BQuick On March 15: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Trade Deficit At 17-Month Low
India’s trade deficit narrowed more than estimated in February from a month ago, as imports fell owing to a sharp drop in oil purchase cost.
- The gap between exports and imports was $9.6 billion last month, compared with $14.7 billion in January, data released by the commerce ministry showed on Friday.
- The deficit is narrower than the $13.7 billion median estimate in a Bloomberg survey of 19 economists.
- Exports rose 2.4 percent from a year ago to $26.7 billion.
- Imports fell 5.4 percent to $36.3 billion.
Is this a sign of an economic slowdown?
2. Another Liquidity Crunch?
The Indian economy is bracing for another bout of tight liquidity over the next two weeks, as a host of factors lead to an outflow of funds from the banking system.
- Advance tax and GST payments, higher leakage of currency ahead of the election and a gap in credit and deposit growth could lead to a cash crunch and force the central bank to step-in with more liquidity soothing measures, senior economists and market experts told BloombergQuint.
- At present, while liquidity is in deficit, the gap is small at about Rs 31,200 crore, as on March 13.
- This deficit could rise sharply to over Rs 2 lakh crore over the next two weeks.
- To be sure, a large part of this deficit, created by tax outflows, will likely prove to be transient.
Together, this could mean significant liquidity tightness.
3. Marico’s Best-Seller Is Struggling
Marico Ltd.’s branding of Saffola as a safer alternative helped win consumers in a country where people suffer from diseases like diabetes and hypertension at least a decade earlier than peers in developed nations.
- But the company’s volumes have plateaued amid competition and as Indians look for healthier options.
- The brand has a 72 percent share of India’s premium oil market and contributes nearly 18 percent to Marico’s domestic revenue, according to the company's website.
- Saffola’s volumes have either fallen or were flat in the last eight quarters barring a spike in three months ended in June 2018—they have since declined.
That comes when India’s burden of non-communicable diseases is escalating.
4. A Hurdle For Coffee Day’s Siddhartha
Shares of Mindtree Ltd. have risen about 8 percent so far on chances of it becoming a takeover target as the Coffee Day Group, its single-largest shareholder founded by VG Siddhartha, is said to be planning to sell its stake to pare debt.
- Siddhartha and Coffee Day Enterprises are looking to release pledged shares of Mindtree to sell them to an investor to raise funds, according to people familiar with the plans who didn’t want to be identified as the talks are private.
- Revoking pledged shares would require negotiation with various lenders and either replacement of the pledged shares with other assets or part repayment of the loans.
- Then the money raised from stake sale can be used to repay the bridge loan.
But who’s interested in buying?
5. Nifty Flat
Indian equity benchmarks registered their best week since November, after posting their longest stretch of weekly gains in over six months.
- The S&P BSE Sensex ended 3.7 percent higher this week to close at 38,024.
- The NSE Nifty 50 ended at 11,426.85, up 3.5 percent.
- On Friday, both indices closed around 0.7 percent higher.
- The market breadth, however, was tilted in favour of sellers.
- Nine out of 11 sectoral gauges compiled by NSE advanced.
Follow the day’s trading action here.
U.S. stocks joined a global advance in equities sparked by China’s renewed commitment to stimulus, but a weak American manufacturing reading and a quarterly event known as quadruple witching damped enthusiasm.
- The S&P 500 edged higher as it heads for a solid weekly advance. Volumes spiked higher and trading was volatile amid the expiration of futures and options on both indexes and stocks.
- The 10-year Treasury yield fell below 2.6 percent.
- Equities from Tokyo to China rose after the Chinese government said it would cut value-added taxes, reinforcing expectations for an eventual pick-up in the second-largest economy.
- Brent crude fell 0.8 percent to $66.68 a barrel, the largest fall in a week.
Get your daily fix of global markets here.
6. Why Jet Lenders Are Increasingly Nervous
Lenders to crisis-stricken Jet Airways Ltd. are getting increasingly nervous as progress on finalising a resolution plan remains slow.
