Stocks are off to a great start this week with both the Sensex and the Nifty gaining around 1%

Investors may be betting that lackluster inflation figures for June could pave the way for further rate cuts by the RBI.

Join us as we follow the top business news through the day.

4:20 PM

Yes Bank says Rs 15k cr capital from FPO to suffice for 2 yrs; looking at cost rationalisation

The troubled lender lays out its recovery plans.

PTI reports: “Private sector lender Yes Bank on Monday said the Rs 15,000 crore capital raising through FPO, the largest ever by any entity, will suffice the growth requirements for two years by taking capital buffers to over 5 percentage points over the regulatory obligation.

It is also looking at manpower rationalisation to save costs, and feels up to 1 percentage point of capital may be required to provision the possible reverses due to the COVID-19 situation, its chief executive and managing director Prashant Kumar told reporters here.

The bank, which had to be bailed out by SBI in March, is aiming to raise the money by selling its shares at Rs 12-13 per piece — which is a discount of nearly 50 per cent to Friday’s close — to raise the capital. SBI, which holds 49 per cent of the bank at present, has committed to invest up to Rs 1,750 crore.

Kumar explained the bank chose the follow-on public offer (FPO) route because it was the only one offering the flexibility to offer shares at a reduced price.

“The common equity tier-1 (CET-1) capital will go from 6.3 per cent to almost 13 per cent. It will take care of growth requirement for two years. In addition to the capital, we also have comfort of 2.50 per cent in deferred tax assets and are not including recoveries; 13 per cent CET also is 5 percentage points over regulatory requirements, Kumar said.

Kumar said the corporate governance issues and the legacy bad assets have been identified and provided for in the last two quarters by the new management, but conceded that COVID-19 can eat up up to 1 percentage point of capital through provisioning.

Without giving an exact time line, he said the bank is looking to rebalance its loan portfolios to have only 40 per cent reliance on the trouble-giving corporate lending segment and the rest on retail and SMEs as against the present 55:45 levels.”

4:00 PM

Sensex rises 99 points; RIL hits record high

Stocks that opened the day in bullish fashion pared gains over the day.

PTI reports: “Equity benchmark Sensex ended 99 points higher on Monday, led by gains in index-heavyweight Reliance Industries, amid positive global cues.

After rallying 430 points during the session, the 30-share BSE Sensex gave up most of its gains to settle 99.36 points, or 0.27 per cent, higher at 36,693.69.

While, the NSE Nifty closed 34.65 points, or 1.15 per cent, up at 10,802.70.

Reliance Industries was among the top gainers in the Sensex pack, jumping over 3 per cent to hit its record closing high, after the company said it has secured Rs 730 crore from wireless technology leader Qualcomm by selling a small stake in Jio Platforms.

Adding to a slew of investments since April that has crossed Rs 1.18 lakh crore, Qualcomm Ventures’ investment will translate into 0.15 per cent equity stake in Jio Platforms on a fully diluted basis.

Tech Mahindra, HCL Tech, Bharti Airtel, Infosys, HUL and ITC were also among the prominent gainers.

However, the gains on the index were capped as index majors HDFC twins slumped up to 2 per cent, after a report stating HDFC Bank has conducted an investigation into allegations of improper lending practices and conflict of interest at its vehicle financing arm.”

3:30 PM

BSE signs MoU with IIT Alumni Council to encourage listing of startups

BSE, (forrmerly Bombay Stock Exchange) has signed a memorandum of understanding (MoU) with IIT Alumni Council to encourage listing culture for startups and develop a ‘high investor depth’ startups platform.

IIT Alumni Council is the largest global body of alumni, students and faculty across all the 23 IITs with over 100 city chapters globally.

This alliance between BSE and IIT Alumni Council will ensure entity transparency, governance improvement and market discovery of share price, provide liquidity for PE investors and enable retail participation, BSE said in a statement.

Ravi Sharma, President and Chief Volunteer of the IIT Alumni Council, said, to increase access to pool of investors for start ups, IIT Alumni Council would use AI and other automation tools to reduce time, cost and efforts involved in the listing process.

 

3:00 PM

Google to invest Rs 75,000 crore in India over next 5-7 years: CEO Pichai

The Centre’s efforts to attract foreign investment got a boost today.

PTI reports: “Google CEO Sundar Pichai on Monday announced an investment of Rs 75,000 crore in India over the next 5-7 years through ‘Google for India Digitisation Fund’

Addressing Google for India event, Pichai asserted that the latest move is a reflecion of the company’s confidence in future of India and its digital economy.

