BQuick On Aug. 19: Top 10 Stories In Under 10 Minutes

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

1. Cheer Up, Says Shaktikanta Das

Reserve Bank of India Governor Shaktikanta Das on Monday tried to dispel the mood of pessimism prevailing around economic conditions saying that growth is the highest priority for the central bank right now, adding that steps have been taken to stabilise the economy.

• “At this particular juncture, growth is a matter of highest priority,” Das reiterated while speaking at the annual banking summit ‘FIBAC 2019' organised by the Indian Banks' Association and Federation of Indian Chambers of Commerce & Industry.

• While acknowledging challenges to the economy, Das admonished stakeholders for excessive pessimism, saying that an attitude of “doom and gloom” will not help anyone.

Das also cautioned on the headwinds that can emerge from financial markets.

Das also said the “time has come to formalise linking of lending rates of new loans to external benchmarks like the repo rate”.

• The central bank has cut interest rates four times this year but the transmission of the same by banks to borrowers has lagged.
• Das said banks have started linking certain lending rates to repo rates after the August policy but the central bank expects them to “move faster”.

So far, banks have approached the linking of loans to an external benchmark with caution.

2. Report On New Direct Tax Code Submitted

A government-appointed task force headed by Central Board of Direct Taxes member Akhilesh Ranjan on Monday submitted its report on the new Direct Tax Code, which seeks to replace the existing Income Tax Act.

Union Minister of Finance and Corporate Affairs Smt. @nsitharaman received the report submitted by Shri Akhilesh Ranjan, Convenor of the Task force constituted by the Government to draft New Direct Tax Law, in New Delhi today. pic.twitter.com/iU4Q6JEqQl

August 19, 2019

• The task force was supposed to submit its report by May 31, but the then Finance Minister Arun Jaitley gave two months extension to complete the exercise.
• Subsequently, the government allowed the task force to submit its report by Aug. 16, in light of the fact that the new members of the task force requested for more time to provide further inputs.
• The task force was asked to draft direct tax laws in line with the norms prevalent globally.

The details of the report, however, could not be known immediately.

3. Reliance Jio Thrives Even As Rivals Struggle

Bharti Airtel Ltd. and Vodafone Idea Ltd. continued to lose subscribers during June, while rival Reliance Jio Infocomm Ltd. added over 82.6 lakh users, according to data released by Telecom Regulatory Authority of India.

• In absolute terms, Vodafone Idea continued to lead the total subscriber tally at 38.34 crore, followed by Reliance Jio with 33.12 crore and Bharti Airtel with 32.03 crore.
• Vodafone Idea shed 41.45 lakh subscribers, and Bharti Airtel 29,883 customers during June, while the Jio continued to add users.

Here's the subscriber market share for Indian telecom operators.

4. Vodafone Idea's CEO Steps Down

Balesh Sharma has stepped down as chief executive officer of the Vodafone Idea Ltd. at a time when the operator continues to lose ground amid an intense tariff war and its subscribers keep switching to other networks for lower rental plans.

• Sharma, who was the CEO since Vodafone India was merged with Idea Cellular Ltd., will take up a new role with the Vodafone Group, which will be announced in due course, according to an exchange filing.
• He quit citing personal reasons.
• The board has appointed Ravinder Takkar, a non-executive director, as managing director and CEO for three years.

Vodafone Idea stock has declined 81 percent since the merger.

5. Nifty Pares Gains, Rupee Plunges; U.S. Stocks Advance

Indian equity benchmarks closed with marginal gains as businesses awaited measures from the government to spur growth.

• S&P BSE Sensex closed 0.14 percent higher at 37,402.49.
• NSE Nifty 50 gained 0.10 percent to close at 11,153.90.
• The broader markets represented by the NSE Nifty 500 Index closed 0.10 percent higher.
• The benchmarks pared gains in the final hour sell-off, led by losses in auto stocks.
• The markets were fueled with positive sentiment over the past few days on account of Finance Minister Nirmala Sitharaman meeting various industry leaders, said Sharmila Joshi, an independent investment advisor, in a conversation with BloombergQuint.
• However, these gains may taper off if the talks don't materialise, Joshi said.
• The Indian rupee tumbled 28 paise to close at an over six-month low of 71.43 against the dollar amid growing worries over economic slump and sustained foreign fund outflows.

Follow the day's trading action here.

Meanwhile, microfinance lender Spandana Sphoorty Financial Ltd. made its stock market debut at a discount to its issue price.

• The stock opened at Rs 825 apiece, nearly 4 percent lower than its initial public offering price of Rs 856, on the BSE. It finally closed 1 percent lower than its issue price at Rs 848.

