BQuick On May 22: Top 10 Stories In Under 10 Minutes

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

1. The Clock Ticks, India Awaits

The six-week-long Lok Sabha election that started on April 11 culminates tomorrow, with counting of votes set to begin at 8 a.m. The polling process may take longer than usual due to the physical counting of Voter Verified Paper Audit Trail slips to five random electronic voting machines in each Assembly segment/constituency. Exit polls have suggested that Prime Minister Narendra Modi will come back to power. But only the final numbers will show who gets India’s mandate. And while you wait, here are some great reads:

• Did Modi use bombs and nationalism to mask his reform failings? Find out here.
• A slew of stocks have their fate linked with that of Modi. Find out the stocks that may rise or fall based on the election results.
• Many have criticised Modi of damaging India's institutions. Mihir Sharma argues why Modi needs less power and not more.
• Fickle policy risks taken by the Modi government have also damaged India's allure for foreign investors. Andy Mukherjee writes how Modi failed to end the tax terror.

2. Will DHFL’s Troubles Reduce Interest In Fixed Deposit Schemes Of Non-Bank Lenders?

India’s non-bank lenders, which have been struggling with tight liquidity conditions in the credit markets, may see reduced interest from public depositors after Dewan Housing Finance Ltd. restricted premature withdrawals from its fixed deposit schemes.

• DHFL’s decision may also prove to be a set-back for the industry, which has been arguing that regulators need to grant deposit-licences to a larger number of non-bank lenders and housing finance companies.
• DHFL is one of 18 HFCs that are allowed to accept public deposits. These HFCs together held about Rs 1.22 lakh crore in public deposits as of March 2018.
• While DHFL has halted premature withdrawals, deposits which are maturing will continue to be honoured.

How will depositors react? Here’s what experts say.

3. A Win-Win...Almost

It was a partial win for both the market regulator and India’s largest bourse at the Securities Appellate Tribunal today.

• While the National Stock Exchange argued for an interim stay on the Securities and Exchange Board of India’s penalty of Rs 1,000 crore, the market regulator opposed it.
• SAT declined to give the NSE a stay but didn’t direct a payment to SEBI’s Investor Protection and Education Fund either.
• Instead, it has asked the bourse to deposit Rs 624 crore in a fixed deposit with SEBI within two weeks.
• The appellate tribunal was hearing the NSE’s appeals against SEBI’s April 30 order where the market regulator had concluded that the stock exchange did not exercise requisite due diligence while putting in place tick-by-tick architecture.

The stock exchange has already been depositing a portion of earnings from the co-location business in an escrow account.

4. What Sent Dilip Shanghvi Back To The Drawing Board

You’d be hard-pressed to find someone who’s lost more during the recent upheaval in the generic drug business than Dilip Shanghvi: He forfeited $17 billion to be precise, plus the title of India’s richest man.

• After a four-year decline that erased 65 percent from the value of Sun Pharmaceutical Industries Ltd., the drugmaker he founded, Shanghvi is preparing to bounce back.
• He’s doing it by borrowing a page from Big Pharma’s playbook: investing in higher-margin patented medicines rather than relying solely on copying drugs.
• That won’t be easy, especially when the multinationals that dominate the pharmaceutical business have already seen the payoffs from their massive research and development spending become more uncertain.

Here is how Sun Pharma is reinventing itself.

5. Is China The New Frontier For Indian Generics?

China, the world’s second-largest pharma market, is expected to be the next growth driver for Indian drugmakers amid a slowdown in the U.S.

• Sun Pharmaceutical Industries Ltd. is looking for a partner in China to scale up its business over the next six to nine months, Dilip Shanghvi, controlling shareholder and managing director, told Bloomberg in an interview.
• And India’s largest drugmaker is not alone. Peers, including Dr. Reddy’s Laboratories Ltd., Aurobindo Pharma Ltd., Natco Pharma Ltd. and Alembic Pharmaceuticals Ltd. that already have a presence in the Chinese market have increased their focus.
• The optimism follows China’s new rules allowing companies to seek nod to launch the drugs approved by the U.S. Food and Drugs Administration.