“Today, I am excited to announce Google for India digitisation fund. Through this effort, we will invest Rs 75,000 crore or USD 10 billion in India for next 5-7 years,” Pichai said.

Investments will focus on four key areas of India’s digitisation, he said. This includes, enabling affordable access and information to every Indian in their own language, building new products and services relevant to India’s unique needs, empowering businesses as they continue to embark in digital transformation, and leveraging technology and Artificial Intelligence for social good in areas like healthcare, education and agriculture.”

2:40 PM

Rupee settles flat at 75.19 against US dollar

Stocks paring gains managed to pull back the rupee as well.

PTI reports: “The rupee settled on a flat note at 75.19 (provisional) against the US dollar on Monday amid high volatility in the domestic equity market.

The rupee, which opened at 75.20 against the US dollar, closed at 75.19 against the US dollar, up by just 1 paisa over its previous close.

It had settled at 75.20 against the greenback on Friday.

During the four-hour trading session, the domestic unit witnessed an intra-day high of 75.08 and a low of 75.21 against the US dollar.

Forex traders said the rupee traded in a range-bound manner tracking high volatility in domestic equities. Moreover, investors awaited cues from Consumer Price Index (CPI) data expected to be released later in the day.

While weak US currency supported the local unit, foreign fund outflows and concerns over rising COVID-19 cases weighed on investor sentiment, traders said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.03 per cent to 96.62.

The 30-share BSE benchmark Sensex was trading 34.01 points higher at 36,628.34 and broader NSE Nifty was up 13.30 points to 10,781.35.

Foreign institutional investors were net sellers in the capital market as they sold shares worth Rs 1,031 crore on Friday, according to provisional exchange data.”

2:00 PM

Communication strategies for teams that work from home

Managing team members who can be working from anywhere requires proven communication models to be redesigned, keeping in view the unique challenges that go with a 100 p.c. remote-working arrangement.

Any communication model that may be designed for work-from-home teams will reaffirm known features of effective team communication. Only that these best practices may have to be promoted more aggressively.

Naresh Purushotham, chief mentor and co-founder, CrestPoint Consultants India, says, “If leaders err in their communication strategies for remote-working teams, let it be that they err on the side of over-communication.” He explains that this will compensate for the lack of regular in-person interactions, where communication happens organically.

 

1:30 PM

Gold holds firm above $1,800/oz on virus fears, weaker dollar

The yellow metal continues to show strength as economic uncertainty continues to worry investors.

Reuters reports: “Gold prices rose on Monday, holding ground above the key $1,800-per-ounce level, as a weaker dollar and worries over surging COVID-19 cases around the globe kept the safe-haven metal underpinned.

Spot gold was up 0.5% at $1,807.16 per ounce by 0731 GMT. U.S. gold futures rose 0.5% to $1,811.10.

“The COVID-19 narrative is not going away and (we) don’t think the U.S. Federal Reserve is going to change course on the rates anytime soon, which should support gold prices,” said Stephen Innes, chief market strategist at financial services firm AxiCorp.

The medium-term outlook for the economic recovery still looks very uncertain and this continues to provide ample room for gold to float higher, Innes added.

More than 12.83 million people have been reported to be infected by the novel coronavirus globally and 565,626 have died, according to a Reuters tally.

Coronavirus infections in the United States continued to surge over the weekend as Florida reported a record increase of more than 15,000 new cases in 24 hours on Sunday.

The dollar index fell 0.2% against its rivals, making gold less expensive for holders of other currencies.

Adding to the worries over economic pain, U.S. President Donald Trump on Friday said he was not currently thinking about negotiating a “Phase 2” trade deal with China.

Gold is used as a safe investment during times of political and financial uncertainty.”

 

1:00 PM

India’s Glenmark cuts price of COVID-19 drug favipiravir version to $1/tablet

One of the cheapest drugs used to treat Covid-19 is set to get even cheaper.

Reuters reports: “Glenmark Pharmaceuticals Ltd said on Monday it would lower the price of its generic version of favipiravir, FabiFlu, to 75 rupees ($0.9983) per tablet for restricted emergency use in patients with mild-to-moderate COVID-19 symptoms in India.

Glenmark last month received Indian regulatory approval to make and sell anti-flu drug favipiravir, which is manufactured under the brand name Avigan by a unit of Japan’s Fujifilm Holdings Corp.

