%) have faced selling pressure this morning following a lacklustre earnings update. MSCI Asia Pacific index declines for first time in seven days. The Hang Seng index slipped after HSBC profits missed; H-shares erase most losses after falling as much as 1.9%. n. In Australia, the ASX 200 came under pressure from material and financial names, with many of the large banks reversing the prior days gains. Over in Japan, the Nikkei (-1.0%) had tripped through 22,000 amid softness in tech names. The Hang Seng (-0.8%) reopened for the first time since last week, however initial gains had been short-lived. But all attention today will be on the bond market, where as Bloomberg notes, debt investors are trading with caution as Treasury markets reopened after the Presidents’ Day break as the VIX jumped to its highest level in five sessions. As reported yesterday, Treasuries are under pressure ahead of what Bloomberg has dubbed "monster debt supply" in which the U.S. gets set to sale a record amount of debt with three days of auctions today totaling $258 billion. And while speculators are turning bearish - rapidly covering net short bets across the curve but mostly in the 2Y... ... money managers are looking at the highest U.S. yields in years as a buying opportunity in a world where shorter-term Japanese and German notes still carry negative yields. “I just advise caution,” said Principal Global Investors’ chief global economist Bob Baur said about stocks as Wall Street futures also pointed lower. "I‘m not sure whether this (early February sell-off) was the dip to buy, there will probably be a relapse and then another relapse, before maybe around mid-summer stocks make another run up.” European bond yields pushed up too, with traders also working through the options of who could succeed Mario Draghi as European Central Bank chief next year after Spain’s economy minister was nominated for the bank’s number two job. In other news, BOJ governor Haruhiko Kuroda didn’t discuss monetary policy during an appearance in parliament today. Speculation has been swirling about the possibility the BOJ is scaling back its stimulus since the central bank reduced its purchases of government bonds in January. The UK is said to have a secret plan to withhold Brexit payments if the EU refuses to provide the UK with a desirable trade deal. Elsewhere, according to a letter seen last week, Netherlands government has linked its decision to activate hard Brexit plan amid a lack of clarity from the UK. Echoing China, the German Economy Minister says the EU will respond appropriately if the US puts a tariff on European steel imports. Speaking of Germany, it reported mixed February ZEw numbers: German ZEW Economic Sentiment (Feb) 17.8 vs. Exp. 16.5 (Prev. 20.4); German ZEW Current Conditions (Feb) 92.3 vs. Exp. 93.9 (Prev. 95.2) South Africa’s rand and Turkey’s lira both gave back more of their recent gains, while growing concerns about the previously reported alleged fraud at India’s second-largest state-run bank sent the rupee skidding to a near three-month low: "Punjab National Bank will need to provide for at least a substantial portion of the exposure. As a result, the bank’s profitability will likely come under pressure,” rating agency Moody’s said as it put it on a downgrade warning. In commodity markets, Oil prices were mixed, with reduced flows from Canada pushing up U.S. crude while Brent sagged $65.45 per barrel on the back of weaker Asian stocks and the dollar’s bounce. Spot gold slipped 0.4 percent to 1,341.06 an ounce, also corseted by the dollar’s bounce, while industrial metals including copper drifted lower for a second day in a thinner-than-usual trading due to new year holidays in China. Bitcoin broke above $11,500, almost double its intraday low from just two weeks ago. Bulletin Headline Summary from RanSquawk European equities have trimmed initial gains (Eurostoxx 50 flat) to trade with little in the way of firm direction ahead of the US return to market EU Parliament is to call for Britain to have privileged single market access after Brexit, according to Business Insider Looking ahead, highlights include US supply, WalMart earnings Market Snapshot S&P 500 futures down 0.6% to 2,719.50 STOXX Europe 600 up 0.1% to 378.63 MSCI Asia Pacific down 0.9% to 176.50 MSCI Asia Pacific ex Japan down 0.5% to 575.76 Nikkei down 1% to 21,925.10 Topix down 0.7% to 1,762.45 Hang