BQuick On July 18: Top 10 Stories In 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Lok Sabha To Debate No-Confidence Motion Against Modi Government On Friday
The Lok Sabha will debate on Friday an Opposition-sponsored no-confidence motion against the Modi government brought by the Telugu Desam Party.
“The discussion will be held for the full day, followed by voting on it,” Speaker Sumitra Mahajan announced in the House today when it reassembled after the lunch break on the first day of the Monsoon Session of Parliament. She added that there will be no Question Hour on Friday and the House would have no other business, barring the discussion on the no-confidence motion.
During the Zero Hour, Mahajan named all members from TDP, Congress and Nationalist Congress Party, among others, who had moved similar no-confidence motion notices.
More than 50 members are supporting the motion, so the leave is granted (to bring in no-confidence motion)Sumitra Mahajan, Speaker, Lok Sabha
2. Indian Markets Slide Lower; U.S. Markets Open Higher
Indian equity benchmarks ended lower after a no-confidence motion against the Narendra Modi government was admitted today by the Lok Sabha Speaker. The S&P BSE Sensex Index closed 0.4 percent lower at 36,373.44 and the NSE Nifty 50 Index closed at 10,980.45, down 0.3 percent.
The market breadth was firmly tilted in favour of sellers. Ten out of 11 sectoral gauges compiled by NSE fell, led by NSE Nifty Metal Index's 3.2 percent decline. On the flipside, NSE Nifty IT Index was the only sectoral gainer, up 0.1 percent.
Follow the day’s trading action here.
U.S. equities opened mixed, led by shares of industrial and material companies, as Morgan Stanley earnings beat forecasts and Google parent Alphabet Inc. faced a $5 billion fine. European shares advanced after a mixed session in Asia.
The dollar strengthened for a second day after Federal Reserve Chairman Jerome Powell gave an upbeat assessment of the U.S. economy, helping spur declines in raw materials prices and emerging-market currencies. Powell will appear Wednesday before a House panel.
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3. Google Fined Record $5 Billion By EU
Google was fined 4.3 billion euros ($5 billion) by the European Union and ordered to change the way it puts search and web browser apps on Android mobile devices, setting a global record for antitrust penalties.
The penalty -- the same amount the Netherlands contributes to the EU budget every year -- is far higher than any other dished out by the U.S., Chinese or other antitrust authorities. More significantly, Google was given 90 days to stop what the EU said were “illegal practices” on contracts with handset manufacturers that push Google services in front of users.
4. Reliance Plans To Borrow $6 Billion In Consumer Push
Reliance Industries Ltd., India’s second-largest company by market value, plans to raise about 400 billion rupees ($5.8 billion) in fresh debt this financial year as it expands its consumer businesses, according to people familiar with the matter.
The billionaire Mukesh Ambani-led company will raise funds through loans and bonds, mostly in the Indian currency, the people said asking not to be named as they are not authorized to speak to the media. Of this, the refining-to-retail conglomerate already has shareholder approval to raise as much as 200 billion rupees through non-convertible debentures.
Reliance’s total debt has tripled in the past five years as it borrowed to fuel more than 3.3 trillion rupees of spending on a new telecom venture and its traditional petrochemicals business. Ambani will invest this year to roll out fiber-based broadband services and on acquisitions, including the purchase oftelecom assets from brother Anil’s Reliance Communications Ltd. The company has total borrowings of about 2.2 trillion rupees, more than half of which is due to be repaid by 2022, according to data compiled by Bloomberg.
5. Sun Pharma Gets First Drug Approval For Halol After Five Years
Sun Pharmaceuticals Industries Ltd. received the first drug approval in five years for its Halol, Gujarat plant from the U.S. drug regulator after India’s largest drugmaker’s key facility was cleared last month.
The Food and Drug Administration has given the go-ahead for cancer injectable Infugem to be manufactured at the facility, the company said in an exchange filing.
The new drug will add to the drugmaker’s growing oncology portfolio of novel products. It had an addressable market size of about $35 million for the 12 months ended March 2018, the company said.
“We’re pleased to add this novel product to our expanding oncology portfolio as gemcitabine is one of the most commonly used cytotoxics in oncology practices,” Abhay Gandhi, chief executive officer, North America, at Sun Pharma, said in the statement.
The Sun Pharma stock gained on the news but closed the day flat at Rs 549.60 per share.
6. This Is What Citi Thinks Will Boost June Quarter Earnings
India Inc. is expected to report “strong” corporate earnings growth for the April-June period as companies benefit from a favourable base in the same quarter last year when companies were still reeling from demonetisation and disruptions due to the Goods and Services Tax.