Glenmark had priced FabiFlu at 103 rupees per tablet earlier, making it one of the cheapest COVID-19 treatment available in the country.

“Glenmark’s price reduction aims to make FabiFlu further accessible for COVID-19 patients across the country,” the company said in a statement.

The price reduction comes at a time when coronavirus cases are continuing to surge across India. The country registered a record increase in infections on Sunday, and has over 870,000 cases as of Monday, with the death toll at 23,174, according to federal health ministry data.

Social media users have also complained of a shortage of COVID-19 treatment in the nation.

A treatment course with FabiFlu would require a patient to take 122 tablets over 14 days, and will now cost 8,475 rupees ($112.80) per patient at the new price.

Meanwhile, Japanese researchers on Friday said a clinical trial of Fujifilm’s Avigan yielded inconclusive results as a treatment for COVID-19.

Dr.Reddy’s Laboratories Ltd has entered into a deal with Fujifilm to sell Avigan globally excluding Japan, China and Russia.

Mumbai-based Glenmark has also commenced a post marketing surveillance study with FabiFlu to monitor its efficacy and safety in 1,000 patients that are prescribed with the oral antiviral, the company said.”

12:30 PM

Is there a safe investment?

In tune with current times, Claudius in the Shakespearean play, Hamlet, would, have, perhaps, said: “When anxieties come, they come not in single spies, but in battalions!” With uncertainty in employment on one side and volatile financial markets on the other, it is natural that we are overanxious about the world around us.

It is in this backdrop that we address a reader’s question: How safe are bank deposits in these uncertain times? In this article, we show there are no safe investments and that your investment decision involves risk trade-offs.

 

12:00 PM

LVB in talks with investors for capital infusion; looks to raise Rs 1,000 crore: CEO Sundar

The adverse impact of the lockdown isn’t stopping this private lender from going ahead with expansion plans.

PTI reports: “Less than a month after striking a deal with Clix Capital for fund infusion, Lakshmi Vilas Bank (LVB) chief S Sundar has said the lender is in talks with other investors to mop up Rs 1,000 crore additional capital.

The nearly 100-year-old LVB is looking at ways to bolster its capital adequacy ratio and the merger deal with Aion Capital-backed non-banking financial company Clix Capital would bring in Rs 1,900 crore for the bank.

The bank needs capital to grow and make profit, and we have got Clix as they have expressed their interest to merge with the bank. The advantage is that they are capital surplus and we are capital deficit, LVB, MD and CEO S Sundar told PTI in an interview.

“We need capital, they have surplus capital. So I find it is a very good alignment in the sense that they have about Rs 1,900 crore of capital (surplus),” he said.

While noting that the merger with Clix would give enough strength to do business, Sundar said the bank was in need of additional funds.

Explaining the deal with the Gurgaon-based investor, Sundar said Clix is bringing about Rs 4,500-4,600 crore as assets, of which Rs 1,900 crore is shareholders’ fund.”

11:30 AM

China’s growing dependence on the US dollar

11:00 AM

Rupee rises 6 paise to 75.14 against US dollar in early trade

The rally in stocks has helped the rupee gain against the dollar.

PTI reports: “The rupee appreciated 6 paise to 75.14 against the US dollar in early trade on Monday tracking weakness in the greenback and gains in the domestic equity market.

The rupee opened at 75.20 against the US dollar, then gained further ground and touched 75.14 against the US dollar, up 6 paise over its previous close.

It had settled at 75.20 against the greenback on Friday.

Forex traders said positive domestic equities and weak US currency supported the local unit, while foreign fund outflows and concerns over rising COVID-19 cases weighed on investor sentiment.

“Expectations of flows into the market could support the currency,” Reliance Securities said in a research note, adding that “cues from Asia remained upbeat. Most Asian currencies were stronger against the US dollar this Monday morning“.

Meanwhile, investors will await cues from Consumer Price Index (CPI) data expected to be released later in the day, traders said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.19 per cent to 96.46.

The 30-share BSE benchmark Sensex was trading 349.67 points higher at 36,944 and broader NSE Nifty rose 103.45 points to 10,871.50.

Foreign institutional investors were net sellers in the capital market as they sold shares worth Rs 1,031 crore on Friday, according to provisional exchange data.”

10:40 AM

TRAI asks Airtel, Vodafone Idea to hold priority plans promising faster speeds

The chief telecom regulator has taken issue with new data plans announced by telecom providers.

