BQuick On Aug. 19: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. India’s Largest Tier 2 Rupee Bond Offering
State Bank of India priced the country’s biggest offering of local-currency Tier 2 bonds yet as the lender boosts its capital buffers amid the worsening financial health of domestic companies.
- India’s largest bank will raise Rs 8,931 crore ($1.19 billion) through 15-year bonds that comply with Basel III capital norms, according to a person familiar with the matter.
- The notes carry a coupon of 6.80%, the lowest pricing on such debt issued by any lender since the country started implementing the stringent capital norms in 2013, data compiled by Bloomberg show.
The lender is selling bonds at a time when India’s banking sector needs to beef up capital ratios. More details here.
2. A Stock’s 8,764% Spike Triggers Rethink In Shareholding Rules
A 8,764% surge in the shares of a company with a minuscule public shareholding has prompted India’s regulator to consider changing its rules for firms emerging from the nation’s bankruptcy process.
- The Securities & Exchange Board of India has sought comments on a proposal to cut the time given to companies that re-list after bankruptcy resolution to boost the free float to at least 10% within six months from 18 months currently.
- The rule mandating such companies to eventually get to the minimum public shareholding to 25% within three years of re-listing remains.
- Market participants have until Sept. 18 to submit their views on the proposal.
Read more on why SEBI is considering the change in minimum public shareholding norms.
3. Easier Rules To Help States Clear Off Power Dues
India’s cabinet eased borrowing norms for states to help them repay dues to power generators and spur cashflows in an industry struck by the pandemic.
- Power Finance Corp. and REC Ltd. will extend loans to electricity retailers beyond the threshold limit for working capital needs, Prakash Javadekar, information and broadcasting minister, said at a media briefing after the cabinet met.
- “This move will help several states and improve liquidity,” Javadekar said.
- The one-time relaxation will allow electricity retailers in some states to clear Rs 32,000 crore ($4.3 billion) of dues, power minister R.K. Singh told the a news channel earlier today.
The threshold was coming in the way of some states benefitting from a Rs 90,000 crore loan programme for power retailers.
4. How Top Portfolio Managers Performed In July
India's top portfolio managers clocked gains for the second straight month as equities continue to rebound from the March lows.
- The 60 biggest portfolio managers by assets tracked by BloombergQuint returned average gains of 5.4% in July compared with a 7.7% rise in the benchmark Sensex.
- They collectively manage Rs 1.13 lakh crore or nearly 80% of the industry's total assets.
- The portfolio managers returned average gains of 11.8% in the last three months as the market recovered from the worst selloff in more than a decade.
Here is a snapshot of how the portfolio managers have performed this year and July.
5. The One Indian Firm That Benefits From Global Supply Disruption
Analysts expect state-run National Aluminium Co. Ltd. to gain as one of the world’s largest alumina producers in Brazil will cut output by more than half for maintenance, potentially disrupting raw material supply.
- Norway’s Norsk Hydro ASA, among the biggest aluminium producers, said it will reduce production at Alunorte alumina refinery in Brazil amid extended maintenance on a pipeline transporting bauxite from the Paragominas mine in the Latin American nation.
- Alumina production at Alunorte, which accounts for about 13% of the global demand, will fall to 35-45% of its full operating capacity during planned maintenance expected to last two months.
- It’s a positive for Nalco, even if for a very short term, since the state-rum miner sells 80-90% of its alumina overseas, he said.
Find out more what analysts think here.
6. Nifty Ends Flat, U.S. Stocks Fluctuate
Indian equity markets ended off the highest point of the day, ending a rangebound session on a flat note.
- The S&P BSE Sensex ended 0.2% at 38,614 while the NSE Nifty 50 index ended 0.3% higher at 11,419. This was the third straight day of gains for the benchmark indices.
- Among the sectoral indices, the Nifty Media index ended as the top performer with gains of 5.4%, courtesy a 14% surge in Zee Entertainment.
- The Nifty Pharma ended lower for the third straight session and has now declined in six out of the last seven trading sessions.
- Broader markets outperformed in today's session with the midcap index ending 0.6% higher while the smallcap index ended with gains of 1.24%.
Follow the day’s trading action here.
Globally, cases exceed 22 million with deaths crossing 7,81,000.
- Greece and Ireland moved to tighten rules after a jump in coronavirus cases.
- The death toll in Iran surpassed 20,000 while the UAE reported a jump in cases.
- Hong Kong recorded the lowest number of new coronavirus infections since its latest outbreak started last month.
Follow the global spread of the virus here.