BQuick On May 29: Top 10 Stories In Under 10 Minutes

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

1. Modi 2.0 Minus Jaitley

Arun Jaitley, finance minister in Narendra Modi’s first cabinet, has urged the prime minister to not include him in the new government for the time being because of health reasons.

• The new Modi administration is set to be sworn in tomorrow.
• Jaitley, in a letter, said he would be available for any informal work for the government or the Bharatiya Janata Party.
• Jaitley said he has had some serious health challenges in the last 18 months and needs to concentrate on his treatment and health.

Read Jaitley’s full letter to the Prime Minister here.

2. First-Hand Account Of What Happened In CWC Meetings

The Congress party is facing a leadership crisis in the aftermath of the Lok Sabha elections. While several media reports said party president Rahul Gandhi is adamant on stepping down, the Congress Working Committee members are opposing the decision. So, what transpired in the meetings?

• Rahul Gandhi has made his decision non-negotiable and was very persistent about stepping down and making way for a new leader, Former Assam Chief Minister and Congress Working Committee member Tarun Gogoi said.

The idea of Rahul continuing as the interim president was suggested by his sister and General Secretary Priyanka Gandhi Vadra, according to Gogoi.

3. Earnings: M&M, PowerGrid

Mahindra & Mahindra Ltd.'s profit for the quarter ended March declined but managed to exceed analyst estimates.

• Net profit fell 16.1 percent year-on-year to Rs 969 crore.
• Revenue grew 4.7 percent to Rs 13,808 crore.
• Operating profit fell 11.37 percent to Rs 1,768 crore.
• Margin contracted by 230 basis points to 12.8 percent—the lowest in five quarters.

The bottom line was hurt by a lower margin and overall decline in sales volume.

Power Grid Corporation of India Ltd.’s profit for the quarter ended March rose to beat estimates due to a deferred tax reversal worth over Rs 6,000 crore.

• Net profit rose 51.9 percent year-on-year to Rs 3,054 crore.
• Revenue rose 18 percent to Rs 9,218 crore.
• Operating profit jumped 19.4 percent to Rs 7,793.4 crore.
• Margin expanded 100 basis points to 84.5 percent.

The company owns about 85 percent of the inter-state transmission network.

4. Sensex, Bond Yields Fall

Indian equity benchmarks ended lower, halting their three-day record closing streak.

• The S&P BSE Sensex closed 248 points or 0.62 percent lower at 39,502.
• The NSE Nifty 50 ended at 11,861, down 0.57 percent.
• The broader market index represented by the NSE Nifty 500 Index ended 0.59 percent lower.
• Ten out of 11 sectoral gauges ended lower.
• Meanwhile, bond sales by Indian firms are set to gather pace after the average yield for a 10-year AAA paper fell to 8.29 percent, the cheapest since last May.

Follow the day’s trading action here.

U.S. Stocks Fall, Crude Slumps

U.S. stocks fell to a 12-week low while Treasuries resumed a rally that sent a key slice of the yield curve to its deepest inversion since 2007.

• Concern is mounting that the bond-market recession warning is growing louder as the trade war shows no signs of easing.
• The S&P 500 Index tumbled through 2,800 and took aim at technical levels considered by chart watchers to provide key support.
• Selling picked up overnight as Chinese media reports suggested Beijing may cut exports of rare-earth minerals used in the defense and energy sectors, opening another front in its trade war with the U.S.
• The dollar rose for a third day. The yuan steadied following news that the People’s Bank of China had injected the most in money-market operations since January.
• West Texas Intermediate crude dipped 3.2 percent to $57.27 a barrel, the lowest in almost three months.

Get your daily fix of global markets here.

5. CLSA Predicts A Recovery For Cement Makers

Cement makers would benefit from greater demand in the housing sector, which is poised to recover, according to Mahesh Nandurkar.

• That apart, the India strategist of CLSA termed the cement industry an “attractive bet” due to improved pricing and robust volume growth.

Nandurkar sees value emerging in the battered down telecom stocks.

6. HDFC Bank’s ‘Mini-Me’ Gets Listing-Ready?

In 2007, HDFC Bank Ltd. had a choice to make. The bank held a licence to start a non-banking financial services company, which it had not really used till then. The decision to make was whether that licence should be surrendered or if the bank could find a way to use it to build its network.

• It chose the latter and twelve years later, it appears that the decision paid off.
• The NBFC, christened HDB Financial Services Ltd., turned in a net profit of Rs 1,153 crore for the year ended March 31, 2019, according to its annual report released this week.
• Profits were up 24 percent for the year. The NBFC’s loan book grew 23.5 percent to Rs 54,709 crore.

Many believe the NBFC is now ripe for a separate listing.

7. Sunil Munjal's Airtel Africa Connection

In October last year, Bharti Airtel Ltd.’s Africa unit raised $1.25 billion from six investors but disclosed the names of only four. The other two, latest filings reveal, are founder-promoter Sunil Mittal and Sunil Kant Munjal of Hero Enterprise.

• Munjal, who left India’s largest two-wheeler maker Hero MotoCorp Ltd. in an ownership split in 2016, owns 4.37 percent, according to the Airtel Africa’s filings with the London Stock Exchange for an initial public offering.
• He bought the stake for $200 million (Rs 1,392 crore at the current exchange rate).
• Mittal, through his private arm Indian Continent Investment Ltd., bought 5.46 percent for $250 million (Rs 1,740 crore at the current exchange rate).
• Mittal’s total holding, including indirect ownership through Bharti Airtel, stands at 9.9 percent.

Here’s a look at Airtel Africa’s ownership pattern and valuation.

8. Not Literate? Can’t Drive In Rajasthan

The Rajasthan High Court ordered the state to cancel all driving licences issued to illiterate persons.

• The judgment was passed in a writ petition filed by a person seeking a licence to drive transport vehicle on ground that he had been issued a licence to ride light motor vehicle 13 years ago.
• While the court heard the petition, it noted that the petitioner was illiterate and still was granted a licence.
• “Such people are a menace for the pedestrians as they would not be in a position to understand road signs and notices of caution written on boards for human safety on the highways as well as on the roads in the cities,’’ Justice Sanjeev Prakash Sharma said while rejecting the petitioner’s request.

But senior lawyers disagree saying that it is unconstitutional.

9. The Cricket World Cup Ad Rate Boom

The television advertisement rates for the ICC Cricket World Cup 2019 have jumped to their highest, beating what Star India charged for Indian Premier League.

• The ad rates for India games range from Rs 15-16 lakh for 10 seconds, two people in media buying agencies said.
• And for the much-awaited India-Pakistan match on June 16, a slot costs up to Rs 20 lakh for 10 seconds, the people said.
• That’s the highest for a cricket game, according to them, and better than Rs 10-12 lakh charged in the latest edition of IPL.

The jump is driven by the change in broadcast timing for Indian viewers.

10. Sundar Pichai Lets Go Of A Giant Payday

Sundar Pichai was, for years, one of the world’s highest-paid corporate executives. Now he’s facing the opposite reality: No big paychecks at all.

• The Google CEO hasn’t received an equity award in more than two years. A key reason is that Pichai turned down a big new grant of restricted stock in 2018 because he felt he was already paid generously, according to a person familiar with the decision.
• It’s unclear how much he passed up. But another giant payday -- on top of hundreds of millions of dollars in previous awards -- could have sparked a new round of controversy for the mild-mannered executive.
• Technology companies are being increasingly blamed for all sorts of societal ills -- including rising income inequality.

The board of Google parent Alphabet Inc. is scheduled to revisit the CEO’s pay later this year.