BQuick On April 8: Top 10 Stories In Under 10 Minutes
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Here is a roundup of the day’s top stories in brief.
1. At Least Six Bidders For Jet Airways
At least six entities may show interest for Jet Airways Ltd. as part of the bidding process initiated by lenders this week, two people with direct knowledge of the matter told BloombergQuint.
- Private equity players like KKR, Blackstone and TPG Capital, as well as strategic players like Lufthansa Airlines, Singapore Airlines and Swiss International Airlines have all reached out to consultants to conduct due diligence on the beleaguered Indian air carrier, the people said on the condition of anonymity as the talks are confidential.
- BloombergQuint had previously reported that State Bank of India had reached out to TPG Capital and Tata Group for a potential sale of Jet Airways. Tata Group owns Vistara, which is a joint venture with Singapore Airlines.
- To be sure, a due diligence is only the early stage of a bidding process. Once these bidders have studied Jet Airways’ books, they may very well choose to not participate at the final stage.
Meanwhile, SBI, which is the lead lender, invited expressions of interest from bidders.
2. L&T Surpasses Annual Order Inflow Guidance
Larsen and Toubro Ltd. is expected to have reported its highest quarterly order inflow, topping its guidance first time in at least six years and beating uncertainty ahead of the election.
- India’s largest engineering conglomerate, a bellwether for investments, needed fresh orders worth Rs 47,900-50,900 crore in the quarter ended March to meet its annual growth forecast of 10-12 percent.
- Going by the disclosures through the quarter, L&T received orders in the range of Rs 42,060-69,560 crore during the period.
- Analysts expect the actual order inflow to be the average of the range or even higher, helping the company surpass its guidance.
Here’s the breakdown of L&T’s order inflows.
3. Vijay Kedia's Wealth Creation Secret
For a retail investor, trading is akin to gambling.
- That’s what veteran investor-trader Vijay Kedia cautions, saying that trading requires a completely different mindset. The parameters and principles are starkly different from investing, and people are not able to differentiate between the two, he said.
- An investor should be ready to lose everything earned over two years in a single trade, according to Kedia—he was speaking at the Delhi edition of BQ Edge, BloombergQuint’s on-ground initiative. “Unless an investor has that mindset, it’s better to not trade.”
Don’t look at Rakesh Jhunjhunwala or Radhakrishnan [Damani] and enter in trading business because it is not that easy as they perceived it to be. They are legends.Vijay Kedia, Managing Director, Kedia Securities
Here’s how Kedia went from having zero capital to having multiple stocks with 100-times returns.
4. MF Inflows Snap Four-Month Decline
Inflows into equity mutual funds snapped their four-month losing streak in March, tracking the rebound in the stock market.
- Net investments into equity funds, including equity-linked savings schemes, more than doubled over the previous month to Rs 11,756 crore in March, according to data released by the Association of Mutual Funds in India.
- India’s benchmark NSE Nifty 50 Index surged about 7.7 percent in March as the market recovered from its February low.
- Overall, the mutual fund industry witnessed a net outflow of Rs 22,357 crore, higher than Rs 20,083 crore that flowed out of all schemes put together in February.
Here are the categories that under-performed.
5. Nifty Volatile, U.S. Stocks Decline
Indian equity benchmarks ended lower after a topsy-turvy day of trade.
- The S&P BSE Sensex ended 0.42 percent or 161 points lower at 38,7800.
- The NSE Nifty 50 ended at 11,604.50, down 0.53 percent.
- The market breadth was tilted in favour of sellers. About 1,026 stocks fell and 739 shares advanced on the National Stock Exchange.
- Ten out of the 11 sectoral gauges compiled by NSE fell, led by the NSE Nifty Realty Index’s 2.19 percent fall.
- On the flipside, the NSE Nifty IT Index was the only sectoral gainer, rising 0.66 percent.
Follow the day’s trading action here.
U.S. stocks halted the longest rally since 2017 as investors awaited signs of progress in the trade war with China ahead of the latest corporate earnings season.
- The S&P 500 headed for its first decline in eight sessions, as the post-Christmas rally stalled with the index about 1.5 percent from reclaiming its all-time high.
