QBiz: Sensex Ends FY19 With Biggest Gain in Four Years & More
1. Sensex Ends FY19 With Biggest Gain in Four Years
Fiscal year 2018-19 saw equity benchmark index Sensex climbing the highest in four financial years. Gaining 17.30 percent in FY19, the index topped FY18 and FY17, when Sensex clocked a 11.30 percent and 16.88 percent rise, respectively.
However, the midcap and smallcap indices saw a decline of 3.03 percent and 11.57 percent, respectively, due to steep valuations and slow earnings growth.
The Rupee too was at a three-year low. It weakened 5.74 percent after a fall of 0.51 percent in the previous year. In FY19, gold also gave negative returns for the first time in four years.
Earlier, Sensex climbed over 127 points to finish at 38,672.91 on Friday, 30 March -- the last trading day of fiscal 2018-19.
2. Etihad, Tata Group, TPG Potential Bidders for Jet Airways
Etihad Airways, which currently has a 24 percent stake in Jet Airways, is interested in bidding for cash-strapped Jet Airways and has approached the State Bank of India-led lenders' consortium, said a report on Friday, 29 March.
Etihad's share in Jet Airways' will fall to a 12 percent from the existing 24 percent, once the lenders take up majority stake in the carrier, as a part of its debt recast plan.
However, the report says that Etihad may seek for an additional 37 percent stake in Jet, taking its stake up to 49 percent.
Reportedly, the Tata Group has also been approached by the banks’ consortium, for a potential investment.
On Monday, 25 March, Jet Airways chairman Naresh Goyal and his wife Anita Goyal had stepped down from the airline’s board to allow the board to move ahead with a debt restructuring plan.
3. Jet Airways Pilots Threaten to Go on Leave From 1 April
Over 1,000 pilots of the struggling private carrier Jet Airways have decided to go ahead with their "no flying" call from 1 April following the airline’s failure to receive funds from the banks on Friday, its pilots guild has said.
The National Aviators Guild (NAG), the body claiming representation of some 1,100 pilots at Jet Airways, had last week announced its decision not to fly from April 1 if their pending salaries were not cleared and clarity on the revival plan not provided by March 31.
Days after that, the airline management went into the hands of SBI-led consortium of banks under a debt-recast plan.
"A part of the expected interim funding from SBI was supposed to be actioned on March 29. Unfortunately, the fund transfer has not taken place, and there is also no update on salary payment from the management. The collective decision of pilots taken at Mumbai and Delhi open house effective 1 April prevails," NAG president Karan Chopra said in a late evening communication to his members.
A source in the pilots' community said around 200 pilots have written to the CEO flagging concerns about non-payment of salaries. The pilots are also members of the NAG, the source added.
4. Current Account Deficit Narrows, Fiscal Deficit Widens
India’s external risks showed signs of waning with the current account deficit (CAD) narrowing to 2.5 percent of gross domestic product (GDP) sequentially in the December quarter (Q3), even as domestic risks increased with the fiscal deficit in the 11 months to February touching 134 percent of the budgeted target, according to official data released on Friday.
India’s balance of payment eased mainly on account of falling oil prices, while lower-than-expected tax collections and continuing government spending were responsible for the widening fiscal deficit.
However, while releasing the borrowing programme for the first half (April-September) on Friday, economic affairs secretary Subhash Chandra Garg said the government is sticking to its fiscal deficit target of 3.4% in 2018-19 and 2019-20.
5. Govt Plans to Borrow Rs 4.42 Lakh Crore in H1 to Bridge Fiscal Gap
The central government is looking at raising Rs 4.42 lakh crore through borrowing in the first half of the 2019-20 fiscal, Economic Affairs Secretary Subhash Chandra Garg said Friday.
Parliament has approved a gross borrowing for Rs 7.1 lakh crore for the entire 2019-20 fiscal. "We will be raising Rs 4.42 lakh crore (gross) in the first half (of FY 2019-20), or Rs 70,000 crore per week for 26 weeks," Garg told reporters.
