QBiz: Sensex, Nifty Rise for Second Day; Govt Liabilities Rise
Here are the top business stories for the day.
1. Sensex, Nifty Snap Longest Stretch Of Weekly Gains Since January
Indian equity benchmarks rose for second day in a row led by telecom and auto stocks.
The Sensex rose 0.38 percent or 147 points to 38,390 and the Nifty 50 index advanced 0.45 percent or 52 points to 11,589.
On a weekly basis, the benchmarks snapped their longest stretch of gains since January as the weakening rupee raised concerns over earnings growth outlook.
Meanwhile, in Friday, 7 September’s session, sixteen of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Telecom index’s 3.35 percent gain. On the other hand, the S&P BSE Power index was top loser, down 0.1 percent.
2. Walmart Asked to Explain India Business Model After Flipkart Buy
India's National Company Law Appellate Tribunal (NCLAT), a local semi-judicial body, has asked a Walmart Inc unit to explain its business model in India, following an objection raised by a traders body against its $16 billion acquisition of e-commerce firm Flipkart.
NCLAT, an appellate body for the Competition Commission of India (CCI), issued the order to Walmart International Holdings Inc, the document dated September 6 showed.
"Before going into the merit of the appeal, we intend to know the manner in which Walmart International Holdings Inc and Flipkart Private Ltd do their business in the relevant market in India," NCLAT said in a notice, asking Walmart to file its reply by 20 September.
The order relates to an appeal petition filed by the Confederation of All India Traders against CCI's approval of the Walmart-Flipkart deal last month.
3. Strategic Sale of Air India’s Ground Handling Arm Likely
The government is mulling strategic sale of Air India subsidiary AIATSL to raise funds and help lower the debt of the national carrier, according to official sources.
A strategic sale of Air India Air Transport Service (AIATSL), which provides ground handling services, is being planned as part of the turnaround scheme for Air India. The airline had debts of Rs 48,000 crore at the end of March 2017.
“The expression of interest (EoI) for bidders will be floated soon after the GoM clears it,” sources told PTI.
The government had originally proposed in May it would offload 76 percent of Air India’s equity share capital as well as transfer management control to private players. The buyer would have had to take over Rs 24,000 crore debt along with over Rs 8,000 crore of liabilities.
The stake sale failed to attract any interest. In June, a group of ministers decided not to go ahead with the Air India stake sale in an election year.
4. Total Government Liabilities Rise to Rs 79.8 Lakh Crore in Q1: Finance Ministry Report
Total liabilities of the government increased to Rs 79.8 lakh crore at end-June 2018 from Rs 77.98 lakh crore at end-March 2018, latest data on public debt showed Friday, 7 September.
Public debt accounted for 89.3 percent of total outstanding liabilities at end-June 2018 with internal debt accounting for 83.0 percent share. Nearly 24.9 percent of the outstanding dated securities had a residual maturity of less than five years.
The holding pattern indicates a share of 42.7 percent for commercial banks and 23.5 percent for insurance companies by end-March 2018.
G-Sec yields have shown a hardening trend in first quarter of the fiscal with the increase in weighted average yield of primary issuances to 7.76 percent from 7.34 percent since the last quarter reflecting the impact of both global and domestic developments, said the quarterly Report on Debt Management, released by the Finance Ministry.
(Source: Financial Express)
5. Infosys Forms Joint Venture with Temasek
Information technology (IT) services firm Infosys Ltd has formed a joint venture (JV) with Singapore-based global investment firm Temasek, the company said on Friday, 7 September.
The joint venture will integrate teams from Infosys and the operations of the Temasek-owned subsidiary in Singapore Trusted Source Pte Ltd, which delivers IT services to Temasek and several other clients.
Infosys will acquire a 60 percent stake in the JV, while Temasek will hold 40 percent.
Incorporated in 1974, Temasek today has offices in 11 locations in Asia, Americas and Europe and had assets under management of $235 billion
“Infosys and Temasek see important synergy and strategic alignment in the JV. Infosys gains significant capacity in terms of workforce as it focuses on strengthening its footprint in Southeast Asia, while Temasek will see a rapid enhancement of its IT services through the augmented capabilities of the JV entity,” according to the statement by the company.
