BQuick On Dec. 18: Top 10 Stories In Under 10 Minutes   

This is a roundup of the day’s top stories in brief.

1. A Twist In The Tata-Mistry Tale

In an important victory for Cyrus Mistry, the National Company Law Appellate Tribunal has ruled that his dismissal as chairman of Tata Sons Ltd. was illegal.

• While restoring him to his original position as executive chairman of the Tata Group’s holding company, the NCLAT held that the resolution by Tata Sons board removing Mistry was illegal.
• The appellate tribunal also set aside the change of Tata Sons from public to private company.
• The NCLAT said that Ratan Tata’s actions against Mistry were oppressive.
• Mistry, however, will not take over the salt-to-software group immediately. The judgment has stayed his restoration for four weeks to ensure smooth functioning of the companies.

What are the implications of the NCLAT decision in the Tata-Mistry case? Find out here.

Read Cyrus Mistry’s response to the judgment here.

2. Gita Gopinath’s Top Priority For Fixing Indian Economy

Troubles faced by the Indian financial sector, including the prolonged bad loan problem and recent disruptions across non-bank lenders, have played a significant role in the sharp slowdown facing the Indian economy, said Gita Gopinath, chief economist at the International Monetary Fund.

• This weakness and the resultant risk-aversion has slowed the flow of credit to the economy and weakened growth more than anticipated, Gopinath said in an interview with BloombergQuint.
• The IMF, which pegged GDP growth for India at 6.1 percent in its October World Economic Outlook, is likely to revise its projections lower in its review in January, Gopinath said.
• Gopinath sees limited room for fiscal support to the economy given that the government has already cut corporate tax rates earlier this year.

Will the global economy be a headwind or a tailwind for India? Watch the full exclusive interview with Gopinath here.

3. What’s Behind The Spike In Margin Trading

Buying shares on borrowed money rose by more than a third this year in the cash segment of the Indian stock market as tighter regulations help formalise such trading.

• The net scripwise outstanding through margin trading jumped nearly 40 percent since Jan. 1 to Rs 5,071 crore as of Dec. 16, according to daily disclosures on the National Stock Exchange.
• Margin trading is gaining strength in the cash or delivery-based segment.
• According to NSE data, such leveraged buying and selling of shares account for nearly 14 percent of the average cash turnover or around Rs 37,000 crore.
• Margin trading has grown as funding sources have improved with brokers using either own money or funding through commercial banks or non-bank financial companies, according to Deven Choksey, promoter of KRChoksey Group.

Find out which were the top margin trading stocks in 2019.

4. A Shift In Real Estate Financing By NBFCs

India’s non-bank lenders, particularly those that have exposure to real estate lending, have found it tough to raise funds at affordable costs over the past year. Concerns of asset quality risks emerging from the real estate sector have left investors worried and financiers starved for liquidity.

• As a way around this, promoters of non-bank lenders are increasingly shifting real estate financing away from their NBFC platforms and towards alternative investment funds.
• Several NBFCs are tweaking their group strategy and considering setting up category-II AIFs as a way to continue financing real estate projects, according to numerous industry experts BloombergQuint spoke to. Some have already started the process.

Find out what is the immediate reason behind NBFC promoters looking to move real estate financing to other platforms.

5. Indian Markets Continue To Hit New Highs

Indian equity benchmarks closed at all-time high for the second consecutive trading session.

• The S&P BSE Sensex rose 0.5 percent to close at record high of 41,558.57
• The NSE Nifty 50 rose 0.47 percent to end at an all-time high at 12,221.65.
• The broader markets represented by the NSE Nifty 500 Index rose 0.34 percent.
• Meanwhile, the NSE Nifty Bank Index, too, crossed a new milestone.
• The 12-share gauge rose 0.32 percent to end at an all-time high at 32,244.25.
• Nine out of 11 sectoral gauges compiled by NSE ended higher.

Follow the day’s trading action here.

U.S. equities and European stocks gained on Wednesday as investors digested a flurry of corporate news amid a lull in trade-war headlines. Treasuries slipped and the British pound weakened.