The remaining Rs 2.68 lakh crore or 37.7 per cent of the total gross borrowing would be raised from the markets by floating government bonds and treasury bills during the October-March period.
Net borrowing in the first half (April-September) would be Rs 3.40 lakh crore. In the second half, net borrowing would be lower at Rs 1.33 lakh crore.
"So in the second half, it would be Rs 83,000 crore plus buyback of Rs 50,000 crore. Net borrowing for the full year is Rs 4.23 lakh crore," the secretary said.
(Source: Hindu BusinessLine)
6. Govt Mulls Sending Official Delegation to US to Resolve Trade Issues
The government is considering sending an official delegation to the US next month from the commerce ministry to discuss ways to resolve trade related issues, sources said.
The government is also expected to again extend the deadline to impose retaliatory duties on 29 US items till May 1. The current deadline will end on April 1.
Although officials of India and the US were negotiating a trade package, the Trump administration earlier this month announced its decision to withdraw export benefits provided by them to India under the Generalised System of Preferences (GSP) programme.
US companies have raised concerns over price capping on medical devices like stent. They also want greater market access for their dairy products and reduction in duty on Harley Davidson motorbikes.
According to exporters, withdrawal of incentives under GSP would impact India's export worth $5.6 billion to the US under this initiative.
Sources said that trade dialogue would help in resolving the issues as the US is one of the largest trading partners of India.
7. NCLAT Seeks Details of Assets and Liabilities of 13 IL&FS Entities
The National Company Law Appellate Tribunal (NCLAT) Friday asked the government and the debt-ridden IL&FS to submit details of assets and liabilities of 13 entities of the group.
A two-member bench headed by Chairman Justice S J Mukhopadhaya asked the IL&FS group to submit the details of four 'amber' entities -- Hazribagh Ranchi Expressway Ltd, Jharkhand Road Project Implementation Company Ltd, Moradabad Bareily Expressway Ltd and West Gujarat Expressway Ltd.
It also asked IL&FS to prepare a similar list for the rest nine 'amber' entities of the group.
Under its resolution plan, the government has categorised IL&FS group companies into green, amber and red categories based on their respective financial positions.
Companies classified as 'green' would continue to meet their payment obligations, while 'amber' category firms can meet only operational payment obligations to senior secured financial creditors.
Red category entities are those which cannot meet their payment obligations towards even senior secured financial creditors.
8. Forex Kitty Continues to Swell, Crosses $406.7 Billion
India's foreign exchange reserves continued to surge for the third week in a row, adding $1.029 billion at $406.667 billion in the week to March 22, according to the Reserve Bank data.
Forex reserves had increased by $3.6 billion to $405.6 billion in the previous reporting week driven by an increase in foreign currency assets.
For the reporting week, foreign currency assets -- a major component of the overall reserves -- increased by $1.031 billion to $378.805 billion, the RBI said Friday.
Expressed in the greenbacks, foreign currency assets include the effect of appreciation/depreciation of non-US units like the euro, pound and the yen held in the reserves.
The reserves had touched a life-time high of $426.028 billion in the week to April 13, 2018. Since then, the reserve kitty has been sliding as the rupee came under pressure.
9. Debtors Need to Honour Contracts, Says Chief Economic Advisor
If the country has to be disruptor to occupy its place among other developed countries, it has to follow a culture of ensuring debtors honour contracts with banks and financial institutions, chief economic advisor Dr Krishnamurthy Subramanian said Friday.
"It is extremely important to respect the moral dimensions of the debt contract," he said while delivering his address at the annual regional meeting and summit on 'Industry Future Forward' organised here by the trade body CII.
The debt contract in itself has moral essence with the equity holder and the businessman keeps all the goods and repays the obligations to the banks. But if things go bad, it is beholden to that contractual obligation, he said.
So far, the country has been having a situation in which private profits and losses were getting socialised through banks, he said.
This was because what appears in the deposits are the tax payers' money, he said.