BQuick On Oct. 9: Top 10 News Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Rout Of The Year
Portfolio managers saw the worst rout of the year in September as concerns around non-bank lenders dragged the market down.
- Fifty portfolio managers with equity assets worth Rs 96,770 crore ($13 billion)—85 percent of the money managed by the category—lost on an average 10.4 percent, according to data collected by BloombergQuint from disclosures to the market regulator.
- The average fall is higher than Nifty 50’s 6.42 percent decline in September—the most in a month since February 2016.
Here are the portfolio managers with the best and worst returns.
2. Singh Brothers’ Rs 1,200-Crore Hit
In the dramatic collapse of their empire, the Singh brothers didn’t just lose control of their healthcare and financial services businesses. They have almost run a chartered airline company into the ground, burning a Rs 1,200-crore hole in their fortune.
- Ligare Aviation Pvt. Ltd., which provides planes and helicopters on demand, is owned by Malvinder Singh and Shivinder Singh.
- The brothers were still billionaires and ran a thriving business when they took control of the airline in 2006—about two years before they sold Ranbaxy Ltd. for $4.6 billion.
- The carrier, then called Ran Air Services Pvt. Ltd., was owned by Vidyut Investment Pvt. Ltd., a subsidiary of Ranbaxy.
- BloombergQuint’s analysis of RoC filings revealed how the Singhs came to own the airline and why it is buried under debt.
The aviation business now has a negative net worth.
3. Indian Markets Fall; U.S. Stocks Volatile
Indian equity benchmarks resumed their decline paced by losses in Tata Motors Ltd., Reliance Industries Ltd. and ITC Ltd.
- The S&P BSE Sensex Index fell 0.51 percent or 175 points to 34,299.
- The NSE Nifty 50 Index declined 0.45 percent or 47 points to 10,301.
- The Nifty 50 index swung 14 times between gains and losses.
- The rupee closed at a fresh low of 74.39 against the U.S. dollar amid high crude oil prices and unabated foreign fund outflows.
Follow the day's trading action here.
U.S. stocks swung between gains and losses as technology shares rebounded and Treasury yields steadied near a seven-year high amid rising trade tensions and a sketchy outlook for global growth.
- The Nasdaq indexes were higher in early trading, while the S&P 500 Index and Dow Jones Industrial Average fell.
- The MSCI Emerging Market Index fell 0.3 percent to the lowest in almost 17 months.
- The euro declined 0.4 percent to $1.1447, the weakest in more than seven weeks.
- West Texas Intermediate crude climbed 0.6 percent to $74.70 a barrel.
Get your daily fix of global markets here.
4. Tata Motors Stock Slumps 13%
Europe’s luxury car titans are bearing the brunt of a slump in Chinese auto demand, and investors in India are paying the price.
- Jaguar Land Rover announced late on Monday that it’s shuttering production for two weeks in October at its Solihull plant in the U.K. -- because of sinking demand in China.
- That announcement sent shares of its owner Tata Motors Ltd. plunging 13 percent to Rs 184.35 apiece, the largest drop in nine years.
- That wiped out $1.2 billion of its market value, or enough money to buy about 25,000 Jaguar F-Pace SUVs, each priced at about $47,000.
- Performance of the marquee brands in China is critical for Tata, which gets more than three-fourths of its revenue from the U.K. units it bought from Ford Motor Co. about a decade ago.
Here’s how luxury carmakers are bearing the brunt of trade tensions.
5. SBI Steps In To Aid NBFCs
State Bank of India is rushing to support the country’s non-bank lenders, many of which may find it difficult to continue growing in an environment of constrained liquidity and higher rates.
- The country’s largest lender will increase its planned purchase of portfolios from non-banking financial companies.
- “The bank had initially planned for a growth of Rs 15,000 crore through portfolio purchase during the current year which is now being enhanced,” SBI said in a statement.
As per the bank’s internal assessment, there may be an opportunity to buy additional portfolio in the range of Rs 20,000-30,000 crore.SBI Statement
- SBI said it would look at both priority sector and non-priority sectors of NBFCs.
- SBI’s move will “alleviate liquidity concerns to a great extent”, Department of Economic Affairs Secretary Subhash Garg tweeted.
This comes amid concerns that NBFCs will find refinancing tough.
Also read: Indiabulls Housing Hikes Lending Rates
6. The Worst Is Yet To Come For Oil Retailers
Earnings of the three state-run oil marketers for the quarter ended September could be hit due to lower inventory gains and sharp depreciation of the rupee.
- The Indian currency depreciated nearly 6 percent against the dollar in the quarter ended September, while Brent crude oil prices averaged only 1 percent higher compared with the previous quarter.
- Generally, higher average crude prices result in inventory gains for oil marketers, including Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd.
- Since the change in average crude prices is lower this quarter, refiners’ earnings are expected to be less compared with the quarter ended March.
Here's how oil marketers will be impacted.
7. IL&FS Is An Unwieldy Monster. Kill It.
For its roads, power stations and other useful assets to live, a bankrupt Indian infrastructure lender must die. Infrastructure Leasing & Financial Services Ltd. was seized by the government this month after unexpected defaults on its $12.5 billion of debt spread panic through money and equity markets. A new six-member board chaired by banker Uday Kotak will have to sort out the mess, writes Andy Mukherjee.
- IL&FS is an unwieldy, opaque hydra that doesn’t just finance long-term assets, but also constructs, operates and owns them.
- It has 348 entities for the government-appointed board to untangle – double the number of subsidiaries, associates and joint ventures listed in the firm’s last annual report.
- Getting the job done in six to nine months, as the government hopes, is next to impossible.
8. WhatsApp To Store Data Locally
Messaging platform WhatsApp said it has set up a system in India that stores payments-related data locally in the country to comply with Reserve Bank of India’s regulations.
- The RBI, in a circular dated April 6, had said all system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India.
- It had given time till Oct.15 to comply with the mandate.
Almost one million people are testing WhatsApp payments.
9. IMF Retains India's 2018 Growth Forecast
The International Monetary Fund forecast a growth rate of 7.3 percent for India in 2018 and 7.4 percent in 2019.
- This acceleration, the world body said in its latest World Economic Outlook report, reflected a rebound from transitory shocks, with strengthening investment and robust private consumption.
- India had clocked a 6.7 percent growth rate in 2017.
- India's medium-term growth prospects remain strong at 7 percent, benefiting from ongoing structural reform.
Can India retain the fastest growing economy tag?
10. #MeToo Arrives In India
India’s #MeToo moment is here. Several women have come forward with tales of sexual harassment and assault. Their allegations target influential men from the entertainment industry and corporate India to journalism and politics. But where do you draw the line between sexual harassment and bad social conduct?
- All allegations need not necessarily fall under the parameters of sexual harassment, Additional Solicitor General of India Pinky Anand told BloombergQuint in an interaction.
- The feeling of being harassed, she said, can never take the place of an actual action which perpetrates sexual harassment on a woman.
- “Ultimately, sexual harassment has to be in a manner which is perceivable by law and as something which comes in the parameters of sexual harassment,” she added.
- Also, a common theme in most, if not all cases, is that the victims didn’t choose to file an official complaint against those they accused.
Sexual harassment? Or Social misconduct? Here’s the legal view.