QBiz: RBI To Give Rs 28,000 Cr to Govt; Higher Air Fares in Feb
1. RBI To Transfer Rs 28,000 Crore As Interim Dividend To Govt
The Reserve Bank of India will transfer an interim dividend of Rs 28,000 crore to the Government of India, it said after a meeting of its central board on Monday, 18 February. The dividend transfer is likely to help the government meet its revised fiscal deficit target of 3.4 percent of GDP for 2018-19.
The decision was taken based on a “limited audit review and after applying the extant economic capital framework,” said the RBI in a release. This is the second consecutive year that the RBI has transferred an interim dividend.
2. Sensex, Nifty Miss Global Rally, Decline Nearly 2% So Far in 2019
The wave of buying that lifted markets worldwide in 2019 passed the Indian markets unnoticed, as election jitters, steep valuations and weak earnings combined to keep investors away.
While stocks in Hong Kong, China and Taiwan have risen 4-10 percent in 2019 so far, and the Dow Jones index over 10percent, India’s benchmark Sensex and Nifty indices fell 1.6 percent and 2.04 percent, respectively. In dollar terms, while the Nifty is down 4.22 percent, the MSCI Emerging Markets (EM) index and the MSCI World index are up 6.72 percent and 9.7 percent, respectively.
3. Flying In February? Here’s How Much More You Will Pay For Tickets
Air fares for flights to major cities have spiked up to 80 percent in February because of runway shutdowns and cancellations, hurting demand when passenger traffic growth is already slowing. Even through the rest of the month, the average airfares will remain up to 67 percent costlier, according to the data provided by online travel search engine ixigo.
While the Mumbai-Hyderabad one-way fare has more than doubled to Rs 4,666 (all inclusive) for travel between 10 and 28 February, flying between Mumbai and Delhi is 35 percent pricier. The cheapest Mumbai-Delhi flight for 19 February is available for Rs 8,690 as of 4 pm on Monday, 18 February.
4. Fortis Fraud May Exceed Rs 2,000 Crore, Says SFIO
The alleged funds diversion at Fortis Healthcare Ltd could add up to more than Rs 2,000 crore, according to the trail of funds uncovered by the Serious Fraud Investigation Office (SFIO), a government official said.
The Securities and Exchange Board of India (Sebi), too, suspects that the total size of the Fortis fraud could be much higher than the Rs 403 crore it originally estimated, a second person familiar with the development said, requesting anonymity.
Sebi has already passed an order against Fortis to recover Rs 500 crore from the Singh brothers for funds diverted to the promoter and promoter-related entities in December.
5. Companies Embrace New Norm That Splits CMD Posts
More than two-thirds of India’s top publicly-traded companies have separated the positions of chairman and managing director (CMD), although the deadline to comply with the rules is more than 13 months away.
That leaves just 156 of the BSE 500 companies to still untangle the role of CMD as of 15 February, compared with 291 in July last year, according to Prime Database, a primary market research tracking firm.
The idea behind the separation of the two positions is to bolster corporate governance. The separation of powers, according to some experts, increases the effectiveness of the board’s oversight role.
6. Share Of Card Payments In Consumption Spending Has Doubled Since Note Ban: Bernstein
Demonetisation was supposed to move consumers away from cash and towards digital payments, including credit and debit cards. Many believe that it didn’t play out that way.
Currency in circulation as a percentage of GDP, a measure of the cash in the economy, has almost moved back towards pre-demonetisation levels. As of March 2019, currency in circulation is expected to be 11.4 percent of GDP, only marginally lower than the 11.9 percent of GDP ahead of demonetisation, showed a HSBC report dated 11 February.
While cash usage in the broader economy may not have fallen sharply, a research note by Bernstein Research shows that a larger proportion of consumption spending is happening via cards.
7. Vedanta, JSW May Jointly Bid for Essar Steel, Make Offer of Rs 48,000 Cr
Vedanta and JSW Steel are in talks to make a joint bid for Essar Steel in a last attempt to keep ArcelorMittal away. A bid together, or one from either company, could be made next week, said sources aware of the development.
Vedanta said they did not comment on market speculation, while JSW Steel did not make a statement. The bid could be in the range of Rs 45,000-48,000 crore, and would be made on the grounds of value maximisation. Arcelor’s bid is for Rs 42,000 crore.
Sources said the companies were considering if JSW Steel should make the bid, or Vedanta.
8. Rupee Worst Performer This Year, May Fall to 73 on Kashmir Tensions
India’s rupee has gone from being the best-performing Asian currency last quarter to the worst this year as rising crude prices and tensions over Kashmir weigh on sentiment.
The currency has slumped 2.4 percent since the end of December, missing the rally in its regional peers on optimism over US-China trade talks. It weakened to 71.515 per dollar on Monday, 18 February, from as strong as 69.23 in early January.
“The risk for the India story, which is keeping the dollar well bid vis-a-vis rupee, is higher oil, followed by Kashmir tensions and the political uncertainty,” said Ashish Vaidya, head of trading at DBS Bank Ltd. in Mumbai.
9. GST Meet to Fix Real Estate Rates on Wednesday; Lottery off the Table
The pending decision on tax rates on lottery tickets has been ticked off the agenda of the goods and services tax (GST) Council meeting scheduled on Wednesday, 20 February, since the group of ministers (GoM) could not arrive at a consensus, Business Standard has learnt. Finalising the tax rate on real estate would be the only major agenda in the GST council meeting.
Maharashtra Finance Minister Sudhir Mungantivar is the convener of the ministerial panel on lotteries.