BQuick On Sept. 18: Top 10 News Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. SEBI Board's Key Decisions
The market regulator today announced a slew of decisions including lowering expenses paid by investors of equity mutual fund schemes by linking them to assets under management.
Here are the details of the decisions taken by Securities and Exchange Board of India’s board:
- The total expense ratio of mutual funds will be reduced considering economies of scale, SEBI Chairman Ajay Tyagi said in a press conference.
TER For Open-Ended Schemes
- SEBI board also eased its consent mechanism that allows settlement of cases by paying a penalty without admitting or denying guilt.
- Tyagi also said that the National Stock Exchange has filed a revised application, also known as the consent application, to settle the co-location issue.
- The regulator also allowed foreign investors to trade in commodity derivatives market, except for sensitive commodities.
- Apart from this, SEBI has made some amendments in its regulations to promote fair market conduct, and allowed for interoperatibility among clearing corporations.
Here's a round-up of SEBI’s decisions.
2. Reliance Jio’s Subscriber Addition Blitz
Mukesh Ambani’s Reliance Jio Infocomm Ltd. added the most users in 17 months in July, staying ahead of rivals in subscriber addition amid consolidation in the industry.
- Reliance Jio added close to 1.17 crore subscribers in July, according to the latest data provided by the Telecom Regulatory Authority of India.
- That compares with the combined addition of 9.27 lakh by Bharti Airtel Ltd., Idea Cellular Ltd. and Vodafone India Ltd.
- The massive subscriber addition coincides with the ‘Jio Monsoon Hungama’ offer launched on July 20 that allows customers to exchange old feature phones for a new JioPhone at Rs 501.
Here’s how telecom operators performed in July.
3. Sensex Falls, Rupee Hits Fresh Low; U.S. Stocks Gain
Indian equity benchmarks closed lower for the second day, ending at the lowest level in over a month.
- The S&P BSE Sensex Index closed 0.78 percent or 295 points lower at 37,290.
- The NSE Nifty 50 Index closed 0.87 percent or 99 points lower at 11,278.90.
- The rupee slid 47 paise to settle at a record low of 72.98 against the U.S. dollar due to surging crude oil prices and escalating trade war worries.
Follow the day's trading action here.
Global equity markets reacted calmly to the latest salvos in the intensifying trade war between the U.S. and China.
- The S&P 500 Index rose, led by technology shares, even after Beijing responded to President Donald Trump’s announcement of fresh levies by saying it will impose tariffs on $60 billion of U.S. goods starting this month.
- The euro climbed 0.1 percent to $1.17, the strongest in almost three weeks.
- West Texas Intermediate crude climbed 1.7 percent to $70.07 a barrel.
Get your fix of global markets update here.
4. PSU Bank Consolidation: Necessary But Not Sufficient
It has now become clear that some banks don’t deserve to exist independently. Others, if cleaned up and capitalised, can continue to play a reasonably material role in the banking sector, writes Ira Dugal.
- Consolidation, however, will not solve any of the bigger problems of these lenders.
- These mergers, if they happen, must be seen for what they are – a necessity more than a reform.
- The question is whether there are enough healthy banks around to absorb weak lenders.
State-owned banks have a bigger problem at hand.
5. Five State-Run Firms To Be Merged This Year
India expects to merge five small state-owned companies with larger public sector peers this year, according to a senior government official requesting anonymity, as strategic sales by ceding control to private sector buyers are unlikely ahead of the next general election in 2019.
- The mergers won’t help much in meeting the divestment target of Rs 80,000 crore for 2018-19 even as higher fuel prices and a weak rupee put strain on the government’s finances.
- The so-called strategic sales follow last year’s template of Oil and Natural Gas Corporation Ltd.’s acquisition of the government’s 51 percent stake in Hindustan Petroleum Corporation Ltd. That had helped the government exceed its selloff target.
- Moreover, privatising state-run firms has been difficult for governments due to opposition by labour unions.
Here are the five entities.
6. New Breeding Ground For Consumer Goods Startups
Two-and-a-half years ago, Arman Sood, 26, Ashwajeet Singh, 27, and Ajai Singh Thandi, 28, launched a premium cold coffee brand Sleepy Owl. They chose to start by selling online. The startup is not the only one doing this.
- At least half a dozen fast-moving consumer goods brands, especially in the personal grooming segment, have mushroomed in the last two-three years, betting on growing consumption in a nation where half of the 1.3 billion people are below 25 years.
- Selling through e-commerce channels helps smaller companies save on the costs of setting up a physical retail network.
- There is interest in these online brands as it gives the investors easy access to consumer data and a sense of what they are buying, Kanwaljit Singh, founder of consumer-focused fund Fireside Ventures, said.
Here’s how startups are milking the online market.
7. India Signals Trade War Truce
India again deferred the imposition of retaliatory tariffs on some U.S. imports, signaling its readiness to find a solution to avert a trade war in contrast to the path China has taken.
- The tariff plan has been deferred to Nov. 2, according to a notification from the finance ministry.
- The Centre had previously planned to levy higher tariffs effective Aug. 4, but they were delayed until Sept. 18 as the two sides held meetings to avoid a full-blown trade war.
- The move comes even as China announced it will retaliate against the U.S.’s plan to impose tariffs. That’s a stark contrast to how the Trump administration is dealing with India.
8. Ola Vs Uber: New Zealand Edition
New Zealand will be the newest battleground for the SoftBank Group Corp.-backed cab aggregators.
- After slugging it out in India for market share with Uber Technologies Inc., followed by ratcheting up their rivalry in the U.K. and Australia, India’s largest ride-hailing platform Ola will test the waters in New Zealand—where Uber already operates.
- To build its presence, it has roped in Brian Dewil, co-founder and director of the robotics startup Horizon Robotics, as country manager.
- New Zealand’s ride hailing market came under the spotlight early this month when Uber said it would block customers with low passenger ratings from its service.
Here’s how Ola plans to lure new drivers to its platform.
9. Analysts' Favourite Indian Defence Stock Is Now World's Cheapest
Analysts retain optimism in Bharat Electronics Ltd. even as shares of the state-run maker of radars to aerospace electronics fell to their lowest in nearly three years after the Ministry of Defence lowered margins on orders.
- The stock plunged more than 27 percent in the last one month. That came after the ministry said margins on new orders will be 7.5 percent against 12.5 percent earlier.
- The counter now trades at 14.94 times its trailing 12-month price to earnings ratio, making it the cheapest defence stock in the world, according to Bloomberg.
- Still, brokerages remain bullish.
Here's why Bharat Electronics' still has enough ammo to surge.
10. Emmys: Netflix Matches HBO
Netflix Inc. won the most Emmy awards of any TV network Monday night, capping a sudden and dramatic rise to the top of the entertainment industry for a company that got its start as a DVD-by-mail operation.
- Netflix earned seven awards during the prime-time presentation of Emmys and 23 overall, both records for the streaming giant.
- Its biggest prizes came for “The Crown,’’ a period drama about the British royal family, and “Godless,’’ a Western miniseries.
- Even as it hit a new high, Netflix was denied the industry’s top honors: It failed to win a prize in any of the three most prestigious categories, losing out to rivals HBO, FX and Amazon.com Inc.
2018 Emmys reflect heightened competition.