On Episode 975 of The Core Report, financial journalist Govindraj Ethiraj talks to Abhay Laijawala, Chief Investment Officer, India at Lighthouse Canton (and veteran metals analyst) as well as Kunal Pande, National Leader - Cyber, Risk and Compliance Services at KPMG in India.

SHOW NOTES

(00:00) Stories of the Day

(01:00) Crude Has Now Crossed $105 As The West Asia War Escalates To New Levels

(03:03) Chinese President Xi Jinping Will Visit Delhi For The BRICS Summit As Trade Relations Are Strained Again

(05:51) US Markets Once Again Cock A Snook At The Treasury Secretary’s Efforts To Rein In Bond Yields

Why Are Copper Prices Rising So Much And Outlook?

Tokenisation Of Assets Has Kicked Off In India, What Does It Mean For Investors?

Apple Raised Prices On ‌its Existing iPhone Lineup In India By As Much As 41%, More Than The US

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NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.

Good morning, it's Friday the 11th of September and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital.

The top stories and themes…

crude has now crossed $105 a barrel as West Asia war escalates to new levels.

Chinese President Xi Jinping will visit Delhi for the BRIC summit amidst once again strained trade relations.

The U.S. markets again caucus snook at Treasury Secretary's efforts to rein in bond yields.

Why are copper prices rising so much and what's the outlook?

Tokenization of assets has kicked off in India, what it means for investors.

And Apple raised prices on its existing iPhone lineup in India by as much as 41% more than in the United States.

Markets, BRICS, Gold and Bond Intervention

Much is happening this week at the Global Fintech Fest in Mumbai, where we have been and banks and fintech companies have been excitedly launching new products and services to enhance payments and the flow of funds in the country's financial system. Elsewhere, the flow of oil slowed down further and friction increased in West Asia. And the leaders of the BRIC countries are meeting in Delhi, including Chinese President Xi Jinping, whose participation has only now been announced and confirmed.

First, crude prices, which were up sharply on Thursday, with Brent crude now at $105.28, over $105 and having gone up more than 30% from the lows touched in early August or just last month, even as the markets now brace for a prolonged war in the Persian Gulf after fighting between the United States and Iran sharply escalated earlier. Top White House advisors have discussed with President Trump the possibility that the Iran war could drag on past Inauguration Day in January 2029, according to officials who spoke to The Wall Street Journal. Now, this report contradicts President Trump's claim on Wednesday that the war would end immediately after the midterm elections in November, according to a CNBC report, which also added that pump prices have hit a Labour Day record on Monday and diesel is expected to cross $6 per gallon for the first time ever in coming days.

Meanwhile, the Organisation of Petroleum Exporting Countries on Thursday lowered its forecast for world oil demand growth in 2026 to 380,000 barrels per day, Reuters reported, a copy of its monthly report saying as much, also marking the fifth straight downward revision. With all this and the backdrop, the benchmark indices snapped a three-day losing streak as bank shares did well, despite the persistent oil price volatility. The Sensex was up 138 points to 74,902, and the Nifty 50 was up 46 points to 23,477.

In the broader markets, the Nifty mid-cap and small-cap were both down 0.38 and 0.07 percent each. Meanwhile, Chinese President Xi Jinping will visit New Delhi this week, his first visit in seven years, but there are still signs that the business ties are strained, with businesses in both countries continuing to face hurdles, including investments stalled by regulations, visa delays, and restrictions on industrial equipment, underlining the gap between diplomatic progress and economic ties, according to a Reuters report. Visa problems now, particularly for Indian businesses or Indian business people visiting China, is a well-documented problem now, with many business people saying that repeated applications have been declined, and more so in recent months.

And there is no word yet whether the President Xi Jinping will have a bilateral meeting with India's Prime Minister Narendra Modi, which will of course be critical and important at this point, that is, we do not know right now. The rupee, meanwhile, declined for the third straight session on Thursday, even as oil prices continued to rise. The rupee was down 0.3 percent to close at Rs 95.44 per dollar, its steepest single-day loss since mid-July, according to Reuters.

