BQuick On Nov. 11: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s stories in brief.
1. Shiv Sena’s Time Runs Out
Maharashtra Governor BS Koshyari has refused to grant the Shiv Sena two more days to consolidate allies and stake claim to form a coalition government with the Nationalist Congress Party and Congress.
- Sena leaders Aaditya Thackeray and Eknath Shinde met the governor at his residence in Mumbai and requested further time, but the governor refused.
- However, Thackeray said the governor has not rejected Shiv Sena's willingness to form a government.
- The Nationalist Congress Party has said that they will take a decision in consensus with its ally Congress, adding that it’s their responsibility to form an alternative government given "the plight of the people and farmers".
- The Congress too said that it will hold further talks with NCP to decide on whether to form a government with Shiv Sena.
2. IIP Shrinks Most In Eight Years
India’s industrial output contracted the most in nearly eight years with weakness seen across most key segments, showed government data released on Monday.
- The Index of Industrial Production contracted by 4.3 percent in September over last year compared to a contraction of 1.1 percent in August.
- The fall in industrial output is the steepest since October 2011, shows historical data available.
- The data adds to fears that growth in the Indian economy slowed further in the second quarter of the current financial year after hitting a six-year low of 5 percent in the first quarter.
The weakness in output was wide spread, with all three industrial sub-segments showing contraction.
3. Nifty Closes Flat, U.S. Stocks Drop
Indian equity benchmarks ended marginally higher after a one-day blip.
- The benchmark indices which traded lower during the day, pared losses during the last 30 minutes, led by the gains in private banks.
- The S&P BSE Sensex rose 0.05 percent to end at 40,345.08.
- The NSE Nifty 50 rose 0.04 percent to close at 11,913.45.
- The broader markets represented by the NSE Nifty 500 Index rose 0.13 percent.
- Six out of 11 sectoral gauges compiled by NSE ended higher.
Follow the day’s trading action here.
U.S. stocks fell amid concern that the U.S. and China are struggling to get an initial trade deal done.
- The S&P 500 headed for its first drop in four sessions, led by technology shares, after President Donald Trump over the weekend described as “incorrect” reports about how much the U.S. was ready to roll back tariffs on China.
- The dollar fell for the first time in six days.
- The pound rallied as the Brexit Party decided not to contest Conservative seats in the upcoming U.K. election, bolstering Prime Minister Boris Johnson’s efforts to leave the European Union.
- West Texas Intermediate crude dipped 1.5 percent to $56.37 a barrel.
Get your daily fix of global markets here.
4. NSE Board Stuck In Limbo
The board of directors of India’s largest stock exchange has had no chairman for 10 months, is running under capacity and the terms of three of its directors have ended.
- The National Stock Exchange, a quasi-regulator itself, is currently awaiting the market regulator’s nod to reconstitute its board to full strength, according to two people aware of the development.
- Regulation allows for up to 15 directors on the board of a stock exchange.
- For at least three years prior to 2018, NSE had a 10-member board.
- Over the last one year, that number has fallen to seven as three directors resigned.
Here’s how the current board looks right now and what it means for NSE’s long-pending IPO.
5. Lupin To Sell Japanese Subsidiary
Drugmaker Lupin Ltd. today said that the board has approved selling its entire stake in Japanese subsidiary Kyowa Pharmaceutical Industry to a private equity fund.
- Japan-based Unison Capital Partners will buy Kyowa for an enterprise value of 57,361 million yen or Rs 3,702.4 crore.
- Under the terms of agreement, Lupin's subsidiary Nanomi BV will divest its entire stake in Kyowa to Unison’s entity Plutus Ltd., it added.
- “This transaction is aligned with our vision to focus on our key markets and strategic priorities to achieve sustainable growth in the mid to long-term,” Lupin Chief Executive Vinita Gupta said.
The drugmaker will use the proceeds to strengthen its balance sheet and fund growth.
6. Nifty Earnings: Biscuits Sell, Metal Doesn’t
Britannia Industries Ltd.’s quarterly profit surpassed estimates on the back of lower tax expenses and higher other income.
- Net profit rose 33.4 percent year-on-year to Rs 404.20 crore, higher than the estimated Rs 365 crore.
