BQuick On Jan. 8: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Cabinet Decisions: Easier Coal Mining Norms, Another Divestment
India opened up coal mining to a larger pool of investors and eased environmental norms as it seeks to boost output and meet growing energy needs.
- The cabinet approved the Mineral Laws (Amendment) Ordinance 2020 that removed restrictions on the end use of coal among other measures.
- It also decided successful bidders can use existing environmental clearances for mines, including iron ore, whose leases are due to expire by March.
- “Now for taking coal blocks, you don’t need end-use plans,” Coal Secretary Anil Kumar Jain said. “Earlier bidding was only open to those who carry on coal mining operations in India,” now anyone can mine coal in the country, he said.
The extension of environmental approvals comes as a relief for iron ore miners.
The cabinet also approved a proposal to divest equity shares of six public sector undertakings, including MMTC Ltd., in Neelachal Ispat Nigam Ltd.
- "The cabinet has approved divestment of some shares of six companies held in Neelachal Ispat," Information and Broadcasting Minister Prakash Javadekar told reporters after the cabinet meeting in New Delhi.
- The six PSUs are MMTC, NMDC Ltd., Bharat Heavy Electricals Ltd., Odisha Mining Corporation, Odisha Investment Corporation and MECON Ltd., he said.
MMTC will sell 49 percent in Neelachal Ispat, while NMDC will sell 10 percent stake.
2. Carlos Ghosn Goes On The Offensive
Carlos Ghosn went on the attack against Japan’s criminal justice system less than two weeks after becoming the world’s most famous fugitive with a daring escape to Lebanon.
- “I was brutally taken from my world as I knew it,” the former head of Nissan Motor Co. and Renault SA said in Beirut on Wednesday, addressing a press conference for the first time since his arrest for financial crimes over a year ago.
- “I was ripped from my family, my friends, from my communities, and from Renault, Nissan and Mitsubishi.”
- Ghosn offered a point-by-point rebuttal of the accusations against him, while trashing the recent performance of the carmakers and international alliance he formerly ran.
- The 65-year-old is seeking to salvage his legacy, blighted by allegations of understating his income and raiding corporate resources for personal gain at Nissan.
Ghosn was facing trials that could have landed him in prison for more than a decade.
3. Iran Retaliates; U.S. Stocks, Gold Stabilise
Iran on Wednesday fired missiles at airbases jointly used by the U.S. and Iraq in retaliation for the killing of General Qassem Soleimani, roiling financial markets and disrupting air traffic but causing no casualties.
- With no Americans killed, expectations of an immediate escalation in the oil-exporting region appeared to recede.
- Though retribution had been expected for the deadly drone strike, Iraq said it had received verbal notice from the Iranians prior to the strikes. A U.S. official said the Iranians were likely aiming to miss.
U.S. President Donald Trump is expected to speak later on Wednesday.
Global financial markets stabilised after the overnight jolt from Iran’s retaliation against the U.S. gave way to speculation the tensions won’t immediately escalate further.
- The S&P 500 opened higher to cap a recovery in futures that fell as much as 1.7 percent after Iran fired missiles at U.S. bases in Iraq.
- Gold was down more than $25 an ounce from its high and Treasuries were little changed as investors await comments at 11 a.m. from President Donald Trump to assess the likelihood of additional actions.
- WTI crude fell back toward $62 a barrel after spiking above $65.
Get your daily fix of global markets here.
4. Sensex Dips Even As Experts Downplay Crude Threat
Indian equities dropped after the price of crude oil, the nation’s biggest import, surged following Iran’s attack on Iraqi bases housing American troops and as the government estimated that the economy is on track for its slowest growth in seven years.
- The S&P BSE Sensex closed down 0.1 percent to 40,817.74, clocking a third decline in four days.
- The NSE Nifty 50 Index lost 0.2 percent and closed at 12,025.35.
- Fourteen of 19 sector sub-indexes compiled by BSE Ltd. dropped, led by a gauge of capital goods companies.
- Larsen & Toubro Ltd. was the top loser on the benchmark index while Bharti Airtel Ltd. rose the most.
- Earnings reports for the most recent quarter begin later this week with Infosys Ltd. and other companies posting results and outlooks, giving investors greater insight into the corporate state of health.
Follow the day’s trading action here.
Global investors are taking the developments in the Middle East in their stride, said Mark Mobius, founder of Mobius Capital Partners, reminding that the conflict is not a new one.
- Speaking about rising oil prices and its effect on the subcontinent, he said,
- “Oil has already surpassed the $70 level. If it goes higher, countries like India who are importers of oil, will be affected so this is something we must consider.”
