Growth slowdown in India temporary, expect momentum to improve going ahead: IMF chief
IMF chief Kristalina Georgieva on Friday said growth slowdown in India appears to be temporary and she expects the momentum to improve going ahead.
Speaking here at the WEF 2020, she also said the world appears a better place in January 2020 compared to what it was when IMF announced its World Economic Outlook in October 2019.
She said the factors driving this positive momentum include receding trade tension after the US-China first phase trade deal and synchronised tax cuts, among others.
She, however, said a growth rate of 3.3 per cent is not fantastic for the world economy.
“It is still sluggish growth. We want fiscal policies to be more aggressive and we want structural reforms and more dynamism,” the managing director of the International Monetary Fund (IMF) said.
On emerging markets, she said they are also moving forward.
“We had a downgrade in one large market India but we believe that’s temporary. We expect momentum to improve further going ahead. There are also some bright spots like Indonesia and Vietnam,” she noted. PTI
India, US agree to resolve amicably dispute over steel import duty
India and the US have agreed to resolve amicably a dispute over American import duties on certain Indian steel products, wherein Washington is yet to fully comply with the WTO rulings, an official said.
The WTO dispute resolution body has ruled against the US in this case stating that the high duty imposed by America on certain hot-rolled carbon steel flat products from India was inconsistent with various provisions of the WTO’s Agreement on Subsidies and Countervailing Measures.
The US agreed to resolve the matter amicably as the appellate body of the WTO’s dispute settlement mechanism has become dysfunctional since last month.
America has failed to fully comply with a six-year-old ruling of the WTO’s dispute panel over import duties on certain Indian steel products which has endorsed India’s belief that not only the practices followed by the US, the law itself violates WTO agreements, the official said.
Sensex ends 227 pts higher; Nifty reclaims 12,200
Extending its gains for the second session, market benchmark Sensex rose 227 points on Friday, tracking rally in banking stocks amid recovery in global equities.
After opening on a weak note, the 30-share BSE index settled 226.79 points, or 0.55 per cent, higher at 41,613.19 -- hitting an intra-day high of 41,697.03 and a low of 41,275.60.
Likewise, the broader NSE Nifty closed 67.90 points, or 0.56 per cent, up at 12,248.25.
Ultratech Cement was the top gainer in the Sensex pack, advancing 2.44 per cent, followed by Tech Mahindra, Axis Bank, Titan, Kotak Bank, ICICI Bank and Bajaj Finance.
On the other hand, PowerGrid, IndusInd Bank, Sun Pharma, TCS, RIL and Infosys, Maruti and HDFC Bank ended in the red.
According to traders, a rally in financial stocks ahead of the Union Budget is supporting domestic stocks. PTI
ED issues fresh summons in Air Asia PMLA case
The Enforcement Directorate (ED) has issued fresh summons to senior executives of Air Asia airlines, including CEO Tony Fernandes, for questioning next month in connection with a money laundering case, officials said on Friday.
According to sources, the central agency has asked Fernandes to appear before the investigating officer of the case here on February 5, his deputy and former Deputy Group CEO of Malaysia-based Air Asia Berhad Bo Lingam on February 3 and R Venkataramanan, former Director Air Asia India Ltd, Bengaluru, on February 10.
Few others linked to the present and past management of the airline have also been asked to depose.
The ED had earlier asked some of these executives to appear this month but after some failed to appear or sought additional time, new dates have been given, they said.
The summons have been issued under the PMLA and as per sources the executives will be questioned and their statement recorded in connection with the investigation. PTI
Tata-Mistry case: SC stays NCLAT order dismissing RoC plea seeking modification of verdict
The Supreme Court Friday stayed the order of appellate tribunal NCLAT which had dismissed the plea of Registrar of Companies seeking modification of its verdict in the Tata-Cyrus Mistry case.
A bench, comprising Chief Justice S A Bobde and Justices B R Gavai and Surya Kant, agreed to hear the appeal of Tata Sons Pvt Ltd (TSPL) and issued notice to the parties concerned.
The apex court said it would hear the matter along with the main plea filed by Tata Sons against the verdict of National Company Law Appellate Tribunal (NCLAT). PTI
Patanjali group eyes Rs 25k crore turnover in FY20
Haridwar-based Patanjali group, which has acquired debt-ridden Ruchi Soya, is expecting Rs 25,000 crore turnover this fiscal, and aims to become the country’s largest FMCG company in coming years, Yoga Guru Ramdev said on Friday.
