BQuick On Nov. 8: Top 10 Stories In Under 10 Minutes
BREAKING NEWS: Anil Ambani Dragged To London Court By Chinese Banks
This is a roundup of the day’s stories in brief.
1. Moody’s Outlook On India Turns Negative
Moody’s Investors Service cut India’s credit rating outlook to negative, citing a litany of problems from a worsening shadow banking crunch and a prolonged slowdown in the economy to rising public debt.
- The sharp slowdown in growth and a surprise corporate-tax cut will put government finances under pressure this year.
- Moody’s is projecting a budget deficit of 3.7 percent of GDP in the year through March 2020, a breach of the government’s 3.3 percent target.
The slowdown has been “deeper and longer” than expected.
The ratings agency said it doesn't expect the credit squeeze to be resolved quickly and warned that it may actually worsen and add risks to an already flagging economy.
- Moody’s comments come days after S&P Global Ratings warned that risks of contagion are rising in the Indian financial sector.
- The credit quality of Indian companies has plummeted to a record low as Prime Minister Narendra Modi’s government struggles to revive economic growth from a six-year-low.
Credit supply will remain impaired, Moody’s warned.
2. A 30-Minute Sell-Off Hurts Nifty
The rating action soured the mood as Indian equity benchmarks ended lower, wiping off more than Rs 1.5 lakh crore of investor wealth.
- The S&P BSE Sensex fell 0.81 percent to end at 40,323.61.
- The NSE Nifty 50 fell 0.86 percent to 11,908.15.
- The 31-stock index halted its record closing spree and the 50-share gauge clocked its steepest decline in more than a month.
- The broader markets represented by the NSE Nifty 500 Index fell 0.83 percent.
- Eight out of 11 sectoral gauges compiled by NSE ended lower.
Follow the day’s trading action here.
The rupee was the worst-hit by the Moody's rating outlook cut.
- The rupee fell as much as 0.5 percent to the weakest in three weeks as stocks gave up their early resilience.
- The yield on benchmark 10-year bonds rose five basis points, the most in a month, to 6.56 percent.
Read more about the domestic currency’s performance today.
3. SBI Cuts Deposit Rates While RBI Waives Off NEFT Charges
State Bank of India on Friday reduced its Marginal Cost of Funds based Lending Rate, or MCLR, by five basis points across tenors, and cut deposit rates by 15-75 basis points.
- The new SBI lending and deposit rates will be effective Nov. 10.
- Friday’s revision is the seventh consecutive cut in lending rates by the bank in 2019-20.
- With this reduction, the one-year MCLR, to which most of its loan prices are linked, will come down to 8 percent, SBI said in a statement.
Here’s the complete list of SBI’s deposit rates for various tenors.
Savings bank account holders wouldn’t be charged for National Electronic Funds Transfer from next year, the Reserve Bank of India said today.
- That was among the measures announced by the central bank in a statement to boost digital payments in India.
- The RBI noted that its efforts to promote digital payments have resulted in a rapid growth in retail digital payments systems.
Here are all the measures announced by RBI today.
4. From Allies To Foes—The BJP-Sena Breakup
Maharashtra Chief Minister Devendra Fadnavis on Friday tendered his resignation while blaming the ally Shiv Sena for the impasse over government formation after the Assembly polls.
- “The governor has accepted my resignation. I thank the people of Maharashtra for giving me the chance to serve them for the last five years,” Fadnavis said.
- He called Sena chief Uddhav Thackeray to break the impasse many times, but “Uddhav-ji did not take my calls,” Fadnavis claimed.
- The Shiv Sena’s “policy” of not talking with the Bharatiya Janata Party but holding talks with the opposition Congress and the Nationalist Congress Party was wrong, he added.
Sena Hits Back
It did not take long for Shiv Sena to react to Fadnavis' statement.
- Sena chief Uddhav Thackheray said that he felt bad for entering into an alliance with the "wrong people", alluding to BJP's Amit Shah and Prime Minister Narendra Modi.
- He said his party has not had any discussion with NCP or Congress yet.
Read more about the biggest political development in the country today.
5. ‘Ask Nilekani Or Ask God’
Two days after Infosys Ltd. Chairman Nandan Nilekani invoked god to defend his firm’s financials, SEBI Chairman Ajay Tyagi said an investigation into the whistleblower case is ongoing.
- “You have to ask him or you can ask God,” Tyagi told reporters when asked about his view on Nilekani's comments.
