Today's Top Business News: Sensex scales 42K, Nifty at record high

A view of the Bombay Stock Exchange at Mumbai.
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A view of the Bombay Stock Exchange at Mumbai. Photo:   | Photo Credit: Vivek Bendre

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News updates from the world of economy, markets, and finance

The Nifty and the Sensex have opened the day with some marginal gains. The Sensex breached the 42,000 mark briefly before dropping below. Both indices have largely been trading flat this week. Bond yields have dropped marginally this morning after rising the past few days amidst inflation worries.

4:45 PM

 

CBI books Adani Enterprises, 2 ex-NCCF officers for alleged irregularities in coal supply contract

The CBI has booked Adani Enterprises Ltd and former chairman of National Cooperative Consumers’ Federation of India and its former managing director for alleged irregularities in the award of contract for supply of imported coal to Andhra Pradesh Power Generation Corporation, officials said on Thursday.

The agency has registered the FIR under charges of criminal conspiracy, cheating under Indian Penal Code and Provisions of Prevention of Corruption Act after a preliminary enquiry into the allegations, they said.

It was alleged that in 2010, APGENCO had floated a tender for the supply of 6 lakhs MT of coal on free-on-rail destination basis to Dr Narla Tata Rao Thermal Power Station, Vijayawada and Rayalseema Therma Power Plant, Kadapa from any port. PTI

 

4:15 PM

 

IDBI to meet RBI this week; seeks to exit PCA framework

LIC-owned IDBI Bank, currently under prompt corrective action since May 2017, is expected to hold meeting with the RBI this week to seek removal of operational restrictions, according to sources.

The lender will make a presentation to the Reserve Bank of India on its improved financial position, the sources said, adding the management is hopeful of coming out of the PCA framework by the end of this month.

The RBI had placed IDBI Bank in May 2017, after it had breached the thresholds for capital adequacy, asset quality (net NPAs was over 13 per cent in March 2017), return on assets and the leverage ratio. PTI

 

4:00 PM

 

Sensex ends 60 pts higher, retreats from 42K level

Market benchmarks Sensex and Nifty on Thursday managed to close with gains but slipped from fresh life-time peaks hit during early trade as investors focussed on signing of US-China initial trade deal.

During the session, the 30-share BSE index breached the 42,000 mark for the first time before settling 59.83 points, or 0.14 per cent, higher at 41,932.56. It hit a record intra-day high of 42,059.45.

Likewise, the broader Nifty scaled its lifetime (intra-day) high of 12,389.05. It ended 12.20 points, or 0.10 per cent, up at 12,355.50.

Nestle India was the top gainer in the Sensex pack, rising 3.23 per cent, followed by Kotak Bank, HUL, Bharti Airtel, RIL, TCS, PowerGrid and Titan. PTI

 

3:45 PM

 

Cos raise USD 0.34 bn via 12 IPOs in Q4 2019; budget to set positive tone: EY

Indian companies raised USD 0.34 billion (Rs 2,400 crore) through 12 initial public offers in the fourth quarter of 2019, with the domestic stock exchanges being ranked seventh globally in terms of number of IPOs, according to a report.

Overall in 2019, 62 IPOs came in with total mop up of USD 2.53 billion (Rs 17,899 crore), a decrease of 62 per cent in volume and 54 per cent fall in terms of proceeds, EY India IPO Trends Report: Q4 2019, said on Thursday.

Consumer products and retail sector was the most active with four IPOs, followed by banking and capital markets with three such offers and diversified industrial products with two public offers, it said. PTI

3:15 PM

 

Nestle to invest 2bn Swiss francs in recycled plastics

Swiss food giant Nestle said Thursday it would invest 2.0 billion Swiss francs (1.8 billion euros, $2.1 billion) over five years to cut its use of virgin plastics in favour of food-grade recycled plastics.

The company, whose brands include Nespresso coffee, Vittel water and Smarties chocolates, also plans to invest in new types of sustainable packaging to meet its target of making all its packaging recyclable or reusable by 2025.

