BQuick On Dec. 2: Top 10 Stories In Under 10 Minutes

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

1. Auto Sales Are Back. Or Are They?

Retail auto sales in November jumped to their highest in about a year, led by two-wheelers. Still, it may be early to see it as a sign of revival.

• Vehicle registrations rose 16.4 percent month-on-month and 2.8 percent over the previous year to 21.56 lakh units in November—the highest since November 2018—according to data from 1,171 regional transport offices in 31 states and union territories, collated by BloombergQuint.
• The registration data comes with a lag of about a week and some of the vehicles booked in the last week of October during the Diwali festivities would have been registered in November.
• So, there’s a possibility of a rollover from the previous month. BloombergQuint’s survey of nine large dealerships had, in fact, revealed that buyers had advanced purchases to time with Dhanteras towards the end of October.
• Moreover, the sales were driven by deep discounts, usually not available during the festival season.

Here’s what vehicle registration data tells us about India’s auto slowdown.

2. Manufacturing Perks Up, But What’s The Way Out Of A Structural Slowdown?

India’s manufacturing sector activity inched up in November, but the upturn remained subdued as growth rates for new orders as well as production were modest.

• The IHS Markit India Manufacturing Purchasers’ Managers Index, or PMI, rose to 51.2 in November from 50.6 in October, when it had fallen to a two-year low, indicating only a slight improvement in the health of the sector.

This is the 28th consecutive month that manufacturing PMI has indicated expansion.

Evidence suggests that the trend of sluggish economic growth is likely to stay for some more time, writes Devendra Kumar Pant.

• What is happening now originated from the demand side, unlike previous supply-side episodes.
• The aggregate capital expenditure by the private sector, the household sector, and the public sector has contracted by around 3 percent in Q2FY20.
• Although RBI is trying to stimulate the economy through monetary policy action, the collapse in demand is making those efforts futile.

That said, there is one particular sector, whose revival could help kickstart the economy.

3. Sensex Swings

Indian equity benchmarks ended mixed after a topsy-turvy session as gains in Reliance Industries Ltd. were offset by losses in HDFC Bank Ltd.

• The S&P BSE Sensex rose 0.02 percent to close at 40,802.17.
• The NSE Nifty 50 fell 0.07 percent to 12,048.
• The broader markets represented by the NSE Nifty 500 Index fell 0.16 percent.
• The market breadth was tilted in favour of sellers.
• Ten out of 11 sectoral gauges compiled by NSE ended lower.
• Meanwhile, initial public offering of Ujjivan Small Finance Bank was fully subscribed on the first day of the share sale, exchange data showed.

Follow the day’s trading action here.

U.S. stocks struggled near record highs after President Donald Trump’s move on tariffs rekindled concern over trade risks.

• The S&P 500 Index was little changed, following its best month since June, as Trump said he’s restoring tariffs on steel and aluminum from Argentina and Brazil.
• The president also renewed his assault on the Federal Reserve, saying it should “lower rates and loosen” monetary policy.
• Treasury yields climbed after better-than-estimated manufacturing data from both China the euro-area.
• West Texas Intermediate crude gained 2.4 percent to $56.47 a barrel.

Get your daily fix of global markets here.

4. Why Mid Caps Matter

Picking stocks that can deliver consistent returns year after year can be challenging for portfolio managers, especially with slowing consumption and economic growth sputtering to a six-year low.

• To solve the problem, Samit Vartak channelises his bets on the “right kind” of mid-sized companies.
• The partner and chief investment officer of SageOne Investment Advisors LLP said one needs companies that aren’t large to achieve annualised returns of around 20 percent.
• “If a large company is going to deliver you 10-11 percent earnings growth and if it’s already trading at 70-80 times the multiple, that means there’s no upside room of that re-rating happening,” he told BloombergQuint on the latest episode of Alpha Moguls.

Vartak explained his logic using the example of the companies that have generated maximum returns in the past eight years.

5. End Of Pricing War And Next Steps For Indian Telecom

Telecom stocks rallied as analysts hailed the tariff hikes announced by India's three private mobile operators, signalling easing of a three-year long price war.

• Bharti Airtel shares closed 3.67 percent higher, while Vodafone Idea Ltd. spiked 14 percent.
• The two said on Sunday that they would hike tariffs between 15-50 percent from Dec. 3.
• Reliance Jio said it will increase prices by up to 40 percent.

Here’s what brokerages said about the hikes.

