BQuick On Dec. 24: Top 10 Stories In Under 10 Minutes

And now for a roundup of the day’s top stories in brief.

1. No Christmas Cheer For Indian Markets

Indian equity benchmarks fell for the third day in a row dragged by HDFC twins, Reliance Industries and Hero MotoCorp.

• The S&P BSE Sensex fell 0.76 percent or 272 points to 35,470.
• The NSE Nifty 50 Index dropped 0.84 percent or 90 pints to 10,663.
• Sixteen of 19 sector gauges compiled by BSE ended lower led by a 2.3 percent decline for the S&P BSE Realty Index.
• On the flipside, S&P BSE Information Technology Index was the top gainer, up 0.5 percent.

Follow the day’s trading action here.

2. U.S. Indices Open 2% Lower on Shutdown And Fed Fears

Meanwhile, U.S. U.S. stocks retreated as the turmoil in Washington kept investors on edge after the worst week for American equities in almost a decade. The dollar has weakened too.

Traders are reacting to news over the weekend that Treasury Secretary Steven Mnuchin called top executives from the six largest U.S. banks to discuss liquidity. He also attempted to assure financial markets that the president won’t move to oust the head of the Federal Reserve. Traders are also assessing the threat to the economy from a government shutdown that looks set to persist into the new year.

Catch up with global markets here.

3. Oil Drops Further

Oil fell toward $45 a barrel as worries over rising U.S. supplies and the global economy overshadowed signals from OPEC that it may extend or even deepen its pledged output curbs.

• Futures fell 0.3 percent in New York, after declining 11 percent last week -- the most since January 2016. Officials from Iraq, Kuwait and the United Arab Emirates agreed with Saudi Arabia’s expectation that the group will extend its cuts for another six months.
• They will have to contend with U.S. producers, which added 10 oil rigs last week, according to Baker Hughes data, even as the nation’s output stays near record high levels.
• The U.A.E.’s energy minister, while stressing that OPEC’s and its allies’ 1.2 million barrel-a-day reduction will clear a glut in the first quarter, hinted additional curbs could be discussed.

Yet, investors remain skeptical.

4. Max + Radiant = 3rd Largest Hospital Chain

Radiant Life Care Ltd., backed by private equity firm KKR, agreed to merge with Max Healthcare Ltd. in a complex deal that, it said, will make the combined entity India’s third-largest hospital and diagnostics company.

• The merged entity will operate over 3,200 beds through 16 hospitals across India and will be among the top three by revenue and the fourth-largest by beds, according to a company statement.
• The combined entity will be valued at Rs 7,242 crore.
• Radiant wants to capitalise on its "significant growth and expansion" at a time when the healthcare industry is rapidly consolidating, chairman and managing director Abhay Soi said in the media statement.

Here’s how the complex deal is structured.

5. Pimco Is The 2019 Bond Bull

The new year promises to bring more gains for India’s sovereign bond market, which has rallied hard and broken a five-quarter losing streak to end 2018 on a high.

• One of the world’s largest money managers Pacific Investment Management Co. says it may raise its holdings of rupee debt, which has topped returns among major emerging Asian markets in the second half.
• Some analysts predict the benchmark 10-year yield to drop below 7 percent to levels not seen since November 2017, as rising bets for interest-rate cuts add more legs to an advance spurred by falling oil prices and the central bank’s bond purchases.
• “We are bullish on Indian bonds and find the current levels quite attractive to add,” said Roland Mieth, Singapore-based emerging-markets portfolio manager at Pimco, which oversees about $1.7 trillion.

Trust Capital’s Sandeep Bagla expects the 10-year yield will drop to as low as 7 percent by April.

6. Indonesia’s Deadly Tsunami

The death toll from a tsunami triggered by suspected volcanic activity near the Sunda Strait in Indonesia has topped 200 as rescuers continue to search for dozens missing in the tourist region.

