BQuick On Sept. 4: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Rajiv Lall Quits IDFC First Bank
Rajiv Lall, one of India’s veteran infrastructure financing professionals, quit as part-time non-executive chairman of IDFC First Bank Ltd., his last link with the IDFC brand.
Lall resigned from his position citing prolonged personal health issues, the bank said in an exchange filing. IDFC First Bank’s board received the resignation letter on Friday.
The bank had a succession plan in place, subject to approval of the Reserve Bank of India, which will ensure smooth transition, it said.
“He [Lall] also expressed that he is leaving the bank in capable hands and has been privileged to serve this wonderful institution."
Here are the highlights of Lall's career.
2. Vodafone Idea's Rs 25,000-Crore Fund Quest
Vodafone Idea Ltd.’s board approved raising up to Rs 25,000 crore as the cash-strapped telecom operator seeks to turn around its fortunes in India’s fiercely competitive wireless market.
The board, at its meeting on Sept. 4, approved raising up to Rs 15,000 crore by way of either issuing equity shares, global depository receipts, American depository receipts, foreign currency bonds, convertible debentures, or warrants, according to its exchange filing.
It also approved raising up to Rs 15,000 crore by issuing non-convertible debentures by way of a public offer or a private placement.
However, the total fundraise shall not exceed Rs 25,000 crore, the filing said.
The company owes Rs 50,400 crore to the Department of Telecommunications in past dues.
3. RBI's Financial Inclusion Push
The Reserve Bank of India has altered its approach to priority sector lending, which was first introduced in 1972 as a way to broaden the spread of credit.
For the first time, the regulator has assigned differential weights to districts based on the extent of credit availability, in the hope that lenders will use the incentive to lend more in financially excluded areas.
According to the revised guidelines issued on Friday, a higher weightage of 125% will be assigned to districts where per capita priority sector lending is less than Rs 6,000. There are 184 districts assigned this higher weightage for FY21.
A lower weightage of 90% would be assigned to districts where the per capita priority sector lending is above Rs 25,000. These districts are 205 in number.
The new guidelines also attempt to transition primary urban cooperative banks towards increased priority sector lending.
4. Pandemic Forces Consumers To Go Digital
The Covid-19 pandemic pushed more people towards digital payments as consumers, stuck in their homes and worried about the virus spread, opted to purchase and pay online.
The share of digital payments, while increasing, still remains modest in overall personal spending, shows data analysed by BloombergQuint.
The data shows that about a quarter of personal consumption expenditure took place via digital payment platforms in the April-June quarter.
This was higher than 21.3% in the April-June 2019 quarter and 14.85% in the April-June 2018 quarter.
The consistent rise in UPI showcases a definitive change in consumer behaviour regarding digital payments.
5. Sensex's Worst Week Since May; Nasdaq Extends Rout
Indian stocks declined, tracking losses in global peers, with investors reassessing the strong recent gains amid a steady rise in local virus infections and slowing economic growth.
The S&P BSE Sensex slipped 1.6% to 38,357.18 on Friday, taking its total decline since the close on Aug. 28 to 2.8%, its biggest weekly fall since May.
The NSE Nifty 50 Index lost 1.7%.
Reliance Industries Ltd. contributed the most to Sensex's decline, dropping 1.7% while Axis Bank Ltd. had the biggest drop of 4.1%.
Follow the day’s trading action here.
Stock markets are unlikely to hit a ceiling as central banks will keep injecting liquidity in the financial system, according to veteran investor Basant Maheshwari.
“Most markets top off in the absence of liquidity. This liquidity is not going to stop in the near future. So, I don’t think the markets are going to top off anytime soon,” Maheshwari told BloombergQuint.
Read more to see Maheshwari's view of the markets right now and the sectors he's bullish on.
The biggest U.S. tech shares continued their slump as traders looked past a better-than-forecast jobs report to focus on concerns about excessive valuations for some of this year’s best performers.
