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Oct 23, 2017 11:03 AM IST IST | Source: Moneycontrol.com
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highlights
Centre puts 8 public sector banks on first stake sale list
The government is considering diluting its stake on a priority basis in eight banks where its shareholding is above 75%, as it mulls ways to gather resources to boost the capital base of public sector banks (PSBs) struggling with massive bad assets, reports The Financial Express. While market conditions will play a crucial role in the stake sale plan, the government would first like to see its share trimmed below 75% in certain PSBs to achieve the twin goals of raising funds for recapitalisation and complying with the minimum (25%) public-float norm.
As of end-September, the government held more than 75% in eight PSBs — United Bank of India, Indian Bank, Bank of Maharashtra, Central Bank of India, Punjab and Sind Bank, Indian Overseas Bank, UCO Bank and Bank of India. (Picture courtesy: The Financial Express)
Vijay Mallya to step down from United Breweries board, name successor
Vijay Mallya has been persuaded to step down from the United Breweries (UBL) board and he will propose a successor following a Securities and Exchange Board of India (Sebi) order that’s made him ineligible to be director of any listed company, reports The Economic Times. The move has also been prompted by the dwindling possibility of his voluntary return to India. He hasn’t revealed the identity of his nominee.
India's largest companies cut hiring by 45% in FY17
The increase in net employees at India’s largest companies slowed down to 66,000 people in FY17 compared with 123,000 people a year earlier, reports Business Standard. At the end of FY17, a total of 3.25 million people were on the rolls of 241 companies of the BSE 500 index versus 3.19 million at the end of FY16. Data on employee strength was not available for the rest of the BSE 500 index companies. Tata Consultancy Services (TCS), Tech Mahindra, ICICI Bank and Axis Bank were the large employers to lead fresh hiring during FY17.
Sebi to tighten listing norms as part of crackdown on shell firms
The Securities and Exchange Board of India (Sebi) is looking to tighten listing norms to prevent fly-by-night operators from getting listed on stock exchanges, reports Mint. “The plan is to increase the minimum net worth requirement, the proportion of assets held in tangible form, the number of years of profitability and the minimum number of public investors to whom shares are allotted,” said sources. By doing so, Sebi wants to ensure that companies with stronger businesses and a potential to maintain profitability during the initial years of listing are allowed to go public, sources stated. (Picture courtesy: Mint)
Banking sector stares at additional Rs 40,000cr NPAs
The banking sector fears accretion of more than Rs 40,000 crore of bad loans to its books following recent classification of eight consortium accounts of Axis Bank as non-performing assets by the Reserve Bank of India, reports PTI. RBI has directed certain reclassifications in the private sector lender's asset classification and provisioning as on March 2017, subsequent to the annual Risk Based Supervision (RBS) exercise conducted for 2016-17. As a result, Axis Bank had to reclassify nine standard accounts into NPAs. Of these, eight accounts are part of consortium lending. As on June 2017, Axis Bank claimed, these nine accounts were classified as standard assets across most consortium banks, with only around 6% of their outstanding classified as NPA. According to estimates, total outstanding loan of these accounts at the end of June 2017 were about Rs 42,000 crore.
Top Headlines
1. Abe wins, says won't delay tax hike unless Lehman-like shock hits economy, reports Reuters
2. Banking sector stares at additional Rs 40,000cr NPAs, reports PTI
3. Sebi to tighten listing norms as part of crackdown on shell firms, reports Mint
4. Centre puts 8 public sector banks on first stake sale list, reports The Financial Express
5. India's largest companies cut hiring by 45% in FY17, reports Business Standard
6. Vijay Mallya to step down from United Breweries board, name successor, reports The Economic Times
7. Flipkart eyes more acquisitions, holds talks with Swiggy, UrbanClap and some financial services start-ups, reports Mint
Centre puts 8 public sector banks on first stake sale list
The government is considering diluting its stake on a priority basis in eight banks where its shareholding is above 75%, as it mulls ways to gather resources to boost the capital base of public sector banks (PSBs) struggling with massive bad assets, reports The Financial Express. While market conditions will play a crucial role in the stake sale plan, the government would first like to see its share trimmed below 75% in certain PSBs to achieve the twin goals of raising funds for recapitalisation and complying with the minimum (25%) public-float norm.