- The lack of a firm plan for equity infusion from promoter Naresh Goyal and partner Etihad Airways PJSC has prevented any interim funding from being approved, forcing the airline to continue cutting back on operations.
- According to at least three people in the know, a resolution plan which was circulated among all stakeholders earlier, is yet to receive approvals from Etihad Airways.
- Without the approval of the Abu Dhabi-based airline, the Jet Airways resolution plan could fail, pushing the Indian carrier closer to insolvency, these people said.
Here’s why negotiations have come to a halt.
7. Mittal Takes Ruia Battle To London
"Hide all docs," the email read.
In a second message, the employee urged a colleague to conceal a laptop. A squad of lawyers and computer specialists from ArcelorMittal was at the London offices of a company controlled by the Ruia family’s Essar Group, as part of efforts to seize assets relating to a $1.5 billion U.S. arbitration award. And a team working for Essar scion Prashant Ruia were out to stop them.
- Lakshmi Mittal has opened a new front in the U.K. in a worldwide legal battle with the Ruia family.
- Set against the backdrop of an ongoing tussle for an Indian steelmaker, the billionaire has accused his fellow Indian tycoons of hiding funds through a series of sham transactions within the Essar Group.
- So far not one cent of the U.S. award -- owed to ArcelorMittal following the collapse of an iron-ore contract -- has been paid.
- The case has moved to London, with Mittal, on one side, and Prashant Ruia, the eldest son of Essar founder Shashi Ruia on the other, awaiting a judge’s ruling on the legality of the search.
For ArcelorMittal, Essar’s Lansdowne House offices may be the key to tracing the group’s assets.
8. How Modi Pulled Off PM Kisan In 8 Days
Nothing gets a government scheme faster off the ground than an election. It took eight days for one crore farmers to be identified as beneficiaries of the Modi government’s PM Kisan Scheme, and for a total Rs 2,000 crore to be paid out to them.
- This data and logistical achievement was helped in part by states that already had detailed land records on hand, and a multi-step verification system involving the Public Financial Management System and banks.
- Farmers in Uttar Pradesh have so far been the biggest beneficiaries of PM Kisan.
- But even as the second installment will be rolled out to the now 2.7 crore identified farmers in April, many others across the country have yet to receive their first.
- The Pradhan Mantri Kisan Samman Nidhi or PM Kisan scheme, a first-of-its-kind farmer income support scheme in India, was announced in the union budget on Feb. 1, just months before the elections.
Here are the challenges the scheme’s rollout faced.
9. Terror In The Age Of Social Media
Social media platforms including Facebook Inc. are facing harsher scrutiny after a shooter accused of killing 49 people in two mosques in New Zealand appeared to livestream the murders over the internet.
- Earlier today, New Zealand suffered its worst mass shooting of modern times, with 49 people dead and more than 20 seriously injured after a terrorist attack at two mosques in the South Island city of Christchurch.
- The video, which shows a first-person view of the killings in Christchurch was readily accessible on social media during and after the attack — as was the suspect’s hate-filled manifesto.
- While platforms including Twitter and YouTube said they moved fast to remove the content, users reported it was there for hours on the alleged shooter’s Facebook account.
Facebook, YouTube and other social-media platforms are struggling to scrub offensive content.
10. Azim Premji’s Joy Of Giving
Azim Premji’s commitment to the philanthropic cause is well known. But his most recent pledge—to give away Wipro Ltd. shares worth around Rs 53,000 crore—brings him in the league of Warren Buffett and Bill Gates.
- Earlier this week, the billionaire earmarked all economic benefits from 34 percent of his shares in Wipro for philanthropy, making it the largest such donation in India’s history.
- That took his total corpus to about Rs 1.45 lakh crore.
- Premji’s total endowment towards philanthropy is almost double the amount India’s private sector raised for social causes in the last five years.
- In 2017-18, Premji alone contributed almost 80 percent of India's individual philanthropy.
- Premji’s personal pledge is thrice of what Indian corporations contributed as mandated corporate social responsibility in last five years.
Yet, the numbers pale in the face of India's social needs.