Asian equities began the week on a subdued note as high U.S. Treasury yields tested Wall Street's lofty valuations, keeping the U.S. dollar near multi-month highs. Market Performance : MSCI Asia-Pacific Index dipped 0.2% but remains 16% up for the year. Japan’s Nikkei slid 0.9%, still boasting a 20% annual gain. Chinese blue chips rose 0.3%, with most of their 16% yearly gain achieved after Beijing’s September stimulus promises. South Korea's index edged up 0.3% but is down 9% for the year, weighed by political uncertainties and events like Jeju Air’s recent plane crash. Global Futures : EUROSTOXX 50 futures gained 0.1%. U.S. futures saw slight declines, with S&P 500 and Nasdaq futures down 0.1%. Economic Drivers and Concerns U.S. Treasury Yields : Yields on 10-year Treasuries are near eight-month highs at 4.631%, up 75 basis points for the year. Rising yields reflect revised expectations of less restrictive monetary policy, raising concerns about potential impacts on corpo...
Arohan Financial Services Ltd, a microfinance institution focused on providing loans to underserved women, is postponing its initial public offering (IPO) after Indian regulators ordered a group of shadow lenders to halt new loans. The Reserve Bank of India (RBI) took action earlier this month, citing concerns over high interest rates and non-compliance with rules related to borrower assessments.
Arohan, based in Kolkata, had planned to file for an IPO to raise US$200 million (RM872 million) but has now delayed those plans following the RBI’s directive. The shadow bank offers loans to groups of three to five women at 24.25% interest rates, with loan amounts ranging from 25,000 rupees (US$297) to 100,000 rupees, over a period of 24-30 months.
The RBI found that Arohan and three other shadow lenders—Asirvad Micro Finance Ltd, DMI Finance Pvt Ltd, and Navi Finserv Ltd—violated rules related to household income assessments and borrowers' ability to repay. Navi Finserv, backed by Flipkart co-founder Sachin Bansal, also canceled a proposed one billion rupee bond sale following the RBI’s order.
Arohan’s investors include Teachers Insurance and Annuity Association of America and Danish asset manager Maj Invest. The company had considered an IPO in the past but postponed it amid similar regulatory and market challenges. Arohan reported a net profit of US$37 million for the financial year ending March.
The RBI's crackdown comes amid increasing scrutiny of shadow banking and microfinance institutions, as these lenders often target financially vulnerable populations with high interest rates.
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