QBiz: RIL Q2 Profit on Record High; China’s GDP Growth Slows to 6%
Top business stories of the day.
1. Retail, Digital Drive RIL’s Q2 Net Profit to a Record High of ₹11,262 Crore
Oil-to-telecom conglomerate Reliance Industries Ltd (RIL) on Friday, 18 October, reported 18.3% year-on-year increase in net profit for the September quarter to a record ₹11,262 crore, backed by strong performances by retail and digital services businesses.
Consumer-facing businesses offset weaknesses in the refining, oil and gas, and petrochemical businesses, as RIL’s net profit increased from ₹9,516 crore in the year-ago period, beating street estimates, which had pegged the profits at ₹11,078 crore.
During the quarter, RIL’s revenue rose 4.8% from ₹1.56 trillion in the year-ago period to ₹1.63 trillion. Eleven analysts had estimated quarterly revenue at ₹1.53 trillion.
2. China's GDP Growth Slows to 6% in Q3, Slowest Since 1992
China's growth slumped to 6 percent in the third quarter of 2019, its lowest level in nearly three decades, as the world's second largest economy struggled to overcome the impact of a bruising trade war with the US and sluggish domestic demand, according to official data released on Friday, 18 October.
The GDP figures emerged just one week after the US and China reached a tentative trade truce to avoid more damages to the world's two largest economies.
China's gross domestic product grew at 6 percent in the quarter ended September, the weakest quarterly growth rate since 1992 and down from 6.2 percent in the previous quarter, according to data from the National Bureau of Statistics (NBS).
3. Retail Sales of Passenger Vehicles See Steepest Fall on Record in September
Retail or showroom sales of passenger vehicles in India declined a sharp 20% year-on-year to 157,972 units in September, according to data released by Federation of Automobile Dealers Associations (FADA). Customers stayed away from showrooms during festivals like Onam and Ganesh Chaturthi in the southern and western states of the country expecting a cut in Goods and Services Tax on vehicles.
Sales of vehicles also remained in the red due to the Shraddh period during the month, considered inauspicious for big purchases in the northern and western states.
Also, manufacturers did not push much inventory to the dealers expecting sales to remain tepid during the month. Wholesale dispatches of passenger vehicles slumped 23.7% year-on-year to 223,317 units in September, the eleventh straight month of such decline.
4. ED Gets Custody of Wadhawans till 22 October in PMC Bank Case
The promoters of bankrupt Housing Development and Infrastructure Ltd (HDIL), Rakesh Wadhawan and his son Sarang were sent to Enforcement Directorate (ED) custody by a special court in connection with the ₹4,355 crore Punjab & Maharashtra Co-operative (PMC) Bank scam on Friday as a fourth depositor died.
The ED had initiated an investigation under the Prevention of Money Laundering Act (PMLA) on the basis of an FIR filed by the Economic Offences Wing (EOW)of the Mumbai Police. Earlier this month, the EOW had registered a case against the Wadhawans and top PMC Bank officials for their alleged role in the multi-crore scam, and subsequently arrested the accused.
Special PMLA court judge P. Rajvaidya sent Rakesh Wadhawan, HDIL’s chairman and managing director, and his son to ED custody till 22 October.
5. Sebi Tightens Norms to Deal with Abrupt Resignations of Auditors
The Securities and Exchange Board of India (Sebi) on Friday tightened the rules around resignations of auditors from listed companies.
The market regulator has said that an auditor will have to provide review — limited or complete audit report — for the quarter during which it resigns. For instance, if the auditor decides to resign in August 2019, it will have to issue the review for the quarter ended 30 September, 2019.
Similarly, if the auditor signs the audit report for all the quarters of a financial year, except the last quarter, then it will have to finalise the audit report for the entire financial year. Sebi has said if the listed company or its material subsidiary does not provide the required information, the auditor shall provide an appropriate disclaimer in the audit report.
6. MPC Minutes: Members Were Concerned About Growth, Rate Transmission
The six members of the Monetary Policy Committee (MPC) expressed dismay at the lack of monetary policy transmission and were alarmed at the slowdown in the economy and the fall in private sector investments, edited minutes of the meetings show.
The Reserve Bank of India’s (RBI’s) MPC met for three days on 1, 3 and 4 October after which the central bank cut policy repo rate by 25 basis points and said the stance would remain “accommodative” as long as required to revive growth.
“Overall, domestic demand has moderated significantly. The weakening of private consumption, which for long has been the bedrock of aggregate demand, in particular, is a matter of concern,” RBI Governor Shaktikanta Das said in the meetings, the minutes show.
7. Trade Differences with US Narrowing, Hope to Have a Deal Soon: Sitharaman
Trade differences have been narrowing between India and the US, Finance Minister Nirmala Sitharaman has said, hoping that the countries will be able to enter into a trade deal soon. “I hope to have an agreement sooner. Obviously narrowing (of difference) is happening.”
The commerce ministry is working on it and hope that the negotiations will get concluded sooner, she said.
Sitharaman is in Washington to attend the annual meeting of the International Monetary Fund (IMF) and the World Bank. “I know the intensity with which the negotiations are going on and a few issues on which there could be some differences are being sorted out. I hope there will be an agreement sooner,” she said.
8. India’s Forex Reserves at New Life-Time High of $439.712 Billion
The forex kitty continued to climb north, swelling by USD 1.879 billion to a new life-time high of USD 439.712 billion, the Reserve Bank said on Friday, 18 October.
The forex reserves had increased by a higher USD 4.24 billion to a new high of USD 437.83 billion in the previous reporting week.
For the week under review, the foreign currency assets, which are the biggest part of the reserves, increased by USD 2.269 billion to USD 407.88 billion, the RBI said.
Expressed in US dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and the yen held in the foreign exchange reserves.
(Source: Financial Express)
8. Oil Companies Defer Decision to Suspend Fuel Supplies to Air India
State-owned fuel retailers on Friday, 18 October, decided to defer their decision to suspend jet fuel supplies to Air India after the national carrier promised to make regular payments to clear outstanding dues, officials said.
The three state-owned oil companies - Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) - had earlier this month threatened to snap aviation turbine fuel (ATF) supplies to Air India at six major airports over payment delays.
Officials said the decision to defer the move follows Air India making a written request for the same as also promising to make regular payments to clear over Rs 5,000 crore in overdue fuel bills.
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