Police officers stand guard at the India Gate monument shrouded in smog in New Delhi, India. (Photographer: Prashanth Vishwanathan/Bloomberg)

BQuick On Feb. 21: Top 10 Stories In Under 10 Minutes

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

1. EPFO Hikes Interest Rate

The Employees’ Provident Fund Organisation has finalised an interest rate of 8.65 percent for 2018-19—a hike of 10 basis points from the previous year—for its six crore subscribers.

  • The Central Board of Trustees—the decision-making body of EPFO—headed by Labour Minister Santosh Gangwar announced the hike in its meeting held in Delhi today.
  • The proposal must now be approved by the Finance Ministry.
  • The retirement fund body had a corpus of Rs 13.33 lakh crore as on March 31, 2018, according to data on its website.

The interest rate hike will leave the fund with a surplus of a little over Rs 151 crore.

2. Some Rating Agencies Ignoring Promoter Debt Risk?

In late January, a surprising bit of news emerged from India’s mutual fund industry.

  • Some of the country’s most prominent mutual funds reached a ‘standstill’ agreement with the Subhash Chandra-promoted Essel Group, which meant they would not sell shares of group companies pledged with them.
  • Within a month, another such instance came to light with mutual funds supposedly agreeing to a ‘standstill’ with promoter companies of the Anil Ambani group.
  • The two instances have highlighted the risk in equity-backed-bonds issued by a number of promoter groups in recent years. This category of instruments is separate from loan-against-shares given by banks and non-banks.

But who rated these instruments?

3. Jet Airways EGM: Questions, Lack Of Trust And A Plea

Minority shareholders of beleaguered airline Jet Airways Ltd. who were hoping to find clarity on the bank-led resolution plan at its extraordinary general meeting were left with more questions than answers.

  • While all resolutions were passed, minority shareholders BloombergQuint spoke to felt the management should’ve provided more details on the plan, the future of the airline and put an end to the uncertainty.
  • "They evaded all the questions. They spoke nothing about the present health of the company or the revival plan of the company. It was just an eyewash," minority shareholder Arvind Gupta said.
  • Another shareholder Khalid Khan said that Chairman Naresh Goyal not attending the meeting was a worry because he is "accountable for everything".
  • Milind Karkera made a plea to a the Tata Group to come and resuce Jet Airways.

Here's how the mood of minority shareholders was at the EGM.

4. Unitech’s Auditor Raises Red Flag

The auditor to Unitech Ltd. has said the developer would have reported Rs 963 crore more in losses in the nine months through December 2018 had it accounted for the reduced value of its investments, loans, receivables and unpaid interest on public deposits.

  • The company reported a loss of Rs 301.6 crore for the nine-month period, according to its exchange filing.
  • For the quarter ended December, it reported a loss of Rs 97.77 crore compared with a profit of Rs 18.08 crore a year ago.
  • Quarterly revenue plunged nearly 86 percent year-on-year to Rs 52.21 crore.
  • R Nagpal Associates, the auditor, said in its qualified opinion accompanying Unitech’s third-quarter results that many of its subsidiaries had accumulated losses and suffered substantial or full net worth erosion.

The management hasn’t adequately or sufficiently accounted for the imminent diminution in their value.

5. How The MPC Went From Hawkish To Dovish

Lower-than-expected inflation, some signs of a slowdown in growth, and a legal mandate that targets headline inflation gave four of six members of India’s Monetary Policy Committee enough reason to cut interest rate by 25 basis points to 6.25 percent earlier this month.

  • The February meet was the first for Reserve Bank of India Governor Shaktikanta Das. The stance he adopted was one which focused on supporting growth now that the mandate of bringing down headline inflation had been met.
  • RBI Deputy Governor Viral Acharya voted against a rate cut but in favour of a stance change, and his views remained mostly unchanged between the December and February meetings.
  • The committee also changed the policy stance to ‘neutral’ from ‘calibrated tightening’ and indicated that there may be scope for more rate cuts.

Here are the minutes of the meet that give a glimpse into the view taken by each member.

Also read: The Government Has A Redemption Headache Coming Up

6. Nifty Extends Gains

Indian equity benchmarks extended gains for the second day and clocked their best two-day rally in nearly three weeks.

