INDIAN ECONOMY: OVERVIEW, GROWTH & DEVELOPMENT
SBI share price falls over 3percent post q1 earnings
State Babk of India stock fell 3.20percent on Friday to day’s low of Rs 307.20 after the public sector bank logged a lower than expected profit of Rs 2,312 crore in the first quarter ended June 30, hit by a tax expense even as bad loan provisions fell.
The stock price of SBI opened 2 points lower against the previous close of Rs 317.20 and fell to day’s low of Rs 307.05, registering a decline of 3.20percent on the BSE.
Shares of SBI were trading with higher volatility, as there was splurge on the volume traded, post the publishing of the earnings report. Overall, 29.71 lakh shares and 644.72 lakh shares changed hands on BSE and NSE, both above 5,10 and 30-day average volume traded.
SBI’s share price has moved below its 150-day simple moving average, although it still trades higher than its 200-day SMA. The stock value has reduced by 9percent in a week.
The biggest lender in India clocked a 176percent quarter-on-quarter increase in net profit of Rs 838.40 cr, on the back of better asset quality and decline in loan provisions.
Net inflow in mutual funds spiked 42pc: Sebi
The mutual fund industry saw a net inflow of Rs 1.09 lakh crore in June 2019. That’s a 42.4 percent jump from Rs 76,990 crore during the previous month. “While growth- [and] equity-oriented schemes and exchange traded funds (ETFs) saw net inflow of Rs 1.07 lakh crore and Rs 42,940 crore respectively, income/ debt-oriented schemes witnessed net outflow of Rs 48,320 crore,” read the latest Securities and Exchange Board of India Bulletin for July.
In recent months, the mutual fund industry has been grappling with redemption pressure in the wake of debt crises at various groups, including IL&FS, Essel and Dewan Housing Finance Corporation (DHFL). According to industry insiders, investors’ confidence was further dented after a series of defaults and delays by some fund houses. For instance, in April, when some fixed maturity plan (FMP) schemes of Kotak and HDFC mutual funds came up for maturity, HDFC AMC had rolled over one of its FMP by 380 days, while Kotak Mutual Fund repaid investors minus their holdings in Essel Group companies.
During June 2019, mutual funds made net investment of Rs 49,803 crore in the Indian securities-secondary market, up over 36 percent month-on-month. Of this, Rs 6,232 crore was ploughed into the equity securities and Rs 43,571 crore in debt securities. In comparison, May saw Rs 5,164 crore parked in equity and Rs 31,340 crore in debt securities.
“Political stability, lower inflation coupled with RBI stance to lower interest rates leading to possible robust growth in the corporate earnings is leading enhanced retail flows towards equity oriented schemes,” N.S. Venkatesh, CEO of the Association of Mutual Fund of India (AMFI), told PTI earlier this month.
Finance ministry invites application for post of RBI deputy governor
The government has invited applications for the post of deputy governor in the Reserve Bank of India (RBI). The vacancy opened after economist Viral Acharya resigned six months before the scheduled end of his term.
Candidates with at least 25 years of work experience in public administration, including experience at the Secretary level or equivalent in the Government of India, or at least 25 years of work experience in an Indian or international public financial institution, can apply for the post, according to a notification issued by the Finance Ministry.
Individuals with exceptional merit and track record at the national or international level in the relevant field will also be considered for the position, the notice said. On salary and allowances, the notice said the post carries the pay scale of Rs 2.25 lakh.
“The appointment will be for a period of three years and the person will be eligible for re-appointment,” the advertisement said.
As per the notification, applicants below 60 years of age as on July 24, 2019 are eligible for the job. The last date for submitting the application is August 30.
Last month, RBI Deputy Governor Viral Acharya, who batted for central bank’s independence, resigned six months before the scheduled end of his term. Acharya, who joined the RBI on January 23, 2017, was youngest deputy governor post-economic liberalisation. Acharya, who did PhD in Finance from New York University Stern School of Business in 2001, will return to the university to teach.
AIWA re-enters Indian market to invest rs 200 crore
AIWA, the Japanese consumer electronics brand, has re-entered the Indian market and plans to launch a range of consumer electronics products. It plans to sell its premium Smart 4K ultra-high definition LED TVs, smart home audio systems, wireless headphones and personal audio products in the country.
To keep up with the rapid pace of technological advancements and product development in market, AIWA will introduce its unique and innovative products that promise to be simple, affordable, user-friendly, and equipped with the latest technology.
AIWA LED TVs are priced at Rs 7,999 and go up to Rs 1,99,000.
Of all the products available in India, TVs will be assembled locally in Delhi while the rest of audio products will be sourced from China, Taiwan and Korea. AIWA products will be available online as well as at offline retail stores through distributor network including large format retail stores and institutional sales, among others. AIWA products will go on sale around August 15, the Indian Independence Day. AIWA claims to have a robust after-sales service network with over 200 service centres across India. The company aims to sell about 200,000 units per annum.