- “I think Infosys has very strong processes, I think even God cannot change numbers of this company,” Nilekani had said during an analyst meeting on Tuesday.
The SEBI chairman refused to comment on the whistleblower allegations, but said the case is being investigated.
6. New Horse Leads An Old Race
One-year-old Marcellus Investment Managers Pvt. Ltd. has made three times the Sensex returns in three months in a volatile market for equities.
- And that made it one of India’s best manager of money for the rich so far this year, second only to Clubmillionaire Financial Services Pvt. Ltd.
- The portfolio manager, promoted by Rakshit Ranjan and Saurabh Mukherjea, returned a gain of 23.9 percent in last three months, taking its assets to Rs 557.7 crore as of October
- That compares with the average return of 7.93 percent by the top 60 portfolio managers and 7.1 percent by the benchmark Sensex.
Here’s more on how the Marcellus’ portfolio and how other portfolio managers performed.
7. What Happened With Nifty Earnings Today
Eicher Motors Ltd.’s quarterly profit surpassed estimates driven by a one-time tax gain and a jump in other income.
- Net profit increased 4.4 percent year-on-year to Rs 572 crore.
- The profit was aided by a lower tax expense as the company switched to the new corporate tax rate.
- Revenue fell 9 percent to Rs 2,192.5 crore.
That comes even as its sales during the quarter fell by 20 percent.
GAIL (India) Ltd.’s quarterly profit missed estimates on the back of lower-than-expected earnings in its marketing segment.
- Net profit declined 17.34 percent to Rs 1,064.25 crore.
- Revenue fell 1.47 percent sequentially to Rs 18,041.06 crore.
- Margin contracted to 8.66 percent from 12.3 percent.
Find out how lower LNG marketing margin hurt profits.
Mahindra & Mahindra Ltd.’s quarterly profit declined but managed to beat analysts expectations even as the automobile slowdown continues.
- Net profit declined 24 percent year-on-year to Rs 1,355 crore.
- Revenue fell 15 percent to Rs 10,935 crore.
- Operating margin contracted 40 basis points to 14.1 percent.
Get the full earnings picture here.
Nestle India Ltd.’s quarterly profit rose on expected lines as the maker of Maggi instant noodles and Kitkat chocolate was able to skirt India’s consumption slowdown with double-digit sales growth.
- Net profit rose 33.5 percent over last year to Rs 595.4 crore.
- Revenue rose 9.4 percent to Rs 3,215.8 crore.
- Domestic sales grew 10.5 percent.
Here’s why Nestle bucked the slowdown.
8. Remember, Remember The 8th Of November
#DemonetisationDisaster was among the top trends worldwide on Twitter Friday, the third anniversary of Indian Prime Minister Narendra Modi’s ban on high-value currency notes that has since been termed a “total failure” and a “draconian” act.
- While Modi’s government hasn’t assessed the impact of the cash ban, several economists and opposition leaders said demonetisation devastated supply chains, especially in India’s vast informal economy.
- Twitter recorded more than 63,700 tweets as users flooded the platform with old pictures, videos, newspaper clippings and comments.
- TV channels showed visuals of members of the youth wing of the main opposition Congress party, who were arrested by police for protesting at the Reserve Bank of India in New Delhi.
Read more on how Indians recalled the cash ban that sent people standing in long queues for hours.
9. Pay Tax By Card, UPI Soon
The government may soon allow you to pay your taxes through a credit card, Unified Payments Interface (UPI) or even through a prepaid wallet, according to a government official.
- The government is considering more digital modes of payments for making income tax payments apart from debit cards and bank account transfers that are used currently, the official told BloombergQuint on condition of anonymity.
- The idea is being considered to simplify payment of income tax, and push use of technology for providing better services to taxpayers, the official quoted earlier said.
If the government includes more modes of payment of tax, it will give a push to compliance.
10. Love Using Your Friend’s Netflix? Your Days Are Numbered.
A coalition that includes Netflix Inc., HBO and cable-industry titans is stepping up efforts to crack down on password sharing, discussing new measures to close a loophole that could be costing companies billions of dollars in lost revenue each year.
- Programmers and cable-TV distributors are considering an array of tactics to cut off people who borrow credentials from friends and relatives to access programming without paying for it.
- The possible measures include requiring customers to change their passwords periodically or texting codes to subscribers’ phones that they would need to enter to keep watching, according to people familiar with the matter.
If none of those tactics work, subscribers could someday be required to sign into their accounts using their thumbprints.