BQuick On August 28: Top 10 News Stories In Under 10 Minutes
This is a roundup of the day’s stories in brief.
1. LIC Board Agrees To Acquire 14.9% Stake In IDBI Bank As First Step
Life Insurance Corporation of India Ltd. will purchase 14.9 percent equity stake in IDBI Bank Ltd., as a first step towards taking majority ownership in the lender.
- LIC gave an in principle approval for “subscription of equity shares on preferential basis subject to their total exposure not exceeding 14.9 percent of post issue capital of IDBI Bank.”
- The state-owned lender will approach its shareholders for an approval on this deal on Aug. 31.
“This is the first tranche of the deal between LIC and IDBI Bank,” said B Sriram, managing director of the lender.
Read more on the LIC-IDBI Bank deal.
2. JSW Steel To Replace Lupin In Nifty 50
JSW Steel Ltd. will replace Lupin Ltd. in the benchmark NSE Nifty 50 Index.
- The company will join Tata Steel Ltd., the only other steelmaker in the index, according to a press release by the National Stock Exchange.
- The changes, which are part of the periodic reconstitution, will be effective from Sept. 28.
- The benchmark index was last reconstituted in April this year when Bajaj Finserv Ltd., Titan Company Ltd. and Grasim Industries Ltd. were included in the index.
Here’s the full list of changes to NSE’s indices.
3. More Record Highs
Indian equity benchmarks extended record-breaking run for the second straight day led by Reliance Industries Ltd., HDFC twins and Infosys Ltd.
- The S&P BSE Sensex Index rose 0.5 percent or 202 points to close at 38,897.
- The NSE Nifty 50 Index advanced 0.4 percent or 47 points to 11,738.
- Six out of 11 sector gauges compiled by National Stock Exchange of India ended higher led by the Nifty Metal Index’s 1.8 percent gain.
Follow the day’s trading action here.
U.S. stocks padded all-time highs, with the S&P 500 Index topping 2,900 for the first time amid speculation that the Trump administration will continue to de-escalate global trade skirmishes.
- The MSCI Emerging Market Index advanced 0.5 percent to the highest in almost three weeks.
- The Bloomberg Dollar Spot Index fell 0.2 percent to the lowest in more than four weeks.
- Brent crude advanced 0.8 percent to $76.80 a barrel, the highest in seven weeks.
Get your fix of global markets, here.
4. F&O Investors To Pay Tenfold Higher Transaction Tax On Delivery
Investors taking physical delivery of securities to settle derivative contracts will have to pay a tenfold higher transaction tax than those who settle in cash.
- The taxman has clarified to the Bombay High Court that the same transaction tax rate will apply to physical settlement in derivatives and equity segments.
- For taking delivery of shares, investors will now pay Rs 10,000 for every Rs 1 crore of transaction value, compared with Rs 1,000 earlier.
- A bench comprising Justice B R Gavai and Justice M S Karnik had sought clarity from the Central Board of Direct Taxes on a petition filed by NSE members
Here's more on the tax department's clarification.
5. Why JSW Steel Is The World's Best Steel Stock
JSW Steel Ltd. is the world’s best-performing steel stock as its ability to maintain margins and lower costs helped it make most of growing steel demand in India.
- Shares of the steelmaker have risen more than 30 percent so far this year, while those of its peers–Jindal Steel and Power Ltd., Steel Authority of India Ltd. and Tata Steel Ltd. have declined.
- The Sajjan Jindal-led company, which is trading close to its 52-week high, also outperformed major steelmakers globally.
- More than 70 percent of the analysts covering the stock have a ‘Buy’ rating, according to Bloomberg data.
Here are the factors giving JSW Steel stock the edge.
6. Reliance Jio’s Tariff War Hurts Vodafone-Idea The Most
The tariff war triggered by Reliance Jio Infocomm Ltd. hurt the Vodafone India Ltd. and Idea Cellular Ltd. combine the most.
- India’s youngest telecom operator gained nearly seven percentage points of revenue market share from Vodafone-Idea Cellular combine since it started reporting financials in June 2017.
- Reliance Jio gained two percentage points from Bharti Airtel Ltd. during the period.
- The Mukesh Ambani-led operator gained another 14 percentage points at the expense of smaller operators– BSNL, MTNL, Aircel Ltd., Reliance Communications Ltd., etc.
Here’s more on the battle for telecom supremacy.
7. Google Teams With Banks To Launch Digital Lending
Alphabet Inc.’s Google is partnering with four Indian banks to grant consumer loans online, as the fight for a $1 trillion digital finance market intensifies.
- The U.S. search giant is teaming with HDFC Bank Ltd., ICICI Bank Ltd., Kotak Mahindra Bank Ltd. and Federal Bank Ltd. to offer instant, pre-approved loans to customers.
- The loans will be provided “right within Google Pay in a matter of seconds,” said Google in a statement.
Read how online lending is becoming the next frontier.
8. Modi’s JFK Moment!
India plans to spend $1.4 billion to send a crew of three to space by 2022, spurred by Prime Minister Narendra Modi’s goal that will help the country break into an elite club.
- A module with three astronauts will be launched from Sriharikota, taking the passengers on a seven-day voyage around the Earth.
- The capsule will then land in the Arabian sea, near the western coastal state of Gujarat.
- The plan, which will put the South Asian nation on track to become the fourth to send humans to space, will create as many as 15,000 jobs and will be preceded by two unnamed test flights, the Indian Space Research Organisation said.
Find out why Modi’s call is akin to the one made by John F. Kennedy in 1961.
9. Quarterly Earnings, Short And Long-Termism: A Fine Line
If quarterly earnings do lead to short-termism, what is the guarantee that a semi-annual or annual schedule would change that, asks L&T's CFO R Shankar Raman.
- A blanket move to a semi-annual/annual reporting schedule, across sectors, will not balance out the short-termism bogeyman.
- Communication should be around devising long-term strategic plans and setting goals, rather than the next quarterly estimates.
Is there a sectoral approach to quarterly reporting?
10. Why Not Show Pakistan The Same Consideration Shown To China?
Wouldn’t a financially desperate Pakistan, if offered half a chance by India, grasp eagerly at an alternative to China's neo-colonialism, asks Bharat Karnad.
- The chief beneficiaries of a squabbling India and Pakistan are China and the United States.
- The so-called China-Pakistan Economic Corridor is increasingly recognised by Pakistanis as a debt trap.
- There’s every incentive for Islamabad to accept the formalisation of the informal Indo-Pak trade.
Read this to understand the benefits of open trade between India and Pakistan.