Analysts' consensus estimates of 25-30% earnings growth for India Inc in FY20 had an important rider: bulk of it was supposed to come from banks and other financial firms; some had calculated this increment at as much as 59 per cent. Low base effect apart, a lot of it hinged on resolution of NCLT cases, which has been slow. A crippling slowdown now threatens to trigger a spike in bad loans while major mergers loom over PSU lenders. Result: they are now talking of mid-teens growth!
STREET PULSE: Where we stand Asian stocks saw gains this morning, as traders weighed further stimulus from China amid weak economic data. On Friday, the People's Bank of China said it would cut the amount of cash banks must hold as reserves to the lowest level since 2007, injecting liquidity into the economy.
Read our full market wrap here  | SGX Nifty traded 21 points higher at 7 am (IST), signalling buoyancy on Dalal Street. Shares in South Korea outperformed but the advance was more modest in Japan, China and Hong Kong. |
| US stocks booked slight gains on Friday. Dow rose 69 points and S&P500 2.71 points while the Nasdaq slipped 13 points |
Crude oil prices rose after a Saudi official said there would be no change in Saudi Arabia's OPEC policy as Prince Abdulaziz bin Salman was made the new energy minister for the world's biggest crude exporter. Brent was up 7 cents at $61.61 a barrel.
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On a High... India's mutual fund industry is on a high, amid strong demand for products despite weakening financial markets. Their hiring increased 28% in FY19, while internal pay increases were solid at 8-12% along with 20-30% market-liked increments and bonuses. ICICI Prudential Mutual Fund has increased staff by 62% to 2,100 in FY2019, while headcount at HDFC AMC rose 25% to 1,600. Reliance Nippon Life Mutual Fund's staff strength rose 26% to 1,700 while SBI Mutual Fund's headcounts jumped 31% to 1700.
Read More | Is RIL up for a big bull run from here on? >>> |
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New Lease of Life… Lenders are considering Rs 7,000 crore in emergency funding to debt-laden DHFL even as creditors decide on the formula for conversion of debt into equity, which is a key part of the proposed restructuring plan. But mutual funds are unlikely to sign the inter-creditor agreement for DHFL, citing a regulatory rider known as side-pocketing or segregation of stressed assets. Only Tata Mutual Fund, which has already complied with relevant regulations, has agreed to be part of the ICA.
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Promoter Challenge… Gautam Thapar, who was ousted as chairman of CG Power & Industrial Solutions after a multi-crore rupee financial scam was unearthed, has sent a legal notice to the company board contesting his removal which he claimed was illegal. The board, which accused Thapar of siphoning funds from the company, will respond to the notice after consulting its legal team. Thapar was fired on August 29 after whistleblowers informed some board members about transactions allegedly not covered in the company's audited accounts.
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Under a Cloud... The slowdown has forced the Indian auto component industry to hold at least $2 billion (about Rs 14,330 crore) investment planned for this year, said Deepak Jain, the new president of the Automotive Component Manufacturers Association. He said investments in capacity expansion have been put on hold but the industry is still doing certain investments in innovation.
Read More Meanwhile... The finance ministry has asked central PSUs to advance their capital expenditure plans and also ensure the timely release of payments to small and medium enterprises, as part of the government's efforts aimed at giving a boost to the sagging economy. North Block called heads of Maharatna and Navratna companies to review their expenditure plans on Friday.
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