Stocks are off to a great start this week with both the Sensex and the Nifty gaining around 1%
Investors may be betting that lackluster inflation figures for June could pave the way for further rate cuts by the RBI.
Join us as we follow the top business news through the day.
LVB in talks with investors for capital infusion; looks to raise Rs 1,000 crore: CEO Sundar
The adverse impact of the lockdown isn’t stopping this private lender from going ahead with expansion plans.
PTI reports: “Less than a month after striking a deal with Clix Capital for fund infusion, Lakshmi Vilas Bank (LVB) chief S Sundar has said the lender is in talks with other investors to mop up Rs 1,000 crore additional capital.
The nearly 100-year-old LVB is looking at ways to bolster its capital adequacy ratio and the merger deal with Aion Capital-backed non-banking financial company Clix Capital would bring in Rs 1,900 crore for the bank.
The bank needs capital to grow and make profit, and we have got Clix as they have expressed their interest to merge with the bank. The advantage is that they are capital surplus and we are capital deficit, LVB, MD and CEO S Sundar told PTI in an interview.
“We need capital, they have surplus capital. So I find it is a very good alignment in the sense that they have about Rs 1,900 crore of capital (surplus),” he said.
While noting that the merger with Clix would give enough strength to do business, Sundar said the bank was in need of additional funds.
Explaining the deal with the Gurgaon-based investor, Sundar said Clix is bringing about Rs 4,500-4,600 crore as assets, of which Rs 1,900 crore is shareholders’ fund.”
China’s growing dependence on the US dollar
Rupee rises 6 paise to 75.14 against US dollar in early trade
The rally in stocks has helped the rupee gain against the dollar.
PTI reports: “The rupee appreciated 6 paise to 75.14 against the US dollar in early trade on Monday tracking weakness in the greenback and gains in the domestic equity market.
The rupee opened at 75.20 against the US dollar, then gained further ground and touched 75.14 against the US dollar, up 6 paise over its previous close.
It had settled at 75.20 against the greenback on Friday.
Forex traders said positive domestic equities and weak US currency supported the local unit, while foreign fund outflows and concerns over rising COVID-19 cases weighed on investor sentiment.
“Expectations of flows into the market could support the currency,” Reliance Securities said in a research note, adding that “cues from Asia remained upbeat. Most Asian currencies were stronger against the US dollar this Monday morning“.
Meanwhile, investors will await cues from Consumer Price Index (CPI) data expected to be released later in the day, traders said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.19 per cent to 96.46.
The 30-share BSE benchmark Sensex was trading 349.67 points higher at 36,944 and broader NSE Nifty rose 103.45 points to 10,871.50.
Foreign institutional investors were net sellers in the capital market as they sold shares worth Rs 1,031 crore on Friday, according to provisional exchange data.”
TRAI asks Airtel, Vodafone Idea to hold priority plans promising faster speeds
The chief telecom regulator has taken issue with new data plans announced by telecom providers.
PTI reports: “The telecom regulator has asked Bharti Airtel and Vodafone Idea to put on hold specific plans that promised faster speeds to certain priority users, as it questioned whether the network preference came at the cost of deterioration of services for other subscribers.
A source said the Telecom Regulatory Authority of India (TRAI) has asked the two operators to withhold the specific plan for the interim period.
The TRAI has written to the two operators — Airtel and Vodafone Idea — and questioned them about their individual plans that promised faster speeds to certain priority users.
The regulator has asked if priority to high-paying customers in those specific plans came at the cost of service deterioration for other subscribers.
It has asked the operators how they are protecting the interest of other general subscribers.
When contacted, an Airtel spokesperson said: “We are passionate about delivering the best network and service experience to all our customers.”
“This is why we have a relentless obsession to eliminate faults, and have been consistently recognised by international agencies as the best network in terms of speed, latency and video experience.
“At the same time, we want to keep raising the bar for our post-paid customers in terms of service and responsiveness. This is an ongoing effort at our end,” the Airtel spokesperson added.
The Bharti Airtel had announced last Monday that it would give preference to platinum mobile customers, who pay Rs 499 and above per month for post -paid connection, on its 4G network.”
Moody’s assigns Baa3 Rating with negative outlook to Adani Ports’ proposed USD bonds
Moody’s Investors Service has assigned a Baa3 rating with negative outlook, to the proposed USD senior unsecured bonds to be issued by Adani Ports and Special Economic Zone Ltd (APSEZ), the biggest port developer and operator in India with an annual capacity of 426 million tonnes.
The issuer rating and the rating of APSEZ’s existing senior unsecured bonds remain unchanged at Baa3.
“The outlook on the ratings is negative,” Moody’s said in a statement.
APSEZ will use the majority of the proceeds to refinance its existing debt and/or that of its subsidiaries, which could include Krishnapatnam Port Company Ltd, subject to the completion of its acquisition by APSEZ.
The company will use the remainder of the proceeds for other general corporate purposes.
Sensex rallies over 400 points; Reliance hits fresh peak
A great start to the week for the stock bourses.
PTI reports: “Equity benchmark Sensex rallied over 400 points in early trade on Monday, tracking gains in index-heavyweight Reliance Industries and strong signals from global markets.
Reclaiming the 37,000 level in opening session, the 30-share BSE Sensex was trading 413.03 points, or 1.13 per cent, higher at 37,007.36.
In similar movement, the NSE Nifty surged 123.35 points, or 1.15 per cent, to 10,891.40.
Reliance Industries was the top gainer in the Sensex pack, jumping over 2 per cent to hit its record high of Rs 1,938.80 per share, after the company said it has secured Rs 730 crore from wireless technology leader Qualcomm by selling a small stake in Jio Platforms.
Adding to a slew of investments since April that has crossed Rs 1.18 lakh crore, Qualcomm Ventures’ investment will translate into 0.15 per cent equity stake in Jio Platforms on a fully diluted basis.
Infosys, Tech Mahindra, Tata Steel, IndusInd Bank, HUL and Maruti were among the other gainers.
On the other hand, Bharti Airtel and HDFC were the laggards.
In the previous session, the BSE barometer ended 143.36 points, or 0.39 per cent, lower at 36,594.33. The NSE Nifty shed 45.40 points, or 0.42 per cent, to close at 10,768.05.
Foreign institutional investors were net sellers in the capital market on Friday, offloading equities worth Rs 1,031 crore, provisional exchange data showed.
According to traders, besides stock-specific actions, positive cues from global markets too buoyed investor sentiment here.”
FICCI survey estimates FY21 GDP growth to be in negative territory
Industry body FICCI on Sunday said its Economic Outlook Survey has projected the country’s annual median GDP growth for 2020-21 at (-) 4.5%.
With the rapid spread of COVID-19 pandemic manifesting into an economic and healthcare crisis globally, the latest forecast marks a sharp downward revision from the growth estimate of 5.5 % reported in the January 2020 survey, it said.
The pandemic outbreak has severely impacted the economic activities as the country had to go through a lockdown to check spread of the virus. However, the restrictions are being gradually eased.
While addressing SBI Banking and Economics Conclave on Saturday, RBI Governor Shaktikanta Das said the Indian economy has started showing signs of getting back to normalcy in response to the staggered easing of restrictions.