The gross domestic product (GDP) numbers for the fourth quarter of 2019-20 shown by the recent official data, put out by the National Statistical Office, may have been overstated, according to economists. Mukesh Ambani-controlled Reliance Industries and its subsidiaries have invested over $2 billion in its four-pronged strategy to become a technology powerhouse. Here are the top ten business headlines on Monday:
Q4 GDP figures overstated? Economists raise doubts over quality of data
Experts say substantial changes in the growth figures for the first three quarters of the year raised doubts on data quality. Read Here.
AI to machine learning: RIL’s $2-billion bet to be a tech tornado
The strategy includes spending over $1.6 billion on buying stakes in 24 tech firms across the US, UK, and India; winning 30 US patents out of the 53 it applied for, mostly in telecom and radio communications; and developing in-house tech in AI, machine learning, blockchain, virtual reality, big data, and 5G. Read more.
Pandemic matters much more for mkts, economies than trade war: Dan Fineman
The re-emergence of the US-China trade war has come as a major blow to the global financial markets that were already reeling from Covid-19 impact. Thailand-based Dan Fineman, co-head of equity strategy for Asia-Pacific at Credit Suisse, said that he is underweight on India, which entered this crisis with weaker economic momentum than its Asian peers, but has been hit harder by the virus than others in the region. Read full interview here.
Covid-19 crisis threatens to wipe out gains from corporation tax cut
Corporate earnings accrued from the September 2019 cut in corporation income tax is gettig threatened to wipe out due to Covid-19 pandemic. The tax cut in September last year had resulted in a 10 per cent increase in the post-tax profits. However, the underlying earnings per share (EPS) of the benchmark Nifty 50 index are now down to Rs 428 per unit of the index from the January high of Rs 453 and inching towards the level prior to the tax cut. Read here.
Mutual funds looking at launching low-volatility products for investors
MFs are looking at launching low-volatility products — equity, as well as hybrid — to give investors alternatives in the current market environment. ICICI MF recently filed for an exchange-traded fund (ETF) that will track the Nifty Alpha Low-Volatility 30 Index. ““The ‘alpha’ factor enables selection and assigning a weighting to the stocks which have performed well on a relative basis,” said Chintan Haria. Read here.
Bonanza after curbs: India Inc goes all out to woo buyers amid Covid-19
From auto, refrigerator, and mobile handset makers to real estate firms, companies are tying up with banks to dole out attractive finance schemes and discounts to make buying more affordable. These offers are being driven by the 135-basis point cut in the Reserve Bank of India’s policy rates after the Covid-19 pandemic, which has made loans cheaper, too. Read here.
Cash-rich PE firms, NBFCs seek deals from realtors on social media
With physical business development being low, certain cash-rich PE funds and non-banking firms are seeking deals for last-mile funding or stalled projects on social media platforms to build their pipeline. Last week, Amar Merani, chief executive and MD of Xander Finance – the lending arm of Singapore-based private equity firm Xander – said, “We cannot physically reach all developers who have inventory and find out who has how much. We are reaching out to developers and intermediaries through social media.” Read here.
Covid-19 pandemic to delay consumer price index, GDP base year revision
The recession forecast caused by the Covid-19 pandemic has derailed the government’s plans to carry out the consumer expenditure survey in 2020-21, further delaying the base revision exercise for the country’s key macro-economic indicators and raising data quality concerns. The base year revision process is recommended on a five-year basis to keep up with the structural changes in spending patterns; however, it should be a normal economic year. Read more.
With clients rethinking projects, Infosys flags risks
Some clients of Infosys have terminated projects or reduced demand for its services amid the ongoing economic crisis, which could impact its profitability in the year ahead, Economic Times reported. The Covid-19 pandemic could pose a major risk as key clients from the United States, Europe and other prominent markets cut costs due to the prolonged economic impact of the outbreak.
Borrowers approach banks to rework loan pacts as earnings fall
Companies are revisiting their loan contracts and seeking concessions from banks on repayment timelines and financial covenants as they worry about a sharp fall in earnings because of strict restrictions during the nationwide lockdown. According to a CII survey, 65% of the companies expect revenues to decline nearly 40% in the June quarter, LiveMint reported.