BQuick On June 17: Top 10 Stories In Under 10 Minutes  

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

1. India, China Agree To Not Escalate Galwan Conflict

India and China held talks over the phone today in an attempt to de-escalate the border conflict in eastern Ladakh where clashes led to the death of 20 Indian soldiers.

• “At the conclusion of the discussion, it was agreed that the overall situation would be handled in a responsible manner, and both sides would implement the disengagement understanding of June 6 sincerely,” India's Ministry of External Affairs said in a statement.

• Earlier in the day, Prime Minister Narendra Modi had said that India wants peace, but will retaliate if provoked.

Follow the developments around the conflict here.

2. Damani’s ‘Friendly’ Takeover Offer

Radhakishan Damani, the Indian tycoon who built a fortune rolling out his supermarkets across the country, is considering acquiring a controlling stake in India Cements Ltd., people familiar with the matter told Bloomberg News.

• Damani, the owner of Avenue Supermarts Ltd., has informally reached out to the cement manufacturer’s controlling shareholder, N. Srinivasan, to explore a takeover, the people said, asking not to be named as the information is not public.
• Srinivasan, who controls about 29% of the Chennai-based cement maker, is also exploring other investors to ward off any hostile bids, the people said, adding Damani has promised a friendly change in management and isn’t seeking a hostile takeover.

The retail tycoon and his family have been piling on shares of India Cements for some months.

3. How Clix Plans To Rescue Lakshmi Vilas Bank

AION Capital-backed Clix Capital Services Pvt. is looking at merging its lending operations with Lakshmi Vilas Bank Ltd., following which, it will invest Rs 2,000-2,500 crore into the bank, two people with direct knowledge of the matter said.

• According to the first person cited earlier, Clix Capital is valued at around Rs 3,000 crore, which would imply that after the merger, Clix Group would hold nearly 65% of the bank. Lakshmi Vilas Bank has a market value of Rs 540 crore, as on June 16.
• Once this merger is complete, the bank would raise funds to shore up its capital base. Clix Group could look at investing Rs 2,000-2,500 crore in the bank to maintain its stake in it, the first person cited earlier said.
• To be sure, this is still a non-binding proposal which is subject to a due diligence exercise which is currently underway.

Find out more about Clix’s plans in this BQ Blue exclusive story.

4. Nifty, S&P 500 Volatile

Indian stocks closed down in a volatile session as investors weighed the consequences of a border conflict with China’s military while coronavirus infections continued to rise as the South Asian nation reopens.

• The S&P BSE Sensex traded in a 600-point range through the session and ended 0.3% lower at 33,507.
• The NSE Nifty 50 traded in a 170-point range during the session, ending below the 9,900 mark at 9,881, down 0.33%.

Follow the day’s trading action here.

Indian investors have the opportunity to invest in “cyclical alphas” in the current equity market, said Shiv Puri, founder and managing director of TVF Capital Advisors, referring to select financial stocks.

Here’s Shiv Puri’s take on what’s ‘amazing’ and what investors must avoid.

U.S. stocks fluctuated as the recent rally begins to show signs of losing momentum amid a worrying increase in coronavirus cases.

• The S&P 500 advanced in volatile trading for a fourth day even as infections increased from China to Brazil and Iran warned it may need a new lockdown.
• West Texas Intermediate crude declined 1.3% to $37.90 a barrel.
• Gold depreciated 0.3% to $1,722.05 an ounce, the weakest in more than a week.

Get your daily fix of global markets here.

5. Loan Moratorium: Supreme Court's Suggestions

The Supreme Court granted more time to the Reserve Bank of India and the Finance Ministry to review their stance on the plea seeking interest waiver on loans under moratorium during the Covid-19 pandemic.

• The three-judge bench headed by Justice Ashok Bhushan, however, said it would only consider the issue of charging ‘interest on interest’ in case of deferred loan payments under the central bank-mandated six-month freeze.
• The top court suggested that either banks can absorb waiver of interest on interest or the government can help banks to deal with the waiver.
• The government can consider intervening in the issue and not everything can be left with the banks, it said.

The government told the top court that it is not advisable to waive interest on loans for a period of six months.

6. PM-Cares: Another Legal Challenge

The Supreme Court has issued a notice to the central government seeking its response to a plea on transferring funds from PM-Cares, set up to deal with the crisis stemming from the Covid-19 pandemic, to the National Disaster Response Fund.

• A bench comprising Justice Ashok Bhushan, Justice SK Kaul and Justice M.R Shah has asked the government to file its response within four weeks, after which the case will be listed for hearing.
• The petition was filed by the Centre for Public Interest Litigation, saying the PM-Cares fund neither comes under the CAG audit nor is covered by the Right to Information Act.

The petitioner argued that there must be a national plan outlining a coordination mechanism between the central and state governments.

7. Jio-Facebook Deal Under CCI’s Scanner

India’s antitrust watchdog is reviewing Facebook Inc.’s purchase of a 10% stake in Reliance Industries Ltd.’s digital assets, a deal that would give the U.S. giant another foothold in one of the world’s fastest growing internet markets.

• The Competition Commission of India looks to prevent misuse of data in all the deals it assesses, Chairman Ashok Kumar Gupta said in an email interview, declining to comment further on the Facebook-Jio transaction pending examination.
• The regulator is also considering whether new parameters should be included in its assessment criteria; currently some mergers and acquisitions escape the threshold for scrutiny even if potential harm is evident, Gupta said.

Here are the peculiarities in the deal that the CCI may look into.

8. Indian Steel Stocks’ Underperformance

Shares of Indian steelmakers surged on hope of a revival in demand as the government started reopening the economy in phases after a stringent two-month national lockdown. Yet, they were outpaced by their global peers.

• Jindal Steel and Power Ltd., which returned gains of around 56% to investors in the last one month, was the only Indian steelmaker to rise in line with global peers, according to Bloomberg data.
• Global steel majors led by Thyssenkrupp AG, in comparison, jumped up to 77.6% during the period.
• Steel mills were hit by restrictions on movement of people and goods and demand for the alloy from key sectors—including construction and automobile—fell.
• But global steel stocks saw a sharper rebound than Indian counterparts.

Here’s why.

9. Covid-19 Deaths Spike, Delhi Health Minister Tests Positive

More than 3.5 lakh people have been infected by the Covid-19 strain of coronavirus in India, with the total number of deaths nearing the 12,000-mark.

• India reported the largest spike in one-day deaths -- at 2,003 -- as Delhi and Maharashtra revised their back-logged data.
• India added nearly 11,000 cases in the 24 hours preceding the Health Ministry’s 8 a.m. update on June 17, taking the total tally to 3,54,065.
• Maharashtra on Tuesday reported that the state's death toll has been revised upwards to 5,537 as it accounted for additional fatalities following a review.
• The Supreme Court on Wednesday asked the Centre to issue directions to states for payment of salaries and providing necessary quarantine facilities to doctors and healthcare workers engaged in treating Covid-19 patients.
• Delhi Heath Minister Satyendar Jain tested positive for Covid-19, a day after he was admitted to a hospital following high fever, a senior official told PTI.

Track news and developments around the Covid-19 pandemic in India here.