BQuick On Sept. 9: Top 10 Stories In Under 10 Minutes

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

1. India’s Auto Sales Fall The Most In 22 Years

Sales of cars and utility vehicles witnessed the biggest monthly decline, as the worst slump in the sector in almost two decades shows no signs of letting up amid a broader slowdown in the Indian economy.

• Domestic sales of passenger vehicles fell 31.6 percent year-on-year to 196,524 units in August, according to data released by Society of Indian Automobile Manufacturers.
• That’s the worst decline since 1997-98 when SIAM started recording data.
• In the first five months of the ongoing financial year, sales of passenger vehicles fell 23.54 percent over the year-ago period to 1,109,930 units.

Click here for a breakup of the data.

2. Big Win For PwC In Satyam Fraud Case

The Securities Appellate Tribunal quashed market regulator SEBI’s order that barred PwC’s India network from conducting audit of listed companies after finding one of its firms guilty of lapses in the accounting fraud at the erstwhile Satyam Computers Services Ltd. The order of Securities and Exchange Board of India is not sustainable, the SAT said in an oral order today.

• There was no finding by the regulator that PwC induced anyone.
• Debarring auditors is beyond the power of SEBI.
  

The SAT today quashed SEBI’s order on these grounds.

3. Losses Mount For Paytm

Vijay Shekhar Sharma-promoted One97 Communications Ltd., the parent company of Paytm, has reported a surge in losses for financial year 2018-19.

Read the BQExclusive story here.

4. The Navratna That Lost 80% Of Its Market Value In Two Years

NBCC Ltd., a navratna or a crown jewel among government-owned companies, has wiped off nearly 80 percent in investor wealth since its peak in November 2017. And the stock has tumbled 42 percent in the last two months.

• The reason: stalled projects in New Delhi because of delay in environmental and other clearances.
• The delay in order execution hurt NBCC’s first-quarter earnings. Revenue from operations declined 16 percent year-on-year to Rs 1,885 crore.
• Edelweiss Securities has a ‘Reduce’ rating on the stock with a revised 12-month target price of Rs 32, implying no upside.

But the management remains optimistic. Here’s why.

6. The Puzzle Of India’s Consumption Slowdown

BloombergQuint’s Ira Dugal decodes the combination of factors that are hurting consumption demand in India.

• Lower food prices, which led to lower wages and reduced spending power created a self-reinforcing spiral in the agricultural economy.
• Another large section of workers, who depend on the manufacturing sector, have been facing their own set of troubles.
• Among the organised private sector, too, wage growth has been declining.

Just like the problem, the solution, too, may need to be a sum of parts.

7. SBI’s Cuts Its Lending, Deposit Rates. Again.

State Bank of India said today it’s reducing lending and deposit rates across maturities, the second time in over a month.

• This comes after the central bank’s Monetary Policy Committee cut its benchmark interest rate for the fourth time this year.
• The state-run lender cut the one-year marginal cost-based lending rate to 8.15 percent from 8.25 percent.
• Retail term deposit rates across maturities will be cut by 20-25 basis points, while bulk deposit rates will be lowered by 10-20 basis points, the bank said.
• The bank had last lowered its MCLR by 15 basis points on Aug. 7—on the day the MPC cut the repo rate by 35 basis points.

All rate changes will be effective from Tuesday.

8. Manpasand Beverages’ New Auditor Suspects Fraud

The newly appointed auditor of Manpasand Beverages Ltd. has suspected fraud at the maker of MangoSip.

• This has prompted the board to order a forensic audit even as its promoter looks to divest stake.
• Batliboi & Purohit, which replaced Manpasand’s previous auditor Mehra Goel & Co. on Aug. 2, has come across several discrepancies in financial statements related to sales, purchases, expenses, GST returns, debtors and creditors accounts, among others.
• Finquest Financial Solutions Pvt. Ltd., which had lent Rs 100 crore to the company, drew similar conclusions based on an independent study.

Manpasand Beverages has been in the eye of a storm after its shares declined over 90 percent in the past year.

9. A Financial Index That Tracks Trump’s Tweets

Analysts at JPMorgan Chase & Co. have created an index to gauge the impact of U.S President Donald Trump’s tweets on the U.S. interest rates, which they say is on the rise.

• The ‘Volfefe Index’, named after Trump’s mysterious ‘covfefe’ tweet, suggests that the president’s tweets are having a statistically significant impact on Treasury yields.
• The number of market-moving Trump tweets has ballooned in the past month, with those including words such as ‘China,’ ‘billion,’ ‘products,’ ‘democrats,’ and ‘great,’ most likely to affect prices, the analysts found.
• The president has averaged roughly 10 tweets a day since the start of 2016, with 10,000 tweets occurring after his inauguration in 2017.

How the Volfefe Index works.

10. The Chinese Communist Party’s Ideological Contradictions

As it turns 70 on Oct. 1, the People’s Republic of China is in weaker shape than widely realised, writes Raj Bhala.

• The last 70 years are not a history of One China unified by Marxist-Leninist-Maoist ideology, but of Two Chinas.
• Embracing globalisation, the CCP imported the economic excesses and extremes against which Mao and the Constitution rail.
• The broader and deeper the CCP integrates China into the international legal order, the further away the Party moves from its legal pillar.

To survive the next seven decades, the CCP should rethink its ideology.