BQuick On July 26: Top 10 Stories In 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Hindalco’s Novelis Strikes $2.6 Billion Deal To Buy Aleris
In an effort to diversify its product portfolio and global footprint Hindalco Industries Ltd.’s U.S. subsidiary Novelis has agreed to buy U.S.-based aluminium producer Aleris Corporation in a $2.6 billion deal. This marks Hindalco’s second big overseas acquisition after the Kumar Mangalam Birla-promoted company first bought Novelis for $6 billion twelve years ago.
- The deal is broken up into $775 million of equity and $1.8 billion of debt.
- The transaction is expected to be completed in nine to 15 months.
- Novelis will fund the buyout via debt, fully financed in its books. That means the net debt to adjusted Ebitda will peak around 4, and then come down to 3 in about two years.
- The 13 manufacturing facilities of Aleris will add capacities in high-end aerospace and automotive segments for Novelis.
Read more about the big deal here.
2. How India's Top Portfolio Managers Lost Money In The Small- And Mid-Cap Rout
India’s top portfolio managers were caught in the small- and mid-cap stock rout, with nine of the 10 best-known names losing money in the first half of the year. And only two managed to end with gains in the quarter ended June.
- Managing assets worth Rs 29,400 crore (about $4.3 billion), they returned a negative 12 percent on average in the first half and lost 4 percent in the three months to June.
- The benchmark Nifty 50 gained 1.7 percent in the January-to-June period, but mid-cap index fell 13.5 percent and the small-cap gauge slid 22 percent.
Here's the detailed breakdown of how top managers fared individually.
3. Indian Markets Hit Record Highs; Facebook Drags Down U.S. Stocks
Indian equity benchmarks rose to record highs on strong earnings momentum showcased by the Indian companies in June quarter so far.
- S&P BSE Sensex rose 0.3 percent to 36,985.
- NSE Nifty 50 index closed 0.3 percent higher at 11,167.
- Gains were led by financial heayweights ICICI Bank, State Bank of India, HDFC twins and Axis Bank.
Follow the day's trading action here.
U.S. equities turned mostly lower on Thursday as investors weighed Facebook Inc.’s disappointing earnings against a trade breakthrough between America and Europe. The euro stayed lower after the ECB held interest rates.
- Facebook's 20 percent fall dragged the Nasdaq down.
- S&P 500 index also fell.
- In Europe, the Stoxx 600 climbed after U.S. President Donald trump agreed to suspend new tariffs on the EU.
Get your fix of global markets update here.
4. Facebook's Stock Has Taken A Historic Plunge
Facebook Inc. plunged as much as 20 percent Thursday after months of scandal and criticism finally hit the company where it hurts: growth.
- Its stock fell the most in its history as a public company, wiping out over $120 billion in market value.
- On Wednesday, Facebook reported its second quarter earnings that fell short of analyst estimates, leaving investors anxious.
- The company also said that the numbers won't get any better this year.
- This has come as a shock for investors as financial stumbles are rare for the social media giant.
Here's what led to Facebook's historic drop.
5. Earnings Update: Maruti Suzuki, ITC, Dr. Reddy’s, Bharti Airtel, Yes Bank
Maruti Suzuki India Ltd.’s profit rose the most in six quarters but still missed estimates as higher commodity prices impacted margins.
- Net profit rose 27 percent to Rs 1,975 crore over last year
- Revenue rose 28 percent to Rs 22,459 crore
- Ebitda grew 44 percent to Rs 3,352 crore
- Margin expanded to 14.9 percent from 13.3 percent
Read more about the carmaker's Q1 results.
Bharti Airtel Ltd. reported a surprise profit in the April-June quarter even as its Indian business remains under pressure because of an aggressive pricing war in the world’s second-biggest telecom market.
- Profit rose 17 percent sequentially to Rs 97.3 crore
- A deferred tax gain of Rs 1,844.3 crore aided the company
- Operating profit fell 2.9 percent to Rs 6,725.8 crore
- Average revenue per user fell to Rs 105, from Rs 116 last quarter
Read more about how Airtel's Indian business remained under pressure.
ITC Ltd.'s profit met analyst estimates in the June quarter as margins improved.
