BQuick On August 21: Top 10 News Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. How Much This Brokerage Gained With First Access To NSE’s Server
Four years of preferential access to the National Stock Exchange of India Ltd.’s server earned Delhi-based brokerage firm OPG Securities Ltd. Rs 25 crore in profit.
- That’s what market regulator has alleged in its show-cause notice to OPG Securities, based on an audit by Indian School of Business, Hyderabad. BloombergQuint reviewed a copy of the notice.
- This is the first time in its nearly three-year-long probe that the Securities and Exchange Board of India has put an amount to the gains made through unfair access to NSE’s co-location service.
- A spokesperson for OPG Securities, when contacted over the phone, declined to comment saying the matter is with the regulator and sub judice. SEBI has yet to respond to BloombergQuint’s emailed queries.
The issue of unfair access can’t be measured in trading gains or losses, say experts.
2. Bharti Airtel Scores A Win Over Reliance Jio
India’s largest telecom operator Bharti Airtel Ltd. has a reason to cheer despite adding fewest subscribers among peers in June. And that’s because the number of active users on its network increased the most during the month, beating Reliance Jio Infocomm Ltd. for the first time since January.
- Airtel added less than 11,000 users in June, but the number of active subscribers on its network increased by more than 1.5 crore, according to the latest data released by the Telecom Regulatory Authority of India.
- A higher number of subscribers actively using an operator’s services doesn't necessarily mean better revenue.
- But it at least means that customers are frequently using the service and the risk of losing subscribers is thus, low.
- Active subscribers for Vodafone India Ltd. and Idea Cellular Ltd. continued to decline for the second consecutive month.
Read more on what’s working for Bharti Airtel.
3. Sensex, Nifty Inch Higher; U.S. Stocks Rise
Indian equity benchmarks rose for a third day in a row to settle at new record highs.
- The S&P BSE Sensex Index advanced marginally to 38,286.
- NSE Nifty 50 Index rose 0.17 percent or 19 points to 11,571.
- Ten out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Power Index’s 1.5 percent gain.
Follow the day’s trading action here
U.S. stocks rose and the dollar slipped as investors assess the latest developments in the trade war with China.
- S&P 500 Index churned about half a percentage point below an all-time high in thin summer trading.
- The dollar fell for a fourth day after Trump complained about the Federal Reserve’s policies.
- West Texas crude rose 1.8 percent to $67.65 per barrel.
Get your fix of global markets here.
4. Ashburton Picks Battered Indian Midcaps
Indian stocks may be Asia’s star performers this year, but Ashburton Investments Ltd. is focusing on one corner of the $2.2 trillion market that has been spared the euphoria: mid-cap shares.
- Mid-sized companies whose earnings are tied to the local economy offer better protection against the headwinds from a trade war and the turmoil in Turkey, Ashburton Investments noted.
- The sell-off in mid- and small-cap stocks--2017’s winners--has left smaller firms trading near the biggest price discount to the Sensex since March 2016, data compiled by Bloomberg show.
Some small and mid-cap stocks that have been recently sold off now offer value to investors seeking to benefit from domestic spending.Jonathan Schiessl, Chief Investment Officer, Ashburton Investments
Here’s why Ashburton Investments is keen on investing in mid-cap stocks.
5. It’s Crunch Time For RCom
Reliance Communications Ltd., the mobile operator that defaulted on its dollar bonds last year, is up against the clock.
- The Anil Ambani-led company is in the midst of restructuring $300 million U.S. currency notes and plans to meet those bondholders on Aug. 24 to seek approval on extraordinary resolutions.
- The talks come ahead of the Aug. 27 deadline set by the Reserve Bank of India for firms with delinquent accounts and under other conditions to implement resolution plans with local lenders to stave off insolvency proceedings.
- The outcome of the talks this month may sway how much the company’s debt holders will get repaid in the end.
Reliance Communications’ proposal to bondholders was worse than the market expected...We think it’s likely that bondholders will push for a better deal.Mihir Chandra, Head Analyst, SC Lowy
Are RCom and its creditors headed for a lose-lose situation?