• More than 220 people, mostly tourists, are confirmed dead, at least 843 injured and dozens are missing in the two provinces hit by waves late on Saturday, according to Sutopo Purwo Nugroho, a spokesman at the National Disaster Mitigation Agency.
• More than 550 homes, several hotels and hundreds of boats were damaged when the tsunami hit shores in Pandeglang, South Lampung and Tanggamus regencies of Lampung and Banten provinces.
• Indonesia’s meteorological agency is investigating the cause of tsunami, though it suspects under-sea erosion triggered by volcanic activity of Mount Anak Krakatau and moon gravitation was the cause, Nugroho said.

This is latest in the series of natural disasters to strike Indonesia this year.

7. Biocon Stays Westward Bound

Biocon Ltd.—India's second-best performing pharmaceutical stock this year—will continue to focus on Europe and the U.S. in 2019.

• That's according to Chairperson and Managing Director Kiran Mazumdar-Shaw, who said that the domestic market isn't suitable for the company to compete in at the moment.
• While Shaw plans to keep the domestic business, as it's "important to build a brand in your own home market", she refuses to play the "commoditising game" as that's where the headwinds lie.
• Biocon and Mylan together have a rich portfolio as they received several approvals in Europe and the U.S. over the last two years, Shaw said, and that's where they will focus.

What about an IPO for the biosimilar business? Soon, she said.

There’s not much more in the news today but here are three excellent columns for your reading pleasure.

8. Simhavalokana 2018: Not A Year For Doubling Down

From trade wars to crude price volatility to liquidity squeezes, this tumultuous year was a handful, making investors feel like Kareena Kapoor in Jab We Met, writes Swanand Kelkar of Morgan Stanley Investment Management. The year's volatility taught him 10 things, he writes. Among them:

• The correlation between hard work and results breaks down. It's not just about "not getting good marks? Study harder."
• Genuine quality stocks are like tennis balls, they bounce back. Lookalikes are like eggs, they break.
• Managing money for others in that sense is about the ability to hold two sets of nerves – your own and your investors’.

Read the full column here.

9. GST: The Many Course Corrections

18 months, multiple rates changes and 400 notifications, circulars and orders – GST is still work in progress, writes Harishanker Subramaniam, leader of the indirect tax practice at EY India.

At the very outset it was clear that the lawmakers and GST Council drafted a law, a rate structure and a base that was far from ideal. The objective was to implement GST first, and then tweak it periodically, basis feedback and improve the structure as we go along.

This is evident from the fact that the GST Council in the last 18 months has met 31 times and taken successful decisions through consensus. The GST Council as a constitutional body has had unparalleled success which many were sceptical about, and due credit goes to the Finance Minister of the Union of India and all State Finance/ Revenue ministers besides the untiring efforts of the GST working committee.

The changes have broadly been in the following key areas:

• Rate rationalisation – especially in the 28 percent category
• Ease of compliance – GST attempted monthly reporting at transaction level with invoice matching - a huge change from summary reporting in erstwhile central and state laws.
• Improvements in law through changes in the Acts and rules – responding to ground reality across several sectors.

For Subramaniam’s comprehensive analysis of the GST regime so far, read this.

10. Debt Isn’t Killing India’s Farmers

It’s election season in India and the money is flowing. Governments in many states have begun waiving tens of millions of dollars’ worth of loans to poor farmers in an effort to buy their loyalty, writes Shamika Ravi.

• The argument – widely accepted by politicians and journalists, the demographic groups with the least fiscal instinct – is that India’s farmers are buckling under the weight of their debts and rural suicides are spiking dangerously. Rural households are desperate for relief.
• The numbers tell a different story. And, given the detrimental impact on credit discipline, not to mention the hole such waivers are going to blow in state budgets, politicians would be wise to rethink their plans.
• According to India’s National Crime Records Bureau, the number of farmers committing suicide has actually been falling in recent years; fewer such deaths were recorded in 2016 than at any time in the previous 16 years. Nearly twice as many Indian housewives commit suicide as farmers do.

Nor does there seem to be a clear link between farmer suicides and poverty.