The company will register a joint turnover of Rs 25,000 crore in the current fiscal ending March 2020, in which around Rs 12,000 crore would be contributed by Patanjali group firms and Rs 13,000 crore will come from Ruchi Soya, he said.
“In next five years, we would have a turnover of around Rs 50,000 crore to Rs 1 lakh crore and will become the largest FMCG company, replacing HUL,” Ramdev said. PTI
China shuts transport, temples, Disneyland as virus toll rises to 25
China stepped up measures to contain a virus that has killed 25 people and infected more than 800, suspending public transport in 10 cities, shutting temples over the Lunar New Year, and rushing to construct a hospital to treat the infected.
The week long holiday to welcome in the Year of the Rat began on Friday, raising fears that the infection rate could accelerate as hundreds of millions of people travel to their homes and abroad. The risks persuaded Shanghai Disneyland theme park to close from Saturday until further notice.
The World Health Organisation (WHO) declared the new coronavirus an emergency for China on Thursday, but stopped short of declaring the epidemic of international concern.
The WHO said on Thursday it was a “bit too early” to consider the outbreak a public health emergency of international concern, a designation requiring countries to step up their response.
“Make no mistake, though, this is an emergency in China,” said WHO chief Tedros Adhanom Ghebreyesus.
The previously unknown virus, which has no cure and can spread through respiratory transmission, has created alarm because there are a number of unknowns. It is too early to know just how dangerous it is and how easily it spreads.
Symptoms include fever, difficulty breathing and coughing. Most of those killed by the virus were elderly, many with pre-existing conditions, the WHO said. Reuters
Sebi cautions investors against dealing in PACL properties
Cautioning investors over PACL’s illegal money-pooling case, market regulator Sebi has advised them against dealing with any property where the group and its promoters have interests.
The Securities and Exchange Board of India (Sebi) found Pearls Agrotech Corporation (PACL) to have collected more than Rs 60,000 crore through illegal collective investment schemes over a period of 18 years.
PACL had raised money from the public in the name of agriculture and real estate businesses.
The fresh advisory comes after the markets regulator received complaints or information that certain entities are attempting to sell such properties. PTI
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Maruti Suzuki begins export of S-Presso
The country’s largest carmaker Maruti Suzuki India (MSI) on Friday said it has commenced exports of its latest compact car S-Presso, which has been conceptualised and designed in India.
The consignments have left for global markets, including parts of Asia, Latin America and Africa regions, the company said in a statement.
“S-Presso is a true symbol of Make in India. The car stands testament to our commitment to offer best in design, technology and safety to our customers both locally and globally,” MSI Managing Director & CEO Kenichi Ayukawa said.
He further said the car has been widely appreciated by customers in India and the company is confident of its acceptance in international markets.
“With S-Presso we are looking to make inroads in many new markets,” Ayukawa added.
The SUV-shaped S-Presso featured amongst India’s top 10 bestselling cars within a month of its launch with the company selling over 35,000 units since launch in September 2019 in the domestic market. PTI
Euro zone bond yields inch up, focus turns to PMI data
Euro zone bond yields edged up from multi-week lows on Friday, as focus turned to the release of key business activity data for the latest clues to the economic outlook.
News that the World Health Organisation has declared the new coronavirus an emergency for China but stopped short of declaring it an epidemic of international concern appeared to bring some calm to world markets.
On Thursday, yields across the bloc fell sharply as fears of the flu-like virus rattled world markets, while European Central Bank President Christine Lagarde said that risks to the euro zone economy remain tilted towards the downside.
In early trade, yields on higher-rated bonds were up 1-2 basis points on the day. Germany's benchmark 10-year Bund yield was up around 1.5 bps at -0.29%, above a six-week low hit on Thursday at around -0.31%.
France's 10-year bond yield, which fell decisively back below 0% this week, was 2 bps higher at -0.05%.
The purchasing managers' index (PMI) -- widely viewed as a forward-looking indicator of growth is released this session.
Britain's January PMI index is also in focus as investors assess whether or not the Bank of England will cut rates at next week's policy meeting.
In Italy, 10-year bond yields were up 1.5 bps at 1.27% , having tumbled to their lowest levels since mid-November on Thursday.
They are down 12 bps this week and set for the biggest weekly falls in six weeks as investors brush aside near-term political risks. Reuters
Operations may be impacted due to bank unions’ two-day strike: SBI
The country’s largest lender SBI on Friday said its operations may be impacted to some extent due the proposed two-day nationwide strike beginning January 31.
