BQuick On Sept. 26: Top 10 Stories In Under 10 Minutes

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

1. RBI Assures More Liquidity Only If...

The Reserve Bank of India has released its new liquidity framework, signalling an easier liquidity stance should financial conditions warrant.

• The framework comes at a time when government borrowings from the market are expected to remain high and bond yields are elevated.
• Against this backdrop, the central bank’s signal of permitting easy liquidity is likely to come as a relief to the markets.
• The review had been initiated due to concerns raised over the conflict between the central bank’s liquidity framework and its monetary policy stance.
• This, according to market participants, was preventing complete transmission of policy rate changes, particularly via the bond markets.

Find out what the new framework entails.

2. SEBI Chief’s Message To Mutual Funds

After tightening rules on debt investments by mutual funds, the Securities and Exchange Board of India reiterated that asset managers need to follow the new framework on extension of repayment deadlines.

• Any extension in maturity of a debt instrument held by mutual funds will be considered a default, according to the new guidelines released earlier this week by SEBI.
• And fund houses will have to report any changes that could impact valuations of schemes.
• “Standstill agreements are not covered in any of the mutual fund regulations and we have made our position clear,” SEBI Chairman Ajay Tyagi said on the sidelines of an event.

The new SEBI mutual fund norms plug a grey area for mutual funds. Here are the conditions.

3. Nifty Rebounds, U.S. Stocks Drop

Indian equity benchmark NSE Nifty 50 rallied 5.8 percent in September series, the best since March when it advanced 7.25 percent.

• Today, the S&P BSE Sensex index rose 1.03 percent to end at 38,989.
• While the NSE Nifty 50 index advanced 1.22 percent to close at 11,580.
• The broader markets represented by the NSE Nifty 500 Index rallied 1.14 percent.
• Ten out of 11 sectoral gauges compiled by NSE advanced.

Follow the day’s trading action here.

U.S. stocks fell and Treasuries advanced as the latest impeachment drama in Washington and uncertainty on the trade front sparked risk aversion.

• The S&P 500 Index fell, with futures turning lower after a whistle-blower complaint at the center of the impeachment inquiry against President Donald Trump was released.
• Stocks fell Tuesday when Democrats said they’d start a formal inquiry, only to rebound Wednesday amid signs of progress on the trade front.
• The dollar ticked lower after jumping the most since March a day earlier, while gold steadied following a plunge in the previous session.
• The pound fluctuated amid rising acrimony in Parliament as the U.K. limps toward Brexit.
• West Texas Intermediate crude declined 0.3 percent to $56.32 a barrel.

Get your daily global markets fix here.

4. Dr. Reddy’s China Breakthrough

Dr. Reddy’s Laboratories Ltd. is the first Indian drugmaker to win an approval to supply a key drug to treat schizophrenia and bipolar disorder in China after the world’s second-largest pharma market asked manufacturers to submit bids to supply commonly used generic medications to its hospitals.

• India’s second-largest drugmaker by revenue bagged the rights to supply Olanzapine in China.
• Its bid was at a 35 percent discount to the drug’s prevailing price and it will supply the product to public hospitals in several provinces, including Zhejiang, Hunan and Guangxi, brokerages including Nomura Holdings Inc. and Jefferies Group LLC said citing a media report of Chinese news agency Caixin.
• China had rolled out a bulk drug procurement programme to drive down prices and provide better access to quality drugs and treatment to its population.

Here’s how big this opportunity is for Dr. Reddy’s.

5. Setback For ITC In Hotel Leela Sale

The Securities Appellate Tribunal rejected ITC Ltd.’s appeal in the sale of Hotel Leelaventure Ltd.’s assets to Brookfield Asset Management.

