BQuick On Oct. 18: Top 10 Stories In Under 10 Minutes  

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

1. RIL's Refining Margin Rebounds; Jio's ARPU Falls

Reliance Industries Ltd.’s standalone quarterly profit met estimates, aided by a sharp recovery in refining margins, higher output from its petrochemicals business and a lower tax rate.

• Net profit rose 7.4 percent sequentially to Rs 9,702 crore.
• Operating profit rose 0.2 percent to Rs 13,666 crore.
• Operating margin widened 20 basis points to 15.7 percent.
• Gross refining margin rose to $9.4 per barrel, from $8.1 per barrel in the previous quarter.

Here's what revived RIL's refining margins.

Reliance Jio Infocomm Ltd.’s operating profit met analyst estimates in the quarter ended September even as its average revenue per user declined.

• Operating profit rose 10 percent quarter-on-quarter to Rs 5,139 crore.
• Net profit rose 11 percent to Rs 990 crore.
• Revenue rose 5.7 percent to Rs 12,354 crore.
• But the average revenue per user of the Mukesh Ambani-led group telecom arm fell for the eighth straight quarter to Rs 120.

Part of the ARPU decline was due to new JioPhone users.

2. MPC Minutes: Rate Cut Signal

India’s Monetary Policy Committee was unanimous in its view that a deepening economic slowdown is worrying enough to keep interest rates low for longer, the minutes of its latest meeting show.

• The concern explains Governor Shaktikanta Das’s statement that the RBI would keep its policy stance accommodative for as long as it is necessary to revive growth.
• While Deputy Governor BP Kanungo pushed for a rate cut to revive domestic demand
• His colleague Michael Patra said that instead of MPC taking a lead in trying to revive the economy, “a full throttle effort by all arms of macroeconomic management is the need of the hour.”

Here are other key insights.

3. Sensex Clocks Longest Gaining Streak In Seven Months

Indian equity benchmarks extended gains for the sixth consecutive trading session, their longest stretch of gains in seven months.

• The S&P BSE Sensex rose 0.64 percent or 246.32 points to close at 39,301.22.
• The NSE Nifty 50 rose 0.65 percent to end at 11,661.75.
• Reliance Industries became the first Indian company to cross the Rs 9-lakh-crore market capitalisation mark intraday.
• The market breadth was tilted in favour of buyers.
• Ten out of 11 sectoral gauges compiled by NSE ended higher.

Follow the day’s trading action here.

U.S. equities fell, led by shares of technology and industrial companies, even in the wake of mostly positive earnings this week.

• Honeywell and Union Pacific were among the biggest decliners in industrial sector of the S&P 500, while Microsoft led tech lower. Consumer staples and energy stocks led gains.
• The dollar approached its weakest close since July and the pound drifted.
• West Texas Intermediate crude gained 0.5 percent to $53.93 a barrel.

Get your daily fix of global markets here.

4. Bharti Airtel Lost Record Number Of Active Users In August

Bharti Airtel Ltd. lost most active subscribers in August as the nation’s second-biggest telecom service provider temporarily shut operations in Jammu & Kashmir during the lockdown and flood in various regions damaged network connectivity.

• The Sunil Mittal-controlled operator lost more than 57 lakh active or paying subscribers in August, according to Telecom Regulatory Authority of India.
• That’s the highest-ever loss in active users for Bharti Airtel.
• Vodafone Idea Ltd.—India’s largest telecom operator by users—also continued to lose paying subscribers for 16 straight months, albeit at a slower pace.
• Its active subscriber base fell by 28.6 lakh in August—the fewest in nine months.
• Reliance Jio Infocomm Ltd., the telecom operator launched by Asia’s richest man, is the only service provider to add active users on its network, yet again.

Here’s a deep dive into the monthly data released by the telecom regulator.

5. Bajaj Allianz Life Annuls Indiabulls Housing Bond Trade

One of the two corporate bond sales that saw yields spike to more than 40 percent this week was annulled by the seller, a rare such reversal of a trade that has only added confusion behind the transactions.

