BQuick On July 2: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Nifty: Vedanta Out, HDFC Life In
Private insurer HDFC Life Insurance Co. will replace Vedanta Ltd. in the NSE Nifty 50 index on account of the voluntary delisting proposed by the Anil Agarwal-led company, the National Stock Exchange said on Thursday.
The change will be effective July 31. The replacement will also be applicable to Nifty 50 Equal Weight Index.
The private insurer, according to Edelweiss Research, is likely to see an inflow of nearly $100 million with a weight of 99 basis points because of the rebalancing of index funds.
Vedanta, with a 47-basis-point weight, is expected to see an outflow of $47 million after the rejig, it said.
Read more on the rejig here.
2. Samir Arora’s Evergreen Tip To Improve Your Portfolio
It’s a confusing time for investors looking to pick stocks and make money amid uncertainty around the economy and the Covid-19 pandemic. Samir Arora has an evergreen piece of advice: eliminate the bad apples.
“Instead of picking the good stocks, look for the bad stocks and throw them out instead,” Arora, founder of Helios Capital Management, said during a BQEdge webinar. “It is easier to say what is bad and throw it out.”
Arora said in a market of 300 stocks, there are always 80-90 stocks that will outperform the index in any given year.
Investors should aim at finding flaws in prospective stocks and whittling down the list until they have a portfolio that is composed mostly of those stocks that are likely to outperform.
Watch the full interview where Arora explains why he's optimistic about the Indian market.
3. Nifty Gains 1%; U.S. Stocks Surge On Jobs Cheer
Indian equity markets ended the weekly options expiry session with gains, extending their winning run to the second day.
The S&P BSE Sensex ended 1.2% higher at 35,843, while the NSE Nifty 50 index ended at 10,551, up by 1.17%.
As of closing today, the Sensex is up 1.9% while the Nifty is up 1.6% on a weekly basis.
Banks were the underperformers in today's session.
Follow the day’s trading action here.
U.S. stocks climbed after better-than-estimated jobs data indicated an economic rebound from the sharpest contraction on record.
The S&P 500 extended its weekly gain as a government report showed payrolls rose by 4.8 million in June after an upwardly revised 2.7 million gain in the prior month.
The unemployment rate fell to 11.1%.
All major groups in the equity benchmark advanced -- led by energy and financial shares.
The Nasdaq Composite headed toward a record, and Tesla Inc. surged as deliveries beat the average analyst estimate.
West Texas Intermediate crude advanced 0.8% to $40.13 a barrel.
Get your daily fix of global markets here.
4. One Area Where India Wants To Follow China
An internal study by the government revealed that Indian telecom companies, contributing about 6.5% to the country’s GDP, are discriminated based on tax compared to Chinese peers, according to a government official.
Telecom companies in India are not allowed input tax credit on telecom towers, and refund of accumulated goods and services tax paid on spectrum charges, the official said quoting the study—the person spoke on the condition of anonymity as details aren't public yet.
By comparison, the official said, China identifies the sector as its national 'champion'.
Chinese companies can claim more credit of the tax paid than they are eligible for.
Find out how this could help Indian telecom operators amid the pandemic.
5. Nearly Half Of India Inc.'s Debt Ratings To Be Withdrawn?
Rating firms in India are seeking to withdraw credit scores where issuers don’t provide enough information to support their assessments in a move that could potentially affect nearly half the country’s ratings.
The current situation means that ratings don’t fully reflect the credit health of issuers, according to a document from major raters submitted to India’s central bank Wednesday and seen by Bloomberg.
That underscores challenges for a country mired in a credit crisis triggered by the 2018 default of a top-rated shadow lender.
The surge in these unreliable ratings came even before the spread of the coronavirus pushed India’s economy toward its first contraction in more than four decades.
The downturn has made the accuracy of credit ratings more crucial than ever to understand the capital position of the nation’s banks.
6. Emami Vs HUL!
Hindustan Unilever Ltd. has renamed its best-selling ‘Fair & Lovely’ products as ‘Glow & Lovely’, days after it decided to remove nomenclature that propagated racial stereotypes.