- Profit rose 10 percent to Rs 2,819 crore
- Revenue rose 7.6 percent to Rs 10,707 crore
- Ebitda grew 12.2 percent to Rs 4,203 crore
- Margin expanded to 39.4 percent from 37.6 percent
Find out more on how ITC's key cigarette business performed.
Dr. Reddy’s Laboratories Ltd.’s profit grew for the first time in five quarters, beating analyst estimates.
- Profit rose to Rs 456 crore from a loss of Rs 66 crore
- Revenue went up 12.2 percent to Rs 3,720 crore
- Ebitda more than doubled to Rs 783 crore
- Margin expanded to 21 percent from 9.2 percent
Find out how Dr. Reddy's performed in different geographies.
Private sector lender Yes Bank reported a strong set of earnings for the first quarter of the current financial year, as its loan book expanded by more than 50 percent over last year.
- Profit jumped 30.5 percent to Rs 1,260.3 crore
- Net interest income went up 23 percent to Rs 2,219 crore
- Gross NPA ratio at 1.31 percent from 1.28 percent last quarter
- Provisions nearly doubled to Rs 625.7 crore
Read more on how Yes Bank has gone full throttle on growth.
6. ICICI Bank On The U.S. SEC's Radar
The U.S. Securities and Exchange Commission has sought details from India’s ICICI Bank Ltd. on its accounting and corporate governance practices, people familiar with the matter told Bloomberg.
- SEC’s queries were centered on the lender's dealings with certain borrowers under CEO Chanda Kocchar, and probable misrepresentations in the bank's accounting
- ICICI's board had appointed a panel to probe allegations of nepotism against Kocchar
- Kocchar is on leave till the results of the internal probe
Here's more on the story
7. ECB Sticks To Its Plan Of Ending Bond Purchases
The European Central Bank stuck to its plan to end bond purchases as the European Union and U.S. stepped back from a trade war and the currency bloc’s economic expansion remained solid.
- ECB reiterated that it will continue buying 30 billion euros of assets a month till the end of September
- It has pledged to keep interest rates unchanged “at least through the summer of 2019”.
- The decision comes a day after the meeting between European Commission's Jean-Claude Juncker and Donald Trump on lowering trade barriers
- ECB President Mario Draghi had singled out rising protectionism as the main risk for the euro area's economy
Read more about the ECB’s meeting today.
Here’s what Draghi said in his press conference.
8. Imran Khan Claims Victory In Pakistan Elections
Former cricket star Imran Khan declared victory in Pakistan’s election, boosting stocks as investors bet he’d be able to form a stable government that could address the nation’s financial woes after a vote tarred by rigging allegations.
- Khan's party the Pakistan Tehreek-e-Insaf was leading in 119 seats, just shy of the 137 needed to clinch majority, according to an unofficial tally from Dawn newspaper.
- Nawaz Sharif’s Pakistan Muslim League-Nawaz trailed with 61 seats.
- Khan has said that fixing the Pakistan economy will be his "greatest challenge".
- He also called for improved trade ties and peace talks with neighbouring India
- “I assure if India takes one step forward, we will take two steps forward,” Khan said in a televised broadcast.
9. Government Gives Its Nod For Vodafone-Idea Merger
The government today gave final nod to the merger of Vodafone India and Idea Cellular, which will create the country’s largest mobile operator.
- The new telecom behemoth called Vodafone Idea Ltd. will be worth over $23 billion.
- It will have a 35 percent market share and a subscriber base of around 430 million.
- The approval comes with the riders that the merged entity will have to abide by the decisions of the telecom tribunal and other courts.
Read more about the final nod.
10. Virat Kohli Could Buy A Porsche 911 With One Instagram Post
With a single promotional post on Instagram, Indian cricket captain Virat Kohli can make enough money to buy a swanky new Porsche 911.
- Kohli could earn an estimated $120,000 with every promotional post on the photo-sharing platform, according to HopperHQ's Instagram Rich List.
- He is the only Asian, and only cricketer to feature on the list of 75 celebrities.
- Kylie Jenner topped the list earning $1 million for a post, followed by Selena Gomez and Cristiano Ronaldo.
See the full list here.
ICYMI: More Time To File Tax Returns
The government today extended the last date for filing income tax returns for the assessment year 2018-19 by a month to Aug. 31.