The bank has however made all arrangements to ensure normal functioning in its branches and offices, the State Bank of India (SBI) said in a filing to the BSE.
“While Bank has made all arrangements to ensure normal functioning in its branches and offices, it is likely that work in our Bank may be impacted to some extent by the strike,” the filing said.
Bank unions have called for a two-day nationwide strike on January 31 and February 1 after talks over wage revision failed to make headway with the Indian Banks’ Association (IBA).
“We have been advised by IBA that United Forum of Bank Unions (UFBU) which constitutes 9 major unions...has given a call for an all India strike by Bank employees on 31st January and 1st February, 2020,” the filing said.
The UFBU constitutes All India Bank Employees’ Association, All India Bank Officers’ Confederation, National Confederation of Bank Employees, All India Bank Officers’ Association, Bank Employees Federation of India, Indian National Bank Employees Federation, Indian National Bank Officers’ Congress, National Organisation Of Bank Workers and National Organisation of Bank Officers. PTI
ECB policy is not on 'autopilot', Lagarde on Bloomberg TV
It is ridiculous to believe the European Central Bank's policy is on auto-pilot and that it won't change until a year-long review of the ECB's strategy is completed, ECB President Christine Lagarde said on Friday.
“To think it's autopilot, that's ridiculous,” Lagarde said on Bloomberg TV. “There's a forward guidance which is strong, which is setting a very clear timetable but it's fact dependent. Let's look at the facts, let's look at how the economy evolves.” Reuters
Facebook names Avinash Pant as India Marketing Head
Facebook on Friday said it has appointed Avinash Pant as Marketing Director for its India operations.
The role of marketing director will be a new one at Facebook India, with the mandate to drive the company’s consumer marketing efforts across the family of apps, including Facebook, Instagram and WhatsApp, the company said in a statement.
Pant comes with 22 years of experience working with consumer brands such as Nike, Coca-Cola, The Walt Disney Company, and most recently, Red Bull, it added.
In his last assignment as the India Marketing Director at Red Bull, he was responsible for building the brand in India, the statement said.
Pant, an alumnus of IIM-Ahmedabad, will report to Ajit Mohan, Facebook’s Vice President and Managing Director, India.
The announcement comes a year after Facebook announced a new leadership structure in India bringing the company’s functions under Ajit Mohan, reporting directly to its headquarters in Menlo Park.
Over the last year, the company has undertaken many India-focused initiatives, and also made its first minority investment in social-commerce venture Meesho.
“We’ve been working towards deepening our mission to build empowered communities... Consumer marketing is a new strategic area of focus for Facebook and one where we will dramatically increase our investment in communicating directly to consumers,” Mohan said. PTI
Westlife Development shares climb over 6% on 3-fold rise in Q3 profit
Shares of Westlife Development, the owner of master franchisee of McDonald’s restaurants in West and South India, on Friday jumped over 6 per cent after the company reported over three-fold jump in profit for the third quarter.
The company’s scrip climbed 6.43 per cent to Rs 448.40 on the BSE.
On the NSE, it advanced 6.40 per cent to Rs 448.
The company on Thursday reported over three-fold jump in consolidated net profit after tax at Rs 22.72 crore in the third quarter ended December 2019.
It had posted a consolidated net profit of Rs 6.92 crore in the year-ago quarter, Westlife Development said in a regulatory filing.
Total revenue during the third quarter stood at Rs 432.93 crore as compared to Rs 370.66 crore in the same period last fiscal, up 16.8 per cent, it added. PTI
Paint makers seek demand revival move in Budget
Paint makers are seeking the Centre’s move to improve consumer sentiments and boost demand in the forthcoming Union budget, instead of any consideration of further tax cut for the sector.
Initially, a 28 per cent GST was levied on paints, but with demand from the industry, the government had brought down the rate by 10 per cent to 18 per cent in July 2018.
“With the economy having slowed down over the last one year, the government should take steps to improve consumer sentiments and boost demand through tax incentives and increased spending in the infrastructure sector,” Berger Paints managing director and CEO Abhijit Roy said in his pre- budget wish.
Country’s largest paint maker Asian Paint’s Chief Operating Officer Amit Syngle said it is always “good if there is a tax cut” but the industry is “not hopeful of such a step” from the government.
“The government should enable consumers to spend more.
It can come through tax breaks and any other forms,” Syngle said.
Roy emphasised on the need for consumer sentiments rather than seeking Goods and Services Tax cut from 18 per cent now.