PTI reports: “The telecom regulator has asked Bharti Airtel and Vodafone Idea to put on hold specific plans that promised faster speeds to certain priority users, as it questioned whether the network preference came at the cost of deterioration of services for other subscribers.

A source said the Telecom Regulatory Authority of India (TRAI) has asked the two operators to withhold the specific plan for the interim period.

The TRAI has written to the two operators — Airtel and Vodafone Idea — and questioned them about their individual plans that promised faster speeds to certain priority users.

The regulator has asked if priority to high-paying customers in those specific plans came at the cost of service deterioration for other subscribers.

It has asked the operators how they are protecting the interest of other general subscribers.

When contacted, an Airtel spokesperson said: “We are passionate about delivering the best network and service experience to all our customers.”

“This is why we have a relentless obsession to eliminate faults, and have been consistently recognised by international agencies as the best network in terms of speed, latency and video experience.

“At the same time, we want to keep raising the bar for our post-paid customers in terms of service and responsiveness. This is an ongoing effort at our end,” the Airtel spokesperson added.

The Bharti Airtel had announced last Monday that it would give preference to platinum mobile customers, who pay Rs 499 and above per month for post -paid connection, on its 4G network.”

10:20 AM

Moody’s assigns Baa3 Rating with negative outlook to Adani Ports’ proposed USD bonds

Moody’s Investors Service has assigned a Baa3 rating with negative outlook, to the proposed USD senior unsecured bonds to be issued by Adani Ports and Special Economic Zone Ltd (APSEZ), the biggest port developer and operator in India with an annual capacity of 426 million tonnes.

The issuer rating and the rating of APSEZ’s existing senior unsecured bonds remain unchanged at Baa3.

“The outlook on the ratings is negative,” Moody’s said in a statement.

APSEZ will use the majority of the proceeds to refinance its existing debt and/or that of its subsidiaries, which could include Krishnapatnam Port Company Ltd, subject to the completion of its acquisition by APSEZ.

The company will use the remainder of the proceeds for other general corporate purposes.

 

10:00 AM

Sensex rallies over 400 points; Reliance hits fresh peak

A great start to the week for the stock bourses.

PTI reports: “Equity benchmark Sensex rallied over 400 points in early trade on Monday, tracking gains in index-heavyweight Reliance Industries and strong signals from global markets.

Reclaiming the 37,000 level in opening session, the 30-share BSE Sensex was trading 413.03 points, or 1.13 per cent, higher at 37,007.36.

In similar movement, the NSE Nifty surged 123.35 points, or 1.15 per cent, to 10,891.40.

Reliance Industries was the top gainer in the Sensex pack, jumping over 2 per cent to hit its record high of Rs 1,938.80 per share, after the company said it has secured Rs 730 crore from wireless technology leader Qualcomm by selling a small stake in Jio Platforms.

Adding to a slew of investments since April that has crossed Rs 1.18 lakh crore, Qualcomm Ventures’ investment will translate into 0.15 per cent equity stake in Jio Platforms on a fully diluted basis.

Infosys, Tech Mahindra, Tata Steel, IndusInd Bank, HUL and Maruti were among the other gainers.

On the other hand, Bharti Airtel and HDFC were the laggards.

In the previous session, the BSE barometer ended 143.36 points, or 0.39 per cent, lower at 36,594.33. The NSE Nifty shed 45.40 points, or 0.42 per cent, to close at 10,768.05.

Foreign institutional investors were net sellers in the capital market on Friday, offloading equities worth Rs 1,031 crore, provisional exchange data showed.

According to traders, besides stock-specific actions, positive cues from global markets too buoyed investor sentiment here.”

 

9:30 AM

FICCI survey estimates FY21 GDP growth to be in negative territory

Industry body FICCI on Sunday said its Economic Outlook Survey has projected the country’s annual median GDP growth for 2020-21 at (-) 4.5%.

With the rapid spread of COVID-19 pandemic manifesting into an economic and healthcare crisis globally, the latest forecast marks a sharp downward revision from the growth estimate of 5.5 % reported in the January 2020 survey, it said.

The pandemic outbreak has severely impacted the economic activities as the country had to go through a lockdown to check spread of the virus. However, the restrictions are being gradually eased.

While addressing SBI Banking and Economics Conclave on Saturday, RBI Governor Shaktikanta Das said the Indian economy has started showing signs of getting back to normalcy in response to the staggered easing of restrictions.

 





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