  • The S&P BSE Sensex closed 0.4 percent higher at 35,898.
  • The NSE Nifty 50 Index ended at 10,789, up 0.51 percent.
  • Ten out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Pharma Index’s 1.28 percent rise.
  • On the flipside, the NSE Nifty IT Index was the only sectoral loser, down 0.13 percent.

Follow the day’s trading action here.

U.S. stocks fell in thin trading, while Treasuries declined as investors grappled with the latest twists in global trade and weaker-than-expected economic data.

  • The S&P 500 headed for its first decline in four sessions as traders weighed headlines showing uneven progress in trade talks between the U.S. and China as a March 1 deadline for more tariffs approaches.
  • Health-care stocks led declines as Johnson & Johnson slid after the company said it received subpoenas from federal prosecutors tied to its talc baby-powder products.
  • The 10-year Treasury yield rose above 2.68 percent, and the dollar edge higher against major currencies after factory data came in below expectations.
  • Gold declined 0.8 percent to $1,336.90 an ounce.

Get your daily global markets fix here.

7. Anil Ambani’s Stand “Smacks Of Deceit”

They say offence is the best defence – but that approach did not succeed for the Reliance Anil Dhirubhai Ambani Group. Instead, the Bombay High Court not only refused to grant an interim relief but also described the group’s stand as deceitful and misleading.

  • The matter pertains to sale of ADAG companies’ pledged shares by Edelweiss Group companies. These shares served as collateral to underlying debentures worth Rs 300 crore subscribed to by the Edelweiss Group companies.
  • But when the ADAG companies defaulted on terms of the debt, the Edelweiss Group companies sold some of these shares.
  • That sale was contested by the Ambani entities, who approached the Bombay High Court seeking a stay on any further share sale.

Despite the aggressive statements and compensation claim, Reliance ADAG lost the first round. Here’s what went down.

Also read: Reliance Capital Invites Nippon Life To Acquire Stake In Joint Venture  

8. SP, BSP Seal Seat Sharing Pact

The Samajwadi Party will contest 37 seats and the Bahujan Samaj Party 38 in Uttar Pradesh in the Lok Sabha polls, the two parties said on Thursday while releasing a list of seats.

  • While announcing the alliance earlier, the two parties had said they will contest from 38 constituencies each out of the 80 in the state.
  • The two parties named the seats distributed among them in a statement signed by SP President Akhilesh Yadav and BSP Chief Mayawati.

Here’s the list of constituencies each party will contest from.

9. Fitch Rules Out Easy Win For Modi

Prime Minister Narendra Modi will “struggle” to win a simple majority in India’s upcoming general election and the opposition Congress party has a “fair chance” at forming government with support from regional allies, according to Fitch Solutions Macro Research.

  • Neither of the country’s main national parties is likely to get a majority in the lower house of the parliament, the affiliate of Fitch Ratings said.
  • That means both will have to try and cobble together a coalition with regional parties at a time when the ruling Bharatiya Janata Party has disagreements with many large “potential kingmaker parties,” Fitch Solutions said.
We at Fitch Solutions are bucking the overwhelming consensus at this juncture that the BJP will most likely form the next government after the upcoming elections.
Fitch Solutions Report

The Congress has a fair chance of marshaling a coalition government, it added.

10. Samsung S10 Vs iPhone XS Max

The Samsung Galaxy S10 is actually four separate phones: the S10e (the “e” stands for “essential,”) the S10, the S10+, and the S10 5G. Having a family of three devices has become a trend, and in many ways the S10e, S10, and S10+ are Samsung’s answers to Apple’s iPhone XR, XS, and XS Max respectively. Despite the similar naming convention (Galaxy “S ten” versus iPhone “ten S” ), there are some significant differences between how the two flagships compete for consumers’ wallets.

  • Samsung has three rear camera lenses while iPhone has two. On paper, Apple is at a disadvantage.
  • Samsung also takes the crown for offering the most storage for digital media.
  • These phones are among the most expensive flagships either has made within their categories, and on paper they’re undeniably the pinnacle of each company’s design prowess.