“As a next step to the reduction of the corporate tax rates, we hope for the rationalisation of the direct tax code which would put more disposable money in the pocket of the tax payers. This will help enhancing consumer sentiments, higher consumption and an overall positive multiplier effect on the economy, Roy said echoing Syngle.
Roy also sought incentives for individuals to invest in housing and realty sector through more tax benefits.
“This should go a long way in boosting consumer confidence and would kick start a positive cycle for all industries related to construction segment,” he added. PTI
Global economy snapback to prove elusive despite market joy: Poll
A significant global upturn will remain elusive this year as many economies still face an array of daunting risks, despite improved sentiment from an initial U.S.-China trade deal and ebullience in financial markets, Reuters polls showed.
The global economy in 2019 may have been near its weakest since the financial crisis thanks to trade protectionism and political uncertainty, but world stocks had a blowout year with several indexes repeatedly setting record highs.
With easy policy from central banks set to continue, that split between markets and events on the ground may extend into this year, according to surveys of over 500 economists covering 46 major economies conducted Jan. 10-22.
When asked what is more likely for developed and emerging market economies this year, more than three-quarters of nearly 400 economists said “about the same as last year”, in terms of growth rates.
While very few economists predicted a deeper downturn this year, not many more forecast a significant pick-up either, despite the euphoria surrounding the initial Washington-Beijing trade deal that cooled nearly two years of escalating tensions between the world's two biggest economies.
In the latest Reuters polls, the 2020 growth outlook for nearly 75% of 46 major economies was either cut or left unchanged from the previous poll. Similarly, the outlook for inflation for nearly 85% of those economies was trimmed or left unaltered.
Most central banks were expected to maintain their easing bias, despite increasing scepticism about their ability to influence growth or inflation. Forecasts for the next likely move were still leaning toward a cut rather than a move away from crisis-era policies. Reuters
HDFC Bank taps Egon Zehnder to identify Aditya Puri's successor
India's HDFC Bank has chosen global executive search firm Egon Zehnder to identify a successor to managing director Aditya Puri, the country's top private lender said on Thursday.
Reuters had reported earlier on Thursday that the HDFC Bank board had tapped the global head-hunting firm in a bid to end a boardroom impasse over Puri's successor and zero in on a candidate.
Four sources familiar with the discussions told Reuters that a six-member internal search committee, appointed in November last year, has been unable to reach a consensus on selecting a successor to Puri, who has been at the helm of HDFC Bank since its inception in 1994.
“Egon Zehnder has been recommended by the search committee and unanimously appointed by the bank's board,” Neeraj Jha, a spokesman for HDFC Bank, said in an email.
Puri, whose term comes to an end in October this year, is also an adviser to the search committee.
“The latest decision to hire a global advisory firm has been taken after the search committee members realised that they have been struggling to come to a consensus on the final name,” said a source familiar with the internal deliberations among members of the committee.
“The deadline for Puri's successor is nearing ... the bank will have to appoint someone who can continue to push for growth despite an economic slowdown,” the source added. According to HDFC Bank, Puri is 69 years old.
As per regulations, the bank will need to get approval from the Reserve Bank of India (RBI), before any new appointment can be confirmed. HDFC Bank is one of three domestic lenders that the central bank has designated as “too big to fail”.
Egon Zehnder, which declined to comment on the matter, had in 2018 also helped Axis Bank, another private lender, to find its chief executive officer. Reuters
Shares inch higher as focus shifts to Union budget
Indian shares edged higher in early trading on Friday, as investors assessed a clutch of corporate earnings reports and awaited the release of the Federal budget.
India's NSE Nifty 50 index was up 0.2% at 12,203.10 by 0430 GMT, while the S&P BSE Sensex was 0.19% higher at 41,441.24.
Poorly received earnings from top Indian companies over the last two weeks have dented risk appetite, with investors now keeping a close watch on the Feb. 1 budget for clues on the government's move to revive economic growth, which has slipped to a more than six-year low.
“There have been mixed cues in the last couple of days, China is a cause of concern and domestically earnings have not been very encouraging,” said Siddhartha Khemka, head of retail research at Motilal Oswal Securities in Mumbai.
“Now there is anticipation about the budget, lot of hope is being built around it and the outcome will give further direction to markets.”
Meanwhile, other Asian markets were subdued on fears that a new coronavirus in China could spread faster as millions of people would be travelling over the week-long holiday.
