BQuick On Jan. 29: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s stories in brief.
1. IndiGo Shareholders Shoot Down Gangwal’s Proposal
A majority of InterGlobe Aviation Ltd.’s shareholders voted against a proposal to amend the articles of association of the company that would’ve allowed the promoters to buy or sell their stake in India’s largest airline.
- 51.4 percent of the participating shareholders voted against the special resolution at today’s extraordinary general meeting, according to a stock exchange filing by the operator of IndiGo.
- The remaining 48.6 percent were in favour.
- A special resolution requires at least 75 percent of the votes cast to go through.
- Almost 94 percent of the total shareholders cast their vote. Given the number of votes against the resolution, it appears that one of the promoter groups voted against it.
The EGM was expected to bring an end to the ongoing promoter dispute.
2. What Will The U.S. Fed Do?
Jerome Powell will likely face questions about the Federal Reserve’s plans to slow its asset purchases as well as the potential fallout from a deadly virus when he faces reporters after a policy meeting later on Wednesday.
- The Fed is all but certain to keep interest rates steady following December forecasts that showed no change in 2020, and is expected to reinforce the signal that policy is on hold.
- Officials could tweak a secondary rate, known as the interest on excess reserves, in a technical move.
- Investors will also focus on the balance sheet, which the central bank resumed growing in October to relieve strain in money markets.
Here are six issues investors are watching for in this decision day guide.
3. Nifty Halts Two-Day Losing Streak; U.S. Stocks Rise
Indian indices halted their two-day losing streak ahead of F&O expiry, led by the gains in Tata Motors Ltd., HDFC Bank Ltd. and ITC Ltd.
- The S&P BSE Sensex rose 0.57 percent or 231.8 points to 41,198.66
- The NSE Nifty 50 rose 0.6 percent to 12,129.50.
- The broader markets represented by the NSE Nifty 500 Index rose 0.53 percent.
- The market breadth was tilted in favour of buyers.
- Ten out of 11 sectoral gauges compiled by NSE ended higher.
Follow the day’s trading action here.
U.S. stocks rose after a flurry of corporate earnings as traders awaited the Federal Reserve’s rate decision amid concern over the coronavirus.
- The S&P 500 extended its rally into a second day as Apple Inc.’s strong results sent the iPhone maker to a record, while General Electric Co.’s outlook topped Wall Street’s estimates.
- Treasury yields declined, while the U.S. dollar advanced against most of its major peers.
- Crude pared gains, following a surge of as much as 1.7 percent after Yemen’s Houthi rebels said they attacked an oil facility in Saudi Arabia.
Get your daily fix of global markets here.
4. Bajaj’s NBFC Twins See Profit Rise In Q3
Bajaj Finance Ltd.’s quarterly profit beat estimates on higher fee and commission income. And that’s despite a rise in provisions.
- Net profit rose 52 percent year-on-year to Rs 1,614 crore.
- Net interest income, or core income, of the non-bank lender rose 42 percent to Rs 4,537 crore.
- Bajaj Finance’s assets under management rose at its slowest pace in five quarters.
Bajaj Finance saw some uptick in consumer demand during the quarter.
Bajaj Finserv Ltd.’s third-quarter profit rose on the back of its life insurance business.
- Net profit rose 32 percent over the previous year to Rs 1,126 crore.
- Revenue rose 31 percent to Rs 14,561 crore.
Here is how Bajaj Finserv’s verticals performed.
5. The Fiscal ‘Escape Clause’
The central government is widely expected to miss its 3.3 percent fiscal deficit target for 2019-20, with the breach likely to be announced in the upcoming budget presentation on Saturday.
- Lower taxes amid weaker growth have meant that the government may invoke the ‘escape clause’ provided by the Fiscal Responsibility and Budget Management Review Committee.
- The 'escape clause' allows the government to breach its fiscal deficit target by 0.5 percentage points at times of severe stress in the economy, including periods of structural change and those when growth falls sharply.
- The breach in itself may not seem alarming in a year when growth has fallen to 5 percent from 8 percent in a six-quarter period, but the implications of invoking the ‘escape clause’ are serious and will take India back towards ‘automatic monetisation’ of fiscal deficits.
This would take the economy back to a practice that had been left behind to try and end the fiscal dominance of monetary policy.
6. Investment Rush In Operational Infrastructure Projects
India’s infrastructure sector has witnessed a steady increase in investor interest over the recent past, especially in operational renewables and road projects. Several factors have contributed to heightened investor appetite, writes Hemant Sahai.
- From an investors’ perspective, such projects are free of construction and pre-development risks and offer a low-risk moderate-return profile, while developers (both government and private sector) can monetise existing assets, potentially to pare debt or raise fresh capital.
- The widespread adoption of the 'Hybrid Annuity' and 'Toll Operate Transfer' models by the National Highways Authority of India have contributed immensely to the development of road sector projects in the country.
Here are the other catalysts.
7. India Sets Up Coronavirus Screening Across 21 Airports
India has set up coronavirus screening across 21 airports and in border states, according to a statement from ministry of health.
- The south Asian nation, which hasn’t reported any cases so far, is also screening people entering through checkpoints at six states bordering Nepal. Four new laboratories have been set up apart from the Pune-based National Institute of Virology.
- At last count, India has screened 155 flights with 33,552 passengers, according to a Jan. 28 statement. The government had said it is awaiting permission from China to evacuate Indian nationals from Wuhan.
8. JD(U) Expels Top Brass For Dissent
Janata Dal (United) on Wednesday expelled its Vice President Prashant Kishor and General Secretary Pavan Varma from the party, saying their conduct in the recent past has made it clear that they don't want to abide by the party's discipline.
- Both leaders have been critical of the party President and Bihar Chief Minister Nitish Kumar over his support to the Citizenship (Amendment) Act and the National Population Register.
- A statement, issued by party's Chief General Secretary KC Tyagi, said that these two were "acting against party's decisions as well as its functioning" which amounted to breach of discipline.
The party also accused Kishor of using "insulting words" against the Bihar chief minister.
Also read: Badminton Ace Saina Nehwal Joins BJP
9. BJP’s Delhi Dilemma
Making this election another ‘Kejriwal versus Modi’ battle is fraught with risks for the BJP, writes Amitabh Tiwari.
- The ‘Modi Factor’ in Lok Sabha polls has risen to 18 percent, when the BJP fetched 57 percent of Delhi’s votes.
- Recent assembly elections in Haryana, Maharashtra, and Jharkhand, suggesting a localisation or split-vote effect.
- The BJP needs to raise local issues and project local leadership, which it is currently struggling with.
What does the BJP do in the absence of local leaders who can match the charisma of Arvind Kejriwal?
10. Drinking At Home In Maharashtra? Know The Rules First
In India’s richest state, every time you bake a rum cake or make liqueur-filled chocolates for your family, you could be breaking the law. That’s because you need a permit to use alcohol in food—even for self-consumption.
- There’s more to worry. Anyone who serves alcohol to more than 10 people without a permit in a party at home can be arrested.
- And if you are willing to take chances with that, consider this: your liquor will be seized.
- Drinkers need to comply with these and a host of other rules in Maharashtra.
BloombergQuint spoke to an Excise Department official to understand what you need to legally enjoy a swig or two.