• Private insurer Bajaj Allianz Life annulled the transaction a day after it sold the bonds of Indiabulls Housing Finance Ltd. to DB International Asia Ltd., a Singapore subsidiary of Deutsche Bank, at a steep discount, three people aware of the details said.
• They asked not to be identified as they are not authorised to share the information.
• The insurer informed the exchange that it was an erroneous trade, the second person said, adding that it couldn’t have been an error as three different bonds of the company were offloaded.
• Bajaj Allianz Life didn’t respond to an emailed query and Deutsche Bank Singapore wasn’t immediately reachable.

Indiabulls Housing and Vodafone Idea Ltd.’s bonds were sold at steep discounts earlier this week.

7. India Will Cut Stake In Axis Bank And ITC, But...

The government wants to pare its stake in Axis Bank Ltd. and ITC Ltd. through Specified Undertaking of Unit Trust of India by more offers of exchange-traded funds and not through offers for sale.

• The government would gradually lower its stake in these two blue-chip companies through the Bharat 22 ETF, a senior government official told BloombergQuint on condition of anonymity.
• The government’s holding in both the companies through SUUTI form part of the exchange-traded fund.
• The SUUTI held 4.97 percent in Axis Bank and 7.94 percent in ITC as of September, according to exchange filings.
• SUUTI’s stake in the private lender, as on Oct. 17, was valued at around Rs 9,726 crore, while that in the cigarettes-to-hotels conglomerate was worth nearly Rs 23,958 crore.
• Axis Bank and ITC Ltd. have a weight of 7.7 percent and 15.2 percent, respectively, in the Bharat-22 ETF.

Here’s why the government doesn’t want to divest stake in ITC below a certain threshold.

8. Conviction Or Doubt?

Overconfidence is a deadly emotional bias has led to the downfall of great empires, too big to fail companies, artists… and investment portfolios, writes Kalpen Parekh.

• While forming confident views of the future, also evaluate what can go wrong if the view doesn’t play out.
• If you have formed a view of investing based on a hypothesis, do also speak to a few others who have an opposite view.
• Doubt extreme views and exaggerated returns.

If asked to forecast oil prices in the next five years, an economics professor will be as off the mark as a zookeeper. However, the professor will offer a forecast with a lot of conviction.

9. Pakistan Escapes Terror-Financing Blacklist

Pakistan has made just enough progress on global anti-money laundering and counter-terrorism financing standards to escape being placed on a blacklist by the Paris-based Financial Action Task Force.

• Pakistan has been asked to swiftly complete its full action plan by February 2020 and failure to do so can lead to a downgrade to the blacklist, FATF President Xiangmin Liu said at a briefing Friday at the end of its plenary meeting in Paris.
• Pakistan has only largely addressed five of 27 action items, with varying levels of progress made on the rest of the action plan, according to a statement.
• Despite a high-level commitment for Pakistan to fix these weaknesses, it “has not made enough progress.” said Liu. “Pakistan needs to do more and it needs to do it faster.”

The announcement will disappoint India, which has long argued and lobbied that Pakistan belongs on the blacklist.

10. China’s GDP Grows At Slowest Rate Since Early 90s

China continued its grind to more moderate growth in the third quarter as investment slowed, providing little upside for a global economy flirting with its first recession since 2009.

• Gross domestic product rose 6 percent in the July-September period from a year ago, the slowest pace since the early 1990s and weaker than the consensus forecast of 6.1 percent.
• On the upside, factory output improved and retail sales held up, but slowing investment growth remained a concern.

As China slows, it is buying less from the rest of the world, pushing its trade surplus higher and dragging on global economic growth. That also has a knock-on effect on trade partners.

Billionaire hedge-fund founder Ray Dalio said the global economy is in a “great sag” marked by political extremes that recall the 1930s, but isn’t headed for a typical end-of-cycle crash.

• Dalio, whose investment management firm, Bridgewater Associates, is the world’s biggest hedge fund, weighed in on topics from global borrowing levels to the U.S. presidential election, where he said a Democratic victory might lead to a reversal of President Donald Trump’s corporate tax cut.
• “Big, unique things are happening” in a global economy awash with money, Dalio said on a panel in Washington.
• The impetus of measures such as interest-rate reductions and tax cuts is fading, “but we don’t have a circumstance to cause a classic crash-type event at the end of the cycle.”