BQuick On June 10: Top 10 Stories In Under 10 Minutes
Here is a roundup of the day’s top stories in brief.
1. Deloitte, BSR Associates: Government Seeks 5-Year Ban
The Corporate Affairs Ministry on Monday filed fresh applications at the National Company Law Tribunal to ban Deloitte Haskins & Sells and EY’s BSR Associates, who are auditors of IL&FS Financial Services, from auditing for five years.
- Deloitte was IL&FS’ financial auditor for 2017-18. BSR Associates is still the auditor of the company.
- A two-member NCLT bench of VP Singh and Ravikumar Duraisamy asked the auditors to file their replies by June 19 and posted the matter for further hearing on June 21.
- The ministry has also made the Reserve Bank of India, Securities and Exchange Board of India and Institute of Chartered Accountants of India as respondents so that if such an order is passed, they can execute the same.
The MCA also sought to appoint a new auditor for the crippled firm.
2. Mutual Fund Flows Fell In May
Mutual fund flows declined in May amid concerns over the industry’s exposure to corporate debt even as investments into equity schemes rebounded.
- The net inflows across all segment of schemes fell 23 percent month-on-month to Rs 76,990 crore in May, according to Association of Mutual Funds in India data.
- That was driven by a 42 percent sequential decline in inflows into income or debt-oriented schemes to Rs 70,119.45 crore.
- Bulk of the inflows in May came through the liquid or the money-market category, used by companies to park surplus cash for the short term.
Read more to find out how long the negative flows may last.
3. What Ridham Desai Thinks Will Drive Growth
Ridham Desai expects the shift in the Reserve Bank of India’s monetary policy stance from 'neutral' to 'accommodative' and its focus on growth to boost India’s economic performance in the coming year.
- “There’s a distinct shift in the central bank’s thinking about the economy,” the India equity strategist at Morgan Stanley told BloombergQuint, adding that the nation’s economic performance over the last two years suffered because of the tighter monetary policy. “We’re now moving away from it.”
- The biggest impact to Indian economic growth, according to Desai, could come from a spillover of the U.S.-China trade war as India is generally immune—but not entirely—to the phenomenon.
- Desai expects the current foreign inflow trend to sustain, led by rising investor interest. “India looks like a place which will outperform emerging markets for the remainder of 2019.”
Here’s Desai’s take on the different sectors.
4. Sensex, Nifty Rise; U.S. Stocks Rise
Indian equity benchmarks ended higher for the second consecutive trading session, led by the gains in Infosys Ltd. and Tata Consultancy Services Ltd.
- Indian benchmarks’ gains were in line with their Asian and European peers after the U.S. President Donald Trump suspended plans for punitive tariffs on goods from Mexico.
- The S&P BSE Sensex closed 0.43 percent or 169 points higher at 39,784.
- The NSE Nifty 50 ended at 11,922, up 0.44 percent.
- The broader market index represented by the NSE Nifty 500 Index closed 0.31 percent higher.
- Six out of 11 sectoral gauges compiled by NSE advanced.
Follow the day’s trading action here.
U.S. stocks joined a global rally in equities after President Donald Trump suspended plans for tariffs on Mexico.
- The S&P 500 Index advanced for a fifth straight session, led by chipmakers and auto companies.
- Emerging-market shares headed to their biggest increase since January as Mexico’s peso strengthened the most in almost a year after the accord with the U.S. late Friday.
- Sovereign bonds fell across the board, along with gold and the yen, as demand for havens ebbed.
- The dollar climbed, particularly versus the pound after weak economic data in the U.K. The onshore yuan fell to its weakest level since November after China’s central bank governor hinted there was no line in the sand for the currency.
- Gold sank 0.8 percent to $1,329.76 an ounce on the biggest tumble in two months.
Get your daily fix of global markets here.
5. A Good Year To Improve Margins?
Analysts expect operating margins of nearly three-quarters of Indian companies to increase in the ongoing financial year.