• The cigarette-to-hotel conglomerate had moved the SAT after the Securities and Exchange Board of India rejected its contention that the sale of Hotel Leelaventure’s assets to Brookfield Asset Management should not be allowed because of related-party transactions.
• SEBI had allowed JM Financial Asset Reconstruction Company Ltd., which owns 26 percent in Leela, to vote on the Rs 3,950-crore deal.
• A bench, presided over by Justice Tarun Agarwala, also vacated an earlier stay order where it had directed Leela not to declare the postal ballot results till the matter was pending before the tribunal.

Here’s ITC’s full argument in the case.

6. Consumer Firms Are Paying More Attention To Kids!

India is home to over 450 million kids but their share in the nation’s personal-care market is tiny. Having failed nearly two decades ago, fast-moving consumer goods makers are again trying to tap young consumers.

• Hindustan Unilever Ltd. unveiled its Baby Dove range of soaps two years ago.
• Dabur India Ltd. plans to launch a shampoo and hair oil under the Dabur Amla brand for online retail.
• Colgate-Palmolive India Ltd. told analysts that focusing on the oral care market for children is key to regaining its lost market share.

FMCG makers launched similar personal-care products in the ’90s, but shelved kids’ products soon after. Here’s why.

7. Anand Mahindra On ‘Biggest Profit Opportunity’ For Businesses

Businesses around the world should stop arguing over climate change and instead capitalise on environment-friendly opportunities arising out of it, according to Anand Mahindra.

• “I don’t intend to get into whether climate change is a real debate and who is guilty,” said the chairman of the automobiles-to-software Mahindra Group.
• His conglomerate’s bets in the last five years on sustainability segments, such as solar power and organic waste-to-energy solutions, have been among the fastest-growing verticals, according to him.
• Mahindra Susten Pvt. Ltd., a subsidiary of the group’s renewable energy arm, offers solar solutions, while Mahindra Waste To Energy Solutions Ltd. focuses on converting organic municipal and agricultural waste to biogas and organic fertilisers.

“Why are we even wasting time arguing who is right or wrong,” Mahindra says.

8. Vedanta Surges On Government’s Plan To Sell Stake In Unit

India’s plan to sell its entire stake in Hindustan Zinc Ltd. spurred a rally in Vedanta Ltd., the biggest shareholder of Asia’s most valuable zinc producer.

• Vedanta surged 6.2 percent to the highest since July 25, while Hindustan Zinc rose the most in almost a year.
• The Indian government, which owns 29.5 percent in the zinc producer, plans to sell the stake via an offer for sale or in the open market once a dispute involving its ownership is resolved by the Mines Ministry, a government official told reporters, asking not to be identified citing rules.
• Billionaire Anil Agarwal’s Vedanta, which owns about 65 percent of the zinc producer, has over the years sought to buy the government’s portion but was hampered by cases related to the legality of the 2002 privatisation.

9. Getting More Bang For The Buck From India’s Limited Fiscal Bullets

With much of the world undertaking stimulus measures again, should India be a beacon of an unsuitably-austere fiscal policy, asks Deep Mukherjee.

• The corporate tax cut is likely to have a lesser-than-anticipated impact in FY20.
• A judicious use of fiscal stimulus is required for higher and immediate economic impact.
• A tricky situation emerges when there is a deterioration of the fiscal deficit along with a simultaneous fall in the real interest rate, and no immediate palpable benefit to economic activity.

That said, India should make good use of the global liquidity glut. Here's how.

10. Daan Utsav: Every Indian Volunteering

This #DaanUtsav Week from Oct. 2 to Oct. 8, BloombergQuint will bring you a series of first-person accounts on volunteering that narrate stories of how different organisations across India are engaging volunteers at scale, or in depth, and bringing about significant transformation.

• Even if you believe that it is money that makes a difference, encouraging volunteering is the best means to your end!
• Unlike giving money, once you start volunteering your time, you will regularly interact with the people you are helping.
• It helps you figure out what the root causes of problems are and you’ll gradually move down the path of being more involved.

Do read their journeys and see how you’d like to get involved.