BQuick On Aug. 24: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. A Narrow Escape For Future Group
Future Retail Ltd. paid interest on a dollar bond, averting one of the largest stumbles on such debt by an Indian company.
Future Retail paid $14 million of interest on its 5.6% 2025 dollar notes, the company said in an exchange filing Monday.
It had missed the original July 22 deadline for the coupon payment, and was in a 30-day grace period that expired Friday.
Failure to repay would have resulted in default and would have allowed holders of the securities to demand immediate repayment on the $500 million of principal.
Future’s cash crunch has been exacerbated by the Covid-19 pandemic and India’s lockdown.
2. Axis Bank-Max Life Deal Revised
Axis Bank Ltd. will buy a lower stake than it earlier said in Max Life Insurance Co. Ltd. as the two companies altered the deal.
The private lender will now acquire 17% in the insurer to increase its holding to 18%, according to their exchange filings.
That’s lower than 29% that Axis Bank earlier planned to buy to increase its stake to 30%.
The companies executed a definitive agreement but have yet to approach regulatory authorities with revised applications.
This revision follows some “recent developments”, Max Financial Services said without giving details.
3. Covid-Proofing Private Bank Balance Sheets
India’s top private banks have collected large capital buffers to prepare for any surge in bad loans that may follow the Covid-19 crisis.
Over the last few months, most major private banks have raised capital following stress tests conducted internally and those mandated by the Reserve Bank of India.
As a result, the tier-1 capital ratio and the common equity tier-1 ratio have risen to multi-year highs, suggesting these lenders are better prepared to deal with upcoming stress.
While results of the stress tests conducted by lenders are not in public domain, the fund raises likely cover any gap that may have exited in capital requirements.
Bankers, however, say they also have room for growth with the capital they have raised.
4. Sensex Forms 'Golden Cross'; S&P 500 Hits Another Record
Indian stocks climbed along with Asian equities, with the benchmark index forming a pattern that some analysts read as a sign of more gains to come.
The S&P BSE Sensex climbed 1% to 38,799 in Mumbai, making a “golden cross” -- a bullish indicator when the 50-day moving average rises above the 200-day line.
The NSE Nifty 50 Index advanced 0.8%.
Follow the day’s trading action here.
The Covid-19 pandemic has taken a toll on the tourism and hospitality sectors. But that’s exactly what makes them an attractive bet on a short-to-medium term for Milind Karmarkar.
Find out why the veteran portfolio manager is betting on “relay-running” stocks like hotels.
U.S. equities followed European and Asian stocks higher on signs that the Trump administration may fast-track vaccines and treatments for coronavirus.
The benchmark S&P 500 climbed to another record, while the Nasdaq Composite also jumped to an all-time high.
The dollar weakened against its peers, while gold traded near $1,950 an ounce.
Get your daily fix of global markets.
5. MCX's Slew Of New Launches
Multi Commodity Exchange of India Ltd. plans to launch a slew of index-based futures to widen its offerings to local investors, after starting a bullion index.
The Kotak Mahindra Bank Ltd.-backed exchange, the nation’s biggest venue for commodities, began a cash-settled bullion index futures on Monday and plans to start a similar product for base metals in a month followed by energy and farm commodities, Managing Director P.S. Reddy said in an interview.
“The markets generally prefer cash-settled contracts to delivery-based contracts,” as they don’t need to worry about the delivery and quality, he said.
MCX is also looking to allow the delivery of gold based on Indian standards and allowing secondary or recycled lead.
6. Indian Jeweller's Rs 1,750-Crore IPO
Kalyan Jewellers India Ltd. plans to raise as much as $235 million, making it the largest initial share sale among Indian jewelers, as it pins its hope on gold’s long-term allure overriding a coronavirus-induced dip in demand in the world’s second-biggest consumer.
The Warburg Pincus LLC-backed company plans to raise about Rs 1,750 crore, of which Rs 1,000 crore will be through a fresh issue of shares and Rs 750 crore from the sale of equity by existing investors, it said in a draft prospectus to exchanges.
