BQuick On Nov. 22: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s stories in brief.
1. Sensex: Three Firms In, Four Out
BSE Ltd. is set to include three new companies in its benchmark stock index with effect from Dec. 23, dropping four existing constituents.
- Nestle India Ltd., Titan Company Ltd. and UltraTech Cement Ltd. will be added to the benchmark, replacing Tata Motors Ltd., Tata Motors Ltd. (DVR), Vedanta Ltd. and Yes Bank Ltd.
- That will also bring down the number of constituents to 30 firms in total from 31 previously.
- Tata Motors’ shares have been dropped as BSE Auto Index has been the second worst-performing sectoral gauge in the past 12 months, declining 11.8 percent.
- The changes reflect the challenges faced by automakers since the festive season last year.
Read more about the dropouts and why Nestle, which also made its way into Nifty earlier, is being added to the benchmark.
2. Uddhav Thackeray Will Be Maharashtra Chief Minister: Sharad Pawar
The new government in Maharashtra will be formed under the leadership of Shiv Sena chief Uddhav Thackeray, Nationalist Congress Party President Sharad Pawar said on Friday.
- Emerging from a marathon meeting of top leaders of the Congress, the NCP and the Sena, who are making efforts to form government in Maharashtra, Pawar said there was a consensus on Thackeray's leadership.
- Other issues are being discussed, Pawar added.
- He said the meeting at Nehru Centre in central Mumbai deliberated extensively on finalising an agenda for governance.
The alliance may soon be ready to stake claim to form a government.
3. Alok Industries’ Buyout Keeps Running Into Delays
The joint resolution plan submitted by Reliance Industries Ltd. and JM Financial Asset Reconstruction Company Ltd. to purchase Alok Industries Ltd. under the Insolvency and Bankruptcy Code is yet to be completed as the bidders haven’t concluded payments due to financial creditors, three bankers in the know told BloombergQuint on the condition of anonymity.
- Alok Industries was one of twelve large firms referred for insolvency in June 2017 and owed banks over Rs 29,000 crore.
- In March, NCLT approved the resolution plan submitted by RIL-JM Financial ARC. The deal, however, is yet to conclude.
- Financial creditors were to receive Rs 5,052 crore against their claims of Rs 29,000 crore. This included upfront payment of Rs 500 crore and a refinancing deal for Rs 2,500 crore.
Will this derail the acquisition of Alok Industries which has already become a long drawn out process?
4. Sensex Falls Again, U.S. Stocks Climb
Indian equity benchmarks fell for the second consecutive trading session, led by the declines in Infosys Ltd. and HDFC Bank Ltd.
- The S&P BSE Sensex fell 0.53 percent or 215.76 to 40,382.37.
- The NSE Nifty 50 fell 0.44 percent to end at 11,916.20.
- The broader markets represented by the NSE Nifty 500 Index fell 0.33 percent.
- The market breadth was tilted in favour of sellers.
- Seven out of 11 sectoral gauges compiled by NSE ended lower.
- Kerala-based CSB Bank’s initial public offering was fully subscribed on the first day of bidding on Friday, with robust response coming in from retail investors. The IPO received bids for 1.05 times the shares on offer.
Follow the day’s trading action here.
Meanwhile, in a role reversal for private lenders, ICICI Bank Ltd. is now trading at a premium to Axis Bank Ltd. for the first time in five years.
Find out why ICICI Bank’s valuation surpassed Axis Bank.
U.S. equities edged higher after President Donald Trump said he was “very close” to a trade deal with China.
- Automakers led gains on the S&P 500 Index after Trump’s comments in an interview on Fox News, where he added that China was much more interested in an accord than he was.
- The pound fell -- boosting British equities -- following a gloomy reading of company sentiment.
- Gold gained 0.3 percent to $1,468.25 an ounce.
Get your daily fix of global markets here.
5. Ambani, Adani Or Tatas—Who Made Investors Richer?
As India’s equity benchmarks scaled new records aided by cuts in corporate tax rates and better-than-expected earnings growth, the nation’s largest conglomerates added Rs 5.96 lakh crore in investor wealth in about two months. Mukesh Ambani’s Reliance Industries Ltd. contributed the most.
- Among the 11 large groups analysed by BloombergQuint, nine generated returns with five beating the benchmark during the period.
- Two saw their market capitalisation decline.
Here’s how India’s biggest conglomerates have fared since Sept. 19.
6. Ridham Desai Says Banks At An 'Inflection Point'
India’s banking sector may witness a turnaround, after recent rule changes put banks in a better position to get their money back from insolvent companies, according to Ridham Desai, managing director at Morgan Stanley India Co.
- A Supreme Court ruling last week in the Essar steel matter to empower banks “has settled several disputes” around India’s bankruptcy law introduced in 2016, Desai said at a conference in Singapore on Thursday.
- “Last week’s judgment may well prove to be an inflection point for the sector,” Desai said, adding that banks previously were not well-placed to recover loans.
I would be fairly optimistic of the banking sector in India.Ridham Desai, MD, Morgan Stanley India
Desai is overweight on financials. Here’s why.
7. Birla Wants To Split Up The Chairman And MD Posts
Kumar Mangalam Birla has backed the regulator’s decision to split the roles of chairman and managing director, breaking ranks with some of the big names of India Inc. on this contentious issue.
- “We have for the longest time had separation of MD and chairman, as two separate roles,” Birla said of his business group, in a conversation with M Damodaran, former chairman of the Securities and Exchange Board of India, at the inaugural session of a two-day conference titled Gatekeepers of Governance.
I can’t imagine how it would be like to have both of those roles combined into one. The difference in the roles is very stark.Kumar Mangalam Birla, Chairman, Aditya Birla Group
- That’s a contrarian view as India’s industry bodies have written to the Finance Ministry seeking a review of SEBI’s decision asking companies to split the role by March-end, citing that 90 percent of the companies are family-run.
Catch the candid interaction between Damodaran and Birla where they discuss ghosts, integrity, succession and all things governance.
8. The Long And Short Of Customer Loyalty
Financial services customers, all over the world, are unexpectedly sticky. Why this inertia, asks Abaneeta Chakraborty.
- Financial institutions lose only about 10 percent of their customer base every year.
- It is almost as if customers do not want to leave.
But, attrition, when it happens in financial services, is silent and invisible.
9. A $4-Trillion Question For Investors
Major fund managers, including BlackRock Inc. and Amundi Asset Management, are running into a roadblock as they seek to put more money into emerging-market sustainable investments: a lack of common global definitions that would make it easier to identify what to buy.
- There’s a shortfall of as much as $4 trillion a year in investment needed to help address problems such as climate change, the United Nations estimates.
- The lack of common standards is one sticking point in filling that gap, money managers say, along with lack of data on carbon emissions and inadequate collaboration between regulators globally.
- Many asset managers are shifting toward making sustainability criteria an essential part of their strategies.
But there's wide gap between sustainable investments and the intended targets in developing nations. Can it be filled?
10. Tesla Launched A Shatterproof Pickup Truck. But Then The Glass Shattered.
Elon Musk unveiled Tesla Inc.’s eagerly awaited electric pickup truck on Thursday but it didn’t go as planned, ending with two smashed windows and the hashtag #cybertruck trending on Twitter for all the wrong reasons.
- In the demo, Tesla chief designer Franz von Holzhausen initially took a sledgehammer to the truck, which withstood the impact.
- Then it all went wrong.
- Von Holzhausen took a metallic ball in his right hand, wound up and tossed it at the truck -- smashing the front driver-side window, stunning the audience and viewers live streaming the event.
"It’s classic Tesla. It’s poetic," one analyst said.