Nestle also said in a statement it would reduce its use of virgin plastics by one third over the next five years and would set up a venture fund with 250 million Swiss francs to invest in start-up companies working in the recycling sector. PTI

2:45 PM

 

IOC to decide on bidding for BPCL after govt lays out rules: Chairman

Indian Oil Corp (IOC), the country’s biggest oil firm, will decide on bidding to buy Bharat Petroleum Corporation Ltd (BPCL) after the government lists out rules for the stake sale, its Chairman Sanjiv Singh said Thursday.

The Cabinet Committee on Economic Affairs had on November 21, 2019 decided to sell government’s entire 53.29 per cent stake in country’s second-largest state refiner BPCL, but a tender for sale hasn’t yet been issued.

“The expression of interest (EoI) (for BPCL stake sale) hasn’t been issued yet. We don’t know the conditions. We have no information whether PSUs are allowed to bid or not,” Singh told reporters here. “I cannot comment if IOC will bid or not unless we see the conditions set out in the EoI.” PTI

 

 

2:15 PM

Room is limited for further RRR cuts in China: PBoC official

China's reserve requirement ratio (RRR) is at appropriate level and there is limited room for further cuts, a central bank official said on Thursday.

China will make timely adjustments to benchmark deposit rates, and should pay more attention to changes in real interest rates when discussing whether to cut interest rates, Sun Guofeng, head of monetary policy department of the People's Bank of China told a news briefing in Beijing.

Real interest rates have been falling significantly and funding costs for small firms also declining, Sun added.

The PBOC has cut RRR eight times since early 2018, including one earlier this month, to help shore up the cooling economy. Analysts have forecast more this year. Reuters

 

1:45 PM

Exim Bank to raise up to $3 billion from overseas borrowings in FY21

The Export-Import Bank of India (Exim Bank) is looking to raise up to USD 3 billion (about Rs 21,000 crore)from overseas borrowing in next financial year (2020-21), a top official said.

The bank has raised USD 1.7 billion (about Rs 11,900 crore) of overseas borrowing through bond issuances and foreign loans in current financial year.

“As a going concern, not only I have to refinance my borrowing but I also need to have fresh borrowings for new business to come up. For any typical year, our gross borrowing requirement is USD 1.5-3 billion. The next fiscal also it is expected to be up to USD 3 billion,” Exim Bank Managing Director David Rasquinha said.

He was speaking to reporters after listing of the bank’s recently raised USD 1 billion bond on India International Exchange (India INX) platform.

On January 6, the bank raised USD 1 billion through a 10-year 144A/Reg S bond, priced at CT10+150 basis points.

This was the third such issuance of 144A/Reg S bond by the bank under its USD 10 billion global medium term notes (GMTN) programme. PTI

 

1:15 PM

SC stays HC order allowing shifting of HDIL promoters from jail to their residence

The Supreme Court on Thursday partially stayed the Bombay High Court order allowing shifting of HDIL promoters Rakesh Wadhawan and Sarang Wadhawan, accused in the multi-crore Punjab & Maharashtra Cooperative (PMC) Bank scam case, from Mumbai’s Arthur Road Jail to their residence.

A bench comprising Chief Justice S A Bobde and justices B R Gavai and Surya Kant took note of the submissions of Solicitor General Tushar Mehta that the high court order to the extent of allowing their release from prison needed to be stayed.

The law officer said the other aspect of the high court order such as sale of assets of the accused promoters under the supervision of high court appointed committee should be allowed to remain operative and the sole objection was with regard to their release from Arthur Road Jail.

The top court agreed with the submissions. PTI

 

12:30 PM

PMC Bank scam: SC to hear today plea against HC order directing shifting of HDIL promoters from jail

The Supreme Court on Thursday agreed to hear a plea filed by the ED and Economic Offence Wing challenging the Bombay High Court order directing shifting of HDIL promoters Rakesh Wadhawan and Sarang Wadhawan, arrested for their alleged involvement in the PMC bank scam, from Mumbai’s Arthur Road Jail to their residence.

Solicitor General Tushar Mehta mentioned the matter before a bench headed by Chief Justice S A Bobde and said the Punjab and Maharashtra Cooperative (PMC) bank scam involved Rs 7000 crore and the high court had on Wednesday passed a very “unusual order” while hearing a public interest litigation (PIL).

