BQuick On Oct. 31: Top 10 Stories In Under 10 Minutes

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

1. Core Sectors Contract, Fiscal Deficit Widens

India’s core sectors, ranging from cement to steel and energy, contracted the most in 14 years in September, adding to a list of indicators suggesting that economic growth remained weak in the July-September quarter.

• The Indian economy grew at a six-year low pace of 5 percent in the April-June 2019 quarter.
• High frequency indicators suggest that growth since then may have weakened even further due to weak demand and constrained financial conditions.
• The index fell 5.2 percent in September, according to data released by the Ministry of Commerce and Industry on Thursday.
• On a cumulative basis, the index grew by 1.3 percent from April to September 2019 compared to a growth of 5.5 percent for the same duration last year.

This indicates the severity of the ongoing industrial slowdown.

India’s fiscal deficit widened in September over the previous month.

• The gap between the government’s revenue and expenditure rose to Rs 6.51 lakh crore as of September, or 92.6 percent of the full year target.
• Revenue receipt stood at 41.6 percent of the budgeted target of Rs 19.6 lakh crore.
• The fiscal deficit level is lower than that of September last year when it had reached 95.3 percent of the FY19 target.

But the fiscal deficit trend is worrisome. Here’s why.

2. Tax Collections Grow At Slowest Pace In A Decade

India’s gross tax collection growth in the first six months of the ongoing fiscal hit a decade low in a year when the government is almost certain to miss its fiscal deficit target.

• Gross tax revenue for the April-September period of 2019-20 grew 1.5 percent year-on-year to Rs 9,19,470 crore.
• It’s the slowest pace since 2009-10 when the tax revenue in the first half had contracted 7.6 percent.
• Net tax revenue collections grew 4.2 percent in the first six months—also the lowest growth in 10 years.

The government now faces a ‘daunting task’ to meet its tax revenue target.

3. Yes Bank Gets A Potential Investor

Yes Bank Ltd. said it has received a binding offer for an investment worth $1.2 billion from a global investor as part of its fundraising efforts.

• The funds would be raised through an issuance of fresh equity shares, the private lender informed the exchanges on Thursday.
• The investment is subject to regulatory, board as well as shareholders’ approvals.
• “The Bank also continues to be in advanced discussions with other global and domestic investors,” it said.
• On Oct. 7, the bank had informed exchanges that it is in the process of finding investors to raise requisite funds.

But will the RBI rules permit such a deal?

4. Sensex Closes Off Record-High, U.S. Stocks Swing

Indian equity benchmarks extended gains for the fifth consecutive trading session, but clocked the second-least gains during the period on F&O expiry day.

• The S&P BSE Sensex rose 0.19 percent to close at 40,129.05 after hitting an all-time high at 40,392.22 intraday.
• The NSE Nifty 50 rose 0.28 percent to end at 11,877.
• The broader markets represented by the NSE Nifty 500 Index rose 0.44 percent.
• In October series, the Nifty gained 2.65 percent and Nifty Bank rose 0.21 percent.
• The markets are going to witness a lot of panic buying from the foreign institutional investors, Basant Maheshwari said as the 31-share index hit an all-time high.
• Eight out of the 11 sectoral gauges compiled by NSE traded higher.

Follow the day’s trading action here.

With markets going up, the price-to-earnings ratio is not an efficient method to measure value of businesses, according to ASK Investment’s Bharat Shah. Here's what he suggests.

U.S. stocks fluctuated amid a mixed batch of earnings and renewed concern that a trade deal with China remains elusive. Treasuries, gold and the yen rose.

• The S&P 500 Index lost 0.1 percent as of 9:33 a.m. New York time.
• The Nasdaq 100 rose 0.2 percent. Apple climbed 2.3 percent.
• The Stoxx Europe 600 Index decreased 0.2 percent.
• The MSCI Emerging Market Index climbed 0.2 percent.

Get your fix of global markets update here.

6. SEBI Tightens Norms For Disclosing Bad Loans

Putting in place a stricter framework, Securities and Exchange Board of India on Thursday directed all listed banks to disclose any divergence in bad loan provisioning within 24 hours of receiving Reserve Bank’s risk assessment report, rather than waiting to publish the details in their annual financial statements.

• SEBI noted that disclosures in respect of divergence and provisioning are in the nature of material events and hence necessitate immediate disclosure.
• Further, this information is also price sensitive, requiring prompt disclosure by a listed entity.

This new framework will come into force with immediate effect.

7. Banks Review Leaked Data Of 1.3 Million Debit And Credit Cards

Indian banks have begun reviewing stolen card data that was recently leaked on the dark web for sale, multiple people in direct knowledge of the matter said.

• The Reserve Bank of India had sent instructions to the banks after the leak was reported on Oct. 29, the people said on the condition of anonymity as details are not public yet.
• The Cyber Security and Information Technology Examination Cell of the RBI advised banks to verify the leaked details, disable existing cards and issue replacements.
• The cyberpolice are also investigating the origin of the leak.
• Details of more than 1.3 million cards issued by Indian banks were put on a website called Joker Stash, a notorious marketplace for cybercriminals to buy and sell card details, on the dark web.

Find out what data was leaked in the card dump.

8. Did Festivities Spark Joy For Automakers?

Retail sales of cars and two-wheelers rose, and inventory fell in October as deep discounts lured buyers to showrooms during the festive season, according to a BloombergQuint survey.

• Demand mainly picked up from the second half of Navratri, or the nine days leading to Dussehra, considered auspicious for buying, the survey of nine large dealerships across India revealed.
• A better-than-expected demand eased the inventory at dealerships.
• Also, stock of Hero Splendor, Mahindra Bolero and select Royal Enfield motorcycles ran out in west and north India.

But is it too early to call it a recovery for the auto sector?

9. Altico Lenders Look For New Lifeboats

Lenders to real estate financier Altico Capital India Ltd. are looking at alternative restructuring options after talks with foreign funds such as Apollo Global Management LLC and Cerberus Capital Management LP fell through, according to two people with direct knowledge of the discussions.

• The value being offered by these two foreign funds was too low for the banks to move ahead with the talks, the people said on condition of anonymity.
• While Apollo Global offered to take over the loan exposure at an 85 percent discount, Cerebrus Capital offered a slightly better 75 percent discount, the people quoted earlier said.
• The lenders to the real estate non-bank lender declined both the offers, as these would require steep haircuts on their Rs 4,300-crore exposure to the non-banking financial company.

The funds think that the real estate market is stressed enough for Altico to recover around 40-50 percent of its loan book.

10. Rajan Vs Sitharaman: Round 2

Former Reserve Bank of India Governor Raghuram Rajan, who faced a stinging attack from Finance Minister Nirmala Sitharaman for presiding over the "worst phase" of the Indian banking sector, on Thursday reminded her that two-third of his tenure as the head of the central bank was under the Bharatiya Janata Party government.

• Rajan, who was Governor of the RBI from Sept. 5, 2013 to September 2016, said a clean up of the banking sector that was "clogging" with bad loans had begun under his term and that the job remains unfinished.

Rajan said the reality is that they started a clean-up and it needs to be completed faster.