As of end-September, the government held more than 75% in eight PSBs — United Bank of India, Indian Bank, Bank of Maharashtra, Central Bank of India, Punjab and Sind Bank, Indian Overseas Bank, UCO Bank and Bank of India. (Picture courtesy: The Financial Express)
CISF to analyse social media trends for airports, nuclear bases security
Social media trends and data analytics will be used for the first time in monitoring security at the country's most vital assets such as airports and nuclear and aerospace installations, reports PTI. The Central Industrial Security Force, the national agency tasked to secure these important assets, has created a maiden 'media lab' and social media monitoring control room -- the Pattern Research For Institutional Social Media (PRISM) analytics -- at its base in Arakkonam near Chennai.
A special team of CISF agents has been trained in the job of tracking social media trends, news, reports and indicators across various platforms, collate them and dish them out as vital pieces of "actionable intelligence" to its various airports and other vital units. Social media platforms like Twitter, FaceBook, YouTube and Flickr will be used by the paramilitary force to check any suspicious and sabotage-like activity against the assets it guards.
Govt may lower visa fee to attract tourists in lean season
Foreigners may get to pay a lower visa fee for vacations in India during the lean season, with the government considering concessions aimed at making the country a year-round destination for tourists from all over the world, reports The Economic Times. The idea, mooted by group of young CEOs at a recent Niti Aayog event, has found favour with the Tourism Ministry, which has started talks with the Ministry of External Affairs to work out the modalities after Prime Minister Narendra Modi evinced interest in such an out-of-the-box idea to boost tourism in the country. The peak season for international tourists in India is from October to March, when travellers from the US, Bangladesh, the UK, Sri Lanka, Russia and Canada throng India in large numbers.
Oil & Natural Gas Corporation (ONGC) has drawn a blueprint to raise crude oil production by 4MT and almost double natural gas output by 2020 to meet Prime Minister Narendra Modi's target of cutting India's import dependence by 10%, Chairman Shashi Shanker said.
Consumer goods giant Hindustan Unilever said growth in India hasn’t returned to historic levels although volumes have improved following the implementation of the Goods & Service Tax (GST) on July 1. The company is optimistic about the future, reports The Economic Times. Unilever saw higher demand-led growth in India driven by price cuts due to the transition to the new tax regime.
Banks to now match original IDs with photocopies for transactions above Rs 50,000
The government has made it mandatory for banks and financial institutions to check the original identification documents of individuals dealing in cash above the prescribed threshold, to weed out the use of forged or fake copies, reports PTI. The Department of Revenue in the Finance Ministry has issued a gazette notification making an amendment to the Prevention of Money-laundering (Maintenance of Records) rules.
The new rule now requires the reporting entity to compare "the copy of officially valid (identification) document so produced by the client with the original and recording the same on the copy". The Prevention of Money Laundering Act (PMLA) forms the core of the legal framework put in place by India to combat money laundering and generation of black money. The PMLA and its rules impose obligation on reporting entities like banks, financial institutions and intermediaries to verify identity of clients, maintain records and furnish information to Financial Intelligence Unit of India (FIU-IND).
Gold hit its lowest in over two weeks early on Monday, as the dollar climbed to a more than three-month high versus the yen after Japan’s ruling bloc scored a big win in Sunday’s election, leaving the door open to ultra-loose monetary policy for longer. Spot gold was down 0.4% at $1,275.70 an ounce, after hitting its lowest since October 6 at $1,273.80 earlier in the session. In other precious metals, silver was down 0.3% at $16.95 an ounce. Platinum fell 0.7% to $913.90 an ounce and palladium dropped 0.6% to $969.
