Indian equities rise over 4 percent in five days on renewed optimism.
The latest rally in the stock market has made investors richer by over Rs 9.76 lakh crore as the benchmark sense rose 2,265.8 points, or 4.24 percent in the past five trading sessions. The market capitalization of BSE-listed firms increased Rs 9.76 lakh crore to Rs 260 lakh crore in that period.
Why it’s important:
The return of foreign portfolio investors in the past few sessions and the decreasing commodity prices and hopes that US Fed may not rise rate aggressively led to optimism among investors. But market volatility may not be over.
Carlyle, Advent close to buying Yes Bank stake for $1 billion
Yes Bank’s is set to have carlyle and Advent as equity investors for about $1 billion, following the proposed sale of the lender’s stressed assets to JC Flowers Asset Reconstruction Company and the setting up of a new board. carlyle and Advent have held a series of meetings with Yes Bank and State Bank of India, as well as Reserve Bank of India, to fine-tune the contours of the plan, which will be done in phases.
Why it’s important:
The reassurance on government’s capital spending comes at a time there are concerns of a slowdown in private investment, slowdown due to potential interest rate increases. The capex is expected to have a multiplier effect on reviving the economy.
Droupadi Murmu elected as India’s first tribal President
Droupadi Murmu, the National Democratic Alliance’s presidential candidate, has chosen as India’s new president. Murmu got more than 70 percent of the votes cast, and at least 20 opposition votes, winning the election by a massive margin by defeating opposition candidate Y ash want Sin ha.
Why it’s important:
Murmu’s victory is being seen as a breakthrough moment for the country’s neglected tribal community, which lags in accessing basic healthcare and education along with the depressed castes.
IT companies earn 43 percent of corporate foreign exchange revenue
Corporate India depends heavily on exporters of software services firms such as TCS, Infosys, and Wipro to earning foreign exchange. They cumulatively accounted for nearly 43 percent of the forex revenues of listed firms, up from 22 percent a decade ago, according to an analysis by Business Standard newspaper.
Why it’s important:
The high share of forex earnings makes India’s IT sector crucial for the country to manage its stubborn trade and current account deficits. It also accounts for little forex expenses, unlike other export-oriented sectors such as oil and gas, and mining and metals.
India mulls reduced 15 percent corporate tax for firms in development hubs
Companies building new factories in the proposed development hubs may be allowed to pay a concessional corporation tax rate of 15 percent for 10 years. The proposal to scheduled to be tabled in Parliament and implemented by October.
Why it’s important:
The development hubs are part of a plan to overhaul the struggling special economic zones and the discounted corporate tax is expected to boost exports and manufacturing.
Reserve Bank cautions lenders to government entities but has no data
Despite reprimanding banks for flouting norms while lending to government entities, the Reserve Bank of India does not have data on the extent of such violations, according to a right to information query. The central bank last month cautioned banks about violations of its guidelines while lending to some infrastructure and housing projects of government-owned entities.
Why it’s important:
The central bank’s concerns stem from off-balance-sheet borrowings by state governments. Banks have lent large sums to some state government entities even though these borrowers did not have cash flows to repay the loans.
A record 73 companies issued bonus shares so far in 2022
Indian companies are handing out bonus shares in record numbers as managements look to reward loyal investors after a good post-pandemic performance in 2021-22. So far this year, 73 firms have announced bonus issues, the second highest since 2010. Bonus share issuance this year, could exceed the recent high of 2018, when 78 companies had given out free stock to shareholders.
Why it’s important:
Bonus shares indicate a return to robust profitability. A change in the tax rules to curb so-called bonus stripping may also have prompted companies to issue bonus shares.
Internet companies flag concern on anticompetitive moves by Big Tech
India’s top internet entrepreneurs including chief executives of flipkart, paytm, oyo, ola, zomato, swiggy and make my trip have met parliamentarians to highlight what they have termed as anticompetitive practices of global technology firms. The corporate brass pointed to contentious issues ranging from predatory pricing to the need for equal access to content across all devices.
Why it’s important:
Digital markets operate differently from traditional markets, so the competition law needs to be developed to address these specific needs.
Online retail may hit Rs 4.9 lakh crore in merchandise value this year
India’s online retail market is on a robust growth trajectory despite the transition to offline as the pandemic recedes. In the three months from April to June this year, close to 40-60 per cent annualized growth was observed in the Indian online market, according to a report by consulting firm Red Seer. With a compound annual growth rate of 38 percent, the market is to set for gross merchandise value worth Rs 4.9 lakh crore in 2022.
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