BQuick On Dec. 16: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Anti-CAA Protests Spread Across Country
Anti-citizenship law protests snowballed into a major flashpoint across the country a day after alleged police brutality on students of Jamia Millia Islamia and Aligarh Muslim University.
- Students from over a dozen education institutions—including the Tata Institute of Social Sciences, Mumbai University, IIT-Bombay, IIT-Madras, IIM-Ahmedabad and Jadavpur University—rallied in solidarity for the Jamia and AMU students.
- Protestors raised slogans against police action and the recently passed Citizenship Amendment law.
- At various places, crowds gathered to collectively read the preamble of the Constitution of India.
- Political leaders too stepped out with Congress’s Priyanka Gandhi leading a protest at India Gate in New Delhi.
- In West Bengal, Chief Minister Mamata Banerjee staged a large protest while declaring that the CAA and the National Register of Citizens can be enforced in the state only over her “dead body”.
- There were also peaceful protests in Assam, which is currently under partial curfew with an internet blackout.
Follow updates from the protests across the country here.
2. Rs 35,298-Crore GST Compensation Paid Out
The Narendra Modi-led government compensated states for losses incurred on account of implementation of the goods and services tax amid worries of acute pressure on their finances.
- The central government released Rs 35,298 crore today as GST compensation to states and union territories, the Central Board of Indirect Taxes and Customs said in a Twitter post.
- The centre had not paid GST compensation to states since August, prompting finance ministers from at least four states to appeal to Union Finance Minister Nirmala Sithraman to release pending dues.
- They, in a joint statement, had said some states were resorting to ways and means (advances) or even overdrafts as they were facing pressure on finances.
On Dec. 12, Sitharaman informed Parliament that the centre will honour its commitment to states, without giving a deadline.
3. Patanjali Seeks More Time For Ruchi Soya Buyout
Patanjali Ayurved Ltd. sought more time from the National Company Law Appellate Tribunal to complete its purchase of insolvent Ruchi Soya Industries Ltd., two people aware of the matter said.
- The move is seen as a precautionary measure as the Baba Ramdev-owned company is likely to deposit the funds in an escrow account by Monday evening.
- Once the funds are in an escrow account—controlled by State Bank of India—the lenders will begin the process of distributing it among all members of the committee of creditors, the persons told BloombergQuint on the condition of anonymity.
- This, they said, may take two days.
Here’s how much the bidder is paying out to the creditors of Ruchi Soya.
4. Can Value Investing Make A Comeback?
As peers bet on safer growth stocks during a period of volatility, Quantum Advisors Pvt. Ltd., India’s fourth-largest portfolio manager, underperformed the benchmarks with its mandate to look at value bets in the broader market.
- “Returns last year favoured those following the growth strategy,” IV Subramaniam, managing director, chief executive officer and chief investment officer at Quantum Advisors said, referring to betting on consistently performing businesses even if they trade at higher valuations.
Value has not been favoured by investors. But value is returning to the market.IV Subramaniam, MD and CEO, Quantum Advisors
- Quantum, which manages Rs 14,635 crore of money for largely foreign investors, lost 0.50 percent this year. It was among the three worst performers in the top 10 portfolio managers by assets.
- In the last three months, however, the firm returned 4.5 percent gains.
- November, however, was another subdued month for portfolio managers.
Only six firms managed to beat the Sensex last month.
5. Sensex Fails To Hold Early Surge
Indian equity benchmarks halted a three-day winning streak, led by the declines in Reliance Industries Ltd. and ITC. Ltd.
- The S&P BSE Sensex Index fell 0.2 percent to 40,938.72 after climbing as much as 0.4 percent earlier in the day.
- The NSE Nifty 50 fell 0.27 percent to 12,053.95.
- The broader markets represented by the NSE Nifty 500 Index fell 0.31 percent.
- Eight out of 11 sectoral gauges compiled by NSE ended lower.
Follow the day’s trading action here.
Meanwhile, foreign investors poured in $3.5 billion in Indian stocks in November, remaining net buyers for a third straight month.