- Of the 208 companies tracked by at least 10 analysts, 153 are expected to witness a rise, according to Bloomberg data.
- Stocks from cement and aviation sectors may outperform due to higher prices and lower costs.
- Meanwhile, earnings before interest, tax, depreciation and amortisation margin of infrastructure and capital goods is expected to decline as commodity prices rise and rupee fluctuates.
- InterGlobe Aviation Ltd. and Vodafone Idea Ltd. feature among the companies with the best chances to improve their margins.
Here is the the full list of companies which have the best and worst shots at improving their margin.
6. TCS Overtakes RIL
Tata Consultancy Services Ltd. on Monday surpassed Reliance Industries Ltd. to become India’s most valued firm by market capitalisation.
- At close of trade on Monday, TCS’ market cap was Rs 8.37 lakh crore, higher than that of RIL’s Rs 8.36 lakh crore on the Bombay Stock Exchange.
- TCS shares rose 2.39 percent during the day, while RIL closed 0.27 percent higher.
- TCS and RIL are followed by HDFC Bank Ltd. at Rs 6.6 lakh crore, Hindustan Unilever Ltd. at Rs 4 lakh crore Housing Development and Finance Corp. Ltd. at Rs 3.7 lakh crore as the five most valued companies in India by market cap.
RIL had last month reclaimed its top spot, overtaking TCS.
7. YV Reddy Points To India’s Limited Fiscal Headroom
India’s fiscal position leaves less room for a stimulus even as domestic growth slows, according to YV Reddy.
- “The true fiscal deficit in the current year is more than perhaps that in the past,” Reddy, former governor of the Reserve Bank of India, said at a conference organised by the National Council of Applied Economic Research.
- “Basically, there is some fudgeting. But if the degree of fudgeting is more, then there is a distance between the true fiscal deficit and the real fiscal deficit. That is one issue,” Reddy said.
Reddy said that India's fiscal deficit can only be sustained if...
8. Can India Benefit From U.S. Trade War With China?
The Trump administration’s ‘America First’ trade policies have attracted criticism from around the globe on a scale never seen before by any country, writes Seetharaman Sampath.
- The end-use import data published by the U.S. Census Bureau shows that India’s exports to the U.S. were around 10 percent of that of China during the last three years.
- A perusal of the export basket from China and India shows a limited overlapping.
So will Trump’s ‘America First’ policies offer significant opportunities for India?
9. Kathua Rape-Murder Case: Life Imprisonment For Three Main Convicts
Three main accused in the gangrape-and-murder of an eight-year-old nomad girl from Kathua, Jammu & Kashmir, were on Monday sentenced to life imprisonment by a court in Pathankot, lawyers said.
- Sanji Ram, the caretaker of the temple where the Kathua rape took place, special police officer Deepak Khajuria and Parvesh Kumar have been convicted under Ranbir Penal Code sections pertaining to criminal conspiracy, murder, kidnapping, gangrape, destruction of evidence, drugging the victim and common intention, the lawyers said.
- They have been sentenced to life imprisonment and fined Rs 1 lakh each for murder along with 25 years in jail for gangrape, they said.
Three accomplices have been convicted for destruction of evidence.
10. The Real Cost Of Mumbai’s Coastal Road Project
The people of Worli Koliwada, a horn of a land jutting into the bay in central Mumbai, life has been a certain way for over five generations. Before daybreak, the men head out into the waters, to cast nets for fish. When the tide ebbs, they return to retrieve the catch: surmai, rawas, ghol, lobsters, crabs, prawns and more.
This life of theirs is now under threat.
- Their fishing waters will be dumped with construction debris and gravel to create a 10-kilometre stretch of land for the southern end of the coastal road.
- The project is aimed at easing the commute in the city of 22 million people and over 3.3 million cars.
- But it is also one that could destroy the livelihood of the village with 700 fishermen and 157 boats.
That’s the story of Mumbai’s original inhabitants. Read it here.