QBiz: Economy Survey Pegs GDP Growth Between 7-7.5 % & More
Here is a roundup of the top business stories of the day.
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1. Indian Economy Is Poised to Grow 7-7.5% in 2018-19: Eco Survey
The Economic Survey says the worst is over and the Indian economy is poised to rebound to grow in the range of 7-7.5 percent in 2018-19.
It credits this recovery to structural policy fixes, including the decision to put in place a bankruptcy code to deal with the bad debt problem — which it believes had become a binding constraint on economic growth.
According to the survey, demonetisation of high-value currencies, together with the rollout of the goods and services tax (GST), has led to more people being brought under the tax net and the formal economy is much bigger than what it is estimated at.
Optimistic while the survey is, it makes a case for policy vigilance to deal with downside risks stemming from rising crude oil prices and any setback to the ongoing recovery of the global economy.
(Source: Livemint)
2. Sebi Weighs Tighter Norms to Protect Market Liquidity
India’s market regulator is weighing options to direct stock exchanges to either stop offering securities-related data feed services to entities trading on bourses abroad, such as the Singapore Stock Exchange (SGX), or levy high additional fees on the traders.
Two persons directly aware of the ongoing discussions between the Securities and Exchange Board of India (Sebi) and stock exchanges said the markets regulator was doing this in an effort to prevent the country’s derivatives business from migrating offshore.
About 40 percent of Nifty futures turnover and as much as 70 percent of the open interest is on the SGX platform and the remaining share is with the National Stock Exchange of India (NSE). On Monday, equity derivatives worth Rs 3.19 trillion were traded on the NSE.
Sebi’s move assumes significance in the backdrop of a recent announcement by SGX of its proposal to launch single stock futures benchmarked to Nifty 50 companies.
(Source: Livemint)
3. Yes Bank Prices Dollar Bonds at 130 Bps over 5-Year Us Treasury Yield
Yes Bank on Monday priced its five-year dollar bonds at 130 basis points over the five-year US Treasury yield, sources aware of the deal confirmed to Financial Express. The bank is believed to have raised $600 million through the issue, which is the first foreign currency bond offering by the lender.
The initial price guidance on the bonds was 150 basis points over the Treasury yield, according to sources. This means the spread narrowed by 20 basis points, which is considered a significant compression for a debut issuer, a banker said.
“The issue saw a great response. The peak order book stood at $1.7 billion, whereas the final order book was $1.1 billion. Asia received near 58 percent of the allocation while about 41 percent went to EMEA,” said a banker close to the deal. Moody’s Investors Service has assigned a Baa3 rating to Yes Bank’s proposed senior unsecured notes, issued under its $1-billion Medium Term Note (MTN) programme.
(Source: Financial Express)
4. Hdfc Q3 Net Soars 233% on Profit from Stake Sale in Insurance Arm
Mortgage lender Housing Development Finance Corporation (HDFC) on Monday reported a 233 percent year-on-year (y-o-y) jump in its standalone net profit for the December quarter at Rs 5,670.21 crore, driven largely by a one-time gain of Rs 3,675.31 crore from the sale of its stake in HDFC Standard Life Insurance Company.
Adjusted for the one-time gain, the company’s performance exceeded expectations of analysts, based on Bloomberg collated data. HDFC’s net interest income (NII) for the quarter came in at Rs 2,929 crore against Rs 2,575 crore in the same quarter last year, a rise of 14 percent.
On an assets under management (AUM) basis, the growth in the individual loan book was 17 percent y-o-y and the non-individual loan book was 21 percent y-o-y, thus taking the growth in the total loan book to 18 percent. The home financier said that individual loans comprise 72 percent of its AUM. During the December quarter, 70 percent of incremental loans came from individual loans. As on 31 December, the loan book stood at Rs 3.42 lakh crore against Rs 2.87 lakh crore in the previous year.
(Source: Financial Express)
5. Markets See Best Pre-Budget Rally in 12 Years
With a gain of 6.7 percent thus far in January 2018, the S&P BSE Sensex has seen the best run in one month prior to the Union Budget presentation in over a decade. The last best performance was way back in February 2006, when the index had gained around 5 percent, data shows.