I don’t think the effect will be dramatic but say if it goes up to $80, the consequences will be felt.Mark Mobius, Founder, Mobius Capital Partners
India should worry only if oil prices reach $80, said Andrew Holland and Richard Harris.
5. Inflows Into Equity Mutual Funds Rebound
Inflows into equity mutual funds rebounded after three months of decline in December as Indian benchmarks extended gains for the fourth straight month—the longest streak since August 2018.
- Net inflow into equity and equity-linked schemes jumped more than threefold over the previous month to Rs 4,499.39 crore in December, according to data released by the Association of Mutual Funds in India.
- Investments into equity mutual funds in November had fallen to their lowest in more than three years.
- An analysis of the category-wise data showed that multi- and small-cap funds witnessed a rise in investments month-on-month.
Here’s how large caps fared.
6. Q3 May Be Even Worse For FMCG Companies
After stagnating sales volumes in previous quarters, some consumers goods makers may even see a decline in the quarter-ended December as distributors are buying less amid slowing consumption, 11 suppliers from eight states told BloombergQuint.
- The distributors—who according to Nielsen India contribute 90 percent to the factory-gate sales of the Rs 4-lakh-crore fast-moving consumer goods industry—stocked upto 40 percent fewer products over a year earlier, they said on the condition of anonymity out of business concerns.
- That helped them destock - inventory days fell from 45 a couple of quarters ago to seven-10 days now, according to the survey.
Here are the key findings from BloombergQuint’s conversation with the distributors.
7. Supreme Court Revives Probe Against Adani Enterprises
The Supreme Court revived the Indian revenue department’s bid to investigate billionaire Gautam Adani’s companies, which the agency claims got undue tax benefits by overvaluing coal imports.
- A three-judge bench headed by Chief Justice SA Bobde put on hold Bombay High Court’s ruling, effectively allowing the revenue office to seek information on the case from overseas.
- The Supreme Court also asked Adani Enterprises Ltd. and Adani Power Ltd. to submit their stance.
- The investigation is part of a larger probe by the Indian revenue department for over-invoicing of imported coal and power plant equipment by several Indian electricity producers.
Here’s what India’s Directorate of Revenue Intelligence alleges.
8. Paytm Targets To Add 10 Million Merchants This Year
Paytm launched an all-in-one quick response code as India’s largest digital payments services provider looks to expand its merchant client base by 10 million this year.
- Its ‘Paytm for Business’ mobile application uses QR codes to accept payments from multiple platforms.
- “Paytm was a pioneer of QR-code payments and today there are so many QR codes on the counters of businesses. But most of these are for Unified Payments Interface transactions and one of the biggest demands for merchants was to consolidate all these codes,” Vijay Shekhar Sharma, chief executive officer at Paytm, told BloombergQuint in an interview.
- Through the new all-in-one QR-code, merchants across the country can accept payments through Rupay cards, Paytm wallets and other third-party-applications on the network, he said.
- The application already has 10 million merchant users, he said, adding that Paytm targets to grow its merchant base from the existing 15 million to 25 million in the next year.
The new service allows merchants to manage payments, record transactions and avail multiple services and products such as loans and insurance.
9. The World In 2030
A fearless generation of ‘Twenty-Somethings’ will define the 2020s, reshaping our world, writes Raj Bhala.
- International trade will be managed for social justice.
- Islamist extremism will be moribund.
- Liberal arts will flourish again.
- Ecological sins will be repented.
10. Strike Over Modi’s Economic Policies Disrupts Banks, Transport
India’s transport and banking services were disrupted on Wednesday as crores of employees joined a strike called by the country’s major trade unions to protest against Prime Minister Narendra Modi’s economic policies.
- About 25 crore people across at least 12 states including Kerala, West Bengal, Bihar, Odisha and Assam participated in the nationwide strike, said Tapan Sen, general secretary of the Centre of Indian Trade Unions.
- Farmers in many of the states also joined in road blockades, he said.
- The one-day stoppage has been called by 10 trade unions, affiliated to communist parties and the opposition Congress party.
- They’re demanding the government rein in price rises and unemployment, provide social security for workers, stop disinvestment in certain state-owned companies and halt overseas investment in railways, insurance, coal and defense sectors.
- The trade unions are seeking “reversal of the anti-worker, anti-people, anti-national policies of the government,” they said in a joint statement.
The union affiliated with Modi’s Bharatiya Janata Party, which claims 1 crore members, did not participate in the strike.