BQuick On August 20: Top 10 News Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. SpiceJet Bucks The Trend
SpiceJet Ltd. reported a loss in the June quarter, but the budget carrier surprised analysts with higher average ticket prices. That came when competition kept airfares in check despite rising fuel prices.
- Yields, or average ticket price growth, was negative for Interglobe Aviation Ltd. because of excess capacity and stiff competition.
- Jet Airways Ltd. is facing financial troubles and the company’s board deferred earnings.
- Aviation turbine fuel prices have jumped nearly 20 percent and the rupee weakened by 10 percent this year, adding to the pain.
- SpiceJet’s average ticket fare increased for the fifth straight quarter. That’s because the budget carrier's focus is on profitability.
I believe in minimising senseless competition and focus more on profitable growth.Ajay Singh, Chairman, SpiceJet
Read more on how SpiceJet stands out from its aviation peers.
2. SPVs To Monetise Non-Core Assets Of PSUs?
India may ask state-owned entities to create special purpose vehicles to house their non-core assets for monetisation, according to a senior government official requesting anonymity.
- Under the institutional framework being considered by the Department of Investment and Public Asset Management, public-sector companies may have to move land holdings and other non-core assets into these SPVs.
- The entities would include state-run companies identified for strategic disinvestment where the government is willing to cede control.
- While the existing framework couldn't suggest a way forward, the new mechanism is expected to help close strategic sales, the official added.
For more details of the framework, read this.
3. Sensex, Nifty Make New Highs; U.S. Stocks Rise
Indian equity benchmarks surged to record highs paced by gains in capital goods and metal stocks.
- The S&P BSE Sensex Index rose 0.9 percent or 331 points to 38,279.
- The NSE Nifty 50 Index climbed 0.7 percent or 81 points to 11,552.
- Sixteen out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Capital Goods Index's 3.7 percent surge.
Follow the day’s trading action, here
U.S. stocks edged higher as traders held onto hopes for an easing of the trade war and await clues from a meeting of central bankers later this week.
- The S&P 500 Index rose a third day amid bets China and the U.S. will tone down the latest trade rhetoric.
- The Bloomberg Dollar Spot Index increased 0.1 percent.
- The yield on 10-year Treasuries declined two basis points to 2.84 percent, the lowest in more than a month.
Get your fix of global markets, here.
4. India’s Youngest Bank Is The World’s Most Expensive Lender
Bandhan Bank Ltd. has become the world’s most expensive lender within five months of making its stock-market debut.
- The microlender-turned-universal bank trades at a Bloomberg-estimated price-to-book value multiple of 6.83 times, the highest among peers with a market value of at least Rs 5,000 crore.
- The stock has risen 87 percent over its IPO price to Rs 730 apiece since its March 27 listing.
Read more on Bandhan Bank’s rise.
5. Motilal Oswal’s Top 10 Post-Earnings Picks
Earnings of most of the companies on the NSE Nifty 50 Index either met or exceeded analyst estimates for end-June quarter results, which concluded last week. Based on their performance, Motilal Oswal has picked top 10 stocks ideal to invest in.
- ICICI Bank Ltd.
- Hindalco Industries Ltd.
- Petronet LNG Ltd.
- ACC Ltd.
- Ashok Leyland Ltd.
- Titan Company Ltd.
- Sun Pharma Ltd.
- Infosys Ltd.
- Bank of Baroda
- L&T Finance Holdings Ltd.
Here’s why Motilal Oswal is bullish on these 10 stocks.
6. Can We Celebrate High GDP Growth Alone?
An exercise by a committee of the National Statistical Commission to provide back-data on a new GDP series adopted by India in 2015 has found itself in political cross hairs. While the political-economy debate drags on, economists say that looking at growth in isolation is not the best way to judge the health of the economy.
- Going by the new series, GDP growth (in constant prices/market prices) was at 10.78 percent in 2010-11. However, a look at other macroeconomic variables in the same year shows that the economy was also plagued by high inflation in this period.