Indian Energy Exchange lists at Rs 1,500 per share, a 5% discount to its issue price of Rs 1,650 per share.
Subdued Diwali for auto makers as buyers stay away
It was a dull Diwali for carmakers this year as uncertainty over the impact of the Goods & Services Tax (GST) held back buyers, particularly businesspeople, reports Mint. Retail volumes failed to keep pace with the large number of dispatches rolled out in the last couple of months by auto makers in anticipation of strong sales over the festive season that concluded with Dhanteras on October 17 —the first day of Diwali. Now, auto firms may have to reduce inventory in the months ahead. With the majority of the businesspeople still trying to familiarise themselves with GST, they are reluctant to make expensive purchases, said dealers. (Photo courtesy: Mint)
Japanese Prime Minister Shinzo Abe and US President Donald Trump agreed to work together to raise pressure on North Korea, Yasutoshi Nishimura, a deputy chief cabinet secretary, told Reuters.
China’s new home prices registered another month of weak growth in September, with the biggest markets slipping and vast numbers of smaller cities cooling off as government measures to cool a long property boom take hold. Average new home prices rose 0.2% month-on-month in September, the same rate as in August when prices rose at the slowest pace in seven months, according to Reuters calculations from National Bureau of Statistics (NBS) data out on Monday.
Flipkart eyes more acquisitions, holds talks with Swiggy, UrbanClap and some financial services start-ups
Armed with over $4 billion in cash, India’s most valuable internet firm Flipkart is planning more start-up investments and buyouts as it seeks to widen its slender lead over Amazon India and diversify its business, reports Mint. Flipkart has held talks to invest in food-delivery app Swiggy, services firm UrbanClap, furniture retailer UrbanLadder and some start-ups in insurance and wealth management, sources said. (Photo courtesy: Bloomberg)
To know what to expect in the market watch video below
Vijay Mallya to step down from United Breweries board, name successor
Vijay Mallya has been persuaded to step down from the United Breweries (UBL) board and he will propose a successor following a Securities and Exchange Board of India (Sebi) order that’s made him ineligible to be director of any listed company, reports The Economic Times. The move has also been prompted by the dwindling possibility of his voluntary return to India. He hasn’t revealed the identity of his nominee.
India's largest companies cut hiring by 45% in FY17
The increase in net employees at India’s largest companies slowed down to 66,000 people in FY17 compared with 123,000 people a year earlier, reports Business Standard. At the end of FY17, a total of 3.25 million people were on the rolls of 241 companies of the BSE 500 index versus 3.19 million at the end of FY16. Data on employee strength was not available for the rest of the BSE 500 index companies. Tata Consultancy Services (TCS), Tech Mahindra, ICICI Bank and Axis Bank were the large employers to lead fresh hiring during FY17.
Sebi to tighten listing norms as part of crackdown on shell firms
The Securities and Exchange Board of India (Sebi) is looking to tighten listing norms to prevent fly-by-night operators from getting listed on stock exchanges, reports Mint. “The plan is to increase the minimum net worth requirement, the proportion of assets held in tangible form, the number of years of profitability and the minimum number of public investors to whom shares are allotted,” said sources. By doing so, Sebi wants to ensure that companies with stronger businesses and a potential to maintain profitability during the initial years of listing are allowed to go public, sources stated. (Picture courtesy: Mint)
Banking sector stares at additional Rs 40,000cr NPAs
The banking sector fears accretion of more than Rs 40,000 crore of bad loans to its books following recent classification of eight consortium accounts of Axis Bank as non-performing assets by the Reserve Bank of India, reports PTI. RBI has directed certain reclassifications in the private sector lender's asset classification and provisioning as on March 2017, subsequent to the annual Risk Based Supervision (RBS) exercise conducted for 2016-17. As a result, Axis Bank had to reclassify nine standard accounts into NPAs. Of these, eight accounts are part of consortium lending. As on June 2017, Axis Bank claimed, these nine accounts were classified as standard assets across most consortium banks, with only around 6% of their outstanding classified as NPA. According to estimates, total outstanding loan of these accounts at the end of June 2017 were about Rs 42,000 crore.
