Hedge funds threaten to pull India investments

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Good morning. Hedge funds are threatening to pull investments from India because of controversial new rules introduced in response to last year’s short seller attack on Adani, one of the country’s biggest companies.

The rules, from Indian markets regulator Sebi, require big foreign investors betting on Indian stocks to reveal all their end investors, something the hedge funds argue would create “severe practical difficulties” and mark a stark departure from international practice.

India’s stock market regulator came under pressure to act on opaque foreign portfolio investors after the release of an explosive short seller report on the Adani Group last year that wiped billions of dollars off the value of the group’s listed companies and the net worth of its founder Gautam Adani.

Sebi’s efforts to unmask foreign investors are also partly driven by a wider government effort to closely track money coming into India from neighbouring countries, including China. Learn more about the impact of the regulatory crackdown.

Here’s what else I’m keeping tabs on today:

• National People’s Congress ends: The week-long session will wrap today — without the customary media briefing from China’ premier, a decision that has captivated observers.

• Japan GDP: Revised growth figures for fourth quarter of 2023 are set to be announced.

• Reddit: The roadshow for the company’s closely watched public debut on the New York Stock Exchange kicks off.

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Five more top stories

1. Officials from some of China’s most indebted regions met with state bankers in Beijing to discuss renegotiating debt payments on billions of dollars in liabilities. The debt threatens to constrain growth in the world’s second-biggest economy. Here’s what we know about the meetings that happened on the sidelines of the “Two Sessions”.

2. Saudi Aramco boosted its dividend to almost $100bn as it reported the second-highest annual profit in its history, even as lower oil prices and state-led production cuts weighed down on performance. Aramco shares were up 1.6 per cent in Sunday trading on the local Tadawul exchange.

3. The US Congress has passed legislation that will fund key US agreements with Pacific Island nations after previous delays undermined efforts to counter China. Here’s what the $7.1bn, deployed over 20 years, will go towards.

4. Americans are increasingly happy about the economy but reluctant to give credit to Joe Biden, according to a new poll that underscores the US president’s challenges as he prepares to square off against Donald Trump. The FT’s Lauren Fedor explains the survey results.

5. The US has airlifted embassy staff out of Haiti as violence engulfs the Caribbean country and gangs attack government buildings in the capital, Port-au-Prince. “Non-essential” staff had left, it said without giving numbers, but the embassy remained open. Earlier this month rival gangs joined forces to launch a wave of attacks on the government.

News in-depth

Ibrahim al-Kharabishy, a Palestinian lawyer in war-ravaged northern Gaza, considered himself fortunate when he was able to bake for his hungry family with pigeon feed. But even that all but disappeared from the market weeks ago, leaving his family to bake with ground hulls of soyabeans usually used as livestock fodder as starvation stalks the region.

We’re also reading . . . 

• Beijing’s ‘broker butcher’: The forceful approach of China’s new Securities Regulatory Commission chief has sparked a state-driven stock rally. But foreign investors remain wary.

• Germany’s ‘memory culture’: Taking responsibility for the Holocaust is at the core of national identity. The collective commitment now faces challenges from both left and right.

• Surge pricing: While surge pricing is something that rideshare app-users are accustomed to, consumers may revolt over differential pricing at brick-and-mortar stores, writes Rana Foroohar.

Chart of the day

Cracks have emerged in Apple’s and Tesla’s China strategies, forcing both companies to discount prices. Apple’s troubles were on full display at China’s annual Communist party bash in Beijing this month, where a dozen participants told the Financial Times they were using phones from Chinese brands. Meanwhile, Tesla drivers have to put up with a growing number of no-go zones for their vehicles.

Take a break from the news

On this episode of the Life and Art podcast, Dune: Part Two is on the agenda. FT’s global business columnist Rana Foroohar, an avid Dune fan, and associate editor Stephen Bush join guest host Katya Kumkova to chat about the star-studded epic. Is watching the film worth its long running time? Why has Dune endured as a franchise? And what do we want from a possible third film?