BQuick On July 25: Top 10 Stories In Under 10 Minutes

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

1. Four Out Of Five For Tata Motors

Tata Motors Ltd.’s reported its fourth loss in five quarters as the automaker was hit by bleak demand in India while its luxury unit Jaguar Land Rover Automotive Plc continued to struggle.

• Net loss increased to Rs 3,680 crore from Rs 1,862.7 crore year-on-year.
• Revenue fell 7 percent to Rs 61,647 crore.
• Operating margin narrowed 130 basis points to 7.5 percent.
• JLR’s margin fell 200 basis points to 4.2 percent.
• JLR’s revenue fell 3 percent to 5.07 billion pounds.

Tata Motors said it could not prevent a loss despite cost-cutting efforts.

2. Bajaj Gets Stringent About Lending

Bajaj Finance Ltd.’s disbursements to small businesses and consumers fell on stricter lending criteria amid slowing consumption even as the non-bank lender met profit estimates in the quarter ended June.

• The company tightened underwriting standards in digital product financing in urban and rural business, translating into an about 15-18 percent cut in new disbursements, according to its investor presentation filed with exchanges.
• The non-banking finance company altered norms for small-to-medium enterprises and business-to-consumer segments, resulting in a 10 to 12 percent decline in disbursements, it said, adding that it also tightened credit standards for auto loans.
• The categories contribute about 40 percent of the total assets for the non-bank lender that offers credit for everything from buying a car to home appliances and even clothes.

Here’s the management commentary and key takeaways from the results.

3. Key Bureaucrat’s Abrupt Exit

Subhash Chandra Garg, a top finance ministry bureaucrat who was overseeing India’s plan to sell its maiden offshore sovereign bonds, is seeking early retirement after he was abruptly moved out of the role.

• Garg, 58, was appointed as secretary of the Ministry of Power, according to a government statement late on Wednesday.
• He was replaced by Atanu Chakraborty, an official who steered the nation’s asset-sale programme, as the economic affairs secretary.
• In a post via Twitter, Garg said he would take charge as power secretary on Friday and has applied for voluntary retirement from the service with effect from Oct. 31.

The official’s departure may put at risk India’s move to raise as much as $10 billion from foreign bond sales.

Garg's abrupt exit has also left the panel tasked to review the Reserve Bank of India’s economic capital framework in need of consultation as he was the government’s lone representative on the committee.

• The Bimal Jalan-headed panel would seek guidance of the RBI on whether another meeting is required, and if there is a need to induct a new member, the person said on the condition of anonymity.
• The panel finalised its report on July 17 but is yet to submit the findings to the RBI.

Garg is said to have written a dissent note on the transferable surplus decided by the panel.

4. Confusion Around $10 Billion Bond Sales

India’s plan to sell its first overseas sovereign bonds is becoming mired in confusion within weeks of the announcement.

• The office of Prime Minister Narendra Modi is opposed to selling debt in foreign currencies, ET Now television reported, citing Cogencis news agency.
• The report comes a day after Subhash Chandra Garg, who was overseeing the planned $10 billion debt sale was transferred to another department.
• Yields on the benchmark 10-year debt jumped as much as 12 basis points, the most since January, to 6.55 percent, on concern the plan will be changed.
• The sale was announced in the July 5 budget, and had fueled a rally on expectation that the government will sell less debt locally.

Here’s what would happen if India scraps the issuance in foreign currency.

5. Worst Nifty F&O Series In Nine Months

Indian equity benchmark NSE Nifty 50 fell 4.98 percent in the July series, the worst since October when it declined 13.3 percent.

• The S&P BSE Sensex closed Thursday’s session marginally lower at 37,870.
• The Nifty closed at 11,252.15, down 0.17 percent.
• The broader market index represented by the NSE Nifty 500 Index ended flat.
• The market breadth was tilted in favour of sellers.
• Seven out of 11 sectoral gauges compiled by NSE advanced.

Follow the day’s trading action here.

ECB Signals Stimulus, QE

President Mario Draghi set the stage for his European Central Bank to deliver another round of monetary stimulus as soon as September to combat the euro area’s severe economic slowdown.