- Revenue rose 6.2 percent to Rs 3,048.8 crore.
- The Wadia Group company had opted for a lower corporate tax rate proposed, which reduced tax expense by a third.
Find out how Britannia grew faster than the market.
Hindalco Industries Ltd.’s quarterly profit fell in-line with analysts’ expectations from a decline in spot metal prices and lower sales volume due to prolonged rains.
- Net profit fell 74 percent year-on-year to Rs 78 crore.
- Revenue fell 8.1 percent to Rs 9,965 crore.
- Operating margin contracted to 7.9 percent from 10.1 percent.
Here’s why both aluminium and copper units of Hindalco remained under pressure.
Adani Ports And Special Economic Zone Ltd.’s profit beat estimates in the quarter ended September as its other income rose.
- Net profit rose 74 percent year-on-year to Rs 1,054 crore.
- That’s higher than the estimated Rs 937 crore.
- Ebitda rose 5.15 percent to Rs 1,791 crore.
The port developer’s operating margin, however, contracted.
7. After 11 Months, Light At The End Of The Tunnel
Domestic passenger vehicle sales rose 0.28 percent to 2.85 lakh units in October from 2.84 lakh units in the year-ago period, data released by industry body Society of Indian Automobile Manufacturers showed on Monday.
- Car sales fell 6.34 percent to 1.73 lakh units as against 1.85 lakh units in October 2018.
- Motorcycle sales last month declined 15.88 percent to 11.16 lakh units as against 13.27 lakh units a year earlier.
- Total two-wheeler sales in October slumped 14.43 percent to 17.57 lakh units.
Here’s what SIAM President Rajan Wadhera had to say about the sales and the outlook for the automotive industry.
8. 15th Finance Commission’s Twin Challenges
The reorganisation of Jammu & Kashmir and creation of a dedicated fund for defence and internal security has made the 15th Finance Commission’s job complex, with the government expected to give another extension to the panel for submitting its report on apportioning revenues.
- The 15th Finance Commission headed by NK Singh is awaiting further change in its terms of reference from the President after the status of Jammu & Kashmir and Ladakh was changed to a union territory, according to a person with direct knowledge of the matter.
- According to Jammu & Kashmir Reorganisation Act 2019, the distribution of taxes suggested by the 15th Finance Commission to the state will have to be apportioned to the union territories of Jammu & Kashmir and Ladakh.
- According to the law, the President, “on the appointed day”, has to make a reference to the Finance Commission for distribution of taxes to the two union territories.
- The appointed day is Oct. 31, when the state was officially split into two union territories.
The panel will need more time to study this in detail as only states are entitled to net proceeds of taxes.
9. As Delhi Chokes, Power Plants Are Missing Deadlines
Ten coal-fired power plants near New Delhi are poised to miss a December deadline to install pollution control devices that would have curbed premature deaths linked to toxic emissions.
- Eight of the plants, whose operators include Vedanta Ltd., Larsen & Toubro Ltd. and Uttar Pradesh Power Corp., have yet to order the required flue-gas desulfurisation units, according to the Central Electricity Authority.
- The units can take as long as three years to secure and install, and it’s unclear if the operators will be penalised by authorities if they miss the deadline.
- If the emissions standards were implemented nationwide, India could avoid more than 3,00,000 premature deaths through 2030.
“Non-compliance will come at the cost of human health.”
10. Alibaba Is Out To Break Its Own Record
Alibaba Group Holding Ltd. has logged more than 215 billion yuan ($30.7 billion) of purchases during its Singles’ Day bonanza, exceeding last year’s record haul about two-thirds of the way through its 24-hour shopping marathon.
- An estimated half-billion shoppers from China to Russia and Argentina swarmed the e-commerce giant’s sites to scoop up everything from Apple Inc. and Xiaomi Corp. gadgets to Ugandan mangoes.
- The company again hosted a televised entertainment revue in Shanghai to run alongside the bargain-hunting, this time enlisting Taylor Swift and Asian pop icon G.E.M. to pump up sales.
- The world’s largest shopping event has become an annual ritual for Asia’s largest company, part showcase of commercialism and part publicity blitz.
Will Alibaba be able to circumvent the trade war and slowing economic growth in China?