- While it was the highest in eight months, one sector alone mopped up two-thirds of the funds.
Find out which sector here.
U.S. equities climbed toward a new high, and European stocks reached a record, amid hopes that a partial trade deal between America and China will ease a key risk for investors heading into year-end. Treasuries fell.
- The S&P 500 Index gained 0.7 percent to 3,192.01 as of 9:33 a.m. New York time, the highest on record.
- The Stoxx Europe 600 Index gained 1.4 percent to 417.67, the highest on record with the biggest rise in more than two months.
- West Texas Intermediate crude rose 0.1 percent to $60.15 a barrel, the highest in three months.
Get your fix of global markets update.
6. An Economic Rebound In Sight?
After a six-quarter decline in GDP growth in India—the longest in two decades—economists are closely watching for any upturn in high-frequency indicators that suggests the economy has bottomed out.
- Growth fell to 5 percent in the first quarter of the current financial year and to 4.5 percent in the second quarter.
- For the full financial year, growth is seen at 5 percent, which means the third and fourth quarters must show at least marginal improvement in momentum.
- For the months of October and November, indicators such as the purchasing managers’ index, along with automobile sales and petrol and diesel offtake have shown marginal improvement.
- However, other indicators like bank credit and imports have shown little or no pick-up.
Some economists think that the economy is close to bottoming out.
7. Can Fiscal Expansion Cushion Deeper Reforms In India?
The low-hanging fruits of policy reforms that gave us high growth rates after liberalisation in the 1990s are no longer available, warns Sabyasachi Kar.
- The current bottlenecks will not go away simply by changing the relevant rules and laws.
- We will need substantial additional institutional capacity and governance capability
- This will need substantial additional resources that will only be available when we have a minimum economic growth momentum.
In such a situation any increase in the fiscal deficit will lead to a more than proportional increase in output due to the effect of fiscal multipliers, Kar argues.
8. Mumbai’s Land Sales Have Spiked. But That’s Half The Story.
Commercial land deals comprised a major chunk of big-ticket real estate transactions in India’s financial capital as the liquidity crunch faced by non-bank lenders weighed on residential markets.
- Buyers favoured commercial and mixed-use projects over residential, according to data shared by real estate services firm Cushman & Wakefield.
- While the number of big-ticket deals in the Mumbai Metropolitan Region in 2019 fell over the previous year, the value rose 56.4 percent to Rs 3,838 crore this year.
- That, however, came on the back of a single Rs 2,238-crore transaction in Bandra-Kurla Complex—the first private land deal in the business district through tendering since 2008.
Most deals are happening in suburbs and only players with healthy financials are entering in land deals in the residential segment.
9. Swiggy Burned A Hole In Its Pockets To Fend Off Zomato
Swiggy’s losses widened in 2018-19 as the online food delivery firm ramped up its services to stave off competition from rival Zomato.
- Bundl Technologies Pvt. Ltd., the operator of Swiggy, posted a loss of Rs 2,364 crore in the year ended March 31, 2019, according to documents filed with the Registrar of Companies.
- That widened sixfold from Rs 397 crore in the previous fiscal.
- What that means is that Swiggy lost Rs 6.4 crore a day.
- By comparison, its rival Zomato Group lost Rs 5.4 crore a day in FY19—driven by Rs 2,035-crore losses during the fiscal at its India business.
The spike in Swiggy’s losses came as it spent aggressively on delivery, salaries, marketing initiatives and expanding to smaller towns.
10. Former BJP MLA Found Guilty In Unnao Rape Case
A Delhi court convicted expelled Bharatiya Janata Party Member of Legislative Assembly Kuldeep Singh Sengar on Monday for raping a woman in Unnao in 2017.
- The court convicted Sengar for rape under Indian Penal Code and Protection of Children from Sexual Offences Act for offence of public servant committing penetrative sexual assault against a child.
- District Judge Dharmesh Sharma, however, acquitted co-accused Shashi Singh of all charges.
The court will hear arguments on quantum of sentence on Wednesday.