BQuick On Jan. 9: Top 10 Stories In Under 10 Minutes
Prime Minister Narendra Modi meets with economists and industry leaders ahead of Budget 2020. (Source: PIB’s Official Twitter Handle)

BQuick On Jan. 9: Top 10 Stories In Under 10 Minutes

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

1. Promoter Share Sales Here To Stay In 2020

After a year that saw some of India’s top business tycoons lose control of their companies as lenders invoked shares offered as collateral against debt, 2020 could see more of that.

  • That’s because controlling shareholders of at least 50 Indian companies have pledged nearly all their holdings, according to data on the BSE.
  • And they contribute more than half of Rs 2.21 lakh crore worth of shares pledged by Indian promoters as on Jan. 6.
  • Shares of these firms are at a higher risk of coming under selling pressure in case of any concerns over debt.

These are the top business tycoons who lost control of their companies in 2019.

Also read: Mid-Sized Firms Worst Hit By India’s Credit Slump: CIBIL

2. Sensex Surges Most In Three Months, S&P 500 Nears Record

Indian equities rose the most in three months, tracking gains in global markets, as the price of crude oil, the nation’s biggest import, steadied after the U.S. and Iran appeared to be stepping back from a military conflict.

  • The S&P BSE Sensex Index advanced 1.6 percent or 634.61 points to 41,452.35, marking its biggest gain since Oct. 9.
  • The NSE Nifty 50 Index also rose by 1.6 percent and closed above the 12,200 mark.
  • Eighteen of 19 sector sub-indexes compiled by BSE Ltd. advanced, led by gauges of real estate and auto companies.
  • ICICI Bank Ltd. was the top gainer on the benchmark index, while Tata Consultancy Services Ltd. dropped the most.

Follow the day’s trading action here.

BQuick On Jan. 9: Top 10 Stories In Under 10 Minutes

U.S. stocks rose and Treasuries fell as investor appetite for risk returned after America and Iran stepped back from the brink of war.

  • The S&P 500 headed for another record as the conflict between the U.S. and Iran, which drove futures down as much as 1.7 percent on Wednesday, hasn’t escalated.
  • Oil continued its decline from multi-month highs, and gold fell for a second day.
  • The greenback gained against major currencies for a third straight day, and 10-year Treasury yields advanced toward 1.90 percent after jobless claims fell by more than expected.

Get your daily fix of global markets here.

3. What To Expect From Infosys And Peers

The profit of India’s five largest information technologies by market value is expected to rise in the seasonally weak October-December period on the back of steady deal wins over the last three quarters.

  • The aggregate revenue of the five largest Nifty 50 IT companies—Tata Consultancy Services Ltd., Infosys Ltd., HCL Technologies Ltd., Wipro Ltd. and Tech Mahindra Ltd. is expected to grow 2.5 percent sequentially in rupee terms, according to Bloomberg.
  • Operating profit is projected to grow 3.2 percent, while net profit may rise 1.1 percent sequentially in the quarter ended December.

Infosys kick-starts the earnings season on Friday.

Also read: Q3 Earnings Preview: India Inc. May Face Another Tough Quarter As Slowdown Persists

4. Domestic Pharma Sales Slowed In December, Passenger Traffic Growth Jumped In November

India’s pharmaceutical market grew at a slower pace as drugmakers saw a decline in sales of anti-infective, cardiac and anti-diabetic drugs.

  • Pharma sales grew 8.8 percent year-on-year in December to Rs 12,024 crore, slipping from a 32-month high of 14.5 percent in the previous month, according to data released by AIOCD AWACS—a pharmaceutical market research firm.
  • The growth rate for the quarter ended December was 9.5 percent compared to 9.7 percent in the year-ago period.

Here are the highlights of the December performance.

Reaching double digits for the first time since January 2019, domestic passenger traffic growth in India jumped to 11.3 percent in November as compared to the corresponding month of 2018, said International Air Transport Association.

However, economic growth (in India) in the third quarter was the weakest in around six years amid a broad-based slowdown that is affecting many sectors of the economy. This will present a more challenging environment for the industry going forward.
IATA Statement

5. PM Modi’s Pre-Budget Brainstorming Session

Unfazed by projections of India’s GDP growth slowing to an eleven-year low in 2019-20, Prime Minister Narendra Modi said fundamentals of the Indian economy are strong and it has the capacity to bounce back.