Mehta told the bench, also comprising justices B R Gavai and Surya Kant, that the father-son are presently lodged under Arthur Road jail in judicial custody and if they are shifted to their residence as per the high court’s order, it would be like bail to them.

The high court had on Wednesday set up a three-member committee for valuating and sale of encumbered assets of Housing Development and Infrastructure Limited (HDIL) to expeditiously recover dues payable by her firm to PMC bank.

The high court had directed the superintendent of Arthur Road jail to shift both the accused to their residence under the supervision of two jail guards to ensure their cooperation to the committee.

The high court had passed the order while hearing a PIL seeking direction for expeditious disposal of HDIL assets and properties attached by the Economic Offence Wing and the Enforcement Directorate and repaying PMC bank depositors at the earliest.

The fraud at PMC Bank came to light in September last year after the Reserve Bank of India discovered that the bank had allegedly created fictitious accounts to hide over Rs 4,355 crore of loans extended to almost-bankrupt HDIL. PTI

 

12:00 PM

Sundaram Finance to sell entire 10% stake in Equifax Credit lnformation

Non Banking Finance Company Sundaram Finance Ltd on Thursday said it will sell its entire 10 per cent equity in credit information firm Equifax Credit lnformation Services Pvt Ltd, a move that will fetch the company around Rs. 91 crore.

Both the companies have executed an agreement to this effect.

“Sundaram Finance Ltd (SFL) has executed a share purchase agreement for sale of its entire equity stake of 10 per cent in Equifax Credit lnformation Services Pvt Ltd,” the company said in a regulatory filing.

Sundaram Finance holds 10 per cent of equity or 1,35,00,000 equity shares in Equifax Credit lnformation Services Pvt Ltd.

The company said Rs 67.43 is the price at which the shares will be divested, which “will be increased by 2.2 per cent per annum for the period from October 2019 till the date of Closing (assuming closing occurs prior to March 31, 2020)“.

At this price Sundaram Finance will fetch around Rs. 91 crore.

The transaction is expected to be completed by the fourth quarter of this financial year. PTI

 

11:45 AM

Rising sea levels threaten sovereign credit ratings: Moody's

Economic shocks stemming from rising sea levels pose a long-term risk to the sovereign credit ratings of dozens of countries which have large areas at risk of submersion, including Vietnam, Egypt, Suriname and the Bahamas, Moody's said on Thursday.

Climate science suggests that sea levels will continue to rise for decades, contributing to increasingly frequent natural disasters such as storm surges, floods and cyclones, the credit rating agency said in a report.

“The economic and social repercussions of lost income, damage to assets, a loss of life, health issues and forced migration from the sudden events related to sea level rise are immediate,” Moody's said.

“Vulnerability to extreme events related to sea level rise can also undermine investment.”

Farming, tourism and trade are all threatened by rising sea levels, especially in countries with a large proportion of land and people at risk of submersion, including island states like the Philippines, Fiji and the Maldives.

While high-income economies, such as Japan and the Netherlands, are also exposed, they have countermeasures in place that mean their credit ratings are unlikely to be materially impacted, Moody's said. Reuters

 

11:30 AM

Markets eye improved transparency in Budget

Indian financial market will look for improved transparency in the Union Budget announcements next month, according to a report by Singapore banking group DBS.

Any reduction in the fiscal deficit could result in a negative credit impulse in the near-term, but will need to be balanced with a credible consolidation plan further-out, according to the the bank’s research report India Budget Preview: Loosening the purse released on Thursday.

The report noted that fiscal deficit in the first eight months of FY20, stood at 15 per cent above target, driven by weak revenues.

At an aggregate level, expenditure has been in line with the budget trend. The fiscal tear-to-date (FYTD) deficit overshoot is not out of sync with past trends, it added.

This is because, typically, the fiscal run-rate worsens for three-fourths of the year and then moderates in the final quarter as expenditure is scaled back and seasonal revenue flows kick-in, wrote DBS economist Radhika Rao. PTI

 

11:00 AM

Asia's dollar bond issuance off to record start in 2020

U.S. dollar bond issuance in Asia hit a record high in the first two weeks of 2020, data showed, as companies and governments took advantage of low interest rates to shore up capital.