Seng Index down 0.8% to 30,873.63 Shanghai Composite up 0.5% to 3,199.16 Sensex down 0.09% to 33,745.75 Australia S&P/ASX 200 down 0.01% to 5,940.85 Kospi down 1.1% to 2,415.12 German 10Y yield rose 2.0 bps to 0.755% Euro down 0.4% to $1.2355 Brent Futures down 0.6% to $65.28/bbl Italian 10Y yield rose 5.6 bps to 1.773% Spanish 10Y yield fell 0.3 bps to 1.508% Brent Futures down 0.6% to $65.28/bbl Gold spot down 0.7% to $1,337.27 U.S. Dollar Index up 0.6% to 89.60 Top Overnight News Latvia will seek to prevent ECB Governing Council member Ilmars Rimsevics from returning to his post after he was caught up in a bribery probe that’s rocked the Baltic nation, the country’s prime minister said in an interview Treasuries are about to reach a turning point, with the trend toward a flatter yield curve poised to end in the next few months, says Akira Takei, a fund manager at Asset Management One Chancellor Angela Merkel sent a strong signal in the debate over her preferred successor as German leader by appointing close ally Annegret Kramp-Karrenbauer as general secretary of her Christian Democratic Union party Prime Minister Theresa May’s team is eyeing up a contingency plan to hold back billions of pounds in Brexit payments, if the European Union refuses to give the U.K. the trade deal it wants Brexit Secretary David Davis will reassure the European Union that the U.K. won’t try to undercut the bloc by tearing up regulations after the split, making the case for mutual trust between regulators on each side Spain’s Economy Minister Luis de Guindos won the backing of euro-area finance ministers late Monday to replace ECB Vice President Vitor Constancio; some economists reckon he may side with the more optimistic governors on the council, who have long been pushing for an end to quantitative easing, while at the same time being mostly consensus-oriented Australia’s central bank reiterated that inflation is expected to “only gradually” accelerate as the economy strengthens and wage pressures increase, in minutes of this month’s policy meeting Asian equity markets are somewhat fragile, with major Asian bourses off to a weaker start. US markets were closed for President’s day and as such, Asian participants took the cue from European equities which slipped in yesterday’s session. In Australia, the ASX 200 (flat) has come under pressure from material and financial names, with many of the large banks reversing the prior days gains. Over in Japan, the Nikkei (-1.0%) had tripped through 22,000 amid softness in tech names. The Hang Seng (-0.8%) reopened for the first time since last week, however initial gains had been short-lived, with the index conforming to the sombre tone. JGBs are flat in thin-trade, March futures contract down 2 ticks and hovering near yesterday’s levels. USTs off by 6+ ticks with yields continuing to pick up, 2yr yields now at the highest since Sep’08 after hitting 2.22%, while the US curve is also flattening this morning. The RBA meeting minutes failed to provide any fireworks with the central bank sticking with its neutral tone. As such, AUD had been largely unmoved post the release of the minutes and instead focus will fall on the wage price index due out tomorrow. RBA February minutes states that low rates are helping reduce unemployment and lift inflation, additionally rising AUD would impede pickup in economic growth and inflation, however AUD TWI is still within narrow range of past couple of years. Top Asian News Espenilla Says Philippine Rate Hike on Table But Data Dependent India Is Said to Tighten Approvals for Offshore Borrowing Bitcoin Rises as South Korea Talks ‘Active’ Support for Trading BHP Falls as Much as 3.8% in London After Adj Profit Misses Ests Toyota Readies Cheaper Electric Motor by Halving Rare Earth Use European equities have trimmed initial gains (Eurostoxx 50 flat) to trade with little in the way of firm direction ahead of the US return to market. The FSTE 100 modestly lags its peers (-0.4%) after disappointing earnings from index heavyweights HSBC (-4%) and BHP Billiton (-4%), dampening sentiment for UK stocks and the former leading to underperformance in the financial sector. Other individual movers include Hikma Pharmaceuticals (+9%) after appointing their new CEO, Fidessa (+21.4%) are also seen higher after reports that Swiss-listed Temenos (-6.8%) are to make an offer for the Co., while Intercontinental Hotels (-3.9%) have faced selling pressure this morning following a lacklustre earnings update. Top European News Gulliver Ends HSBC Tenure With Rare Profit Miss on Margins U.K. Has Plan to Halt Brexit Cash If EU Backslides on Trade Deal Morgan Stanley Says Stock Slide Was Just Appetizer for Real Deal Oil Holds Momentum That’s Driven by OPEC’s Promise to Re- Balance A Diversified Portfolio May Not Help Investors Much This Year In FX, the DXY has now rebounded above 89.500, and on broad-based gains vs G10 rivals, albeit mainly inspired by another round of short covering. A major French bank notes that the market remains very short of Dollars (in line with latest weekly CFTC spec positioning data) and modestly long Jpy and moves in the headline pairing off last week’s circa 105.55 low support the rebalancing theory as spot trades back over 107.00. 107.32 offers eyed next, and as a recap this level now forms resistance rather than support on the way down as the 2017 low. Similar price moves elsewhere, as Eur/Usd recoils further from recent peaks and briefly testing bids at 1.2350 with small stops just below, but not challenging key Fib support at 1.2319. Cable briefly reclaimed the 1.4000 handle after reports in Business Insider suggested that the EU Parliament is to call for Britain to have privileged single market access after Brexit. Usd/Chf now inching closer to 0.9350 and Usd/Cad just shy of 1.2600 amidst the ongoing Greenback recovery, while Aud/Usd is retesting 0.7900 on the downside with little direction gleaned from RBA minutes overnight, but key data to come tomorrow (wage growth). Nzd/Usd straddling 0.7350, with strong chart support around 0.7338. In commodities, WTI and Brent crude futures are seen higher albeit off best levels as the firmer USD caps gains; WTI holds above the USD 62.00bbl level (note the weekly API inventories will be released tomorrow, not today due to yesterday’s US market holiday). In terms of energy news flow, the Joint OPEC/non-OPEC Technical Committee concluded that the oil glut is dissipating at a faster pace than anticipated, according to sources. Additionally, UAE energy minister claims OPEC and allies are to continue oil cooperation beyond 2018 and notes UAE, Saudi Arabia and Russia all support an extension cut beyond 2018. In metals markets, spot gold trades lower alongside the aforementioned firmer USD while copper prices have seen little in the way of firm direction as Chinese participants remain away from market. UAE Energy Minister says the UAE is expected to over-deliver on production cuts in Q1 due to maintenance commitment with OPEC-led pact. Global Event Calendar Mexico Citibanamex Survey of Economists 8:30am: Canada Wholesale Trade Sales MoM, Dec., est. 0.4%, prior 0.7% 10am: Mexico International Reserves Weekly, Feb. 16, no est., prior 173b Bond Auctions: 11:30am: U.S. to Sell USD51 Bln 3-Month Bills 11:30am: U.S. to Sell USD45 Bln 6-Month Bills 1pm: U.S. to Sell USD55 Bln 4-Week Bills 1pm: U.S. to Sell USD28 Bln 2-Year Notes DB's Jim Reid concludes the overnight wrap With Chinese New Year holidays and President’s Day in the US, yesterday was always going to be quiet and we weren’t disappointed on this. It was a far cry from two weeks ago last night when we saw the largest single day spike in the VIX on record and a 1000 point move on the DOW in c20 minutes towards the end of the session. In reality the market has regained its poise very impressively since. For the markets that were open yesterday, it was generally a down day though. The Stoxx 600 fell for the first time in four days (-0.63%), but trading volume was thin and at roughly half the 30 day average. Within the Stoxx, losses were led by the health care, consumer and real estate sector, with Reckitt Benckiser down 7.5% after warning pricing pressures would continue to hit margins. Across the region, the DAX (-0.53%) and FTSE (-0.64%) also fell modestly while Italy’s FTSE MIB was the relative laggard at -1.0%. The Vstoxx rose for the first time in six days, up 7.7% to 19.13. Government bonds weakened with core 10y bond yields up 2-4bp (Bunds +2.8bp; Gilts +2bp), in part reversing Friday’s gains in the absence of material macro data. Key peripherals yields were also up 2-5bp, while Greek bonds outperformed with its 10y yields down 1.9bp after Fitch upgraded the country’s long term issuer rating from B- to B with a positive outlook retained. Post the