BQuick On August 2: Top 10 Stories In 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Apple Hits $1 Trillion Milestone
Apple Inc. shares rose 2.8 percent on Thursday, making the consumer technology giant the first U.S.-based company to be valued at $1 trillion.
- The iPhone maker’s market capitalization briefly passed $1 trillion, based on trading in New York and share count data the company disclosed in a recent regulatory filing.
- PetroChina Co. crossed the $1 trillion mark in late 2007 but slumped quickly as oil prices collapsed in the financial crisis.
- Other tech giants are not far behind Apple today, with Amazon.com Inc., Alphabet Inc. and Microsoft Corp. worth more than $800 billion each.
Here’s a deep-dive into Apple’s volatile 40-year journey.
2. How Many Mallyas Does India Have?
Vijay Mallya has allegedly swindled the most from banks among 28 fugitive economic offenders on the list made public by the Indian government. Mallya allegedly defrauded banks of about Rs 7,500 crore, according to the list the Finance Ministry submitted to the Lok Sabha. It includes cases currently under trial and being investigated.
- Mallya is followed by jewelers Mehul Choksi and his nephew Nirav Modi, who allegedly swindled Punjab National Bank of Rs 14,000 crore.
- Following suit are promoters of Sterling Biotech Ltd.—Chetan Sandesara, Nitin Sandesara and Diptiben Sandesara, who allegedly defrauded banks of Rs 5,383 crore.
- Promoter of Winsome Diamonds Jatin Mehta, who is reportedly now a citizen of St. Kitts, the Caribbean, allegedly cheated banks to the tune of Rs 4,625 crore.
- The list also includes names of Sabhya Seth, promoter of Dwarka Das Seth International, for allegedly defrauding Oriental Bank of Commerce to the tune of Rs 390 crore.
Find out more about the country’s alleged runaway tycoons.
3. The Optical Illusion Of 0% GST On Sanitary Napkins
Consumer products company Johnson & Johnson India Pvt. Ltd. lowered prices of sanitary napkins after the feminine hygiene products were exempted from the goods and services tax last month. Till then sanitary napkins were taxed at 12 percent GST. But prices have not come down by as much.
- That’s because manufacturers can no longer claim credits for taxes paid on inputs—they could earlier set off the credits against tax liabilities.
- As companies have been denied input tax credit, they will be able to pass on to consumers only the net benefit of GST exemption, a J&J spokesperson said.
- According to Rakesh Nangia, managing partner at Nangia Advisors LLP, the actual benefit to the consumer would depend on how much of the taxes paid on inputs businesses are willing to absorb.
Here's why the GST rate cut on sanitary napkins won't benefit consumers at large.
4. Sensex, Nifty End Lower Again; U.S. Stocks Fall On Trade Concerns
Indian equity benchmarks ended lower for the second day in a row, amid weak global cues.
- S&P BSE Sensex Index closed 0.95 percent lower at 37,165.16.
- NSE Nifty 50 Index closed at 11,244.70, down 0.89 percent.
- The market breadth was tilted in favour of sellers. Ten out of 11 sectoral gauges compiled by the NSE fell, led by NSE Nifty Realty Index's 1.6 percent decline.
- On the flipside, NSE Nifty Pharma Index was the only sectoral gainer, up 1.4 percent.
Follow the day's trading action here.
The rupee, the year’s worst performing Asian currency, appreciated to its strongest in six weeks in early trades before erasing most of the gains tracking emerging market peers as the U.S. Federal Reserve stuck to its plan to lift rates gradually.
Stocks fell around the world as the Trump administration’s latest threats to free trade rattled markets. The dollar climbed and bonds were mixed after key central bank decisions.
- Energy and materials company led the S&P 500 Index's drop to a two-week low.
- European equities tracked sharp declines in China and Hong Kong indices.
- Dollar strengthened against most of its peers.
Get your fix of global markets update here.
5. Earnings Update: ONGC, Indiabulls Housing Finance
Oil and Natural Gas Corporation Ltd.’s profit for the quarter ended June missed analyst estimates even though global crude prices rose and the rupee depreciated.
- Standalone net profit rose 4 percent quarter-on-quarter to Rs 6,144 crore.
- Revenue increased 13.5 percent to Rs 27,213 crore.
- Operating profit rose 29.43 percent to Rs 14,732 crore, while the margins rose to 54.14 percent from 47.49 percent in the previous quarter.
Here’s a snapshot of the oil explorer's June quarter performance.
Indiabulls Housing Finance Ltd.’s profit for the quarter ended June rose in line with analyst estimates on healthy loan growth.