Commenting on the launch, Jeffrey Alan Goldberg representing AIWA internationally, says, “We decided to launch this great brand in India because this is one of the most dynamic markets in the world with huge potential. While there are many other products in the market, the ability of the Indian consumer to lap up the most innovative technology is unmatchable. Moreover, the sense of nostalgia when it comes to AIWA is strong, and I am sure India will embrace the new brand identity with love and joy.”
Monthly GST collections below potential
Goods and services tax (GST) collections breached the Rs 1-lakh crore mark in July 2019 at a time when debate on the economic slowdown is flaring up. At Rs 1.02 lakh crore, GST collections rose 6 percent and 2 percent, respectively compared to the figures in July 2018 and June 2019. However, Rating agency Crisil recently revised downwards the gross domestic product (GDP) target for 2019-20 to 6.9 percent from 7.1 percent earlier. That said, the monthly GST collections crossing the Rs-1 lakh crore in three of the four months of the current fiscal indicate talks of economic slowdown could be blowing out of the proportion. The monthly average has been Rs 1.04 lakh crore so far compared to Rs 98,114 crore during 2018-19.
So, are rising collection figures reflecting the true state of the economy or highlighting a contradictory trend?
Forex reserves fall by $727 mn to $429.6 bn
The country’s forex reserves decreased by USD 727 million to USD 429.649 billion for the week ended July 26, led by a decline in foreign currency assets, RBI data showed on Friday.
The forex kitty had increased by USD 1.579 billion to a new lifetime high of USD 430.376 billion in the previous week ended July 19.
In the reporting week, foreign currency assets, which are a major component of the overall reserves, fell by USD 1.734 billion to USD 399.357 billion, the central bank said.
Expressed in dollar terms, foreign currency assets include the effect of appreciation/depreciation of non-US units like the euro, pound and yen held in the reserves.
Gold reserves surged by USD 1.025 billion to USD 25.330 billion, according to the central bank data.
Special drawing rights with the International Monetary Fund dipped USD 2.8 million to USD 1.444 billion. The country’s reserve position with the fund also declined by USD 15.8 million to USD 3.534 billion, the apex bank said.
Maruti Suzuki cuts temporary jobs
India’s biggest automaker, Maruti Suzuki India Ltd (MRTI.NS), said it had cut the number of its temporary workers to cope with a slowdown in auto sales, adding to the jobless problem in Asia’s third largest economy.
The vehicle industry, accounting for nearly half of India’s manufacturing output, is facing one of its worst slowdowns in nearly a decade, with vehicle sales falling rapidly. There is little sign of a swift revival.
Maruti Suzuki said, it employed 18,845 temporary workers on average in the six months ended June 30, down 6percent or 1,181 from the same period last year. The company also said job cuts had accelerated since April.
Two sources familiar with the matter said the company would freeze hiring new employees until the downturn reversed.
It is the first time the reduction has been reported. The listed firm is not required to disclose any reduction in its temporary workforce.
India’s jobless rate rose to 7.51percent in July 2019 from 5.66percent a year earlier, according to private data group CMIE. Those figures do not include many people on the margins of society who are day labourers and are often unemployed or underemployed.
Economists say government jobless figures are out of date and lack credibility. Maruti Suzuki, majority-owned by Japan’s Suzuki Motor Corp (7269.T), said it had not reduced its 15,892-strong more permanent workforce. It declined to say whether further reductions were planned or comment on the hiring freeze.
The automaker previously said it had cut production by 10.3percent in the first six months of the year.
Huawei y9 Prime launched in India with pop-up selfie camera
Huawei Y9 Prime has been launched in India at a price of Rs 15,990. The new offering by the Chinese tech major will be sold through Amazon India and offline retail stores. The USP of the phone are the triple rear cameras and a pop-up selfie camera.
The triple rear camera set-up at the rear of Huawei Y9 Prime features a 16MP primary sensor, along with 8MP ultra-wide sensor and a 2MP depth sensor. The pop-up front camera houses a 16MP sensor. All cameras on the Huawei Y9 Prime sport AI-powered features and 3D Portrait retouching.
Up front, the Huawei Y9 Prime features a 6.59-inch TFT LCD screen with a FullHD+ resolution of 2340×1080 pixels. The screen is not interrupted by notches, thanks to the pop-up selfie camera.
On the inside, the Huwaei Y9 Prime is powered by a Hisilicon Kirin 710F coupled with 4GB of RAM and 128GB of internal storage, which can be enhanced to 512GB. The device is powered by a 4,000mAh battery. The Huawei Y9 Prime will run Android 9 with EMUI 9.0 out of the box. The device will be available in Emerald Green and Sapphire Blue.
For connectivity, the Huawei Y9 Prime features Wi-Fi 802.11 a/b/g/n/ac, Wi-Fi Direct, Wi-Fi hotspot, Bluetooth 5.0, USB Type-C and even a 3.5mm audio jack.
The Huawei Y9 Prime will be available for Amazon Prime members from August 7 and will be sold in open sale from the next day. The device can be pre-ordered at offline retail outlets from August 5. Units pre-ordered from offline stores come with Huawei Sport Bluetooth headphones and a 15,600mAh power bank for free.