- Catalysts remained scant on Monday after trade talks ended last week in Washington without any timetable for an agreement.
- Company news dominated, with General Electric tumbling after JPMorgan cut its rating on the stock, and Boeing dropping amid the ongoing fallout surrounding the 737 Max airplane.
- The dollar fell, while Treasuries edged lower.
- West Texas Intermediate crude rose 1.1 percent to $63.77 a barrel, the highest in five months.
Get your daily fix of global markets here.
6. BJP’s Rs 100 Lakh Crore Infrastructure Pledge
Prime Minister Narendra Modi’s ruling Bharatiya Janata Party pledged spend $1.44 trillion (Rs 100 lakh crore) on infrastructure to boost the economy and raise living standards, in a bid to match its main rival’s populist promises.
- The BJP released its manifesto in New Delhi on Monday, reiterating its pledge to double farmers’ income by 2022, improve GDP share from manufacturing and double exports.
- It will also scrap Article 370 of the Indian Constitution which grants special concessions to the disputed state of Kashmir.
The essence of the manifesto is to deplete poverty to single digits in next five years and then eventually eliminate it.Arun Jaitley, Finance Minister
The manifesto gives no details of how the party will ensure funds will be raised.
7. Consumers Switching From Larger To Regional Brands, Says Amul
Consumers are switching from larger national brands to smaller and regional ones that offer more value for money, according to the head of India’s largest dairy products maker.
- “Now consumer is giving more preference to the city brand, mohalla brand or regional brand than the national brand,” RS Sodhi, managing director at Gujarat Co-Operative Milk Marketing Federation Ltd., the maker of Amul branded milk to ice-creams, told BloombergQuint in an interview.
- “The regional brands are more economical and giving more delivery.”
- Bigger brands feel that consumers are downtrading, but the truth is they are just switching to other brands, he said.
“The consumer has become smarter and wiser,” said Sodhi.
8. What Baring Gets From NIIT Technologies Buyout
Baring Private Equity Asia said on Sunday it will acquire 56 percent stake in NIIT Technologies Ltd., including an open offer for 26 percent shareholding.
Here’s how NIIT Technologies stacks up against its peers:
- NIIT Technologies’ revenue growth may have slowed to a four-year low, but it’s expected to grow faster than Hexaware Ltd. and Mindtree Ltd. over the next two years, according to Motilal Oswal’s estimates.
- Among the three companies, Mindtree has the highest annual revenue while NIIT Technologies leads when it comes to earnings before tax, depreciation and amortisation margin.
- NIIT Technologies is the tenth-largest information technology company by market capitalisation but it’s the fourth-most expensive stock on price-to-earnings basis projected for the year ended March 2019, according to Bloomberg.
Here’s how the companies stack up on verticals and geographical reach.
9. Mukesh Ambani's $2.5 Billion Shopping Spree
A $2.5 billion spending spree involving more than two dozen deals provides some insight into how Mukesh Ambani is piecing together a strategy to take on Amazon.com Inc. in India.
- Asia’s richest man is sharpening his focus on e-commerce with a string of tiny acquisitions and stake purchases to face the world’s largest online retailer, after shaking up India’s telecommunications industry with cheap data and free calls.
- The acquisitions represent a new strategy for Ambani’s Reliance Group, whose founder -- his father Dhirubhai Ambani -- built a petrochemicals business and the world’s largest oil-refining complex from scratch.
- It’s a clear pivot toward consumer offerings in a country that’s becoming a battleground for giants such as Amazon.com and Walmart Inc.’s Flipkart Online Services Pvt.
Ambani outlined his plan to shareholders in July.
10. The Story Of Extortive Prices For Cancer Drugs
Here are the findings of a deep-data dive into the price changes made to 517 medicines and how cheaper treatment will now be, by Oommen Kurian.
- All the medicines costing more than Rs 40,000 were cancer medicines, according to a recent IIM Calcutta study.
- Patients used to be charged a mark-up of more than 100 percent on 379 of these 517 cancer medicines.
- 101 of these medicines used to cost more than Rs 20,000, and in the post-regulation scenario, only 40 do.
Here’s the scale of impact on a patient who, say, is undergoing three cycles of treatment.