  • Modi, who seems to have taken charge of the efforts to revive the economy, has over the past few days held 12 brainstorming sessions with different stakeholders over various issues affecting the economy and to thrash out appropriate policy interventions in Union Budget 2020-21.
  • On Thursday, he met economists, private equity and venture capitalists, business leaders and agri experts at NITI Aayog and called for focused efforts to achieve the target of making India a $5 trillion economy by 2024.
  • The prime minister said he was happy that the two-hour open discussion has brought to the forefront the experience of people on the ground and those working in their respective fields

"We must all work together and start to think like a nation," an official press statement quoted Modi as saying.

Also read: India Asset Sales to Fall Short of Target by Nearly 50%

6. India’s Economic Slump: Should Policymakers Go Above And Beyond?

India is witnessing an exceptional growth slowdown which requires a deeper counter-cyclical response, writes IDFC AMC’s Suyash Choudhary.

  • Ideally, our growth cycle currently may well require lower rates as well as higher public spending.
  • Operation Twist does not resolve all problems of weak monetary transmission.
  • To address fiscal policy playing spoiler to monetary policy, an enhanced role of foreign capital should be explored.

Also read: Modi Government Should Focus On Economic Slowdown, Says Economist Nouriel Roubini

7. Why 2020 May Be The Best Year For ONGC Stock In Over A Decade

India’s largest oil and gas explorer usually disappoints analysts but they still expect it to return the best gains in more than a decade in 2020.

  • Shares of Oil and Natural Gas Corporation Ltd. are estimated to rise as much as 45 percent this year, according to the average of 12-month analyst targets compiled by Bloomberg.
  • That will be the highest gains since 2009 and the best returns among its peers in the S&P BSE Oil and Gas Index.
  • To be sure, the stock hasn’t lived up to analysts’ expectations seven times in the last 11 years.

Here are the other reasons that could power the rally.

8. Indian Rupee: A Decade Of Mixed Emotions

The rupee was the worst performer among Asian emerging markets in the 2010s, but escaped the kind of drubbing that the other BRICS saw. Now, what lies ahead, asks Ira Dugal.

  • Will inflation-targeting mean that the average rate of depreciation due to inflation differentials moderate?
  • If limits for FPI flows into the debt markets are loosened, is the rupee in for a decade of possibly more support but also more swings?
  • What if we don’t get our act together on the country’s demographic dividend?

9. Are QR Code Payments Coming Of Age In India?

Turn on your phone camera, point at a sticker and pay. That’s how simple QR-code based payments appear to be. Amid a sea of options, QR-codes, seen as a low-cost option, particularly for small businesses, are gaining traction.

  • On Wednesday, Vijay Shekhar Sharma, founder of Paytm, launched his company’s latest offering—the ‘all-in-one’ QR.
  • While having introduced QR code payments a few years ago, Paytm’s latest offering claims to allow merchants to make and accept payments through its wallet, UPI-based payment apps and Rupay cards.
  • Paytm, along with PhonePe, Mobikwik, Razorpay, Freecharge and many others are pushing QR-code based payments to capture transactions made by small and informal merchants, like kirana (mom-and-pop) stores.
  • They hope to replicate the experience of a country like China, where over 7.2 trillion yuan worth of payments were made via QR-codes in the twelve months till March 2019, according to a June 2019 report from the iResearch Consulting Group.

So how popular are QR codes in India?

10. Jeff Bezos May Meet Modi

Amazon.com Inc. Chief Executive Officer Jeff Bezos will be visiting India next week and is likely to meet Prime Minister Narendra Modi, besides industry leaders, PTI reported citing unnamed officials.

  • The top executive will also attend SMBhav an event focussing on small and medium businesses in India—that is slated for Jan. 15-16 in New Delhi.
  • Bezos is likely to discuss regulatory issues in his meeting with the government officials.
  • He is also slated to engage with SMBs during the SMBhav event. The event—which will focus on discussions around how technology adoption can enable SMBs in India—is slated to see participation from industry experts, policymakers, solution providers and Amazon leadership.

When contacted, Amazon declined to comment.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.