BQuick On Dec. 28: Top 10 Stories In Under 10 Minutes

This is a roundup of the top stories of the day.

1. Bankruptcy Law: Proof Of Concept

The Reserve Bank of India said recoveries and resolutions spiked in the year ended March 2018, primarily because of evolution of the new bankruptcy law and individual efforts of banks.

• In 2017-18, banks reported better recoveries from stressed assets owing to the implementation of the Insolvency and Bankruptcy Code and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests or Sarfaesi Act, according to the central bank’s annual Trend and Progress of Banking report.
• Financial creditors including banks were able to recover Rs 4,92,500 crore from 21 accounts under the insolvency law where resolution plans were approved in 2017-18, according to data provided by the RBI. Through the Sarfaesi route, they recovered Rs 26,500 crore. The total worth of disputed loans in FY18 was 12,78,600 crore.
• That compares with Rs 38,500 crore recovered from Rs 2,78,300 crore worth of loans involved via channels like Lok Adalats, debt recovery tribunals and the Sarfaesi Act in 2016-17.

For more on recoveries and resolutions read this.

Also, read this - Banks Show Drop In Stressed Assets

2. Repay On Time And Get Interest-Free Farm Loans?

In a bid to address farmers' distress ahead of 2019 general elections, the government is considering waiving interest on crop loans for farmers who pay on time, costing an additional Rs 15,000 crore to the exchequer, sources told PTI.

• According to sources, several rounds of meetings have taken place at the highest level in the last few days to chalk out a plan to address difficulties faced by farmers in view of low realisation in several crops amid bumper production.
• This may have been prompted by BJP’s recent electoral defeats. The ruling party at the Centre lost power to the Congress in three heartland states of Madhya Pradesh, Rajasthan and Chhattisgarh in the recent state polls.

There is also a proposal to tweak the crop insurance scheme.

3. Indian Markets’ Hattrick

Indian equity benchmarks posted their best three-day rally in two weeks led by HDFC twins, ICICI Bank and Larsen & Toubro.

• The S&P BSE Sensex rose 0.75 percent or 269 points to 36,077.
• The NSE Nifty 50 Index advanced 0.74 percent or 80 points to 10,860.
• In the last three sessions, Sensex has risen 1.71 percent and Nifty has advanced 1.83 percent.
• All the 11 sector gauges compiled by the National Stock Exchange ended higher led by Nifty Media index’s 1.9 percent gain.

Follow the day’s trading action here.

Also Read: What Will Drive Markets In 2019

Meanwhile, U.S. stocks too rose for a third day, continuing a furious rebound from the brink of a bear market as investors speculated the three-month rout had gone too far.
Follow U.S. market action here.

4. Gold Signs Off With A Bang

Gold is closing out 2018 with a flourish. Prices are poised for the biggest monthly gain in almost two years as concerns about the outlook for next year, volatility in global equities, and a prolonged government shutdown in the U.S. spur demand for the traditional haven.

• Spot bullion hit a six-month high on Friday, topping $1,280 an ounce, as investors favored defensive assets, adding to holdings in exchange-traded funds over the month.
• Gold is powering into the year-end after global equities sank in the fourth quarter. Banks including Goldman Sachs Group Inc. have flagged the potential for gains over 12 months as the Federal Reserve steps back on the pace of U.S. rate increases. As the final week of the year closes, there was a slew of downbeat economic data and outlooks from the U.S., China, Japan and Europe.
• “We are very optimistic on gold,” said Benjamin Lu, an analyst at Phillip Futures Ltd. “There’s still a lot of uncertainty and gloom toward 2019.”

Here’s what will aid bullion’s climb in the first quarter.

5. Thumbs Down For Indigo Airlines?

InterGlobe Aviation Ltd.-operated IndiGo is the “worst performing” carrier for consumers, while national carrier Air India has the best luggage policy, said parliamentary panel chairman Derek O’ Brien based on its latest report.

Meanwhile, IndiGo in a statement said, “As an airline our endeavour is to minimise extra hassle right from the airport entry, check-in to boarding and create more convenient experience for our customers.” “We, therefore, evaluate every complaint/feedback rigorously and develop training modules keeping the customer sentiment very much in mind,” it said.

• O’Brien said the panel had taken a strong note that during festive season some airlines were charging eight to 10 times more than the normal fares.
• The committee has recommended that cancellation charges can’t be more than 50 percent of basic fare.
• And that, tax and fuel surcharge collected should be refunded to passengers.

The panel noted that Air India had the best luggage policy.

6. More Time To Select TV Channels You Want To Watch

Telecom Regulatory Authority of India has given consumers time till Jan. 31 to opt for channels of their choice under the new framework for broadcasting and cable services.

• The regulator said that broadcasters, DTH operators, and multi-system operators requested some more time for seeking options from subscribers for smooth migration.
• Accordingly, distribution platform operators have been permitted to seek options from consumers till Jan. 31 and customers will be migrated as per their choice from Feb. 1.
• Under the new framework, consumers would select and pay only for the channels they wish to view.

7. India To List Seven State-Run Firms

India plans to list seven state-run companies through initial public offerings as it aims to meet its divestment target and contain the risk of a fiscal slippage.

• The PSUs will be listed to unlock their potential and enhance their value, Union Minister of Law and Justice Ravi Sankar Prasad said today while announcing the Cabinet decisions taken late on Thursday night.
• Prime Minister Narendra Modi’s government has been relying at buybacks and dividends to bridge the budget gap. It aims to raise Rs 80,000 crore by divestments. The progress on that front, however, is still slow.
• “Disinvestment is way below the budgeted target of Rs 80,000 crore and may result in some slippage,” Devendra Kumar Pant, chief economist at India Ratings and Research, said in a media statement.

Here are the seven PSUs that will be listed on stock exchanges.

8. Red Flags for Vadilal

Two Vadilal Group firms haven’t filed statutory auditor reports along with earnings statements, a rare such delay for Indian companies.

• Vadilal Industries Ltd., the maker of the namesake ice cream and frozen yogurt, suggested differences between the audit committee and the board of directors led to the delay.
• They have “not been able to conclude on certain matters and hence the limited review related agenda item has been postponed,” it said in its Dec. 24 exchange filing. Vadilal Enterprises Ltd., the distributor of the group’s dairy products, didn’t disclose the reason for not submitting the limited auditor review.
• As required by law, the audit committees of both boards are dominated by independent directors. While it’s not clear what the specific differences are between the board and their committees, it can be said that such impasse over auditor reviews is unusual.

Neither company has offered shareholders any explanation for this unusual situation but here is a red flag.

9. BQ Goes Underground To Witness Construction Of The Mumbai Metro

In a few years, travelling to south Mumbai won’t involve commutes in overcrowded buses or trains, or traffic holdups on the road.

Line 3 of the Mumbai Metro that connects Cuffe Parade in the south to Special Electronics Export Processing Zone in the suburbs via the business district of Bandra Kurla Complex over 33.5 km will be completed in phases at a cost of Rs 23,136 crore. The line—which will run entirely underground—will be functional in Dec. 2021, according to the Mumbai Metro Rail Corporation, the project’s implementing agency.