Telecom veteran Sanjay Kapoor’s deep dive into missed warnings since 1999, how India’s “sunrise sector” reached near implosion, and the path back to good health.

• The problem begins to arise when you become reactive rather than proactive on how the industry is transforming and how consumer behaviour is changing.
• The shift from standard definition to HD, from 4K to 8K, is an exponential jump in terms of the data consumed for the same video. But the customer is not willing to pay commensurately.
• Some aspirations will have to change. One player may need to say, I will only serve 20-25 percent of the market and I don’t want 30 percent market share as sustainability is more important.
• Reviving BSNL and MTNL might just turn out to be a misadventure.

Ultimately, the winners will emerge from offering the right consumer experience, Kapoor writes.

6. Karvy Case: 90% Investors Get Back Shares

The Securities Exchange Board of India's prompt action against Karvy Stock Broking Ltd. has resulted in nearly 83,000 investors getting back their securities that were illegally transferred by the broker to its own account and were even pledged without any authorisation.

• With the latest transfer by National Securities Depository Ltd., nearly 90 percent of Karvy’s investors have received their securities while the remainder will get after clearing their dues.
• Karvy Stock Broking has taken Rs 600 crore in loans by pledging securities worth more than Rs 2,300 crore of 95,000 clients, according to SEBI.
• Of these, nearly 83,000 investors have got back their securities, which were were illegally transferred by Karvy Stock Broking to its own account, the regulator has said.
• Meanwhile, leading stock exchanges NSE and BSE have both suspended Karvy's trading licence in view of the ban by SEBI.

Timely action was necessary as any delay could have led to invoking of pledge by lenders with whom the broker had pledged the clients' securities.

7. Piramal Raises Rs 1,100 Crore

Billionaire Ajay Piramal’s shadow banking unit has borrowed Rs 1,100 crore ($153 million) from Barclays Plc to refinance part of its existing debt and extend new loans, people familiar with the development told Bloomberg News.

• While the rate of interest is 7.5 percent on the four-month loan deal signed last week between Piramal Capital & Housing Finance Ltd. and the British bank, the blended annualised cost, including the fee, is higher than 10 percent, the people said, asking not to be named as the information is not public.
• The Indian non-bank financier has offered to repay the borrowings from the money raised from a proposed share sale, and the security cover is two times the loan value, the people said.

The funding for Piramal Capital comes at a time many Indian financiers are reeling from a 17-month sustained upheaval in the nation’s credit markets.

9. Nirmala Sitharaman Responds To Rahul Bajaj

Finance Minister Nirmala Sitharaman has responded to industrialist Rahul Bajaj's statement that India Inc. was afraid of criticising the Narendra Modi government, saying spreading one’s own impression “can hurt national interest” - a remark that drew sharp reactions on social media.

• At The Economic Times’ ET Awards event on Saturday, the chairman of Bajaj Group had told Home Minister Amit Shah and Railway Minister Piyush Goyal that people are afraid of criticising the government’s policies and added that no one in the business community would speak about this issue.
• Bajaj found support in Biocon Chairperson Kiran Mazumdar Shaw who said the government treated India Inc. as “pariahs” and doesn’t want to hear any criticism of the economy.
• Sitharaman responded on Twitter saying that, “Always a better way to seek an answer than spreading one's own impressions which, on gaining traction, can hurt national interest,” she said.

A day before the ET event, former Prime Minister Manmohan Singh had stated that many industrialists have told him they lived in fear of harassment by government.

10. Why Top Chefs Love Kolkata And Mumbai

Everyone knows you can enjoy wonderful meals in cities such as Paris, New York, London and Tokyo. But what of other dining destinations, with fabulous dishes that are more likely to be found in casual bars or bistros than in fancy restaurants?

• For Chef Asma Khan of Darjeeling Express in London, the food found in the bustling streets of her native Kolkata is an experience not to be missed.
• “There is a unique food experience not to be missed if you are in Calcutta over a weekend: Terreti Bazar on Sun Yat Sen Street. It is fascinating, with Chinese and Indian stalls selling breakfast," Khan said.
• Her other recommendations include Arsalan, Park Circus, for biryani and Shiraz for classic Mughlai.
• Meanwhile, Ravinder Bhogal of Jikoni, in London, loves Mumbai for the food.
• “It’s a mosaic of old and new and such diversity,” she says.

Bloomberg asked some of the world’s leading chefs about their favourite food cities. Here are their recommendations.