Tourists stand on a pier as the sun sets over the Baltic Sea in Binz on Ruegen Island, Germany (Photographer: Krisztian Bocsi/Bloomberg)  

BQuick On Dec. 13: Top 10 Stories In Under 10 Minutes

This is a roundup of the top stories of the day.

1. A Rs 6,000-Crore Gift

Indian Oil Corporation Ltd. announced its biggest-ever payout to shareholders in at least 17 years at a time the government, its promoter, is looking to mop up funds to meet its divestment target.

  • It announced a dividend and a first-ever buyback in its board meet today, according to an exchange filing. That would cost the company nearly Rs 12,321 crore, the most it will spend to reward shareholders since at least 2001.
  • Of the total amount announced, the government will get close to Rs 5,942 crore and a dividend distribution tax—imposed by the government on companies as per the dividend paid to investors—of Rs 1,331 crore, according to BloombergQuint’s calculations.
  • That will help it get closer to its Rs 80,000-crore divestment target for 2018-19—the government has collected Rs 54,000 crore so far this year.

But that may add to the debt pile of India’s largest oil refiner.

2. TRAI Order That Gave Jio An Edge Set Aside

The telecom appellate tribunal set aside the sectoral regulator’s predatory pricing guidelines that placed restrictions on large older carriers but excluded Mukesh Ambani’s Reliance Jio Infocomm Ltd.

  • The Telecom Dispute Settlement Appellate Tribunal ordered the regulator to reconsider the provisions within six months and barred it from levying any penalty based on the February 2018 guidelines, according to an order uploaded to its website.
  • This spells relief for Bharti Airtel Ltd. and  Vodafone Idea Ltd.—earlier Vodafone India and Idea Cellular.
  • That’s because the Telecom Regulatory Authority of India had changed the definition of significant market player while determining predatory pricing.
  • According to the new norms, service providers holding a share of at least 30 percent of total activity in a relevant market qualified for it.
  • Of the four parameters to identify significant market player, TRAI retained subscriber base and gross revenue, but dropped capacity and traffic share.
  • Which meant, while restrictions remained on Bharti Airtel and Vodafone India, Reliance Jio despite having the highest monthly data consumption was excluded.

TDSAT said said it found the new definition of significant market player used by TRAI “extreme”.

2. Indian Airlines Hit An Air Pocket?

Indian airlines’ fuel consumption grew at its slowest pace in 11 months in November, suggesting passenger growth slowed in the world’s fastest-growing aviation market during the festival month.

  • Demand for aviation turbine fuel from carriers rose 5 percent on a yearly basis for the month, the lowest since December last year, according to data from the Oil Ministry’s Petroleum Planning & Analysis Cell.
  • And airliners’ pace of burning fuel slowed despite a lower base since Diwali holiday travel fell in October last year.
  • The Diwali month usually sees a spike in air travel. Signs of a slower passenger growth during the holiday period this year would be a concern when airlines expected to benefit from falling oil prices.

4. Nifty Extends Winning Streak; U.S. Stocks Rise

Indian equity benchmarks rose for third day in a row after inflation fell to its lowest in 17 months in November as food prices continued to decline and lower crude costs brought down fuel inflation.

  • The S&P BSE Sensex Index rose 0.42 percent or 151 points to 35,929.
  • The NSE Nifty 50 Index climbed 0.5 percent or 54 points to 10,792.
  • Investors sentiment got a boost as slower-than-estimated inflation may enable the new central bank governor to reduce interest rates.
  • Sixteen of the 19 sector gauges compiled by BSE ended higher led by the S&P BSE Consumer Durables Index’s 1.4 percent gain.
  • On the flipside, the S&P BSE Metal Index was the top loser, down 0.7 percent.

U.S. equities opened higher as investors weighed the latest trade developments between America and China.

  • The euro fell and bonds rose as the European Central Bank confirmed an end to its asset-purchase program but sounded a cautious note on growth.
  • The S&P 500 gained following the news overnight that Chinese importers had resumed buying U.S. soybeans.
  • Treasuries and the dollar edged higher as U.S. jobless claims came in below estimates.
  • West Texas Intermediate crude decreased 1 percent to $50.66 a barrel, the lowest in more than two weeks.