change, Fitch’s rating is now in line with S&P’s. In FX, the US dollar index was marginally higher (+0.13%) while the Euro was broadly flat and Sterling fell 0.19%. In commodities, WTI oil was up 1.33% to $62.50/bbl while precious metals were little changed (Gold -0.04%; Silver +0.18%). This morning in Asia, markets are broadly lower with the Nikkei down for the first time in four days (-1.06%), while the Kospi (-1.27%) and Hang Seng (-0.37%) are also lower, as the latter pared back earlier gains as trading resumed post the New Year holidays. The UST 10y yield is up 2bp and S&P index futures are down c0.3% this morning. Back in Europe, finance ministers have nominated the Spanish Economy Minister Luis de Guindos to be the next Vice President of the ECB to replace Mr Constancio. The decision puts Spain back on the ECB’s executive board after a six year absence. Mr de Guindos will resign from his existing post within days and said he is “pragmatic” rather than a dove / hawk when it comes to monetary policy and will always defend the ECB’s independence. Looking ahead, he will face a hearing at the EU Parliament and then EU leaders will ratify his appointment at their summit on March 22. Elsewhere, Germany’s acting Finance Minister Peter Altmaier said Mr de Guindos would be an “excellent choice” for the role. Staying with the ECB, the latest QE purchases data was released yesterday. It was yet another very strong week for CSPP relative to PSPP which now leaves little doubt about the ECB's intentions to keep the former elevated relative to the latter, given that we now have 6 full weeks of data since they halved the net flow of QE. The CSPP/PSPP ratio was 29.4% (27.3% over last 4 weeks). As a reminder, before Apr 2017 when QE was still €80bn/m the ratio was 11.5%. Between Apr-Dec 2017 (QE €60bn/m) the ratio edged up to 12.7% but since Jan 2018 (QE €30bn/m) the ratio is now 25.5%. Indeed the strength of corporate vs. government purchases as proxied by the CSPP/PSPP ratio has so far surpassed our expectations of "roughly 20%". Staying in Europe, an interesting story yesterday as SPD members now start voting as to whether to enter a coalition with Mrs Merkel, was the one that suggested that the far right AfD party has overtaken the SPD in the polls for the first time. The Bild/INSA poll put them at 16% and 15.5% respectively against 12.6% and 20.5% at the election back in September. The fear from the SPD was always that a renewed collation agreement would lead to them seeing their popularity drop further but with stalemate elsewhere they were left with limited choice but to negotiate in the end. Are the electorate punishing them for their decision to enter talks or the fact that it took so long to do so? Either way, in our view the fact that far right in Germany are now second in the polls is fairly remarkable really. Continuing with politics, ahead of the 4th March national election in Italy, DB’s Clemente De lucia noted that the risk of a hung parliament remains high, but it is a close call as the centre-right coalition is closing the gap to get an outright majority. If the elections prove to be inconclusive, Clemente expect the parties and institutions to work hard to form a grand coalition. Whatever the result of the elections, the fiscal stance will be in the spotlight after the vote. All parties are pledging significant expansionary policies. As things stands, Italy does not comply with EU fiscal rules and without some adjustments, Rome could be on a collision course with Brussels. With the gap between Rome and Brussels not significantly large, we expect a compromise to be reached. Refer to the note for more details. Now turning to some of the Brexit headlines. The BOE governor Carney noted the transitional deal to be reached before the end of March “obviously won’t be a hard, legally binding agreement, but….something that has legal text associated with it, which will be part of the separation agreement, (then) that should be good enough”. Elsewhere, three unnamed senior British officials have told Bloomberg that the UK have a fall back option of withholding the £40bn divorce Brexit payments to ensure the EU agrees to the trade deal it wants. The former leader of PM May’s conservative party Iain Duncan Smith said “either the EU gives us a trade deal or they won’t get any money at all”. Finally, DB’s Oliver Harvey has assessed the suitability of a CETA (comprehensive economic and trade agreement) type deal between the UK and the EU and the implications for growth and markets. Overall, the team believes there are no workable alternatives for the UK to maintain close to present levels of trade with the EU27 in the current time frame outside of the EEA and a separate customs agreement. They expect this to be the ultimate destination of Brexit, but not before a political crisis. Refer to their note for more details. Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. The February Rightmove index on asking prices for UK homes was above the prior month’s reading at 0.8% mom (vs. 0.7% previous) and 1.5% yoy (vs 1.1% previous). The Euro area’s current account surplus in December was below last month’s reading at €29.9bln (vs. €32.5bln previous) but the fullyear surplus rose to a new high of €392bn. In Asia, Japan’s Reuters' Tankan manufacturers' index fell 6pts to +29 in February (vs. the prior reading at an 11- year high), while the non-manufacturers index was steady at a solid level of +33. Looking at the day ahead, the January PPI and the February ZEW survey are due in Germany. The February CBI selling prices data in the UK and the February consumer confidence print for the Euro area are also due in the afternoon. In terms of politics, the Social Democrats party in Germany will begin a two-week period for members to vote on the proposed coalition pact.
Stocks of Indian jewelers and state-run banks have been sinking since Friday, when the full extent of what's now understood to be the largest bank fraud case in Indian history was unveiled in a complaint to Indian federal banking regulators filed by the the Punjab National Bank, a state-owned bank based in New Delhi. The bank discovered the first bread-crumbs in January, but the full extent of the fraud - which was carried out over seven years and involved the theft of nearly $1.8 billion - wasn't known until very recently. And before today, when Reuters published a report fleshing out some newly uncovered details, little was known about the mechanics behind it. The pressure has dragged the S&P BSE SENSEX - an index of some of India's most established companies - lower. Last week, we learned that the fraud involved Nirav Modi, one of India's 100 richest men and a well-known jeweler who has dressed both Hollywood and Bollywood stars, was at the center of the conspiracy. He was aided by Mehul Choksi, whose Gitanjali Group of companies was intimately involved in the fraud. Finally, the third key conspirator was PNB branch deputy manager Gokulnath Shetty, who oversaw the circulation of fake "letters of undertaking" - essentially one bank vouching that a certain client is credit-worthy and should qualify for a loan from another bank. From the broadest possible perspective, the fraud unfolded as follows: Modi and Choksi controlled a group of fraudulent jewelry companies. Shetty would circulate "letters of undertaking" vouching for collateral that didn't really exist. Based on these letters, the shell companies secured loans from foreign branches of India-based banks. This money then disappeared. A fourth individual - a junior employee who worked for Shetty - is also being held but his or her involvement is still unclear. But in the first major review of the case by an English-language media organization, Reuters said the details available overwhelmingly point to a shocking failure of oversight by both India's banking regulators and the state-owned bank's internal controls. As a result, criminals were able to steal early $2 billion from PNB largely because nobody was watching. A review of bank and government documents related to the case - and interviews with current and former PNB executives, bank auditors and experts - points to a lack of accountability and standards in the country’s public banking system. As of last September, those banks held about 87 percent of the Indian banking system’s 9.46 trillion rupees (about $147 billion) of soured loans that are non-performing, restructured or rolled over. A preliminary investigation by the nation’s tax authority said of the PNB fraud that “the hit Indian banks would take in the end may well exceed” $3 billion, according to an internal note seen by Reuters. “Yes, there is a problem. We have recognized it,” bank Chief Executive Officer Sunil Mehta said during an investor call on Friday. “We are in the process of