BQuick On March 26: Top 10 Stories In Under 10 Minutes

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

1. Forex Swap Success

The Reserve Bank of India successfully concluded a forex swap auction, a rare move intended to ease liquidity conditions.

• The central bank bought the targeted $5 billion as part of the long term Dollar/Rupee swap auction with a three-year tenor, it said in a release.
• In turn, Rs 34,561 crore was infused into the Indian banking system.
• The auction was successful with the RBI getting bids far in excess of what it intended to purchase, said Shubhada Rao, chief economist at Yes Bank Ltd.
• From here on, we can expect the RBI to consider using this tool for liquidity injections along with existing options such as bond purchases under its open market operations program.

Markets are divided on the impact on bonds and currencies.

2. Mindtree Cancels Buyback

The board of Mindtree Ltd. has decided that it will not go ahead with the share buyback which it had been mulling before Larsen & Toubro Ltd. mounted a Rs 10,700-crore offer to acquire a majority stake.

• The mid-sized IT firm has also decided to constitute an Independent Directors’ Committee to provide their “reasoned recommendation” on the offer by L&T for the consideration of shareholders.
• The committee will be led by Apurva Purohit, the lead independent director, as chairperson and spokesperson.
• Meanwhile, the company also notified that L&T will conduct its open offer to acquire 31 percent stake from May 14 to May 27.

Here’s what the newly appointed committee will do.

3. Nifty’s Late Surge, Dow’s Strong Start

Indian equity benchmarks rallied during the last hour trade, erasing most of the losses clocked in the last two trading sessions.

• The S&P BSE Sensex ended 1.12 percent or 424.5 points higher at 38,233, after jumping nearly 500 points intraday.
• The NSE Nifty 50 ended at 11,483, up 1.14 percent.
• The broader markets, represented by the NSE Nifty 500 Index, ended 1.18 percent higher.
• Ten out of 11 sectoral gauges compiled by NSE ended higher.

Follow the day’s trading action here.

U.S. stocks rallied and Treasuries fell as investor concern over an economic downturn showed signs of easing.

• Every industry in the S&P 500 Index advanced, with energy and technology shares leading gains.
• The yield on benchmark U.S. debt climbed after closing below 2.4 percent on Monday, though the spread between three-month and 10-year rates remained in negative territory.
• The dollar erased this month’s drop, and haven currencies slipped.
• Oil surged as tension in Venezuela revived fears of supply losses. Gold retreated.

Get your daily global markets fix here.

4. Goyal’s Departure Is Not Enough

Twenty-five years after he founded Jet Airways Ltd., debt troubles have forced Naresh Goyal to step down as chairman and relinquish his seat on the board. His wife Anita has also resigned from directorship. Their shareholding, once a controlling 51 percent stake, stands diluted at 25.5 percent due to conversion of debt to equity.

• With the Goyals gone, lenders are hopeful they will find a buyer/investor who can revive the airline. But that’s easier said than done.
• The problem lies in Jet’s cost structure. At Rs 4.92, its cost per seat kilometer is on average 20 percent higher compared to its peers—IndiGo and SpiceJet Ltd.
• That’s just one reason why Jet is burdened with high costs.

Here are the other issues ailing Jet Airways.

5. Cement Price Rise And Rollback

Cement prices rose for the third straight month in March but companies had to roll back part of the hike in the northern and southern regions because of muted demand, according to a BloombergQuint dealer survey.

• All-India prices rose by Rs 7 for a 50-kilogram bag to Rs 342, BloombergQuint’s interaction with 17 dealers across five regions showed.
• That came despite weak infrastructure activity due to Holi and year-end volume pressures that usually weigh on the pricing power.

Find out how cement prices moved in the different parts of the country.

6. Indian Drugmakers Face Greater Scrutiny

The U.S. drug regulator’s inspections of Indian facilities spiked last year even as it conducted fewer checks in the rest of the world, underscoring the risk domestic companies face in one of their largest markets.

• Inspections by the U.S. Food and Drug Administration in India jumped 24 percent over a year earlier, according to a report by Bank of America Merrill Lynch.
• By comparison, the number of global inspections by the regulator fell 18 percent.
• India accounted for 14 percent of the total drug quality inspections in 2018 compared with 9 percent in 2017, the note by Girish Bakhru, a pharma analyst at BofAML, said.
• That points to the increased scrutiny Indian drugmakers’ manufacturing practices face for their exports to the American market, the biggest contributor to the sales of some of them.

Despite more inspections, there is a silver lining for Indian pharmaceutical majors.

7. Ambit Exiting Bad Loans Business

Ambit Private Ltd. is in the final stages of exiting its equity investment in the asset reconstruction company venture it started with U.S.-based JC Flowers & Co., three people in the know said.

• Stressed asset investor Eight Capital Management LLC and London-based Emso Asset Management will together buy the Indian asset management company’s 47.5 percent stake in the ARC, the people said on condition of anonymity.
• The two investors will also purchase a 5 percent stake owned by serial investor Jerry Rao in the venture to assume majority control of the ARC.
• JC Flowers, one of the world’s largest distressed asset investors, will continue to hold its 47.5 percent stake in the venture.

The planned exit is part of a shift in Ambit’s investment strategy in India.

8. Raghuram Rajan’s Skepticism

Former Reserve Bank of India Governor Raghuram Rajan expressed doubts over the Indian economy growing at 7 percent when not enough jobs are being created.

• He also said that the cloud over the gross domestic product numbers must be cleared by appointing an impartial body to look at the data.
• Rajan, who also served as chief economist at International Monetary Fund, told CNBC-TV18 that he had no idea what statistics are pointing at currently and a “revamp” was needed “to really figure out what India’s true growth rate is”.

A strong economy is one where more jobs are created, says Rajan.

10. Oprah Or Spielberg Can’t Hide Apple’s Flaws

Apple Inc. prides itself on craftsmanship and perfection. Even the desk chairs in Apple’s headquarters are worthy of their own article. That’s why it was so surprising that Apple’s new products for news, television and more feel so half-baked, writes Shira Ovide.

• Over nearly two hours on Monday, Apple trotted out Oprah Winfrey, Steven Spielberg and Big Bird but left a lot of blanks.
• The company effectively introduced five products. But only one of those five, the magazine and news subscription, is available now, and it already existed under a different name and guise.
• It’s not unusual for Apple to get people excited about products before it is ready to sell them.
• Yet, Monday’s announcements felt at times like drawings on napkins — sketches that were incomplete, not ready or not thought through to their eventual conclusion.

That suggests Apple may not be prepared yet to be more than just the iPhone company.