Gold prices were down too, erasing earlier gains thanks to a stronger U.S. dollar and rising bond yields, even as investors awaited key U.S. inflation data for insights on the Federal Reserve's interest rate outlook, according to Reuters, which added that spot gold was down slightly to $4,385 per ounce. Meanwhile, quite interestingly, gold-backed exchange-traded funds globally saw an inflow of $18 billion in August 2026, marking the second-largest monthly inflow in value terms on record, according to a World Gold Council report. And this rise was driven primarily by North American and European-listed funds.

North America recorded its third-largest monthly inflow on record at $7.7 billion in August 2026, while Europe posted its largest flow ever at $7.9 billion, according to reports quoting the WGC. Collective holdings rose by 121 tonnes to 4,189 tonnes, the highest on record. On Wall Street, U.S. government bond yields have hit multi-year highs as oil prices climbed further.

The 10-year Treasury yield is now above 4.9 percent, its highest intraday level since October 2023. The European Central Bank raised interest rates on Thursday, saying it expected inflation to remain above target for an extended period. It raised the key deposit rate by 25 basis points to 2.5 percent from 2.25 percent, in a move that was widely expected.

European Central Bank President Christine Lagarde warned that the conflict in the Middle East and recent developments in Russia's war on Ukraine would keep headline inflation well above target, the bank's 2 percent target, for an extended period, according to a CNBC report. U.S. President Donald Trump is now vowed to pay each American adult $5,000 if Republicans keep of Congress in November in the midterm elections, which of course raises more questions over federal spending. It also raises other questions which we will not get into.

Meanwhile, the National Stock Exchange's IPO is expected to be priced today, going by some reports, though there is no official announcement at the time of this recording. Meanwhile, the NSE did scale back its initial public offering after several institutional investors, led by Morgan Stanley's investment vehicle, trimmed their planned stake sales, according to the Mint. The NSE IPO was earlier expected to be the country's biggest and could have raised about 30,000 crores by selling a roughly 6 percent stake.

But the issue is now cut to about 5.1 percent and therefore could raise about 23,000 crores, which would be lower than the previous largest public listing of Hyundai Motors at 27,000 crores in 2025, or last year. The pricing, as per reports this week, was expected at about 1,800 per share. But we have to, of course, await the details of the official announcement.

Copper Prices

Copper prices have surged to record highs amidst expectations that Trump would impose tariffs on refined copper products like cathode, as well as copper concentrate produced at mine sites, according to a Reuters report, thanks to which traders and others are rushing to build inventories in the United States to get ahead of any duties, also creating one of the world's largest stockpiles of the metal. The White House has said that the administration has not taken a final decision, according to a Reuters report. But the larger question is, what is driving copper and other commodity prices up? And does copper's current supply position hold any clues on how prices of this metal or others might behave in the near term? So we decided to dive in a little deeper with Abhay Lajiawala, Chief Investment Officer, India of fund house Lighthouse Canton, as well as a veteran metals analyst.

And I began by asking him how he was seeing copper prices move and what was driving that.

INTERVIEW TRANSCRIPT

Abhay Laijawala: So look, what we are really seeing is across the board, the entire non-ferrous metal space, and even the precious metals, they've all been moving up. In fact, that has been the trend throughout this year. As far as copper is concerned, there is a little bit of long-term or structural factors together with short-term factors as well.

So one of the short-term factors for global copper prices has been this expectation of the United States of America raising import tariffs on copper cathodes to 15% and then after one year to 30%. And that tariff decision has been awaited, but there has been no announcement. And therefore, as a result of this expectation, you have seen massive imports of copper into the US warehouses.

So material is moving out of the LME and it is moving into comics. And the amounts are not small. We are talking of as much as 900,000 tonnes having moved into comics warehouses.

So that is the short-term pull which has depleted the LME warehouses and has led to pricing strength. The other factors which have contributed to the copper prices are one, Chile is a large supplier of copper. The Codelco mine over the years has been facing issues.