fixing it up. We’ll see wherever the loopholes are there. The people-related risk, we are going to mitigate.” But despite that promise of action, one current senior executive at the bank’s headquarters in New Delhi said further problems could not be ruled out. “In Indian banks, we don’t work under ideal situation,” the executive, who declined to be identified, said during an interview at his office. “We are in the business of risk, you can’t say there won’t be road accidents.” Reuters also provided the most detailed account yet of how Shetty was able to circulate the fraudulent letters to other Indian banks... According to court documents filed on Saturday by the CBI, branch deputy manager Gokulnath Shetty issued a series of fraudulent Letters of Undertaking – essentially guarantees sent to other banks so that they would provide loans to a customer, in this case a group of Indian jewelry companies. These letters were sent to overseas branches of banks, thought to be almost all Indian, that would then lend money to the jewelry firms. Shetty did so using the bank’s SWIFT system to log in with passwords that allowed him, and in at least some instances a more junior official, to serve as both the person who sent messages and as the person who reviewed them for approval, according to court documents and interviews with bank executives. “The involvement and connivance of more staff members and outsiders at this stage cannot be ruled out,” said a CBI document submitted to the court in Mumbai. ... After entering the transactions on SWIFT, the CBI documents said, Shetty – who worked at the same branch from 2010 to 2017 despite normal bank practices of regular rotations - did not record them on the bank’s internal system. Because PNB’s internal software system was not linked with SWIFT, employees were expected to manually log SWIFT activity. If that was not done, the transactions did not show up on the bank’s books. A SWIFT spokeswoman said in a statement last week that the company does not comment on individual customers. All together, there were at least 150 such fraudulent Letters of Undertaking during a seven-year period, according to a CBI official who spoke on the condition of anonymity. As one of the bank's auditors' said, the fraudulent transactions was "off books". The mechanics of how the fraud happened, and what it says about the underlying industry culture, are worrying, said Abizer Diwanji, national leader for financial services in India at accounting firm Ernst & Young. “Checks and balances are there in public banks as well but they are not followed earnestly,” said Diwanji, who has tracked India’s financial services industry for more than two decades. “This is where the discipline, the culture is not there. I always believe that we don’t have the culture to manage risks, even operational risks. PNB is not an outlier in this.” To control such risks, most private sector banks require branches to route SWIFT messages through their central offices, Diwanji said. They also usually integrate their own software systems and SWIFT, meaning that activity such as a Letter of Undertaking being sent would get automatically recorded. Neither is the case at PNB or most state-run banks in India, Diwanji said. Representatives of two of the external audit firms listed on PNB’s annual report for the 2016-17 fiscal year said they could not have known what happened. “It was off-books, so auditors will not be in a position to detect it,” said Sudesh Punhani, a partner at Chhajed & Doshi. The question now is: Will Indian banking regulators make the hard but necessary decision to force banks to integrate their systems with SWIFT while strengthening other oversight tools? Even if it risks uncovering other embarrassing fraud cases? Remember, it was just October, when we discussed Indian Prime Minister, Narendra Modi’s, decision to hand over $32bn to recapitalize India’s state banks. The motivation was India’s slowing growth rate and the need to add one million Indians to the workforce every month. India has the second highest bad debt ratio of the world’s largest economies – possibly third since China’s official figure is patently incorrect. Crippled by massive bad debts, the state-owned banks were struggling to extend more credit to the economy. The announcement caused a surge in India’s Sensex equity index, led by the banks. So much for that? Time for another bailout!!
