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BQuick On Dec. 9: Top 10 Stories In Under 10 Minutes

BQuick | Top news, must-read stories and columns – all served up in less than 10 minutes.

A large container ship moored to the harbour quayside in the U.K. (Photographer: Simon Dawson/Bloomberg)
A large container ship moored to the harbour quayside in the U.K. (Photographer: Simon Dawson/Bloomberg)

Here’s a roundup of the day’s top stories in brief.

1. RBI's Inflation Target To Be Relaxed?

India’s government is considering recommending a looser inflation target for the central bank, allowing it to focus more on economic growth despite price pressures, people familiar with the matter told Bloomberg News.

  • A consumer-price inflation band tracked by the Reserve Bank of India may be relaxed further from the current 2%-6% range, said the people, who asked not to be identified citing rules.

  • The government still needs to hold consultations with the central bank before finalising a new framework sometime next year.

RBI has previously faced criticism for largely overstating inflation.

2. Non-NPA NPAs!

An interim direction from the Supreme Court preventing banks from tagging defaulting accounts as non-performing assets continues to be in place for a fourth month running, forcing bankers to find go-arounds to deal with errant borrowers.

  • Four senior bankers, who spoke on conditions of anonymity, said that while an account may not be tagged as an NPA, lenders are dealing with them as defaulters to the extent possible.

  • Banks typically hold back any fresh lending to accounts which are tagged as non-performing.

Read this BQ Blue exclusive on how banks including State Bank of India are finding work arounds.

3. NBFC Dividends: New Benchmarks Proposed

The Reserve Bank of India has released draft guidelines that propose, among other things, minimum financial benchmarks for non-bank lenders seeking to declare dividends.

  • The benchmarks will change depending on the type of non-bank finance company.

  • The regulator also proposed to set up a matrix for calculation of the extent of dividends payable by NBFCs, depending on their size and nature.

Read the details of the draft released on Wednesday.

4. Sensex Crosses 46,000

Indian stocks rose, in line with peers in Asia, as investors remained optimistic about a U.S. stimulus deal and steady foreign inflows continued.

  • The S&P BSE Sensex advanced 1.1% to 46,103.50, while the NSE Nifty 50 Index climbed by a broadly similar magnitude.

  • The Sensex completed its fifth consecutive session of gain, its longest winning streak since mid-November, to close at a new high.

Follow the day's trading action here.

U.S. Stocks Rise, Dollar Drops

Stocks rose and Treasuries dropped as hopes for a U.S. stimulus deal countered fears about resurgent coronavirus cases.

  • The S&P 500 was on track for another record, while the Nasdaq 100 underperformed.

  • Tesla Inc. was little changed after JPMorgan Chase & Co. said the electric-car maker is “dramatically” overvalued.

  • DoorDash Inc. is making its trading debut Wednesday, with Airbnb Inc.’s initial public offering set to follow.

  • The dollar headed toward its lowest level since April 2018.

Get your daily fix of global markets.

5. Tata Motors' Turnaround For Real?

For Tata Motors Ltd., the pandemic-ravaged year has brought into spotlight what was in the works for half a decade—a turnaround.

  • The maker of the Nexon compact sports utility vehicle reported best monthly sales in eight years in October, outpaced peers in the last few months and gained market share.

  • Analysts and company executives say the turnaround has been a culmination of a new management focus, fresh models and better coordination and inventory management with dealers.

Can the company maintain its recent momentum?

Opinion
Bosch India Flags Severe Shortage Of Critical Components To Indian Automakers

6. India's Nascent Export Revival Faces New Threat

A recent revival in Indian exports is under threat because there aren’t enough shipping containers to get the goods across the sea.

  • Shipments of certain goods, especially sales of packaged foods, had surged in recent months as more people eat at home during lockdowns, boosting expectations of a busy Christmas season.

  • Global trade is being roiled by a shortage of containers because dire predictions of a collapse this year that prompted carriers to cancel sailings have proved too pessimistic.

Here's why the situation in India is worse.

Opinion
Risk Of Higher Borrowings Fades On Weak Expenditure, Improved Economy

7. Life Insurers’ Premium Dips In November

Premium collection of life insurers dropped again in November after two months of growth on account of a high base.

  • The individual annualised premium equivalent—a sum of first-year premium and single-premium policies—fell 33% year-on-year last month, according to data compiled by BloombergQuint from the Insurance Regulatory Development Authority of India.

  • Month-on-month, however, private companies witnessed a premium growth of 2%.

However, there were some bright spots.

8. India Inc.'s Hedging Costs Jump

Indian companies are paying the most since May to hedge dollar borrowings, adding to strains at firms already stretched by the pandemic.

  • The six-month Mifor swap rate, a derivative that firms use to hedge against moves in rates with foreign-currency borrowings, has climbed 8 basis points this month to 4.6%.

  • That’s near a seven-month high.

The jump is disrupting some firms’ plans to raise funds overseas.

9. Covid-19 Vaccines: India's Wait Continues

An expert committee of the Central Drugs Standard Control Organisation on Wednesday sought additional safety and efficacy data for Covid-19 vaccine candidates of Serum Institute of India Ltd. and Bharat Biotech International Ltd., official sources told PTI.

  • The application by the Indian arm of U.S. pharmaceutical firm Pfizer Inc. was not taken up for deliberation on Wednesday as the firm sought more time for making presentation before the committee, they said.

  • The applications of both Bharat Biotech and the Serum Institute are still under consideration, a source told PTI.

All three firms had sought emergency use authorisation for their shots.

Opinion
U.K.’s Vaccine Warning; Merkel Urges Sacrifice: Virus Update

10. Farmers Reject Government's Proposals

As thousands of farmers continue to protest at various borders of the national capital demanding the repeal of three new farm laws, the government proposed to give a "written assurance" that the existing Minimum Support Price regime for procurement will continue.

  • However, the farmers' unions rejected the proposal and said they would intensify their agitation until the government accepts their demand for a complete repeal of the three laws.

  • The government also proposed to make necessary amendments on at least seven issues, including one to allay fears about the weakening of the mandi system.

Minister Prakash Javadekar said the negotiations were "work in progress".