In this week's wrapup, we talk about Indian companies directly listing on foreign stock exchanges, South Korea’s short-selling ban, the Global South and more.
For the markets edition this week, we discuss Dabur’s attempt at turning around its stock market fortunes. You can read it here.
Meanwhile, here’s a recap of what we wrote over the week.
Note: We’ll be taking a publishing break tomorrow (12th November, Sunday) on account of Diwali. We hope you and your family have a great festival too. And we’ll see you with a new Finshot on Monday.
Indian companies get a foreign stock exchange visa
Companies that go public, do so because they get larger access to capital. It helps them grow their business, launch new products or cut down debt. This means that tapping into foreign markets for capital could build bigger opportunities for them.
Unfortunately, Indian companies aren’t allowed to directly list overseas. Companies like Infosys or Tata Motors, which are already listed on foreign stock exchanges used something called Depositary Receipts (DRs) to do so. Simply put, they’re a tool to list beyond the borders via intermediaries. But soon, DRs may not be the only way. A couple of days ago, the government gave the green signal to companies to directly list on foreign stock exchanges. So we wrote about it in our Monday’s story here.
The hidden cost of free foodgrains
Prime Minister Narendra Modi made a big election promise. He is extending the free ration scheme for food grains for another 5 years! And it obviously sparked a lot of public debates. So in Tuesday’s newsletter, we tried to figure out what this programme may actually cost the government. You can read it here.
Why did South Korea ban short-selling?
In 2008, the Global Financial Crisis crushed markets and economies. So South Korea banned short selling to protect its markets from extreme volatility.
In 2011, a debt crisis loomed large over Europe. So South Korea banned short-selling another time to insulate its markets from external influence.
In 2020, the pandemic walked in uninvited. And South Korea banned short-selling again.
Short-selling simply means borrowing securities from brokers and selling them in the market while expecting their prices to drop. If the predictions work in their favour, and prices indeed dip, then investors buy them back at a lower price, return the borrowed securities and pocket a profit.
And South Korea does not seem to like this practice. Last week they imposed the country’s fourth short-selling ban which will last until June 2024. So why is South Korea banning short-selling over and over again? We wrote about it here.
What's this Global South, anyway?
Three weeks ago the Economist published a story with this headline: “Xi Jinping wants to be loved by the global south”
On November 3rd, Time wrote: “The West Is Losing the Global South Over Gaza”
And on November 6th, here’s what the HinduBusinessline carried: “India’s G20 Presidency strove to mainstream the concerns and aspirations of the Global South, says FM Sitharaman”
Every second headline today seems to have the phrase “Global South”. So, what exactly does this Global South mean? And why is the term gaining so much prominence? If you’re curious too, head over here to find out.
The great Indian IPO boom
India’s IPO market seems to be heating up. So far this year, the country has actually launched 194 IPOs including small and medium enterprises. It’s the highest number of IPOs in nearly a decade. What’s causing the buzz and is it really a boom or a bubble? We tried to make sense of it all in Friday’s story here.
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Finshots Weekly Quiz 🧩
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Also folks, since we’re taking a publishing break tomorrow, here’s the winner of last week’s quiz… 🥁… Sib Sankar Datta! Congratulations. Keep an eye on your inbox and we’ll get in touch with you soon to send over your Finshots merch.
We wish you and your family a very Happy Diwali!
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