BQuick On May 9: Top 10 Stories In Under 10 Minutes
Here is a roundup of the day’s top stories in brief.
1. Earnings: Asian Paints, HCL Tech
HCL Technologies Ltd.’s profit for the three months ended March was in-line with analysts’ estimates, despite a drop compared to the December-ended quarter.
- Net profit of the software services provider fell 2.1 percent sequentially to Rs 2,550 crore.
- Revenue rose 1.9 percent to Rs 15,990 crore.
- Earnings before interest and tax fell 1.5 percent to Rs 3,039 crore.
The company said a deal with IBM will help add more clients.
Asian Paints Ltd.’s net profit for the March quarter fell short of estimates as margin contracted on account of higher raw material prices and marketing costs.
- The paint maker’s net profit fell 1.6 percent over last year to Rs 473 crore.
- Operating income declined 2 percent to Rs 822 crore.
- Margin contracted 230 basis points to 16.4 percent.
The auto slowdown hit the company's joint venture.
2. Double Whammy For Mutual Funds
The uncertainty in the equity markets ahead of general election results and concerns around debt funds rubbed off on mutual funds in April—inflows into equity schemes declined to their lowest in 31 months, while income funds saw outflows.
- Net inflows into equity mutual funds, including equity-linked schemes, dropped to Rs 4,609 crore during the month. That’s the worst since Rs 3,743 crore reported in September 2016.
- Lower inflows in equity plans came despite an investment of Rs 8,238 crore through systematic investment funds.
- Overall, the mutual fund industry witnessed a net inflow of Rs 1,00,460 crore across all schemes compared with an outflow of Rs 22,357 crore in March.
Investors are in wait-and-watch mode due to credit events and downgrades.
3. How Jaitley Managed To Meet Fiscal Deficit Target
The Indian government may have had to cut back on spending of nearly Rs 1 lakh crore in order to meet Finance Minister Arun Jaitley’s fiscal deficit target of 3.4 percent of gross domestic product in 2018-19.
- The government’s tax collections were around Rs 1.6 lakh crore lower than the target due to weak direct tax and goods and services tax mop up, a government official said on condition of anonymity.
- That would have forced the government to rein-in expenditure or re-route unutilised funds from various government departments.
- Expenditure rollovers and unutilised funds would have helped in meeting the target, the official said.
If not, the fiscal deficit would’ve shot up to 3.8 percent, according to BloombergQuint’s calculation.
4. Nifty Falls To 11,300, U.S. Stocks Slide
Indian equity benchmarks ended lower for the seventh consecutive trading session, their longest losing streak in nearly three months.
- The S&P BSE Sensex closed 0.6 percent or 230 points lower at 37,558.
- The NSE Nifty 50 Index ended at 11,301, down 0.5 percent.
- The broader market index represented by the NSE Nifty 500 Index closed 0.43 percent lower.
- Six out of 11 sectoral gauges compiled by the NSE ended higher.
Follow the day’s trading action here.
Losses in U.S. stocks accelerated, with the S&P 500 headed for the worst week of the year, as a deadline approached for America and China to raise reciprocal tariffs.
- The yen climbed with Treasuries as investors sought havens, while the yuan fell to its weakest since January.
- Sentiment worsened after China’s government-run Global Times said it’s unlikely that a deal would be reached before Friday.
- Tech shares led the declines, with Intel falling as much as 5 percent.
- In Europe, automakers led a retreat for the Stoxx Europe 600, which the MSCI Asia Pacific gauge dropped the most in six weeks.
- Treasury 10-year notes jumped, hours after Wednesday’s auction saw the weakest demand for the benchmark bond in a decade.
- West Texas Intermediate fell 1.6 percent to $61.14 a barrel.
Get your daily fix of global markets here.
5. Days Of Free UPI Money Transfers Ending?
Three years after the unified payments interface was introduced, larger banks plan to start charging customers for transactions done via the platform.
- Bankers, who have seen UPI-based payments become the go-to option, feel the platform has now stabilised to a level where charges can be introduced, said two people familiar with the ongoing conversations between banks and the National Payment Corporation of India.