• The S&P 500 Index advanced 0.2 percent to 3,197.08 as of 9:33 a.m. New York time, hitting the highest on record with its sixth consecutive advance.
• The Stoxx Europe 600 Index increased 0.1 percent to 415.54.
• West Texas Intermediate crude declined 0.6 percent to $60.54 a barrel, the first retreat in a week.

Get your fix of global markets update.

6. Supreme Court Agrees To Hear Pleas Against New Citizenship Law In January

India’s controversial religion-based citizenship act will have to pass the scrutiny of the nation’s top court, even as Prime Minister Narendra Modi’s government pledged to push ahead and implement the law.

• A three-judge bench headed by Chief Justice of India S.A. Bobde issued a notice to the government seeking its response.
• The court agreed to examine the legality of the legislation following more than 50 petitions filed by activists, lawyers, student groups, Muslim bodies, and politicians from across the country.
• The court will next hear the case on Jan. 22 and may decide in January if the law should be stayed, Bobde said.

That may calm demonstrators ahead of massive nationwide protests planned for Thursday.

7. India’s Asset Managers Are Outperforming Most Global Peers

Indian asset managers’ shares are trouncing global peers this year as domestic money managers benefit from the tectonic shift in savings from gold and real estate to stocks and bonds.

• Reliance Nippon Life Asset Management Ltd. and HDFC Asset Management Co. shares have more than doubled in 2019.
• They are the third- and fourth-best performers among 36 peers with a market value of at least $2 billion, data compiled by Bloomberg show.
• Flows into mutual funds since demonetisation have grown sharply. Yet, only 1.5 percent of Indians own fund, suggesting a long runway for growth.
• And passive investing that’s decimated fees for U.S. managers is still to take hold in India.

Here’s what's behind the parabolic surge in the listed duo of fund houses in India.

8. The $680 Million Question Of What The Boss Knew

Anil Ambani, the younger brother of Asia’s richest man, faces a $680 million legal test to answer one and only one question: Just what did he know about what his employees were doing on his behalf? Other Indian tycoons will take an abiding interest in his defense, writes Andy Mukherjee.

• China’s ICBC is seeking to recover $680 million by invoking what they say is a personal guarantee he gave in 2012.
• Anil Ambani, however, says that he never knowingly provided any guarantee.
• In his version, he had only authorized his employees to furnish a non-binding “personal comfort letter” to lenders.
• Somehow, that letter of comfort morphed into what the banks now argue to be an iron-clad guarantee under English law.

This has all the ingredients of an engaging courtroom drama. And Ambani will get his day in the court when trial commences next year.

9. Inside ‘Crazy Guy’ Masayoshi Son’s Reckless Vision Fund

Every six weeks or so, the SoftBank Vision Fund, the biggest source of investment money flowing to Silicon Valley, convenes a multihour video conference call for 75 people on three continents to catch up on its startups.

• Masayoshi Son, as is universally known, can be charming and effusively complimentary on the calls.
• Or he can be enraged, berating presenters and demanding a perpetually shifting yet unfailingly detailed set of metrics.
• Or he can be both.
• No one ever quite knows where he’ll land on the charm-rage axis.
• That’s the thing about Son: Whichever approach he chooses, the point is always to go big or go home.

And while this has been a differentiating feature of his Vision Fund, it is also one that depicts a culture of recklessness.

10. Latest Star Wars Movie A Big Flop?

“Star Wars: The Rise of Skywalker,” is on track to be the worst-reviewed film in the nine-picture saga.

• The latest instalment of the series received positive reviews from 56 percent of critics tracked by aggregator Rotten Tomatoes.
• Only “Phantom Menace,” released in 1999, received a worse rating -- at 53 percent.
• While the site is still compiling reviews, it’s already posted 43, including from six top critics at news organisations.
• Commentators who found the film underwhelming pointed to a number of problems: It answered some of the same questions and themes of past movies.

Yet, that may not hurt box office collections with analysts expecting it to be among the top five debuts of all time.