В понедельник, 19 февраля, фондовый рынок Индии завершил торговую сессию умеренным снижением основных индексов. Сегодня торги на азиатских площадках проходят в "облегченном" режиме с учетом того, что в Соединенных Штатах биржи закрыты по случаю Дня президентов, а в Гонконге и Китае отдыхают в связи с Новым годом по лунному календарю. Отступление котировок на индийском рынке возглавил банковский сектор, которому оказали медвежью услугу известия о крупном мошенничестве в государственном банке Punjab National Bank. По итогам торгов вторника индекс Nifty 50 понизился на 0,71% до отметки 10378,40 пункта, а BSE Sensex уменьшился на 0,69% и достиг уровня 33774,66 пункта. Среди голубых фишек наибольшие потери, от 1% до 6%, зафиксировали Tata Steel, Larsen & Toubro, Bharti Airtel и ITC. В плюсе завершили сессию Hindalco, Vedanta, Yes Bank. Валютная пара USD/INR ушла в плюс на 0,22% до отметки в 64,545.
Indian authorities have uncovered a $2 billion banking fraud involving one of the country's 100 richest men, a jeweler who made his name dressing Hollywood and Bollywood actors including Kate Winslet and Priyanka Chopra. His name is Nirav Modi, and on Friday shares of the Punjab National Bank - or PNB - plunged after federal investigators first unveiled their findings in a fraud investigation. In its complaint to India's the Central Bureau of Investigation, PNB alleged that the fraud was led by Nirav Modi, a jeweler who’s dressed Hollywood and Bollywood actors including Kate Winslet and Priyanka Chopra. Modi’s No. 85 on Forbes’s 2017 list of India’s richest people and, at 47, is one of the youngest names on that list, according to Bloomberg. The scheme also involved Mehul Choksi, whose Gitanjali Group of companies was intimately involved in the fraud. PNB on Friday said it had filed complaints against Mehul Choksi’s Gitanjali Group of companies. These include Gitanjali Gems Ltd. and PNB alleges a 49 billion rupee (nearly $800 million) loss from Choksi’s companies, CBI spokesman Abhishek Dayal said in a text message. Nirav Modi PNB also claimed that Modi and Choksi worked with a former PNB employee, Gokulnath Shetty, who was posted at a PNB branch in Mumbai from where the fraud originated. Shetty was a deputy general manager in the bank's FX department. Shelly was instrumental in helping Modi and Choksi pull off the heist. The details of the scheme will sound familiar to anybody who has read our coverage of China's "ghost collateral" scandal: Modi and his collaborators secured fake guarantee letters from PNB bank, used over a period of roughly six years to secure some $2 billion in loans from overseas branches of Indian banks. During the scheme, several fake guarantee letters were issued by PNB - all without evidence of collateral - that were then used to secure the loans. The schemers allegedly then bypassed the lender’s internal messaging system in order to avoid detection, and placed instructions via the Swift global payment system asking overseas branches of Indian banks to pay out cash in the form of "secured" loans. The exact details of how this played out haven't yet been made clear. And the scheme probably would've continued, if it hadn't been for those pesky federal regulators. Indeed, the scam was uncovered when Modi approached the bank about securing a new loan for its company. But Shetty - his man on the inside - had retired, and his successor declined to honor Modi's request. In an incredibly brazen move, Modi - who had apparently become too comfortable with the success of his scheme - contested the bank's decision to deny him another guarantee. "At this, the firms contested that they have been availing this facility in the past also but the branch records did not reveal details of any such facility," PNB said in the complaint. It was only then that the bank and investigators discovered fake letters of undertaking and filed an initial complaint alleging a $44 million fraud. Two weeks later, it filed another complaint covering transactions worth about $1.8 billion, according to people familiar with the matter. The exposure of the scheme - and the realization that the loans would never be repaid - sent PNB scrambling to try and pin some of the exposure on its counterparties, the overseas branches of Axis Bank and Allahabad Bank. PNB has alleged that the money was used either to retire import bills or replenish maturing lines of credit with some other banks, according to the document seen by Bloomberg. In its public