While expenditure on gold will be subdued this year due to the pandemic, its long-term appeal remains intact as cultural norms dictate the metal’s wide-spread use during Indian weddings and as an investment option, Kalyan said.
Kalyan is betting that the young age profile of the country will sustain growth.
7. A Year Of Low Or No Salary Hikes
Indian companies gave an average salary hike of 3.6% in 2020-21 compared to 8.6% in the previous financial year amid the coronavirus pandemic, according to a survey.
The survey by Deloitte Touche Tohmatsu India LLP showed that timing and potential impact of Covid-19 were the two most important factors that affected increments in FY21.
“Organisations that had already decided increments before the start of the lockdown in March 2020 have given a higher increment compared with others,” according to the survey.
“Moreover, organisations expecting a decline of more than 20% in revenue in FY21 due to Covid-19 have given much lower increments.”
Only four out of ten companies gave their workers a pay hike in 2020.
8. Sonia Gandhi Urged To Continue As Congress Chief...For Now
The Congress Working Committee on Monday urged Sonia Gandhi to continue as its interim chief till an All India Congress Committee session can be convened and authorised her to effect necessary organisational changes to deal with the challenges facing the party.
At an over seven-hour long meeting, which took place in the backdrop of more than 20 party leaders seeking an immediate organisational overhaul and a collective leadership, Gandhi is said to have offered to quit but was requested by the party's top decision-making panel with over 50 members to stay on.
Announcing the resolution passed by the CWC, the party's General Secretary KC Venugopal later said at a press conference that the CWC unanimously requested Gandhi to continue to "lead the Indian National Congress until such time as circumstances will permit an AICC session to be convened."
The CWC also authorised her to effect necessary organisational changes to take on various challenges before the party.
The CWC also resolved that inner-party conflicts cannot be deliberated through media or in public fora.
9. Prashant Bhushan Will Not Apologise
Advocate Prashant Bhushan on Monday filed a fresh affidavit in the Supreme Court maintaining his stance that he will not apologise for his tweets made in June which led the top court finding him guilty of criminal contempt.
“If I retract a statement before this court that I otherwise believe to be true or offer an insincere apology, that in my eyes would amount to the contempt of my conscience and of an institution that I hold in highest esteem,” said Bhushan.
On Aug. 20, the apex court had given Bhushan time till Aug. 24 “to submit an unconditional apology, if he so desires.”
The court had also asked Bhushan to reconsider his statement which he submitted in the last hearing. Bhushan declined to do either.
Bhushan said his expression was meant in good faith and not to malign the top court and was meant as constructive criticism.
10. Covid-19: Haryana CM Tests Positive; Hong Kong Reports First Confirmed Re-Infection
Covid-19 cases in India rushed past the 31-lakh mark today even as fresh cases fell to the lowest in six days.
India added over 61,000 new cases in a matter of 24 hours, taking the total tally to 31.06 lakh.
This includes over 57,000 deaths and over 23 lakh patients who have recovered.
Fresh cases reported in a 24-hour span fell to 61,408—the lowest in six days—after hovering near 70,000-mark for a few days.
Deaths reported in a day fell to the lowest in 12 days at 836.
Meanwhile, Haryana Chief Minister Manohar Lal Khattar said that he has tested positive for Covid-19.
Track all Covid-19 related news and updates in India, here.
Globally, cases crossed 23.4 million with deaths surpassing 8,09,000.
A man was infected with the coronavirus after recovering from an initial bout in April in what scientists said was the first case showing that re-infection may occur within a few months. The 33-year-old’s second SARS-CoV-2 infection was detected via airport screening on his return to Hong Kong from Europe this month.
Indonesian island of Bali announced it will remain closed to foreign visitors for the rest of the year.
U.S. President Donald Trump said a treatment based on blood plasma donated by people who’ve recovered from Covid-19 will be expanded, even before researchers fully understand how well it works.
Follow the global spread of the virus here.