BQuick On Aug. 8: Top 10 Stories In Under 10 Minutes
Here is a roundup of the day’s top stories in brief.
1. Stocks Tumble, But That Doesn’t Worry MF Investors
Inflows into equity mutual funds, including equity-linked schemes, rose for the third straight month even as the benchmark index posted its worst July in 17 years.
- Net inflows rose 6 percent over the previous month to Rs 8,112.5 crore in July, according to data released by the Association of Mutual Funds in India.
- “Despite a difficult month and volatile market conditions, the overall sentiment towards debt, equity and hybrid mutual fund schemes has been positive, and equity SIP contributions are at all time high over last three years,” said NS Venkatesh, chief executive officer at AMFI.
- “This reflects continued investor trust in the Indian MF Industry,” he said.
Contributions through systematic investment plans rose to its highest level ever.
2. Who Wins, Who Loses From MSCI Rejig
MSCI Inc.—the world’s biggest index compiler with about $12 trillion in assets benchmarked to its products—added HDFC Life Insurance Company Ltd. to its Global Standard Index and removed Union Bank of India from the Global Small Cap Index, besides changing weight of companies on its India indices, effective Aug. 27.
- Housing Development Finance Corporation Ltd. and Reliance Industries Ltd. have the highest weight on the MSCI India Index.
- Weights were increased for insurance, auto and telecom stocks, while they were lowered for software, banking and energy companies, according to the August 2019 Quarterly Index Review for MSCI Equity Indexes.
Here’s the complete list of the companies listed on the Index, with their updates weightage.
3. Nifty’s Best Day Since Exit Polls
Indian stocks climbed the most in more than two months after ET Now television channel reported that the Narendra Modi government may drop an increased surcharge on foreign investors registered as trusts in the country.
- Separately, the finance ministry is studying implications of withdrawing long-term capital gains tax after a three-year holding period, government officials told reporters in New Delhi, on the condition of anonymity.
- The S&P BSE Sensex staged a late advance, rising 1.7 percent, its biggest gain since May 20, to close at 37,327.36
- The NSE Nifty 50 ended at 11,032, up 1.63 percent.
- The broader markets represented by the NSE Nifty 500 Index ended 1.4 percent higher.
- All the 11 sectoral gauges compiled by NSE ended higher.
Follow the day’s trading action here.
Equities climbed around the world after China’s stronger-than-expected daily fixing of its currency eased fears about a worsening trade conflict.
- All three benchmark stock gauges in the U.S. advanced, led by retailers, as the Stoxx Europe 600 rose for a second day.
- Gold dipped after closing above $1,500 an ounce for the first time since 2013, while Treasury yields edged higher and the dollar weakened slightly.
- West Texas Intermediate crude rose 2.3 percent to $52.26.
Get your daily fix of global markets here.
4. Yes Bank Launches QIP
Private sector lender Yes Bank Ltd. has launched a qualified institutional placement to help it meet an urgent need for capital.
- In a notification to stock exchanges on Thursday evening, Yes Bank said that the capital raising committee of its board had approved the opening of the QIP issue.
- The floor price for issue set at Rs 87.9 per share, the statement said.
- The bank’s capital raising committee may offer a discount of not more than 5 percent on the floor price, it added.
The bank is looking to raise up to $275 million.
5. India’s Biggest Cement Maker’s Profit Doubles
UltraTech Cement Ltd.’s first-quarter profit doubled, helped by lower power and freight expenses.
- Net profit rose 100.3 percent over last year to Rs 1,198.7 crore in the quarter ended June.
- Revenue rose 14.7 percent to Rs 9,794.8 crore.
- Sales volume, including exports, rose 2 percent to 17.86 million tonnes.
Still, analysts say volume growth that missed estimates, may see more moderation.
6. Suzlon's $1.2-Billion Repayment Offer
India’s troubled wind-turbine maker Suzlon Energy Ltd. offered to repay about Rs 8,500 crore ($1.2 billion) to lenders as part of a bad-debt-resolution plan, people with knowledge of the matter said.
- Creditors led by State Bank of India will have to take a haircut of as much as 44 percent on Suzlon’s debt if the offer is accepted, the people said, asking not to be named as the information is not public.
- The settlement plan backed by Vestas Wind Systems A/C is the only bid in front of lenders after Brookfield Asset Management Inc. dropped out of the race, one of the people said.
Suzlon has been embattled since Modi's government shifted to auctions for wind projects.
7. Bharti Airtel Could Become A Foreign-Owned Entity
The principal parent of India’s third-largest mobile operator may become a foreign-owned entity following its plans to pare debt.
- Bharti Telecom Ltd. is seeking equity from its existing promoter group (which may include overseas entities) and Singaporean telecom firm SingTel, proportionate to their holdings in the mobile operator.
- This equity capital is for the purpose of deleveraging.
- If the capital raise results in an increase in foreign equity in Bharti Telecom to 51 percent or more that would make the Mittal-owned company a foreign-owned entity, as per the government’s foreign direct investment policy.
In turn, Bharti Telecom’s entire stake in Bharti Airtel will be considered as foreign investment.
8. Drab Outlook, But A Colourful Quarter
India’s three largest paintmakers beat estimates in the quarter ended June as volumes rose and crude prices fell.
- Asian Paints Ltd., Berger Paints India Ltd. and Kansai Nerolac Paints Ltd. reported a mid- to high-teen growth in domestic decorative paint volumes in the April-June period against 10-12 percent expected, according to data compiled by BloombergQuint.
- Blended volume growth of Kansai Nerolac, however, is lower than peers on account of higher share of industrial paints to its overall revenue.
- The slowdown in industrial and automotive paints business was offset by a strong double-digit volume growth in the decorative segment, HM Bharuka, managing director at Kansai Nerolac, told BloombergQuint.
Here’s what aided the margins if the pain-making companies.
9. Filing Income Tax Returns - Oh! Not So Complicated
Intimidated by this year’s income tax return forms? Here are practical tips to avoid any penalty, by PwC’s Ishita Sengupta and Manavi Gupta.
- What happens if you miss the Aug. 31 deadline?
- Which ITR form should you use?
- Do you need to disclose exempt income?
10. Modi’s First Address Since Elections
Prime Minister Narendra Modi will address the country at 8 p.m. today—his first since coming to power with a decisive mandate, repealing Jammu & Kashmir’s autonomous status and splitting the state in two union territories.
- The last time he addressed the nation was on March 27 during the Lok Sabha polls when he announced that India had demonstrated anti-satellite missile capability by shooting down a live satellite.
- The planned address comes just days before the prime minister's customary speech on Independence Day from the ramparts of Red Fort.
- He is expected to explain the government's decisions on abrogating special status to Jammu and Kashmir.
You will be able to follow the speech live here.