complaint, PNB names the Hong Kong branches of Axis Bank Ltd. and Allahabad Bank as the overseas counterparties. Allahabad Bank has exposure of about 40 billion rupees while Axis Bank has a roughly 30 billion rupee exposure, a person familiar with the matter told reporters in New Delhi. Union Bank has about 20 billion rupee exposure with rest accounted to State Bank of India, the person said, asking not to be named as the information isn’t public. "Allahabad Bank has raised claims of two tranches of $26 million each from Punjab National Bank for underwriting the letter of credit," the Mint newspaper reported citing Usha Ananthasubramanian, managing director at Allahabad Bank. "We want the bank to pay up as the exposure is on PNB." Axis Bank told the exchanges on Thursday that the transactions were undertaken in the normal course of business and credited to PNB’s nostro accounts. It added it has "sold down all of the referred transactions.” The Reserve Bank of India has been left to disentangle the mess, and has asked for all parties involved to submit all relevant information about the loans by the end of the week. India’s government has asked all banks to send reports involving this case or other such incidents latest by the end of this week, the Press Trust of India reported. The banking bureaucrat Kumar told BloombergQuint that the case is an isolated one. About 10 PNB employees have been suspended pending the CBI investigation, he said. He didn’t name any of the accused. PNB’s CEO said Modi has reached out to PNB to present a repayment plan but the bank has sought more details. Nirav Modi had left India even before the CBI complaint was filed, according to media reports that didn’t cite any people. India’s foreign ministry on Friday said it has suspended Modi and Choksi’s passports, and the documents may be revoked if they fail to respond. "We will seek government intervention to extradite Modi and Choksi and will not allow any settlement that leaves burden on tax payers," C.H. Venkatachalam, general secretary of the All India Bank Employees Association, said in a phone interview. "From the data we are collecting the sense is that the amount is set to become bigger." Meanwhile, the authorities are seeking to extradite Modi and Choksi and promising that any settlement to help shore up PNB's damaged balance sheet will not saddle taxpayers with the cost of the bailout. But we imagine that promise is about as genuine as the collateral Modi and Choksi used to "secure" their loans.
Второй по величине государственный банк Индии по объему активов Punjab National Bank обнаружил мошеннические трансакции на 1,8 млрд долларов, сообщает BBC.
Nirav Modi, a diamond dealer who has designed jewelry for Dakota Johnson and Kate Winslet, was named as a suspect in a $1.8 billion fraud at India's Punjab National Bank.
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В четверг, 15 февраля, фондовый рынок Индии завершил торги на положительной территории, последовав примеру мировых фондовых рынков, при этом ключевые индексы подросли на 0,4%. Согласно опубликованной сегодня статистике, индекс оптовых цен увеличился в январе на 2,84% г/г, тогда как аналитики прогнозировали +3,25% г/г после +3,58% г/г в декабре. По итогам сессии Nifty 50 ушел в плюс на 0,42% до отметки в 10545,50 пункта, а BSE Sensex стал тяжелее на 0,41% и закрылся на уровне 34297,47 пункта. К 13:45 МСК валютная пара USD/INR подешевела на 0,17% до отметки в 63,915, а пара EUR/INR подорожала на 0,02% и находится на уровне 79,8266. Доходность десятилетних государственных облигаций составила, тем временем, 7,556%. Рыночная капитализация второго по величине активов в Индии кредитора Punjab National Bank снизилась на 12,9% ввиду появившихся вчера сообщений о том, что он выявил мошеннические транзакции на сумму $1,77 млрд.
The scandal at Punjab National Bank, a state-controlled lender, risks drying up the loans small and medium-size businesses need to power the country’s growth.
Второй по величине госбанк Индии по объему активов, Punjab National Bank выявил мошеннические транзакции на $1,77 млрд, пишет The Wall Street Journal.
Scam resulted in money being advanced to a handful of accounts overseas
Второй по величине государственный банк Индии заявил, что он обнаружил мошенничество на $1,8 млрд в своем филиале в финансовом центре страны. Последствия могут распространяться и на других кредиторов, сообщает Bloomberg.
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