This is a roundup of the day’s top stories in brief.
1. Infosys Profit Misses Estimates In June Quarter
Infosys Ltd. missed analyst expectations in the April-June quarter as its margin contracted and the key banking and financial services vertical underperformed.
Net profit of India’s second-largest software services provider fell 2.1 percent quarter-on-quarter to Rs 3,610 crore during the April-June period, Infosys said in its exchange filing. That compares with the Bloomberg consensus estimate of Rs 3,741 crore. The bottom line was hit by a Rs 270 crore reduction in the fair value of Panaya.
The company, after a boardroom coup and leadership change last year, is preparing for opportunities ahead. For that, it will continue to invest in digital services ranging from big data analytics to artificial intelligence that deliver higher margins so that it can counter lower spending and a move to automation by its clients.
That may not be enough to win over investors. “They have not been beating the street expectations, which as such aren’t very high,” said Urmil Shah, a research analyst at IDBI Capital. “Based on what TCS and Infosys have delivered this quarter, there is no clear sign of an uptick in the IT industry.”
2. Sensex Clocks Best Weekly Gain Since January
Indian equity benchmark Sensex registered its best weekly gains in nearly six months, while the NSE Nifty 50 Index clocked its best weekly gains in over a year.
Sensex closed little changed at 36,541.63, while the Nifty closed above 11,000.
Reliance Industries Ltd. was the biggest gainer of the week, rising over 12 percent. The market breadth was in favour of sellers. Nine out of the 11 sectoral gauges compiled by NSE fell, led by NSE Nifty Media Index’s 3.5 percent decline. On the flipside, NSE Nifty IT Index was the top sectoral gainer, up 0.2 percent.
U.S. stocks struggled for direction as lingering concern about the trade war between the U.S. and China cast a cloud over the start of earnings season. The dollar and Treasuries advanced.
The S&P 500 Index inched lower as banks and telecommunications firms weighed on the benchmark. Citigroup Inc. and Wells Fargo & Co.’s shares fell after missing expectations, while AT&T Inc.’s stock slumped after the Justice Department said it will appeal an antitrust ruling in favor of the company.
3. Private Credit Bureaus Have A New Competitor: Their Regulator
India’s retail bankers are in a comfortable spot today. Loan growth in this segment has been strong but delinquencies have remained in check. Ask them why and most will attribute the comfort in retail lending to the country’s credit bureaus.
Credit bureaus, or credit information companies (CIC) as they are called in regulatory parlance, are a relatively recent addition to the Indian lending landscape. TransUnion CIBIL, the country’s first largest CIC, was incorporated only in the year 2000 and commenced credit bureau services in 2004. Since then three others - Equifax, Experian and CRIF High Mark - have started operating.
Today, these bureaus are facing a collective challenge to their existence. The challenge comes from no less than the regulator itself and its plan to launch a public credit registry (PCR).
On June 6, the RBI said that it has decided to set up a PCR in a phased manner following recommendations of a committee headed by Y.M. Deosthalee. The decision has left the country’s credit bureaus nervous, forcing the top management at some of these firms to reach out to the RBI for clarity.
4. Maharashtra Multiplexes Can’t Bar Outside Food Or Sell Over MRP
Food outlets in Maharashtra multiplexes won’t be allowed to charge more than the maximum retail price from August 1 and there will be no ban on taking eatables from outside.
The government will take strict action against erring multiplexes, State Food Minister Ravindra Chavan said today while replying to a query in the Legislative Council. The government is working on a resolution that is expected to come out in six weeks, he said.
The state had agreed to come out with a policy after a public interest litigation was filed in the Bombay High Court against the practice of not allowing outside food in multiplexes. The court had also expressed concern over “exorbitant” prices.
5. Mukesh Ambani Topples Jack Ma As Asia’s Richest Person
Mukesh Ambani overtook Alibaba Group founder Jack Ma to become Asia’s richest person as he positions Reliance Industries Ltd. to disrupt the e-commerce space in India.
The chairman of India’s refining-to-telecoms conglomerate, Ambani was estimated to be worth $44.3 billion on Friday with Reliance Industries Ltd. rising 1.6 percent to a record 1,099.8 rupees, according to Bloomberg Billionaires Index. Ma’s wealth stood at $44 billion at close of trade on Thursday in the U.S., where the company is listed.
6. India’s Trade Deficit In June Widest In Five Years
India’s trade deficit in June widened the most in five years on the back of a surge in crude oil imports.
The trade deficit – the gap between exports and imports – stood 28 percent higher over a year ago period at $16.6 billion, according to data released by the Ministry of Commerce. That was led by a 56.6 percent surge in imports of petroleum products, the data showed. India imports about two-third of its oil needs.
7. Race For Fortis: IHH Healthcare Beats Manipal Health
The board of Fortis Healthcare Ltd. approved Malaysian healthcare major IHH Healthcare BHD’s binding offer for a Rs 4,000-crore equity infusion, after it outbid the only other competing offer from TGP-backed Manipal Health Enterprises Pvt. Ltd.
As per the approved bid, Fortis Healthcare will issue 23.5 crore shares to IHH Healthcare at Rs 170 per share, India’s second-largest hospital services company today said in an exchange filing. The deal also offers a cash exit option to 26 percent shareholders on expanded share capital through the mandatory tender offer of up to Rs 3,349 crore at a price of not less than Rs 170 per share.
8. Apex Court Likens Government’s Social Media Hub To A Surveillance State
The Supreme Court today took a strong note of the Information and Broadcasting Ministry’s decision to set up a social media hub for monitoring online data, observing that it will be ‘like creating a surveillance state.’
The top court said the government wants to tap citizens’ WhatsApp messages and sought its response within two weeks.
A bench of Chief Justice Dipak Misra and Justices AM Khanwilkar and DY Chandrachud issued notice to the Centre on a plea by Trinamool Congress legislator Mahua Moitra and sought Attorney General KK Venugopal’s assistance in the matter.
9. Trump Apologises To Theresa May And Vows U.K. Trade Deal After Brexit
Theresa May and Donald Trump entered a news conference on Friday holding hands and went out of their way to praise one another’s leadership, a day after the U.S. president assailed her Brexit strategy and said one of her political opponents would make a good prime minister.
The two leaders said they’d complete a trade deal between their countries as soon as the U.K. leaves the European Union, after Trump told the Sun newspaper in an interview published Thursday that an accord might not be possible because of her decision to maintain ties with the EU.
The interview, published during a gala dinner May hosted for Trump at Blenheim Palace, appeared to further ratchet up tensions in a relationship that’s been fraught since the president assumed office. But Trump tried to make it up to May on Friday, repeating over and over that she was a “tough negotiator,” -- a high form of praise from the author of “The Art of the Deal.”
10. Facebook Wants Instagram’s Millennials
In late June, Spencer Chen got an unusual notification from Instagram. The app prompted him to check out a friend’s new photo—on Facebook. Chen grabbed a screenshot and posted the notification on the internet, calling it a cry for attention by the older social network. It felt like a cheap trick, he says, like “placating big brother in the Facebook building.”
Chen is one of the tens of millions of people who used Instagram before Facebook Inc. acquired the photo-sharing app in 2012. Ever since, he says, he has anticipated the day when Facebook would start messing with the photo app to suit its needs. That day, he says, has come.