China is currently undergoing market-friendly reforms.

6. Earnings: IndusInd Bank, Cipla

IndusInd Bank Ltd.’s quarterly profit missed estimates as it categorised loans to the Infrastructure Leasing and Financial Services group as non-performing, leading to an increase in provisions.

• Net profit fell 62 percent year-on-year to Rs 360 crore.
• Net interest income, or the bank’s core income, rose 11 percent to Rs 2,232 crore.
• IndusInd Bank’s asset quality worsened.

It has classified over Rs 3,000 crore IL&FS exposure as NPA.

Cipla Ltd.’s profit for the quarter ended March more than doubled, topping analyst estimates.

• Profit rose to Rs 367 crore from Rs 179 crore.
• Revenue rose 19 percent year-on-year to Rs 4,404 crore.
• U.S. business grew 53 percent and 38 percent sequentially.

India and South Africa businesses continued to lead growth.

7. Volatile Day For Nifty Ahead Of Election Results

Indian equity benchmarks ended higher after a topsy-turvy trade ahead of election results scheduled to be announced tomorrow.

• The S&P BSE Sensex ended 140 points or 0.36 percent higher at 39,110.
• The NSE Nifty 50 ended at 11,737, up 0.25 percent.
• The broader market index represented by the NSE Nifty 500 Index closed 0.2 percent higher.
• Nine out of 11 sectoral gauges compiled by NSE advanced.

Follow the day’s trading action here.

Most U.S. stocks declined on news that the White House was prepared to target more technology firms in its trade wrangling with Beijing, while U.S. Treasury Secretary Steven Mnuchin said President Donald Trump is likely to meet with his Chinese counterpart at the end of June.

• The S&P 500 Index opened lower after reports that the White House was considering blacklisting China’s video-surveillance firms.
• But Mnuchin’s remarks on Wednesday may help fuel optimism that trade talks can still bear fruit.
• Meanwhile, energy shares slid along with crude futures after the EIA reported an unexpected buildup in U.S. oil and gasoline stockpiles.
• The pound extended a decline and gilts jumped as Prime Minister Theresa May faced pressure to quit within days.

Get your daily fix of global markets here.

8. Oil Marketers Have A Rs 1.42 Lakh Crore Headache

The total debt of three state-run oil marketers rose the most in more than a decade as the government is yet to pay them subsidy dues.

• The combined debt of Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd. and Hindustan Petroleum Corporation Ltd. jumped 39 percent year-on-year to nearly Rs 1,42,700 crore as of March 2019, according to data compiled by BloombergQuint.
• Their leverage ratio, or total debt-to-Ebitda, stood at 2.5 times compared with 1.6 times in 2017-18.

Here’s what else added to the oil retailers’ debt.

9. A Fresh Start For Small Debtors: How Does It Work?

While the Insolvency and Bankruptcy Code has laid down the framework for personal insolvency, it hasn’t been notified as yet. It contemplates three options for individual insolvencies: a resolution process, bankruptcy and a fresh start process.

• While the framework for resolution process and bankruptcy for individuals is similar to how it works for companies, the fresh start process is attempting to do something new — giving a clean slate to small debtors.
• The process seeks to cover debtors with annual income less than Rs 60,000, debt less than Rs 35,000, assets less than Rs 20,000 with no dwelling unit.
• The target group is the extremely vulnerable population that has no hope in hell of repaying the debt — in some sense, it’s like a debt waiver, Renuka Sane, associate professor at the National Institute of Public Finance and Policy, told BloombergQuint.

Here’s how the process can be initiated.

10. Where In Asia Can You Get The Best Pay

With Hong Kong and Singapore routinely topping the charts as the most expensive places to live and play, it may come as some surprise that Japan offers the best pay packets for expats in Asia.

• The average expatriate pay package provided by companies in Japan to mid-level employees is $386,451 a year, eclipsing what’s on offer anywhere else in the region, according to a report by consultancy ECA International.
• Japan also saw the biggest increase in expat package values last year, thanks to a stronger yen and steeper housing costs, said Lee Quane, a regional director at the firm.

Here are the ten best paying countries in Asia for expatriates.