Initially, there was drought and that has led to production issues in Codelco. But more recently, over the last couple of months, the production issues have been on account of excessive rainfall because of the El Nino. So the Codelco mine has come down from about 31%, 31% of global.

Chile has been 31% of total supply and Chile's supply due to Codelco has gone down to, I believe, in the mid-20s. So the point I'm trying to make is that copper is balanced, but when you have these issues, the market becomes excessively tight. Now, this would not have happened had this tariff-related pull into the US not taken out so much metal out of the LME warehouse.

And one more development has occurred and that development is sulphur. So because of the West Asia conflict, sulphur prices have moved up. China has gone ahead and restricted sulphuric acid exports.

And you might say, why is that important for copper? But it is important for copper because one part of copper production or globally some part of copper production comes from leaching. So in leaching, you treat copper concentrates with sulphuric acid and you convert, you leach the concentrate into copper.

And because of what I just mentioned, the West Asia conflict, the restriction on the exports of sulphur and China's restrictions on sulphuric acid, you know, the cost of leaching has gone up. So it's a combination of all these factors. Right.

And how are things looking on the demand side? Demand remains robust, you know, and in fact, demand is going to intensify even more. So as we had spoken on your show, according to the International Energy Association, you know, the world's total electricity consumption is set to rise to about 39,000 terawatt hours from 28,000 terawatt hours, which is an increase of roughly about 40 percent between now and 2035.

And as I had said earlier, to put it in perspective, that is equivalent to building or acquiring the entire grid of European unions five times over. Now, as a result of that massive spurt in the electricity demand, copper is at the centre focus of electrification. The entire world is electric, vehicles, transmission equipment, renewable energy transmission.

So, you know, the demand for copper is going to go up very significantly. So we think that, you know, the total demand of copper, which is at about 27, 28 million tonnes today, could probably be going up to as much as 45 million tonnes by 2035. Now, these are figures coming from Wood McKinsey and international consultancies.

So, you know, we are going to see a significant increase in demand.

Govindraj Ethiraj: Right. And how are you seeing prices because of all of this, particularly in the near term, considering that you've just hit record highs?

Abhay Laijawala: So look, in the near term, if we see some kind of a cooling down on the tariff related issues in the United States of America, we might probably see the copper price react positively in the sense copper prices may come down a bit if there is a resolution on these tariffs. And that uncertainty goes away. This draining of the LME and accretion to COMEX in.

But the problem is going to be on these mines with the mines getting depleted, the ores getting depleted. And with these weather related factors. Last year, you had a situation at the Grasberg mine in Indonesia that tightened supplies.

This year, you've been having an additional problem at Codelco as a result of the El Nino. So the issue is that, you know, up until 2027, the situation is not very tight. But when such situations happen, what I just mentioned, the sulphuric acid or the flooding issues at Codelco, they just make the situation even tighter.

The worry that we should all have should manifest what happens after 2027, 2028, when we are going to see, you know, the market move into a deficit. Demand grows even stronger with the electrification of everything, electric vehicles, etc., and very limited supply.

Govindraj Ethiraj: Right. That's a grim and useful note to end on. Thank you so much for joining me, Abhai.

Abhay Laijawala: My pleasure.

Tokenisations of Assets

The Reserve Bank of India is looking to expand tokenization to other asset classes after testing the technology for certificates of deposit, a Reserve Bank of India official said on Wednesday at the Global Fintech Fest in Mumbai. According to him, the central bank feels tokenization can enable faster, more efficient issuance, trading and settlement of financial assets. Some 249 transactions have been completed through certificates of deposit tokenization so far, with around two thirds of them taking place in the secondary market.

The official said the central bank had tested government securities and certificates of deposit on the same platform and following the experience believes that other asset classes can also be brought on. He said that now that we've tested success and have the ecosystem talking about this, we think other classes or other asset classes can also come in. On Thursday at the Global Fintech Festival, I caught up with Kunal Pande at the bureau studio that we were shooting in.

Pande is the partner at KPMG in India and also national leader cyber risk and compliance services and I began by asking him how he was seeing the outlook for tokenization and some of the challenges and opportunities ahead.