India's Nifty banking index was higher by 0.4%, although it is on track for a 2% drop this week. The NSE Financials index rose 0.23%.
Shares of Bank of Baroda, the country's second-largest public-sector bank, was up 0.79% ahead of its earnings announcement for the December quarter.
Meanwhile, the Nifty IT index fell as much as 0.71%, with eight of its 10 constituents trading in the negative territory.
Shares of Biopharmaceutical company Biocon Ltd slipped over 4% after it flagged a 6.5% drop in quarterly profit on Thursday.
Shares of lender PNB Housing Finance Ltd slid over 9% after it posted a weak set of quarterly numbers on Thursday. Reuters
Investors want stability, predictability of policy, judicial reforms: Gurnani
Leading international investors are planning to visit India in March-April and all of them are looking for stability and predictability in policy as well as judicial reforms, Tech Mahindra MD and CEO C P Gurnani said on Thursday.
He added that India is an important destination for businesses where investors are getting decent returns.
“I was talking to a few leaders here and they are all visiting or are planning to visit India in March-April time frame. The only two request everybody has is stability and predictability of the policy and judicial reforms,” Gurnani told PTI.
He expressed concern on recent statutory levies on the telecom sector and said that judicial reforms go hand in hand with ease of doing business.
In an about 12-year-old case on revenue sharing, the Supreme Court recently upheld the government’s stand and broadened the definition of adjusted gross revenue (AGR) for telecommunications companies to include non-core operations. The apex court ordered telecom companies to clear all pending AGR dues amounting to around Rs 1.47 lakh crore by January 23, 2020.
Vodafone Idea Chairman Kumar Mangalam Birla announced in December that the company will shut shop if it does not get any support on payment of the AGR dues. PTI
Rupee falls 5 paise against US dollar in opening trade
The rupee declined by 5 paise to 71.31 against the US dollar in early trade on Friday as spread of a deadly new virus from China kept investors edgy.
Besides, rise in crude oil prices and lower opening in the domestic equity market also impacted the rupee movement, forex dealers said.
However, fresh foreign fund inflows supported the Indian currency, they added.
At the interbank foreign exchange market, the rupee opened weak at 71.34, but it recovered some lost ground to touch 71.30 against the US dollar in morning trade.
The domestic currency had settled at 71.26 against the American currency on Thursday.
According to reports, coronavirus infection has killed at least 25 people, while the number of confirmed cases has increased to 830.
Brent crude futures, the global oil benchmark, rose 0.06 per cent to USD 62.08 per barrel.
The BSE benchmark Sensex was trading 71.95 points or 0.17 per cent lower at 41,314.45. Similarly, the broader NSE was trading 17.85 points, or 0.15 per cent, down at 12,162.50.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, inched up 0.02 per cent to 97.70.
Foreign institutional investors bought equities worth Rs 1,352.13 crore on a net basis on Thursday, provisional exchange data showed.
The 10-year Indian government bond yield was at 6.60 per cent. PTI
Sensex drops over 70 points in early trade; Nifty below 12,200
Market benchmark Sensex dropped over 70 points on Friday as investors chose to stay cautious ahead of the Union Budget amid weak global cues.
The 30-share BSE index was trading 71.95 points or 0.17 per cent lower at 41,314.45. Similarly, the broader NSE was trading 17.85 points, or 0.15 per cent, down at 12,162.50.
Top losers in the Sensex pack included PowerGrid, Kotak Bank, Infosys, TCS, Tata Steel and Bharti Airtel.
On the other hand, Asian Paints, Titan, Bajaj Auto, RIL, Sun Pharma, L&T and ICICI Bank were trading on a positive note.
According to analysts, a cautious trend remain in the near-term since a lot has been factored in the market about budget wish list and revival in earnings growth, while the start to Q3 result is below par.
Bourses in Hong Kong and Japan were trading on a tepid note, while markets in China, Taiwan and South Korea were closed for a holiday on Friday.
Brent crude oil futures rose 0.06 per cent to USD 62.08 per barrel.
On the currency front, the rupee depreciated marginally to 71.29 against the US dollar in morning session.
In the previous session, Sensex settled 271.02 points, or 0.66 per cent, higher at 41,386.40. Likewise, the Nifty closed 73.45 points, or 0.61 per cent, down at 12,180.35
Meanwhile, on a net basis, foreign institutional investors bought equities worth Rs 1,352.13 crore, while domestic institutional investors offloaded shares worth Rs 984.56 crore on Thursday, data available with stock exchanges showed. PTI