That's according to the top team at Citi Research. “We have highlighted that a low base of last year is why you have such a strong 21 percent earnings growth expectation this quarter,” Surendra Goyal, head of India equity research at Citigroup, told BloombergQuint. “There are certain headwinds on the macroeconomic front. But at the company level we are starting to see the aggregate performance improve.”
For sector-wise earnings expectations read this.
7. Cabinet Hikes Sugarcane Price, ISMA Says Mills Can’t Afford It
The government today decided to increase the minimum price sugar mills pay to cane growers by Rs 20 per quintal to Rs 275 per quintal for the next marketing year starting October, sources said to new agency PTI.
The decision to increase the fair and remunerative price of sugarcane for the 2018-19 marketing year was taken by the Cabinet Committee on Economic Affairs, they added.
The government had recently announced a sharp increase in the minimum support price of kharif (summer-sown) crops, including paddy.
The Commission for Agricultural Costs and Prices had recommended a Rs 20 per quintal hike in the FRP of sugarcane at Rs 275 per quintal for the next season. The FRP, which is the minimum price that sugar mills have to pay to sugarcane farmers, is Rs 255 per quintal for the 2017-18 season.
Industry body ISMA says sugar mills can’t afford the higher cane price.
8. Incentives For Milk Exports, Tariffs On Solar Imports
India’s dairy products makers are divided on how the government’s decision to provide 10 percent export subsidy will help.
The incentives are “too little, too late”, Hatsun Agro Products Ltd.’s RG Chandramogan told BloombergQuint. Prabhat Dairy’s Vivek Nirmal, however, said the move, coupled with state incentives, may have a positive impact on the industry.
India will give a 10 percent incentive to boost exports of dairy products, Union Minister Nitin Gadkari said yesterday. The government is also considering distributing milk through mid-day meals and anganwadis to ensure better returns to producers.
- Hatsun Agro Product: This will not help the dairy industry in any way
- Prabhat Dairy: Definitely a good move
- Parag Milk Foods: Incentives give a golden opportunity to milk farmers
Solar project costs and tariffs in India may rise from record lows if the government accepts a proposal to impose up to 25 percent safeguard duty on photovoltaic panels imported from China and Malaysia for two years.
Girishkumar Kadam, vice-president and sector head of corporate ratings at ICRA Ltd., told BloombergQuint the proposed levy would increase capital costs for solar power projects by 15 percent and to maintain returns, developers may have to hike tariffs by 30-35 paise per unit. A statement from rating agency Crisil echoed his views, “The duty could raise capital costs for solar projects based on imported modules by nearly 15-20 percent (at current prices).”
The Directorate General of Trade Remedies recommended the safeguard duty even as solar tariffs remained at record lows in India’s largest federal auction of 3 gigawatts of projects. A 25 percent safeguard duty has been recommended on imported solar cells and modules for the first year. The duty will be lowered to 20 percent in the first six months of the second year and 15 percent in the next six.
The recommendation follows an application by the Indian Solar Manufacturers’ Association in November 2017, which said the domestic industry sustained heavy losses due to a surge in solar cell imports.
9. India’s Dilemma: Trump Or Cheap Iran Oil?
The U.S. embargo on Iran oil shipments has put Prime Minister Narendra Modi in a quandary. If he plays along, India could find itself on the right side of President Donald Trump on trade but lose cheap supplies and precious foreign exchange.
Oil imports from Iran totaled about $9 billion in the year ended March and substituting some of the contracts with more North American crude will help India lower the $24.5 billion trade surplus it runs with the world’s largest economy. The South Asian nation is already buying more crude from the U.S., data from the Census Bureau and Energy Information Administration show.
While ending purchases from Iran will cost India savings on shipping costs and the longest credit period offered by any of its suppliers, there are gains to be had from paring the trade surplus with the U.S. -- at the heart of Trump’s trade war with China. For one, it will soften the approach on thorny issues such as India being named in the U.S. Treasury’s watchlist of potential currency manipulators who use exchange rates to boost exports.
So what can India do? Read this to find out.
10. BookMyShow Raises $100 Million In TPG Group-Led Funding
Online ticketing platform BookMyShow has raised $100 million (about Rs 680 crore) in a fresh funding round led by TPG Growth, an investment fund of private equity firm TPG.
The fresh infusion will be used to fuel growth plans, BookMyShow said in a statement. “They (TPG group) bring with them extensive experience across the global media and entertainment sector, which will be instrumental as we look to accelerate our growth plans in this space,” Ashish Hemrajani, founder and chief executive officer at the ticketing company, said in the statement.
Avendus Capital, which advised BookMyShow on the transaction, said other existing investors also participated in the round.
BookMyShow declined to comment on the valuation of the latest round. It last raised around Rs 550 crore in July 2016 from Stripes Group, Accel Partners, SAIF Partners and Network18 at a valuation of more than Rs 3,000 crore.