6. Indian Aviation Sees Strong Passenger Growth In Seasonally Weak July
Airline passenger traffic in India, the world’s fastest growing aviation market, jumped in a seasonally weak month of July on capacity addition and lower fares.
- The number of passengers rose 21 percent on a yearly basis to nearly 1.16 crore in the month, according to data released by Directorate General of Civil Aviation.
- Growth in July travel was better than the growth in travel during the holiday month of May.
- The growth was primarily led by the country’s largest airline IndiGo, whose passenger growth stood at 31.5 percent–the highest in 18 months. For IndiGo’s peers, however, July wasn’t that great a month.
Read why July wasn’t good for IndiGo’s peers.
7. Private Hospitals Find Modi’s Health Insurance Pricing Unviable
Calling the pricing unviable, private hospitals threatened to stay away from the Prime Minister’s health insurance scheme that will cover more than half-a-billion Indians.
- According to the Indian Medical Association, the rates of medical procedures under the scheme were “unscientific, non-viable and would compromise on patient safety”.
- The prices calculated by the association--a doctors’ lobby that agreed to bring small and medium hospitals on board--were up to 84 percent higher than what the government fixed.
“The existing package rates are at least 25 percent lower than even the break-even point for small and medium hospitals,” said Dr. RV Asokan, chairman at IMA Hospital Board of India. “If hospitals are to provide treatment at such unsustainable rates, they will end up shutting shop because of losses,”he added.
Participation of private hospitals is vital for the scheme. Here’s why.
8. Why Amazon Wants To Buy A Supermarket Chain In India
A year after Jeff Bezos took the fight to brick-and-mortar retailers in the U.S. with the acquisition of upscale grocery chain WholeFoods for $13.7 billion, Amazon.com Inc. eyes an encore in India.
- The world’s largest online retailer is in talks with the private equity fund Samara Capital and the investment arm of Goldman Sachs to acquire Aditya Birla Group-owned More, according to business newspapers Economic Times and Mint.
- The deal, according to the reports, will place an enterprise value of Rs 4,200-5,000 crore on the business.
- Amazon’s plan to pick stake in the chain comes when Indian offline retailers are looking to boost their sales through e-commerce to build an omni-channel network.
Read more on Amazon’s plans to expand its India presence.
9. Flipkart Buys Liv.ai
Flipkart has acquired artificial intelligence startup Liv.ai, which has built a platform that translates speech to text, for an undisclosed amount as the country’s largest e-retailer looks to overcome language barriers.
- This comes after rival Amazon.com Inc. made in-roads in voice and speech-recognition technology via its AI-powered virtual assistant Alexa.
- Liv.ai’s co-founders along with the entire team would be joining Flipkart, as part of the deal.
- With this acquisition, Flipkart is targeting the next 100 million internet users in tier-2 and 3 cities, Chief Executive Kalyan Krishnamurthy said.
Here’s Flipkart’s rationale for the Liv.ai deal.
10. India’s GDP Fracas Could Hurt Modi and Maul Rupee Bears
Just as some analysts were starting to believe in a reset for the Indian rupee, with the government becoming more relaxed about letting it weaken, history got in the way. The history in question is past GDP data, writes Andy Mukherjee in this column.
Here’s an excerpt...
Modi can ill afford a laissez-faire stance. Could he allow the Congress Party to claim that the rupee at 80 to the dollar (it’s around 70 at present) is a symbol of the prime minister’s failure to deliver the “good days” he promised in 2014? Modi might have bitten the bullet if he could give his social-media warriors the cover of GDP data that make his performance look good while rendering the previous regime’s record indecipherable.
Now that a direct, unflattering comparison with the past has suddenly sprung up, however, my bet is he can’t let the rupee go. Every milestone in that weakness – 70, 71, 72, 75, 80 – would make him vulnerable to ridicule on Twitter, Facebook and WhatsApp. And that’s one thing no Indian politician who has to fight reasonably fair elections can endure.