The fiscal stimulus did push up the growth rate to 10.8 percent in FY11 from 4.2 percent in FY09 but it did not sustain for long with a jump in inflation.Soumya Kanti Ghosh, Chief Economic Adviser, State Bank of India
- The Indian economy also showed double digit growth in 2007-08, a year before the global financial crisis hit. However, inflation was high at above 9 percent, and this was also a period of high global growth.
Growth rose from an average of 5.7 percent in NDA-1 to 8.5 percent in the first four years of UPA-1 on global tailwinds, fell to 4.2 percent on the global headwind of the Great Financial Crisis and recovered to 7.4 percent during UPA-2 (excluding the FY10 base effect) and 7.3 percent in the current Modi-led NDA-2 regime.Indranil Sen Gupta, Economist, Bank of America-Merrill Lynch
Read this to understand the broader macroeconomic conditions in high growth years.
7. Kerala Races To Avert Disease Outbreak As Flood Waters Recede
Kerala is shifting its focus to relief and rehabilitation work to assist lakhs of people affected by the worst flood in a century as rescue operations wind down.
- The death toll has climbed to 341 since the monsoon started in June, including 191 since Aug. 8, the state’s disaster management control room told Bloomberg, while the number of evacuees at relief camps is growing.
- The threat of disease outbreaks is now a primary concern, with carcasses in flood waters raising fears of health risks to the state’s nearly 3.4 crore population.
- India’s health ministry will today airlift 60 tonnes of emergency medicines and has put six specialized medical teams on standby, the home ministry statement said.
“Health workers are already surveying the risk of water borne diseases across villages and municipal wards to ensure that steps are taken to avoid any outbreak..We are stocking essential medical supplies and ensure that each region is being sent adequate quantity of medicines,” said E. Chandrasekharan, Kerala’s revenue minister.
Here’s more on the challenges that lie ahead.
8. Here Comes The India Post Payments Bank
There was a time when India Post was ubiquitous in our lives. With time and technology it became less so. But soon, one of India’s oldest organisations will try to resurrect its significance to at least a part of the country with the formal launch of its payments bank.
- The official launch of the India Post Payments Bank is around the corner, suggest news reports. It follows a pilot project that has been underway in Raipur and Ranchi since January 2017.
- According to the website of the IPPB, the plan is to open 650 branches that will allow the payments bank to cover almost all districts of the country.
- More than 3,500 people will be employed with the entity, which will provide deposit services and have the ability to cross-sell banking and insurance products.
- According to the India Post annual report 2017-18, IPPB will offer services through a mix of physical and digital platforms. Channels for delivering services will include--counter operations, ATMs/micro ATMs, doorstep, mobile and internet banking, mobile wallets.
Here’s what you can expect from India Post Payments Bank.
9. PepsiCo's $3.2 Billion SodaStream Deal
PepsiCo Inc. agreed to buy fizzy-drinks dispenser SodaStream International Ltd. for $3.2 billion, sending the company synonymous with sugary sodas into the homes of more health-conscious consumers.
- PepsiCo will pay $144 a share in cash for the Israeli company, the companies said in a statement today.
- In one of her final acts as the PepsiCo chief, Indra Nooyi is betting on a 'razors-and-blades' business model to reanimate revenue growth.
- SodaStream sells machines used with compatible carbon dioxide capsules and optional flavored syrups, and its success in locking in customers allowed it to recently raise its full-year outlook.
Read more on the PepsiCo-SodaStream deal
10. DNA ‘Evidence’: Only Opinion, Not Science
DNA evidence is widely touted as the most accurate forensic tool, but what is not widely publicised is it is not infallible. From crime scene to database, it is extremely vulnerable to a number of different unknown variables and outcomes, write Elonnai Hickok and Murali Neelakantan.
- Problems include primary and secondary transfer of DNA, contamination, incomplete samples, mixed samples, and inaccurate or outdated methods of analysis.
- DNA evidence can be useful as a forensic tool but it is not a silver bullet for solving every crime.
- India's DNA Bill is silent on how the evidence should be used, presented and appreciated in court.
- India has yet to develop a robust jurisprudence for evaluating scientific evidence.
Read more on why DNA evidence is definitely not proof of crime.