5. Yes Bank’s CEO Search Isn’t Over

Yes Bank Ltd. is yet to select a candidate to succeed its Chief Executive Officer Rana Kapoor and will submit a name to the central bank only after Jan. 9.

  • The bank shortlisted candidates for the post but will zero in on one in its next board meeting in January, it said in an exchange filing.
  • In the meantime, Yes Bank chose a new non-executive, part-time chairman and shortlisted names for the chief executive officer’s job.
  • The lender will now seek requisite approvals from the Reserve Bank of India, it said in a statement. The lender didn’t disclose any of the names.
  • Its board now includes two newly independent directors—TS Vijayan and Uttam Agarwal. That leaves only one vacancy after three members quit in the past month citing governance issues.

The stock tanked over 6 percent after the announcement.

6. State-Run Banks Seek Easier NPA Rules

India’s state-run banks sought an easing of rules related to bad loan recognition in a meeting with newly-appointed central bank Governor Shaktikanta Das, people familiar with the matter told Bloomberg News.

  • The heads of seven banks also asked for a liquidity boost for the financial system to help non-bank financiers tide over a cash crunch, the people said, asking not to be identified, as the discussions are private.
  • An easing of lending curbs on 11 weak state-run lenders was also discussed, they said.

Bankers are hoping Das will be more lenient than Urjit Patel.

7. What’s Pushing Food Inflation Lower

A fall in retail inflation is typically good news for the Indian economy, which has seen numerous bouts of high and volatile inflation. But just as high inflation can be worrying, so can low inflation. The former hurts consumers; the latter hurts producers.

  • In India, retail inflation fell to 2.33 percent in November, close to the lower end of the inflation target of 4 (+/-2) percent.
  • The current bout of low inflation is being led by falling food prices, leading to concerns of rising distress among the farming community.
  • A break-up of the inflation data shows that three categories — vegetables, pulses and sugar — account for a bulk of the decline in food prices. Of the three, the pulses category has seen negative inflation for more than a year.
  • Sugar, too, has shown disinflation for about a year, while the disinflationary trend in vegetables is more recent.

But the reasons for the low prices differ from category to category.

8. No Relief For RCom

The Supreme Court today reiterated its order to Reliance Communications Ltd. in which it had asked the company to pay Rs 550 crore to Ericsson in order to proceed with the spectrum sale to Reliance Jio.

  • The apex court was hearing a petition filed by Anil Ambani-led RCom in which it sought the extension of Dec. 15 deadline to make the payments to Ericsson.
  • In October, the Supreme Court had made it clear that Dec. 15 was the last deadline for them to pay and delayed payment will attract an interest of 12 percent per annum.
  • In today's hearing, RCom argued that it is yet to receive the ‘no objection certificate’ that they had sought from the Department of Telecommunications for the Reliance Jio deal.

A contempt plea filed by RCom against DoT will come up tomorrow.

9. Modi's World Trips Cost Indians $280 Million

Prime Minister Narendra Modi’s hectic travel schedule over the past four-and-a-half years cost Indian taxpayers about $280 million as he made 84 trips around the world, according to India’s foreign ministry.

  • The money spent on each trip, combined with the cost of maintenance on Air India One and setting up a secure hotline, was provided in a response to a lawmaker’s question in parliament by V.K. Singh, the country’s junior foreign minister.
  • Since taking office, Modi has maintained a punishing pace of world travel, meeting some global leaders such as U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe multiple times in a bid to boost India’s influence in global affairs and secure its strategic interests.
  • Some of his trips, including an informal summit with Xi Jinping in the Chinese city of Wuhan, are credited as diplomatic successes. His meeting with China’s leader after a tense stand-off in the Himalayas was seen as ushering in a detente between the world’s two most-populous countries.

10. Fewer People Now Under BJP-Ruled States

With the Bharatiya Janata Party losing power in three Hindi-heartland states--Madhya Pradesh, Rajasthan and Chhattisgarh--the population under BJP rule has dropped by 254 million, from nearly 888 million (71 percent of India’s population) in 2017 to nearly 634 million (51 percent of the population) in Dec. 2018.

BQuick On Dec. 13: Top 10 Stories In Under 10 Minutes