INTERVIEW TRANSCRIPT

Kunal Pande: Govind, you are right. India, we have announced regulations. We have had some initial developments in terms of products.

Certificate of deposits have gone into tokenised space and money has been raised there. But tokenization, in my mind, we are at the beginning. There is huge opportunity here because tokenization can allow, you know, democratisation of participation in various financial instruments.

You know, imagine, let's say, even a power plant. If the electricity generated can be tokenised, right, people can invest in that in terms of future production. It could be around real estate.

So there are a number of areas where tokenization can enable access in a seamless manner and across the democratised population. And that's why regulation also is very important because it is new and, you know, there needs to be a regulation. In fact, in my mind, you know, the regulators have to work together because when you look at tokenised assets, there's always a, you know, money part of it in terms of payment.

So atomicity of payment, programmability of the instrument, all that can be enabled. It can also allow a lot into the programmability, which I just said, wherein the contracts could be made programmable basis, you know, even they can execute, which again brings in efficiency. And efficiency is the last element anyways of tokenization because through tokenization and using, you know, blockchain as a technology, one can bring in a lot of efficiency because the breakpoints in a traditional digital environments can be completely, you know, addressed through a mechanism of tokenization.

Govindraj Ethiraj: So, and the first steps that we've seen is in the world of financial instruments. So tell us about that and how that's playing out.

Kunal Pande: So I think we are at the early stage, as I said, a few products have been launched. What is important is now, you know, with the regulator coming out with regulation and allowing that now market has to pick up the cue and newer products have to be launched. So we started with certificate deposits, corporate bonds can be issued, the various other instruments where investment can happen, let's say real estate, let's say infrastructure and other types of securities.

Those can be tokenised somewhere, fractionalisation can come in. Now the industry players have to innovate. Of course, they can take you from global markets where some of the things are already happening.

You know, whether you go to Western Europe or they go to Singapore and US where things are happening and we need to bring some of these products into the country.

Govindraj Ethiraj: Right. And I'm going to come to the risk part as well. But as you see the evolution and you said that we are at the starting point, what comes logically next, as in what kind of instruments or what are the opportunities for tokenization, which are sort of low hanging fruit?

Kunal Pande: So I think the opportunities in my mind would be for those securities where the market is limited. So for example, real estate right now, typically a real estate project is big. In India, we have now REITs which are allowing, but tokenization can make it much more smooth where the participation can be much better.

So those are the elements where it could be. As an example, you know, on the other side, I would say that I was hearing about it, even a company, let's say if the share price is very high, through tokenization, I can fractionalise it. You know, a retail investor can invest on it.

Those are, I think, the large ticket items, whether it's a big project, a big real estate, that is where tokenization help us in enabling the market access to retail investors and allow it to grow.

Govindraj Ethiraj: Could it also be illiquid assets? Like you mentioned real estate, because at some level it's also an illiquid compared to...

Kunal Pande: Yeah. So if the illiquidity is attributed to the, you know, the size of an individual unit, then yes. So it will not address if it's illiquid in its other form of intrinsically, but if it is because of the size of the asset, yes.

It can also make it in some sense, you know, liquid by making access available at a larger space, because through a tokenization, you are loading it to a digital framework and then digital has no geographical boundaries, right? So then the access can be enabled, not just in India, potentially overseas also where NRIs can participate.

Govindraj Ethiraj: So as you look ahead, what are the, not the, either the pitfalls or some of the challenges that you see on this road, which also links with your other portfolio, which is cyber risk.

Kunal Pande: One of the most important would be whenever we talk about tokenization or any such new initiative from a technology lens, one is the blockchain as a ledger. Now that is mathematically secured. And of course, a lot of investments have gone into bringing in the right kind of cryptographic technologies, but there is always a interface with the outside world.

So let's say if our real estate has to be tokenised, right? The building is there still. Somebody is tokenising that building and then introducing token into the blockchain network.

So this interface between the outside blockchain and blockchain is the most important thing, which is where challenges can come in. One needs to have operational controls like, you know, very good reconciliations and very good reporting and disclosure mechanisms so that, you know, because otherwise let's say hypothetical example, I have tokenised a particular real estate. What stops me from, you know, again tokenising it and loading into another chain?