The men’s range of the product will be called ‘Glow & Handsome’, HUL said in an exchange filing on Thursday. That didn’t sit well with peer Emami Ltd.
The company has threatened legal action as it has already changed its men’s fairness cream’s name to ‘Emami Glow & Handsome' and launched the brand digitally last week.
"Although shocked, we are not surprised to note HUL’s unfair business practice, which has been prevalent time & again to damage our brand image," Emami said.
Find out more on the impact of the name change and how costly it will be for the company.
7. Divi’s Laboratories: Insider Trading Allegations
The Securities and Exchange Board of India has issued a show cause notice to L Kishore Babu, chief financial officer of Divi’s Laboratories Ltd., alleging that he, along with certain other employees and individuals, was involved in insider trading activities in the company’s scrip.
The market regulator has asked them to demonstrate why action should not be taken and an order for disgorgement of the gains should not be passed against them.
This comes after SEBI conducted an investigation in the suspected insider trading activities by certain entities while trading in the scrip of Divi’s Lab between July 7-10, 2017.
Based on the chronology of events and minutes of the board meeting, SEBI identified eight individuals—including Kishore Babu—who ‘reasonably’ had access to this unpublished price sensitive information before its disclosure to the stock exchanges.
Get full details of SEBI’s investigation here.
8. GVK Group On CBI's Radar
The Central Bureau of Investigations has registered a case against GVK Reddy, the chairman of the GVK Group of Companies and GV Sanjay Reddy, vice chairman of GVK Group and managing director of Mumbai International Airport Ltd. for alleged irregularities to the tune of Rs 705 crore in the running of the airport, officials said on Wednesday.
CBI has alleged that promoters of GVK group in connivance with their executives and unidentified officials of Airport Authority of India ltd. resorted to siphoning of funds from MIAL using different ways, officials said.
The agency has alleged that they siphoned off funds showing execution of bogus work contracts to nine companies in 2017-18 causing a loss of Rs 310 crore, they said.
The promoters of GVK group allegedly misused reserve funds of MIAL to the tune of Rs 395 crore to finance their group companies, the CBI said.
The agency also said that the group inflated expenditure by showing payments to employees who were not involved in running the firm.
9. Covid-19: India Tally Crosses 6 Lakh
Covid-19 cases in India hit another grim milestone amid the second phase of the reopening the economy.
India added over 19,000 new cases of the novel virus, taking the total tally to 6,04,641, according to the Health Ministry’s update as of 8 a.m.
The country has reported over 18,000 cases for six days now.
The satellite city of Navi Mumbai will go under total lockdown for the next ten days till July 13, the municipal corporation said today.
Meanwhile, municipal areas of Thane, Kalyan and Mira Bhayander went under lockdown for 10 days today.
Track news and developments around the Covid-19 outbreak here.
Globally, cases crossed 1.06 crore with over 5.14 lakh deaths.
Mexico overtook Spain in coronavirus deaths and is now the sixth hardest hit nation, while Australian police are probing alleged security lapses at Melbourne hotels used to quarantine overseas arrivals, including claims guards slept with guests.
The latest surge in U.S. cases spurred areas including New York City and California to pull back on reopenings and more local governments instituted mask requirements.
Follow the global spread of the virus here.
10. Cyrus Mistry Argues NCLAT Right To Reinstate Him As Tata Sons Chairman
The NCLAT was well within its powers to re-instate Cyrus Mistry as the executive chairman of Tata Sons even if the relief was not specifically sought by him, Tata Sons’ former executive chairman has said in his affidavit.
Mistry was removed as executive chairman of Tata Sons in the company’s board meeting on Oct. 24, 2016, which led to the biggest corporate feud of the decade.
After two rounds of litigation, the case landed at the Supreme Court in January this year.
The Mistry side has responded to it saying the appellate tribunal’s decision had correctly held Tata Sons’ conduct to be oppressive and one that warranted intervention.
It would be incumbent on judicial forums exercising equitable jurisdiction to protect Tata Sons from absence of probity, the Mistry side has said. BloombergQuint has reviewed a copy of this affidavit.
In its appeal, Tata Sons has said that by reinstating Mistry, the NCLAT had undermined the will of the directors and shareholders.