Here's more on the new market entrant's listing.

U.S. stocks climbed after the Trump administration signaled progress on trade negotiations and beat back speculation the economy is headed for recession.

• The S&P 500 Index extended gains into a third day as U.S. Commerce Secretary Wilbur Ross said the nation will delay restrictions that the Trump administration has imposed on some business operations of China's Huawei Technologies Co.
• Long-dated bonds are moving the Treasury yield curve away from inversion, as the U.S. government considers borrowing for a century.
• Crude rallied after a drone attack on a Saudi Arabian oil field.
• Gold sank 1 percent to $1,508.60 an ounce.

Get your daily fix of global markets here.

6. Big Winners Of The Earnings Season

Even as the Nifty 50 companies performed their worst in at least three years, with around half of the companies missing earnings estimates for the quarter ended June, some bucked the trend.

• Tamil Nadu Newsprint & Paper: Higher volumes, lower input cost and overall cost control aided the paper company's operating performance in 2018-19.
• Westlife Development: The operator of the McDonald's chain of restaurants in west and south India posted improved operational performance in the three-month period, aided by growth in same store sales for the sixteenth consecutive quarter.

Here's the full list of ten companies whose operational performance improved the most in the first quarter—expect some surprises in there.

7. Have Government's Efforts To Support Rural Economy Worked?

Rural economic indicators, such as inflation and wage growth, remain subdued despite steps taken by the government to help stabilise an economy hit by falling food prices and weak income growth, shows data analysed by BloombergQuint.

• Concerns around rural distress had prompted the government to step in with support measures last year.
• Data available on the website of the PM Kisan scheme shows that 6.8 crore farmers have received cash transfers so far. The scheme intended to transfer Rs 6,000 to each eligible farmer in three equal installments of Rs 2,000 each.

• Inflation data for the last twelve months shows that rural inflation remains subdued and well below urban inflation.
• National averages for inflation levels, however, may not be the best gauge for impact of cash transfers to farmers.

To assess the impact at the state level, BloombergQuint studied the inflation scenario in Uttar Pradesh and Maharashtra.

8. Homebuyers Write To Prime Minister

A lobby representing homebuyers has asked Prime Minister Narendra Modi seeking forensic audit of all projects delayed for more than three years and steps to ensure flat-owners don't have to suffer like those who bought apartments in projects of the Amrapali group.

• Citing the Supreme Court's recent judgment in the Amrapali case, Forum For People's Collective Efforts, wrote in a letter to the prime minister to address issues related to more than five lakh delayed homes and implementation of Real Estate (Regulation and Development) Act, 2016 (RERA) across the country.
• The letter, released to the media by the forum, has been marked to chief ministers of all states.

The letter is suggesting a separate cell to deal with issues of delayed projects and creation of a stress fund to complete stuck projects.

9. Food Aggregators Asked To Review Discounting Schemes

An umbrella body of hotel and restaurant associations has asked food service aggregators like Zomato and Swiggy to review their discounting schemes and engage in a dialogue for addressing restaurant owners' issues.

• The Federation of Hotel & Restaurant Associations of India has also warned food aggregators such as Zomato, Swiggy, Nearbuy, Dineout Prius Heights, EasyDiner and Magicpin of nationwide protests if they continue with their practices and schemes.
• The FHRAI in a statement said that it has asked the food service aggregators to engage in a “fruitful dialogue” to arrive at a win-win outcome for all.
• Calling for a review of all their discounting schemes, the federation said as a technology partner, by merely hosting its members' inventory, food service aggregators cannot hold sway and arm twist the traditions and aspirations of millions of entrepreneurs in India.

Restaurants most common complaint is about contracts being one sided.

10. Masa's Visionary Sequel Has A Desperate Look

It looks like SoftBank Group Corp.'s Masayoshi Son may be struggling to start his next epic journey, writes Tim Culpan.

• A month after announcing an eclectic mix of investors for its Vision Fund 2, SoftBank is leaning on its own employees for cash, planning to lend them as much as much as $20 billion to buy stakes in the venture-capital vehicle, the Wall Street Journal reported at the weekend.
• The report adds to signs of possible funding gaps in the $108 billion cash pile Son is targeting. SoftBank itself is already putting in $38 billion.
• Add the potential contribution from employees, and we're looking at 54 percent of the money coming from directly inside the SoftBank family.
• Son may account for $15 billion of that $20 billion target.

In the end, SoftBank will probably scrape together the money it needs by casting a wider net and calling in favors.

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