BQuick On Nov. 7: Top 10 Stories In Under 10 Minutes

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

1. There Is A Trade Thaw!

China and the U.S. have agreed to roll back tariffs on each other’s goods in phases as they work toward a deal between the two sides, a Ministry of Commerce spokesman said.

• “In the past two weeks, top negotiators had serious, constructive discussions and agreed to remove the additional tariffs in phases as progress is made on the agreement,” spokesman Gao Feng said Thursday.
• “If China, U.S. reach a phase-one deal, both sides should roll back existing additional tariffs in the same proportion simultaneously based on the content of the agreement, which is an important condition for reaching the agreement,” Gao said.

An understanding between the two could provide a roadmap to de-escalate the trade war that’s cast a shadow on the world economy.

Meanwhile, soon after shunning the China-led RCEP trade pact, India has suggested that it could ink a trade deal with the U.S. before the end of the year.

• Manoj Kumar Mohapatra, Minister (Commerce) in the Embassy of India in Washington, said in New York on Wednesday that Commerce and Industry Minister Piyush Goyal will visit the U.S. next week during which he will hold discussions over a trade deal.
• “We will be continuing our trade talks. We are quite committed that before the closing of this year, we will be having an agreement which will be giving a boost to further our trade relationship,” Mohapatra said.

Earlier in September, Donald Trump too had said that they will have a trade deal with India “very soon”.

2. Qatar Wants IndiGo, Not Air India

Qatar Airways reiterated it is keen to buy a stake in IndiGo, India’s biggest airline, to help the Doha-based company bolster its presence in the world’s fastest-growing aviation market.

• The company, which signed a code-share partnership with IndiGo’s owner, Interglobe Aviation Ltd., on Thursday, first showed interest in acquiring a stake in 2015.
• Qatar Airways will still wait for a battle between IndiGo’s shareholders to end before it announces any decision, Chief Executive Officer Akbar Al Baker said in New Delhi.
• The company has no interest in buying the government’s stake in flag carrier Air India Ltd., he added.

Here’s how a stake in an Indian carrier will help Qatar Airways.

3. Nifty Is Back Above 12,000

Indian equity benchmark—S&P BSE Sensex—ended at a fresh record high, while Nifty 50 crossed the 12,000 mark for the first time since July.

• The 31-stock index rose 0.45 percent to close at a new all-time high of 40,653.74.
• The NSE Nifty 50 rose 0.42 percent to end at 12,012.
• The broader markets represented by the NSE Nifty 500 Index rose 0.44 percent.
• The market breadth was tilted in favour of buyers.
• Nine out of 11 sectoral gauges compiled by NSE ended higher.

Follow the day’s trading action here.

4. Economy Low, Markets High—Why?

Ananth Narayan compares economic data, market returns, earnings growth, and fund flows to make sense of this unusual decoupling.

• How do we account for this divergence?
• What are the implications for policymakers?
• What could go wrong?

Read why this divergence could threaten our financial stability.

5. A Startup Is Cashing In On India’s $1 Trillion Gold Stash

Indians have a particular attachment to gold; rural farmers and the urban working class alike invest their savings in the precious metal and flaunt jewelry at weddings. Indians stockpile more of the precious metal than citizens of any other country, and their hoard is seven times the amount of gold mined globally in 2018.

• Now, Bangalore-based Rupeek is giving the centuries-old business of gold lending an internet-aided makeover to help Indians cash in on the 25,000 tons of the metal the World Gold Council estimates they’ve stashed away.
• Backed by two of Silicon Valley’s most powerful venture capital firms, Sequoia Capital and Accel, the startup allows people to borrow money against their hoard, often built up from wedding gifts or inherited from their families.

Find out how the startup is sidestepping the ignominy of being seen pawning the family jewelry.

6. The Promoter Dilemma

The government, regulator and courts are in a quandary. On the one hand they want to give companies every chance to save themselves. On the other, they don’t want the defaulting promoter to be the saviour, even if he is the last man standing.

• Soon after enacting the Insolvency and Bankruptcy Code, 2016, Parliament amended it to disallow the promoter of the corporate debtor from participating in the insolvency resolution.
• Courts have scuppered many an attempted backdoor entry by disgruntled promoters.
• But if the only option facing the asset is liquidation, then should promoters be denied a last rescue effort?