- Net profit during the quarter rose 30.3 percent year-on-year to Rs 1,054.7 crore.
- Net interest income, or the core income from operations, rose 22.1 percent to Rs 1,690 crore.
- The company’s asset quality remained steady with the gross non-performing assets steady at 0.78 percent.
Here's how the company fared in April-June period.
6. Sanjeev Sanyal Expects Over Rs 1 Lakh Crore To Be Recovered From The Dirty Dozen
Recoveries from the twelve largest bad loan accounts, sent for resolution in 2017, will help supplement government fund infusions to ensure that public sector banks are adequately capitalised, said Sanjeev Sanyal, principal economic adviser to the government of India, in an interview to BloombergQuint. However, if more capital is needed for the banks to grow, the government will provide it, he said.
- Sanyal expects recoveries between Rs 1.2-1.3 lakh crore from these large accounts that had loans of roughly Rs 2 lakh crore.
- Commenting on the government’s decision to hand over IDBI Bank Ltd. to Life Insurance Corporation of India, Sanyal said the decision was a commercial one and was taken by the boards of the respective entities.
- Sanyal sees India being the fastest growing major economy this year, with growth rates seen in the range of 7.4-7.5 percent.
Get more of Sanjeev Sanyal’s insights into the state of the Indian economy.
7. IMF Paper Reignites India’s Universal Basic Income Debate
The idea of a universal basic income for India was put on the table in 2016-17 by former chief economic adviser Arvind Subramanian. Almost immediately after, it was dismissed as impractical, given the limited fiscal space available to the Indian government.
The debate, however, has not died down. Now the International Monetary Fund has floated the idea for India.
- IMF said that UBI could replace nearly 950 schemes and sub-schemes in India including the inefficient Public Distribution System.
- IMF believes that a UBI scheme could be a more effective support system than the PDS by plugging leakages.
- Currently, out of Rs 100 spent on PDS, Rs 64 reaches households.
- IMF paper argues that a cash transfer program would be much simpler to administer especially with Aadhaar in place.
Here's how UBI stacks up against the PDS.
8. Swiggy Acquires Scootsy
Online food delivery startup Swiggy today said it has acquired on-demand delivery platform Scootsy in an all-cash deal as it looks to strengthen its position in India’s food-tech market where it competes with players such as Zomato.
- The acquisition will help the firm boost its delivery service and expand to newer markets, Swiggy said in a statement.
- While the company did not disclose the financial details, people privy to the development told BloombergQuint that Swiggy acquired the Mumbai-based startup for about Rs 50 crore.
- Scootsy operates in multiple categories such as restaurants, bakeries, gourmet stores and gifting shops. It will continue to operate as an independent app after the acquisition.
- Swiggy recently became the second unicorn, or startups valued over $1 billion in the India food tech industry, after it raised $210 million in a funding round.
Read more on the Swiggy-Scootsy deal.
9. Why Google’s Secret China Project Is Angering Its Staff
Google staff awoke on Wednesday to surprising news: Their company is working on a search app tailored, and censored, for China. The project, kept secret from all but select teams and leaders, sparked a furious internal debate. Yet the move couldn’t have been entirely surprising for Googlers.
- Sundar Pichai, chief executive officer since 2015, has made no secret of his desire to take the search giant back to mainland China.
- Under Pichai, Google has invested in Chinese companies, met with its leaders and made it a priority to spread Google’s artificial intelligence technology across the country.
- Pichai’s new leadership style and priorities haven’t always sat well with the Google rank and file. Within hours of the China search news breaking, several staff privately criticized the plans.
- Two employees compared it to Project Maven, a Google AI contract with the Pentagon that sparked an internal revolt earlier this year and did not see the light of the day.
- Another person who has seen some early examples of the Chinese search app, code-named Dragonfly, described it as a “censorship engine.”
- Google said on Wednesday that the company does not “comment on speculation about future plans” and declined to comment further.
Read more on the ongoing internal rift in Google.
10. The DNA Bill: Another Invasive, Imperfect Database!
The Supreme Court’s confirmation of privacy as a fundamental right in the Puttaswamy case seems to have been ignored completely in the DNA Bill 2018. Besides, DNA evidence is not infallible, write Elonnai Hickok and Murali Neelakantan.
Here are some of the changes they recommend:
- First, enact a privacy legislation.
- Establish separate data banks for criminal and civil purposes.
- Limit the type of profile that can be added.
The authors argue that legal system does not understand DNA evidence at all.