Losses for Amazon.com, Apple Inc., Microsoft Corp. and Facebook Inc. pushed the tech-heavy Nasdaq 100 to a two-week low a day after that gauge’s biggest drop since March.
Most shares rose on the S&P 500, led by financial stocks, and an equal-weight version of the index eked out a gain.
West Texas Intermediate crude fell 0.6% to $41.11 a barrel.
Get your daily fix of global markets.
6. And Then There Were Four...
The list of bidders for the assets of insolvent home financier Dewan Housing Finance Corp. has come down to two Indian business houses and two international funds, looking to purchase different parts of the business.
According to three people with direct knowledge of the matter, who spoke on condition of anonymity, Piramal Group and Oaktree Capital Management continue to be in discussions with the Committee of Creditors to purchase DHFL’s retail loan assets.
The Adani Group and Hong Kong-based investor SC Lowy remain interested in picking up wholesale assets, these people said.
The deadline for submission of bids is set for Sept. 16.
The bidders have been conducting due diligence and preparing a bid for the housing financier.
7. Key Takeaways From ITC’s Annual General Meeting
ITC Ltd. expects consumer spending to shrink in the ongoing financial year as the economic disruptions caused by the Covid-19 pandemic dent livelihoods across India.
The pandemic has caused unprecedented disruption to economic activity the world over, plunging an already slowing global economy into a recession, Sanjiv Puri, chairman of the cigarettes-to-consumer goods maker, told shareholders of the company at its 109th annual general meeting on Friday.
Global GDP growth, the company said, is estimated to contract by 5-7%—the deepest recession since the Great Depression nearly a century ago.
Puri also told shareholders that the company expanded its product portfolio during the lockdown.
Puri outlined three phases to reimagine the future for the company. More details here.
8. India's Gold Imports Rebound
India’s gold imports more than doubled last month ahead of the start of key festivals in the world’s second-biggest bullion consumer.
Inbound shipments climbed to 35.5 tons in August from 14.8 tons a year earlier, according to a person familiar with the data, who asked not to be identified as the information isn’t public.
Imports were also higher than July’s 25.5 tons.
Finance Ministry spokesman Rajesh Malhotra didn’t immediately respond to a call to his mobile phone.
The rebound follows a nearly 80% drop in imports between January and June.
9. Paytm Trims Its Losses
Digital financial services firm Paytm on Friday said its revenue for fiscal year ended March 31, increased to Rs 3,629 crore supported by an increase in the number of transactions across various segments and point of sale devices.
The financial technology firm said its losses have narrowed by 40% on a year-on-year basis.
"Our efforts have started reflecting in the strong adoption of more profitable services by our consumers and merchants," Paytm President Madhur Deora said in a statement.
The company said that it has sold 2 lakh units of Android-based point of sale devices amid demand from small and medium-sized enterprises, grocery stores etc.
Paytm expects significant push in the recently launched stock trading segment on its online investment and wealth management platform.
10. Covid-19: India Adds Over 83,000 Cases...Again
Confirmed Covid-19 cases in India continued to rise at a record pace even as the government urged viewing the infection tally in context of the country's 1.3 billion population.
India added over 83,000 cases in 24 hours, taking the total tally over 39 lakh.
This includes over 68,000 deaths and over 30 lakh patients who have recovered.
This is the second straight day that India has recorded over 83,000 cases.
To be sure, laboratories across the country tested close to 11.7 lakh samples since the last two days, likely contributing to the spike in detection of fresh infections.
According to the Indian Council of Medical Research, India is testing an average of 9.5 lakh samples a day now.
Authorities have reported over a thousand deaths for the third straight day.
Track all Covid-19 related news and updates in India, here.
Globally, cases crossed 2.63 crore with deaths exceeding 8.69 lakh.
Russia’s proposed vaccine induced an antibody response in early trials and had no serious adverse effects, according to the first peer-reviewed data on studies.
Meanwhile, Novo Nordisk is exploring whether medicines that help people lose weight and control diabetes can also fight Covid-19.
Follow the global spread of the virus here.