QBiz: Rupee Hits 17-Month High; Reliance Industries Shares Slump

The benchmark 10-year bond yield rose to its highest level in two years and traded above 7.80 percent on open. 

1. Rupee Jumps 37 Paise, Storms to Fresh 17-Month High at 65.04

Scripting its second biggest single-day gain this year, the rupee on Monday zoomed by 37 paise to close at a fresh 17-month high of 65.04 on the back of panic dollar selling by speculative traders and exporters.

This is the highest closing for the domestic unit since 28 October 2015 when it had closed at 64.93. Expectations of more reforms that will boost long-term economic growth reinforced investor optimism including the much awaited labour, agricultural and banking reforms.

Robust capital inflows and weakness of the dollar against other currencies overseas predominantly boosted the rupee value against the dollar, a forex dealer said.

(Source: Times of India)

2. Reliance Industries Falls After Manipulation Charge, Trading Ban

Billionaire Mukesh Ambani’s Reliance Industries Ltd fell the most in two months after it was barred from trading futures and options on India’s equity markets for a year after regulators found it guilty of manipulating share prices.

Reliance Industries lost as much as 3.1 percent to 1,247.10 rupees, the biggest intraday drop since 17 January, and was at 1,249 rupees as of 2:37 pm in Mumbai on Monday. The company was the second-worst performer on the benchmark S&P BSE Sensex, which declined 0.8 percent.

The Securities and Exchange Board of India said Reliance, along with 12 unlisted trading houses it used, carried out unlawful transactions in the shares of its former unit Reliance Petroleum Ltd in late 2007. The regulator ordered the companies to return gains of 4.47 billion rupees ($68.3 million) plus interest, according to an order posted on its website Friday.

(Source: BloombergQuint)

3. After Nine-Year Ban, Govt Allows Export of Edible Oil in Bulk

The Government of India has allowed bulk export of select edible oils. In a notification issued on Monday, the office of the Director General of Foreign Trade, said, “Exports of groundnut oil, sesame oil, soybean oil and maize (corn) oil in bulk, irrespective of any pack size, has been exempted from the prohibition on export of edible oil.”

This means a nine-year ban on their export has been lifted. Until now, export of select edible oils were allowed only in consumer packs of up to five kg each.

This should mean better realisation for producers, improving their capability to pay more for oilseed. This could encourage more sowing by farmers.

(Source: Business Standard)

4. Flipkart to Hire 1,200 Workers in 2017

India’s largest e-commerce marketplace Flipkart is returning to the job market with an intent to hire 1,200 people this year, potentially sparking the revival of confidence in India’s startup sector.

Seen as a torchbearer, the loss of investor confidence in Flipkart last year sparked off a chain reaction in India’s startup sector. Now flush with $1 billion in fresh funding, albeit at a lower valuation, the company’s narrative could have a positive effect on India’s ecosystem.

“In 2017-18, we are certainly looking to increase the headcount by 20-30 percent higher than the previous year,” Nitin Seth, Chief Operating Officer at Flipkart, told the Financial Express. “We will hire more people to expand our supply chain network... our engineering and technology team and... new categories like large appliances, consumer electronics, furniture and grocery.”

(Source: Business Standard)

5. Airtel, Idea, Voda Added 2.27 Million Subscribers in February 2017

Telecom companies like Bharti Airtel, Vodafone and Idea, jointly increased their total subscriber base by 2.27 million in the month of February to reach 817.42 million, according to Cellular Operators Association of India (COAI) data.

In a statement, it said, “…the number of mobile phone subscribers showed an increase to 817.42 million in February 2017. The net increase in subscriber base is 2.27 million in the month of February.” The COAI has said that country’s largest telecom service provider Bharti Airtel has added around 1.2 million subscribers in February.

Meanwhile, Idea has added the same amount for the month and Vodafone has managed to add 792,063 subscribers. The total number of mobile subscribers of Airtel stands at 270.6 million. While Vodafone has a total subscriber base of 207.2 million and Idea has 193.3 million. Meanwhile, Aircel with 13,309 subscribers added in February boasts of a total consumer case of 91.1 million.

(Source: Financial Express)

6. LG, Samsung, Sony to Slash TV Prices by 15%

The Rs 22,000-crore LED television market is heading for a price war with the big three – LG, Samsung and Sony – cutting prices by as much as 15 percent due to increased competition and as they seek to gain market share.

The price cut, the steepest ever, comes at a time when the top three are facing growing threat from smaller brands like Micromax, Intex, TCL, BPL and Sansui that are selling their products at prices that are Rs 2,000-10,000 cheaper, three senior industry executives said.

Consumers, too, are showing readiness to buy these brands that are online-exclusive or are available both online and offline, much like in the smartphone market. They are also increasingly changing their TV sets every four-five years, as prices of large-screen models plunge and companies upgrade technology. LG, Samsung and Sony together control around 80 percent of the Indian LED TV market, but others are now capturing share slowly.

(Source: Economic Times)

7. Three in Final Race for 35% Stake in ICICI Lombard

Bulgebracket private equity funds Warburg Pincus, Carlyle and Temasek have been shortlisted for a 35 percent stake in ICICI Lombard General Insurance Co Ltd, the country’s largest private sector general insurer, in a deal that could fetch up to $1 billion, said people familiar with the development. The selection took place late last week after bids were received from four potential investors.

Others in the race included Blackstone, KKR, Advent and General Atlantic. The three will now conduct a final round of due diligence before submitting binding offers by April end, the people mentioned above said.

Earlier this year, Prem Watsa’s Fairfax Financial Holdings decided to sell 25 percent of its 34.6 percent stake in the insurance joint venture with ICICI for regulatory reasons. Reducing its stake to 10 percent will allow the Canadian firm to start a new general insurance joint venture in India, one of the people cited above said, adding that foreign investors cannot cannot own more than 10 percent in an insurance company as a financial stakeholder.

(Source: Economic Times)

8. Irdai Wants Insurance Policies Issued in Demat Format

The Insurance Regulatory and Development Authority of India (Irdai) is planning to ask life insurers to issue policies only in a dematerialised (demat) format beyond a specified threshold premium, four people aware of the development said.

This rule will be made applicable to all insurance contracts, both for existing and new customers, these people said, including executives from insurance repositories, insurance companies and a regulatory official.

India’s insurance sector is the biggest in the world in terms of the number of policies –about 360 million are in force. This number is expected to increase at an annual average of 12-15 percent over the next five years, according to the India Brand Equity Foundation, a government trust under the department of commerce.

(Source: Livemint)

9. Govt Employees Can Now Withdraw 12 Months’ Pay

The Narendra Modi government has eased rules for government employees to withdraw from their pension fund to meet family expenses.

Now an employee can withdraw up to 12 months’ pay or 3/4th of amount on credit, whichever is less. Earlier he or she was allowed to take only 3 months’ pay or half the amount. Also, the new rules allow a subscriber to take money after completion of 10 years of service against earlier general eligibility of 15 years of service.

The new rules allow withdrawals for education, obligatory expenses, illness and purchase of consumer durables. Employees are also allowed to withdraw for “primary, secondary and higher education, covering all streams and institutions.”

(Source: Hindustan Times)