Stock markets post biggest rise in three months as Fed effect fades
Indian indices rose the most in more than three months as investors bought stocks, returning to buy the dips after Monday’s selloff triggered by US Fed’s hawkish tone. Investors saw their wealth increase by Rs 5.72 lakh crore as the Sensex surged 1,564 points, or 2.7 percent, and the Nifty gained 2.58 percent to 17,759.30 points. It was the biggest gain for the indices since 20 May.
Why it’s important: The remarkable bounceback could have been due to optimism after overseas investors sold shares less than expected. Although the volatility index has declined, further market swings cannot be ruled out.
AMCs sitting on pile of cash that can counter potential selloff by FPIs
Asset management companies are sitting on the biggest pile of cash in the past five years, indicating that the hoard could be used to counter a potential selloff by foreign portfolio investors, experts said. As of July, cash as a proportion of assets under management of equity-oriented schemes stood at Rs 57,045 crore, much higher than the five-year average of Rs 31,531 crore.
Why it’s important: The high levels of cash indicate asset managers are not deploying funds aggressively despite steady inflows via systematic investment plans. The increasing popularity of mutual fund investments is acting as a counterweight to foreign investor activity.
National Payments Corp to buy 10% in Open Network for Digital Commerce
The National Payments Corporation of India is close to picking a 9-10 percent stake in Open Network for Digital Commerce. NPCI, which manages the digital payments network of the Unified Payments Interface, is expected to invest around Rs 10 crore in ONDC. The process is likely to be completed in the next 10 days.
Why it’s important: The government initiative aims to rival foreign e-commerce giants like Amazon and Flipkart. ONDC might do to online commerce what UPI has done to digital transactions.
Lenders get 14 resolution proposals for Reliance Capital, 90% recovery expected
Lenders to Reliance Capital received as many as 14 resolution plans as part of the Anil Ambani-founded holding company’s insolvency proceedings. A Piramal Group led consortium, Oaktree Capital, Torrent Investments, IndusInd International and Cosmea Financial Services are among bidders who have either offered to acquire the entire company or submitted plans for select clusters.
Why it’s important: Although lenders are proceeding with the sale of Reliance Capital, some investors fear the process may falter if the share pledge of Reliance General Insurance is not released. It could be a reason why bidders are making conditional offers.
Tata group splits top roles by amending articles of association
The shareholders of Tata Sons, the holding company of the $128-billion salt-to-software group, approved an amendment to the articles of association related to leadership at the annual general meeting. With this, Tata Sons, and Tata Trusts, which owns 66 percent of the group, will have separate chairmen. Ratan Tata, who chairs Tata Trusts, also held the position of Tata Sons chairman till 2012. The subsequent Tata Sons chairmen, Cyrus Mistry, and N Chandrasekaran, have not chaired Tata Trusts, but there was no provision for a legal separation of the two positions.
Why it’s important: The amendment has made it legally binding to separate the positions of Tata Trusts and Tata Sons chairmen. The move is meant to decouple ownership from management.
Zee signs pact with Disney Star for TV rights to ICC men’s tournaments
ZEE Entertainment and Disney Star have signed a licensing agreement for exclusive TV rights of ICC Men’s cricket tournaments. Disney Star will license the TV broadcasting rights for four years till 2027 for an undisclosed amount to ZEE. Disney Star will continue to be the exclusive home for streaming all ICC tournaments through Disney+ Hotstar. ICC has in-principle approved this arrangement.
Why it’s important: The strategic licensing agreement could help both media firms to fetch good returns on their investments.
Gautam Adani only top billionaire whose wealth rose in 2022
Gautam Adani, who has become the third-richest person in the world, is also the only one among the world’s 10 wealthiest people to have seen his net worth increase this year, according to a Mint analysis of the Bloomberg Billionaires Index. At the start of the year, Adani’s net worth was $76.1 billion, ranking him the 15th richest globally. Adani has gained more this year ($60.9 billion) than any other billionaire on the top 500 list. His gain exceeds the net worth of all but 18 individuals.
Why it’s important: The rise of Gautam Adani as the richest Indian and now the third richest globally has been fueled by aggressive business expansion by his conglomerate, even in areas where it has no previous expertise. The high growth is expected to continue.
Standalone 5G services could help Reliance Jio one-up telecom rivals
Reliance Jio Infocomm’s standalone 5G technology may offer users an experience different from Bharti Airtel and Vodafone Idea, helping the country’s top telecom firm expand market share and boost revenue per user through higher data consumption, experts said. Jio is also expected to launch cheap 5G handsets under its JioPhone Next brand.
Why it’s important: Reliance has announced a massive capital spending plan for the next five years, part of which will go towards building 5G infrastructure, which is expected to provide a better user experience.
Beleaguered firms could be allowed to raise funds by issuing shares at a discount
Corporations in the red may get the leeway to sell shares at a discount to raise capital to mitigate financial distress, according to amendments to the companies law the government is working on. The proposals by the corporate affairs ministry are part of the draft legislation to amend the existing law.
Why it’s important: The amendments would offer operational flexibility to businesses, reduce red tape and make the framework of tribunals and reporting authorities stronger.
Indian economy shows unequal, uneven distribution of wealth
The coronavirus pandemic made unequal wealth distribution worse, leading to a debate on the K-shape recovery to the Indian economy. The per capita income, net state domestic product per person, of the top five Indian states was 3.3 times higher than the bottom five in 2021-22, an analysis showed.
Why it’s important: The income gap between various states is growing and the pain of inflation is worse for those falling behind. This is emerging as a top challenge for policymakers.Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.