• While there are still signs of strength in the economy,“this outlook is getting worse and worse,” Draghi said in Frankfurt on Thursday after a meeting of the ECB’s Governing Council.

ECB’s Governing Council changed policy language to prime for easing.

U.S. stocks fell from record highs amid a torrent of corporate results, while the euro recovered from a two-year low and European bonds reversed gains after Mario Draghi didn’t give markets enough of a dovish signal they were hoping for.

• The S&P 500 dropped from an all-time high and the Dow Jones Industrial Average slumped for a second day as investors digested a flood of earnings.
• The euro rose versus the dollar and Treasuries fell after ECB President Draghi left rates unchanged but said a “significant degree” of monetary stimulus is needed.
• Gold dipped 0.5 percent to $1,419.14 an ounce.

Get your daily fix of global markets here.

6. Job Cuts, Showroom Shutdowns And India’s Auto Woes

For three months, Manoj, a car salesman, missed targets. Last week, after having worked at a dealership in South Delhi for three years, he was sacked. But he wasn’t an underperformer, and he wasn’t alone.

• About 25,000-35,000 people have lost jobs in the last year and nearly 271 car and two-wheeler showrooms shut across India as fewer Indians are buying vehicles, according to data provided by the Federation of Automobile Dealers Associations.
• Showrooms are trying to cut manpower and inventory costs, both of which account for about two-thirds of overall costs, said Vinkesh Gulati, vice president of FADA.
• While that may only be a fraction of the 2.5 million people employed in the 25,000-odd showrooms across India, it underscores the human cost of the slowdown.

Here are the carmakers, which have been most affected by the cuts.

7. Automation In Banking Not Hurting Hiring Yet

Hiring at India’s top private lenders rose in 2018-19 after two consecutive years of subdued growth in employments, show annual reports of the country’s largest private banks.

• This, despite fears that increased automation across a number of banking functions would reduce hiring.
• According to the ‘Jobs and Salaries Primer: 2019 versus 2018’ report from TeamLease Services Ltd., cyber security, enterprise architecture, issue redressal, wealth management and risk modelling are the top areas for recruitment for banks.

Here’s what hiring data compiled by BloombergQuint reveals.

8. Dear SEBI, Please Tread Carefully On 35% Public Float Plan

If the minimum public shareholding is raised to 35 percent...

• Which companies will go first?
• What’s the timeline?
• What are the methods to dilute?
• What’s the tax treatment?

Top lawyer Cyril Shroff and his team list the many issues SEBI must consider when taking up the public float proposal, in the final part of their column series.

9. RTI Amendment Bill Passed

The Right to Information (Amendment) Bill 2019 cleared the Rajya Sabha test today despite the Opposition's demand to send it to a committee for greater scrutiny.

• The motion was negated by 117 members voting against the motion and 75 members voting in favour.
• This was after high drama in the House over what opposition charged was "intimidation" by the treasury benches to get the motion for sending the amendment to the RTI Act to the Select Committee rejected.
• The amendments seek to change this and give the power to the government to fix their tenure, salaries and service conditions.

The Lok Sabha had passed the RTI amendments on July 22.

10. The Warren Buffett Lunch Mystery

Chinese cryptocurrency entrepreneur Justin Sun, who cited health issues in postponing his charity lunch with Warren Buffett this week, issued a broad apology to just about everyone for touting the plan to dine with one of America’s richest people, noting it raised concerns among authorities.

• Sun’s announcement on Monday that he was delaying a lunch he’d won with a $4.57 million bid at auction fuelled speculation he or his company had come under pressure.
• The move was surrounded by a flurry of posts and articles claiming he was denied an exit visa from China and that his venture and its cryptocurrency, Tron, faced investigation.
• The digital coin’s price fell even after he posted a video that showed him in San Francisco.
• One person with knowledge of the matter said several Tron executives were briefly detained by Chinese authorities, and then released once Sun agreed to put off the lunch.

Buffett’s annual charity auction has rarely been so dramatic in recent years, with many winners choosing to remain anonymous.