Trusted Source will provide services across cloud, data and analytics, cybersecurity, digital experiences and AI and automation.
6. Tesla Erupts in Chaos After Senior Execs Leave, Musk Tokes Up
The turmoil at Tesla Inc has reached a fever pitch, with the news that two senior executives are leaving Elon Musk’s electric-car maker emerging hours after he smoked marijuana during a podcast interview streamed live online.
Chief Accounting Officer Dave Morton gave notice Tuesday that he was resigning less than a month into the job, according to a Friday filing. Tesla’s stock plunged, then extended declines after Gabrielle Toledano, the head of human resources who’s been on a leave of absence, told Bloomberg News that she won’t rejoin the company.
Morton, a former chief financial officer for computer-drive maker Seagate Technology Plc, joined Tesla one day before Musk tweeted that he was considering buying out some investors at $420 a share and taking the company private. The CEO abandoned that effort 17 days later, and all the while drew a subpoena from the Securities and Exchange Commission and a series of lawsuits alleging market manipulation.
7. Il&Fs Board Decides to Seek a Loan of Rs 30 Billion from LIC and SBI
In an emergency meeting on Friday, the board of Infrastructure Leasing & Financial Services (IL&FS) decided to seek a loan of Rs 30 billion from two shareholders — Life Insurance Corporation of India (LIC) and State Bank of India (SBI).
The board decided to meet on 15 September to ensure that IL&FS and other group companies do not default on any further repayment obligation.
The fundraising was necessitated after recent defaults by IL&FS group firms to various institutions. IL&FS, with a consolidated debt of around Rs 1 trillion, is facing delays in execution of projects apart from delay in receiving payments from various government agencies for constructing infrastructure projects.
A source said Lone Star, I Squared Capital, and the National Infrastructure Investment Fund were in the race to buy out its road projects.
(Source: The Hindu Business Line)
8. Switching Two-Wheelers to Electric Can Cut Oil Bill by Rs 1.2 Lakh Crore, Says Niti Aayog
India can cut its annual oil import bill by some Rs 1.2 lakh crore in the next five to seven years by switching its two-wheelers from internal combustion engine to electric, according to the NITI Aayog. "India has over 170 million two-wheelers. If we assume that each of these vehicles uses a little more than half a litre of petrol per day or about 200 litres per year, the total amount of petrol used by such vehicles is about 34 billion litres," said the NITI Aayog's 'Zero Emission Vehicles: Towards a Policy Framework' report released on Friday, 7 September.
"At Rs 70 per litre, this would cost about Rs 2.4 lakh crore. Even if we assume that 50 per cent of this is the cost of imported crude (as tax and other may be 50 per cent), one may save Rs 1.2 lakh crore worth of imported oil," it said.
The report added there was a real possibility of getting this done in the next five to seven years, but it would require a policy regime that encourages access to latest technologies and which systematically ensures that India's electric vehicle program keeps pace with the global scale.
Incidentally, minutes before releasing the report, Prime Minister Narendra Modi announced that the government will soon put in place a new stable policy regime to promote the use of electric and other alternative-fuel vehicles in the country to fight climate change.
(Source: Financial Express)
9. British Airways Cyber Attack: 380,000 Customers Hit, Carrier 'Deeply Sorry'
British Airways was forced to apologise on Friday, 7 September, after the credit card details of hundreds of thousands of its customers were stolen over a two-week period in the worst ever attack on its website and app.
The airline discovered on Wednesday that bookings made between 21 August and 5 September had been infiltrated in a "very sophisticated, malicious criminal" attack, BA Chairman and Chief Executive Alex Cruz said. It immediately contacted customers when the extent of the breach became clear.
Around 3,80,000 card payments were compromised, the airline said, with hackers obtaining names, street and email addresses, credit card numbers, expiry dates and security codes – sufficient information to steal from accounts.
The attack came 15 months after the carrier suffered a massive computer system failure at London's Heathrow airport, which stranded 75,000 customers over a holiday weekend.
Shares in BA's parent, International Airlines Group, fell 3 percent in early deals on Friday.
(Source: Business Standard)
Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.