The recent rally, analysts say, comes on the back of a liquidity super-cycle and buoyant global equity markets and not just budget expectations that are getting frontloaded ahead of the event.
Thus far in financial year (FY18), foreign institutional investors (FIIs) and mutual funds have invested Rs 198.91 billion and Rs 1,119.49 billion in the Indian equity markets. Of this, around 152.46 billion has come in January 2018 alone.
(Source: Business Standard)
6. Telecom Stocks Slump on Renewed Price Wars
Share prices of telecom stocks fell on Monday, the first trading session after Reliance Jio announced a new plan exclusively for its Jio Phone users.
Reliance Jio is offering free voice calls and unlimited data at Rs 49 for a validity of 28 days. The announcement was made post-trading hours on Thursday. The shares of Idea Cellular, Bharti Airtel, and Reliance Communications fell by 1.63%, 2.66%, and 3.88%, respectively.
The BSE Telecom index fell by 1.18% and ended the session at 1487.65. Last week telecom stocks fell after Reliance Jio decided to offer 500 MB extra data to its subscribers using 1GB and 1.5GB per day data packs.
The move came after Bharti Airtel introduced its Rs 399 plan, offering unlimited calls and 1GB 4G data daily with 84 days validity. In a note, to investors, Kotak Institutional Equities said Reliance Jio’s aggressive competition could continue until it reaches unspecified market share, revenue or profit targets.
(Source: Financial Express)
7. Share of Digital Services in Indian IT Export Revenue to Double by 2020
The share of digital services in the export revenue of Indian information technology (IT) service companies are expected to double to around 30 percent by 2020, rating agency and research firm CRISIL has said.
This will be supported by initiatives like large-scale reskilling of the tech workforce and more of mergers and acquisitions (M&A) in the digital space. ‘Digital’ encompasses newer technologies such as Big Data and Analytics, Internet of Things, Artificial Intelligence, machine learning, Robotic Process Automation, Augmented Reality and Virtual Reality.
According to CRISIL, the digital services portfolio of Indian IT export have been growing at a healthy annual 30-35 percent, though traditional services are still the bulk of the $140-billion industry and growing two-three per cent annually. Overall, IT revenue growth is expected to be around eight per cent a year until FY20, the report said.
(Source: Business Standard)
8. Resolution Will Happen in Most Accounts Under NCLT, Says SBI’s Deputy Md Sunil Srivastava
Banks are expecting a write-back in provisions for some of the large 11 accounts referred to the National Company Law Tribunal (NCLT), State Bank of India deputy MD (corporate accounts group) Sunil Srivastava tells Shamik Paul. He expects competitive bidding for these assets and, going forward, sees a decline in the rate of growth of non-performing assets.
We have received bids for a couple of them already, and they are under evaluation. As for the other large assets, we have seen very good response and the bids are expected in the next two weeks or so. We expect that in most of the accounts, resolutions will happen.
These approvals may take one or two months. Our expectation is that we may have a finality on the bids before the end of this quarter, and a full culmination of the process, with the change in management, by the end of the next quarter.
(Source: Financial Express)
9. Indirect Taxpayer Base Rises by 50% with GST Implementation: Economic Survey
India’s indirect taxpayer base has increased by more than 50 percent with the implementation of the goods and services tax (GST), the formal sector is bigger than currently estimated and the country’s internal trade is around 60 percent of gross domestic product (GDP), the Economic Survey for 2017-18 said, basing its findings on data and trends from GST.
The Economic Survey is the first to be presented after India rolled out GST last July.
More than 10 million taxpayers have registered under GST, as against 6.5 million registered under the old tax regime, but after discounting for multiple counting. With the tax registration, return filing and tax payment process completely online under GST, policymakers have a new database to look for trends about firms and consumers.
Further, the direct taxpayer base has increased by around 1.8 million due to demonetisation and GST, the Survey said.
(Source: Livemint)
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