China's Evergrande, the mainland's third-largest property developer, was the latest to tap investors on Thursday when it launched a deal to raise up to $2 billion to help repay other bonds coming due this year.

In Asia excluding Japan, offshore borrowers have raised $29.15 billion through 52 deals since Jan. 1 - a record for the period, according to data from Dealogic. The data does not include Evergrande's deal which is yet to price.

Companies typically rush to market in January, seeking to tap investors with fresh mandates.

This year's deal flow is “a continuation of a trend that started in the fourth quarter last year with the market benefiting from forecasts of greater stability in U.S. interest rates and a pause in the escalation of trade tensions between the U.S. and China”, said Andrew Heathcote, Freshfields Bruckhaus Deringer's head of Asian debt capital markets.

In 2019, during the same time period, $12.5 billion was raised in 33 deals, the data showed.

So far this year Chinese companies have accounted for $17.72 billion over 34 deals - more than half of the total.

Indonesia's government did the largest deal, raising $3.1 billion, followed by a $2 billion offering from Asian Development Bank, according to Dealogic. Reuters

 

10:15 AM

Sensex crosses 42K for first time ever; Nifty hits record high

Market benchmark Sensex on Thursday scaled the 42,000 mark for the first time ever and Nifty hit its record peak in opening session tracking positive cues from global equities after the US and China signed an initial trade deal.

After hitting a record peak of 42,009.94, the 30-share BSE index was trading 127.65 points or 0.30 per cent higher at 42,000.38.

Similarly, the broader NSE Nifty scaled a lifetime intra-day high of 12,377.80. It was trading 28.45 points or 0.23 per cent higher at 12,371.75.

Sun Pharma was the top gainer, rising 1.30 per cent, followed by Nestle India, HUL, Kotak Bank, UltraTech Cement, Bajaj Auto and Bharti Airtel.

On the other hand, IndusInd Bank, Tata Steel, NTPC, Titan, Mahindra and Mahindra, Tech Mahindra, ONGC and Asian Paints were trading in the red.

According to traders, global stocks rallied as investors heaved a sigh of relief after the US and China on Wednesday signed the first phase of a trade deal, concluding more than a year of tough negotiations between the two largest economies of the world. PTI

 

10:00 AM

India plans new law to protect foreign investment

India is planning a new law to safeguard foreign investment by speeding up dispute resolution, aiming to attract more capital from overseas to boost stuttering domestic growth, two officials with direct knowledge of the matter told Reuters.

In a 40-page initial draft, India's finance ministry has proposed appointing a mediator and setting up fast-track courts to settle disputes between investors and the government, one of the sources said.

“The idea is to attract and promote foreign investment, but a major issue for investors is enforcement of contracts and speedy dispute resolution,” said the official.

The draft proposal is aimed at diffusing investor mistrust around the sanctity of agreements, which has worsened recently after some state governments decided to review approved projects, or threatened to cancel contracts.

Both officials declined to be named as the proposal is not public, and is still being assessed by different ministries and regulators.

A spokesman for the finance ministry did not respond to a request for comment.

Foreign investors have highlighted the enforcement of contracts as one of their biggest concerns, said the second official, adding that improving on this front would also reduce litigation for the government.

While investors can still rely on the existing legal system to settle disputes, it often takes several years for cases to be decided or settled. Reuters

 

9:30 AM

India's 2019 electricity demand rise smallest in six years

India's annual electricity demand in 2019 grew at its slowest pace in six years with December marking a fifth straight month of decline, government data showed.

Power demand rose 1.1% in 2019, the smallest rise since 2013, data compiled by the Central Electricity Authority showed.

December demand for electricity fell to 100.81 billion units from 101.28 billion a year earlier, representing a fifth consecutive month of decline. Reuters

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Printable version | Jan 20, 2020 6:13:46 AM | https://www.thehindu.com/business/businesslive-16-jan-2020/article30573338.ece

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