New India Assurance (NIA), the largest general insurance company in the country, is set to hit the capital markets with around Rs 10,000 crore IPO in the first week of November. The offer comes soon after the Rs 11,370 crore IPO of GIC Re, which will be listed on October 25.
ArcelorMittal, the world's largest steel company, has joined the bidding race for stressed steel assets in the country by expressing interest to acquire Bhushan Steel, reports The Economic Times. The LN Mittal-led ArcelorMittal has submitted an expression of interest (EoI) for Bhushan Steel, which has been referred to National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code. This provides ArcelorMittal, which failed to make much headway in setting up greenfield steel projects in India, an opening to pick up good steel assets in the country at what is widely believed to be reasonable prices, sources said.
Bhushan Steel has a significant presence in auto steel categories with a 5.6-million tonne integrated steel unit, including a cold rolled facility, in Odisha. The company owes nearly Rs 42,000 crore to lender banks and was admitted into NCLT in July 2017. It is one of the two biggest companies to have been admitted under insolvency proceedings this year along with Essar Steel.
RBI clarifies that linking Aadhaar to bank accounts is mandatory
Clearing the air on media reports that suggested the linking of Aadhaar to bank accounts was not mandatory, the central bank on Saturday clarified that such a linkage was mandatory under government laws. "The Reserve Bank clarifies that, in applicable cases, linkage of Aadhaar number to bank account is mandatory under the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017 published in the Official Gazette on June 1, 2017," RBI said in a statement on its website. "These rules have statutory force and, as such, banks have to implement them without awaiting further instructions," RBI added.
British households’ financial worries have eased to their lowest since June, despite the prospect of higher Bank of England interest rates and a reliance on borrowing to make up for falling employment income, reports Reuters. The IHS Markit Household Finance Index rose to 43.8 in October from 42.8 in September, its highest since June, and marking a recovery from a third quarter which was the weakest since 2014. Since its launch in 2009, the survey has never exceeded the 50 mark that would indicate an improved financial situation.
China's unemployment rate has hit its lowest point in multiple years at 3.95% by the end of September, but employment still face challenges as the economy pushes ahead with structural reforms, China's Labour Ministry said. The Ministry of Human Resources and Social Security said in a statement that 10.97 million new jobs had been created in China from January to September this year, a growth of 300,000 compared with the previous year, reports Reuters.
Oil prices rose on Monday over supply concerns in West Asia and as the US market showed further signs of tightening while demand in Asia keeps rising, reports Reuters. The amount of US oil rigs drilling for new production fell by seven to 736 in the week to October 20, the lowest level since June. Much will depend on demand to guide prices, with the US market tightening, flows from Iraq reduced due to fighting between government forces and Kurdish militant groups, and production still being withheld as part of a pact between the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC producers to tighten the market. In the main growth areas of Asia, consumption remains strong especially in China and India, the world’s number one and three importers.
Janet Yellen defends legacy amid uncertainty over Fed leadership
Federal Reserve Chair Janet Yellen defended the central bank’s use of unconventional and often unpopular monetary policy tools after the Great Recession, highlighting some of her achievements at the helm as President Donald Trump weighs her reappointment, reports Bloomberg. “The U.S. economy is much stronger today than it would have been without the unconventional monetary policy tools deployed by the Federal Reserve in response to the Great Recession,” Yellen said.
Yellen made the case for preserving policy makers’ ability to confront the next recession with more bond purchases, a strategy known as quantitative easing aimed at lowering borrowing rates. “While I believe that influencing short-term interest rates should continue to be our primary monetary policy lever in normal times, our unconventional policy tools will likely be needed again should some future economic downturn drive short-term interest rates back to their effective lower bound,” Yellen said.