That’s the question IBBI has now asked stakeholders to weigh in on.

7. How Nifty Earnings Turned Out Today

Bharat Petroleum Corporation Ltd.’s quarterly profit beat analysts’ estimates as it benefited from a one-time tax reversal.

• Net profit rose 55 percent sequentially to Rs 1,708.5 crore.
• That’s higher than the Rs 1,665 crore estimated by analysts tracked by Bloomberg.
• Profitability was boosted by a tax reversal of Rs 580.3 crore.
• Without this, profit would have been lower than analysts’ expectation.

Find out about the operational performance of the oil marketer.

Power Grid Corporation of India Ltd.’s profit for the three months through September rose, meeting analyst estimates.

• Net profit rose 9.4 percent year-on-year to Rs 2,527.4 crore.
• Operating profit jumped 8.3 percent to Rs 7,557 crore.

Here’s why JP Morgan thinks the company is well placed to benefit for three years.

Sun Pharmaceutical Industries Ltd. reported a profit in the quarter ended September, matching analysts’ expectations.

• The company posted a net profit of Rs 1,064 crore compared with a net loss of Rs 270 crore in the year-ago period.
• Last year, Sun Pharma had reported a one-time loss for settling an antitrust litigation.
• Revenue rose 17.1 percent to Rs 8,123.4 crore.

Revenue increased partly due to an acquisition in Japan.

UPL Ltd.’s quarterly profit missed estimates because of a one-time expense.

• Net profit was Rs 89 crore in the quarter ended September.
• Analysts tracked by Bloomberg had estimated the metric at Rs 516 crore.
• Profitability was negatively impacted by an exceptional cost of Rs 305 crore on the back of litigation expenses in one of its U.S. subsidiaries.

Find out how an earlier acquisition and a lawsuit hurt its earnings.

8. Raymond To Demerge Lifestyle Business

Raymond Ltd. today announced that it will demerge its lifestyle business and list it separately.

• The lifestyle business will house its existing branded textiles, apparel and garment units, according to a statement to exchanges.
• Raymond shareholders would be entitled to shares in the lifestyle business in the ratio of 1:1, essentially mirroring the shareholding of the listed entity on the effective date.
• The move will clearly demarcate its lifestyle business. The existing company will then house the B2B shirting business, auto component engineering business, denim and fast-moving consumer goods units.
• Raymond has also announced it will allot equity and compulsorily convertible preference shares to JKIT, an associate company which will infuse Rs 350 crore from the proceeds of a land sale.

The amount will be used to repay debt.

9. Direct Tax Collections Remain Tepid

India’s net direct tax collections in April-October grew just 2.7 percent over the same period last year making it highly unlikely that Prime Minister Narendra Modi's government will meet its budgeted target.

• The net direct tax collected in the first seven months stood at Rs 5.2 lakh crore, Bloomberg News reported citing unnamed sources.
• That is less than half the Rs 13.35 lakh crore the government hopes to get.
• The government is staring at a revenue shortfall of over Rs 1 lakh crore against the target of Rs 13.35 lakh crore for the current fiscal year.

Also Read: Two Reasons Why Rajan Thinks World Economy Is In A Better Place

10. The Secret Life Of A Google Contract Worker

More than half of Google's workers are temporary, vendor or contract staff, known as TVCs. This shadow workforce misses out on many of the famous benefits and perks that have burnished the internet giant’s reputation as one of the world’s best places to work. Last year, a group of TVCs called for better benefits and in September, TVCs working as data analysts in Pittsburgh voted to unionize, a rarity for the tech industry.

• TVCs are facing a unfortunate situation: They hold jobs that require them to act as representatives of Google, but they don’t actually work for the company.
• Thousands of TVCs work at Google in white-collar jobs behind the scenes -- marketing products or screening YouTube videos, for example.
• Other TVCs also have jobs that require they toe an awkward line of being the public face of Google while not being on Google’s direct payroll.
• The hidden nature of contractors’ real employment status sometimes approached absurd levels.

Read the inside story of how one such worker that blew the lid on the life of a Google contract worker.