BQuick On May 3: Top 10 Stories In Under 10 Minutes
Here is a roundup of the day’s top stories in brief.
1. Airtel Africa: Biggest IPO In London This Year
Bharti Airtel Ltd., India’s second-biggest wireless carrier, is preparing to kick off the initial public offering of its Africa unit in a deal that could raise about $1 billion, people familiar with the matter told Bloomberg News.
- Airtel Africa is planning to make a formal announcement about the London listing this month and aims to start trading in June, the people said, asking not to be identified because the matter is private.
- It’s considering seeking an equity valuation of about $5 billion, they said.
Valuation and the listing date are still under discussion.
2. Bid To Acquire Jaypee Infratech Fails... Again
Suraksha Asset Reconstruction Company Ltd.’s bid to acquire Jaypee Infratech Ltd. failed to secure enough votes for the second time, according to two people in the know, leading to uncertainty about the fate of the insolvent developer that is yet to deliver homes to thousands of buyers.
- Majority of the banks in the Jaypee Infratech’s Committee of Creditors voted against the resolution plan submitted by Suraksha ARC.
- Only private lender The Jammu & Kashmir Bank Ltd. voted in its favour, one of the people said.
- About 9,000 of more than 20,000 homebuyers, waiting to get the apartments in Jaypee Greens Wishtown in Noida, participated in voting, the people said.
Promoter Manoj Gaur is trying to regain control of the company by offering to infuse money.
3. HUL’s Volume Growth Falls
Hindustan Unilever Ltd.’s volume growth fell to its lowest in six quarters as rural demand moderated.
- Net profit rose 13.8 percent year-on-year to Rs 1,538 crore.
- Revenue rose 9.3 percent to Rs 9,945 crore.
- Volume growth stood at 7 percent for the quarter— the lowest since June 2018.
- Moderation mostly occurred in the general trade and wholesale channel that feeds into the rural markets.
The FMCG sector is not “recession-proof”, the management said.
4. Nifty Dips; S&P 500 Halts Two-Day Drop
Indian equity benchmarks registered weekly losses, dragged by Yes Bank Ltd., as the Mumbai-based lender fell 26 percent during the period after reporting a surprise loss in the March quarter.
- The S&P BSE Sensex shed 0.27 percent this week to close at 38,963.
- The NSE Nifty 50 ended at 11,712, down 0.36 percent.
- The broader market index represented by the NSE Nifty 500 Index closed 0.67 percent during the period.
- On Friday, the benchmark indices ended the session with minor losses.
- Six out of 11 sectoral gauges compiled by NSE advanced.
Follow the day’s trading here.
U.S. stocks rose after hiring data that topped forecasts boosted optimism in the world’s largest economy.
- The S&P 500 Index halted a two-day drop as the report showed the labour market can support growth without sparking inflation, giving cover to the Federal Reserve’s plan to remain patient on rates.
- Treasuries erased losses, sending the 10-year yield down to 2.52 percent.
- Tesla Inc. rose after raising $2.35 billion through debt and stock offerings.
- West Texas Intermediate crude increased 0.3 percent to $61.97 a barrel.
Get your daily fix of global markets here.
5. NBFC Crisis Over, Problems Remain: Aditya Puri
Troubles among India’s non-bank financiers will persist for at least a year even if the danger of a full-blown financial crisis has passed, according to the head of India’s most valuable bank.
- Tighter regulatory oversight and asset sales have staved off the worst of the problems afflicting India’s non-bank financial firms following last year’s defaults by IL&FS, according to HDFC Bank Ltd.’s Managing Director Aditya Puri.
- Even so, it will be another 12 to 18 months before the liquidity issues in the wider sector are resolved, Puri added.
It’s not a Lehman-like thing that comes and then there is contagion across the system.Aditya Puri, MD, HDFC Bank
Watch Bloomberg’s exclusive interview with Puri here.
6. Axis Bank Focussing On Retail, With An Eye On Wholesale
Ask an Indian bank chief what his or her lending focus is these days and the answer isn’t tough to guess. Retail loans and lending to small businesses have become the go-to options as Indian banks try to recover from a bruising corporate bad loan cycle.
- Axis Bank, under the new leadership of Amitabh Chaudhry, is not different in that regard.
- Chaudhry intends to push growth in both the retail and SME lending segments, which already account for 63 percent of the bank’s book.
- But that focus will not mean that Axis Bank will cede space in wholesale banking, Chaudhry told BloombergQuint in an interview.
- In fact, Chaudhry hopes that Axis Bank will be among the top five wholesale banks once the industry consolidates.
Axis Bank will need to rejig its priorities at least in the wholesale lending segment.
7. Anil Ambani’s $2 Billion Challenge
The last stronghold in embattled tycoon Anil Ambani’s phone carrier-to-power empire is also developing fault lines.
- Reliance Capital Ltd., his financial services business that almost doubled its profit in five years, had largely remained insulated from the distress plaguing the wider conglomerate.
- Now, the company that controls India’s fifth-biggest mutual fund, is racing to close a planned $2 billion of asset sales to bolster its finances after cash dwindled to Rs 11 crore ($1.6 million) as of March, according to CARE Ratings.
- The downgrades came against the backdrop of soaring finance costs for an industry shaken by last year’s IL&FS meltdown.
Asset disposals are key to averting a crisis at Reliance Capital.
8. What’s Muddling RBI’s Projections?
Inflation projections are particularly important in an inflation-targeting regime where the central bank uses the projection as an intermediate target and acts accordingly. As such, a projection which is off the mark leads to a greater risk of policy errors.
- Retail inflation fell sharply last year as food prices softened unexpectedly. That drop in food inflation also meant that the Reserve Bank of India’s inflation projections went wrong, leading to questions about the need for the two interest rate hikes announced in 2018.
- Addressing these concerns, Deputy Governor Viral Acharya said in the February monetary policy meeting that the central bank was introspective of the “lament” over its inflation forecasting ability.
- Citing an internal study, he said central banks tend to make large errors in economies where food is a bigger component of the basket.
The study showed a link between food, demonetisation and missed forecast.
9. Cyclone Fani Wreaks Havoc
Three people were killed in separate incidents as cyclone Fani battered the Odisha coast on Friday, officials said
- While heavy rain and winds will continue today, cyclone Fani has started weakening and will enter Bangladesh by tomorrow evening, the Indian Meteorological Department said.
- Over Rs 1,000 crore has been released in advance for the states affected by Cyclone Fani, Prime Minister Narendra Modi said at a rally today.
- The Indian Navy is undertaking aerial survey to assess the extent of impact and devastation after the cyclone.
Follow live updates on one of the most extreme cyclones to hit India in decades.
10. Buffet Bets On Amazon
Warren Buffett has said that he underestimated Amazon.com Inc.’s Jeff Bezos. Now one of Buffett’s deputies is willing to put money behind the tech giant.
- Berkshire Hathaway Inc. has been buying Amazon shares and the purchases will show up in a regulatory filing later this month, Buffett told CNBC in an interview Thursday.
- Buffett, Berkshire’s chairman and chief executive officer, said “one of the fellows in the office that manage money” made the purchases, a reference to investment managers Todd Combs and Ted Weschler.
- Combs and Weschler have gained influence at Berkshire in recent years. Buffett credited some of his conglomerate’s purchases of airline stocks and Apple Inc. to the deputies.
The Amazon stake further cements the relationship between Berkshire and Bezos’s company. Here's how.