So the same asset has two tokens, which is not right. So there needs to be a better control and same thing from a cybersecurity perspective. If the interface can be, you know, hacked into, then it could create problems.

And in fact, some of the large global, not just from a tokenization perspective, if you look at on the cryptocurrency side, some of the incidents which have happened on cybersecurity side, it is mostly around this interface where the outside of, you know, blockchain to inside the connectivity is happening and that's where the challenges can come in.

Govindraj Ethiraj: And how would you rate our preparedness on that front in India in terms of, let's say, the talent and the skills to fortify these new networks that are being built?

Kunal Pande: So I think there are, you know, two lenses to look at here. Given the speed with which the cybersecurity and the threats which are evolving, we can't really say how good we were because the tomorrow is changing very fast, you know, with the mythos of the world, a lot of risks are coming. So one has to evolve there.

If you look at beyond that or before that rather, I think from an India perspective, you know, we have the capabilities. The challenge again there is that the weakest link gets exploited and the odds are loaded towards the attacker. Attacker needs one success across the year as a, you know, the person who is owning or the entity which is owning and protecting needs to be right every time.

So there more than security, I would say resiliency have to be built in because you can't make sure that nothing will go wrong, but you need to make sure that if something goes wrong, how quickly you can identify and take action to contain and remediate. So that I think is a more important thing where we are seeing progress happening, but I think more needs to be done on that direct. Socialising that, educating, marketing it about the product in terms of how it is beneficial for the participant because I can have the best thing, but if the user group doesn't know, especially if you're talking about the large retail group, large even let's say SME and you know, those kind of organisations which are not financially savvy, one has to propagate that.

The technology and the framework is the plumbing and the pipeline. The water will flow when the investors start to participate. So how do you make sure the investors are aware and whenever anybody is investing in the new type of form, there is always that inhibition and uncertainty.

So a lot of work I think also needs to be done on that direction. So define products, educate the participants in terms of how it can be done and smoothen out some of the challenges that can come in when they are participating.

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Meanwhile, also speaking at the GFF yesterday, Infosys co-founder and chairman Nandan Nilukani, who's also the architect of Aadhaar, said India needs to build tokenization infrastructure that can operate at population scale and handle billions of transactions rather than focus merely on issuing tokens. He said creating tokens alone would not be enough and the ecosystem would need interoperability, liquidity and the ability to operate at very high volumes if tokenization is to extend across different asset classes and use cases.

He did say that tokenization is already gathering momentum pointing to the initiatives involving certificates of deposit and corporate bonds. He also clarified that tokenization of assets is different from the tokens used in AI where a token is a unit of work or consumption. In financial tokenization, an asset and all its attributes are bundled into a single portable digital package that can be transferred to another party.

Big Increase in the Price of Apple Products in India

Apple has raised the prices of its existing iPhone lineup in India by as much as 41 percent within hours of revealing the newer models and it has not discounted older variants like before and this is one of the steepest hikes in any market where it has repriced this year according to a report. While Apple has also raised prices in the U.S. on Wednesday, those increases were between 10 and 21 percent. The hikes came after Apple's September event which was called Surprise and Shine where incoming rather new chief executive John Ternus unveils Apple's first foldable phone, the iPhone Duo.

The India price for the lower storage variant of the iPhone 17 which is the earlier version rose nearly 21 percent to 99,000 rupees while the iPhone Air saw a 41 percent increase to 224,900 or 2.24 lakhs for its one terabyte variant. In comparison, the equivalent U.S. variants rose nearly 13 percent to 899 dollars for the base iPhone 17 and 21 percent for the iPhone Air 1TB at about 1,699 dollars. The iPhone Duo is the first iPhone with a folding display but there are of course many manufacturers who have been making foldable phones for some years now.

Apple also used the titanium frame, dual batteries and a vapour chamber to address some of the challenges that come with putting a large folding display into a phone size device according to the Reuters report.