- Not all transactions are likely to draw charges, though. Just like in the case of cash withdrawals at ATMs, banks may charge beyond a certain number of free transactions a month.
- These charges will be levied only on peer-to-peer transactions and not on those where merchants are being paid for services.
Kotak Mahindra Bank became the first lender to move in this direction.
6. McDonald's-Vikram Bakshi Feud Ends
McDonald’s Corp.’s bitter legal battle with one of its two India franchisees ended with the world’s largest fast-food giant buying full ownership of the business that runs outlets in north and east India.
- McDonald’s India Pvt. and its affiliate McDonald’s Global Markets LLC have acquired full ownership of Connaught Plaza Restaurants Pvt. after reaching a settlement with its former 50:50 joint venture partner Vikram Bakshi, the Indian unit of Oak Brook, Illinois-based McDonald’s said in a statement.
- It didn’t give a value for the deal.
McDonald’s and Bakshi have been at odds since 2013.
7. Jet Employees’ Bid To Be Considered?
A bid being stitched together by pilots of the grounded Jet Airways India Ltd. may get a hearing if no binding offers emerge from the four potential investors currently in the race, people with knowledge of the matter told Bloomberg News.
- Lenders led by State Bank of India have asked a group of airline employees, seeking to make a formal proposal, to wait to see who remains in the race after a Friday deadline lapses, the people said.
- SBI Capital Markets Ltd., which is advising Jet Airways’ lenders, has received at least three unsolicited approaches, one of the people said.
- Etihad Airways PJSC, India’s National Investment and Infrastructure Fund and private equity firms TPG Capital and Indigo Partners have been shortlisted as potential investors.
Any investors in the debt-ravaged Jet Airways will have to weigh the sector’s growth prospects too.
8. An Opportunity For Petronet LNG
A fall in prices of liquified natural gas in Asia offers state-owned Petronet LNG Ltd. a chance to use its additional capacity coming on-stream by June to sell the fuel at a higher margin.
- The Singapore liquified natural gas prices—the benchmark LNG prices for Asia—have declined close to 40 percent to $5.1 per million British thermal unit from start of the year, according to Bloomberg data.
- That’s because of a supply glut and high inventory in North Asia.
- Petronet’s Dahej, Gujarat plant with a capacity of 15 million metric tonnes per annum is running at a utilisation of over 100 percent because of long-term contracts it signed.
- That doesn’t allow the India’s largest gas importer and regasifier to sign new contracts based on spot prices.
But the company is expanding its capacity and that’s room to get fresh contracts.
9. Judges Recommended For The Supreme Court
The Supreme Court of India’s Collegium has recommended the names of Justice Bhushan Ramkrishna Gavai and Justice Surya Kant for elevation to the nation’s highest court.
- “While recommending the names of Mr. Justice Bhushan Ramkrishna Gavai and Mr. Justice Surya Kant, the Collegium has taken into consideration combined seniority on all-India basis of Chief Justices and senior puisne Judges of High Courts, apart from their competence, conduct and integrity,” the collegium’s resolution, which was uploaded to the apex court’s website, said.
- Justice Gavai, currently ranked eighth in the all-India seniority list of high court judges, was appointed as judge of the Bombay High Court in 2003 and has been on its bench since then.
- Justice Surya Kant is ranked eleventh on all-India seniority list of high court judges and was appointed as judge of the Punjab & Haryana High Court on Jan. 9, 2004 and was later elevated as Chief Justice of Himachal Pradesh High Court.
The collegium also reiterated names of Justice Aniruddha Bose and Justice AS Bopanna.
10. The Best And Worst In Aviation
Doha’s Hamad International Airport, Tokyo Haneda International Airport, and Athens International Airport have taken the top spot for the fourth year running in AirHelp's best and worst airport and airline rankings.
- The airports are rated based on three factors: on-time performance, service quality, and food and shopping options.
- Congestion continues to be the biggest problem facing airports.
- Surprisingly, its sunny weather results in fewer delays, and vacationers are more likely to leave positive reviews.
- Not only did Doha top the rankings for airports, the Qatar Airline was voted the best in the world.
Find out the ten best and worst airports and airlines of 2019.