OPINION, P8 ECONOMY, P2 25% PUBLIC FLOAT BY PSBs EDITORIAL Important not to sideline the Tejas in F16/Gripen deal Govt appears to be rethinking its stand on price-caps on stents thankfully INTERNATIONAL, P16 TWITTER EXCHANGES Finmin to urge Sebi for deadline extension Trump Jr was in touch with WikiLeaks during campaign MUMBAI, WEDNESDAY, NOVEMBER 15, 2017 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XXXXXV NO. 205, 36 PAGES, `6.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 32,941.87 ▼ 91.69 NIFTY: 10,186.60 ▼ 38.35 NIKKEI 225: 22,380.01 ▼ 0.98 HANG SENG: 29,152.12 ▼ 30.06 `/$: 65.42 < > 0.00 `/€: 76.69 ▼ 0.46 BRENT: $62.78 ▼ $0.38 GOLD: `29,397.00 ▼ `117.00 — Nov 14, 2017 QUICKENING INFLATION IN THE NEWS Amazon invests another `2,900 cr in Indian unit AMAZON HAS invested another `2,900 crore ($443 million) in its Indian unit as part of its commitment to invest $5 billion to expand its Indian business, reports Sameer Ranjan Bakshi in Bengaluru. With this fresh round of infusion, Amazon has pumped in about $1 billion into Amazon Seller Services (Amazon India) this financial year itself. The development comes on the back of Morgan Stanley’s statement on Monday that Amazon could become a $1-trillion company within one year. In the latest funding round, Amazon has raised the sum from its Singapore-based group entity Amazon Corporate Holdings and a Mauritiusbased group entity, Amazon.com.incs. Bond yield hits a 14-month high BLOOMBERG Mumbai, November 14 SOVEREIGN BOND TRADERS’ worries about inflation are intensifying.India’sconsumer-priceindex(CPI)acceleratedatthefastest pace in seven months, data released on Monday evening showed. The pace may quicken duetoabouncebackinglobalenergyprices,denyingtheinflationtargeting central bank space to lowerinterestratesnextmonthat a time when economic growth is stuck at a three-yearlow. Not surprisingly,the yield on the benchmark 10-year notes climbed above 7% on Tuesday for the first time since last September.The yield could reach as high as 7.10%, according to IDFC Bank. Nomura Holdings is predicting CPI to rise above 4% this month,and to stayabove the Reserve Bank of India’s 4% tar- Analysts say this cuts RBI room to lower interest rates next month when economic growth is at a three-year low get through 2018. Sovereign bonds have been under pressure on concerns rebounding oil priceswouldwiden the government’s budget deficit, forcing it to boost the size of debt sales justwhen state administrations are borrowing heavily and the central bank is selling debt to suck out excess liquidity from the system. As investors adjust their positions to the new inflation expectations, another 10-basis-point rise in the benchmark 10-year yield can’t be ruled out,according toMumbai-basedSandeepBagla, associate director atTrust Capital Services. “The market has completelyremovedanyexpectations of a rate cut,” he said. Crude prices will have a significant impact on sentiment as they have delivered a double whammy by being inflationary and also presenting a risk to the fiscal situation,Bagla added. Yield on 6.79% government bonds due May 2027 rose 8 basis points to 7.05%, highest for benchmark 10-year debt since September 7,2016. A separate government report on Tuesday showed wholesale price inflation rose 3.59% year-on-year in October compared with a 3.01% median estimate in a Bloomberg survey and 2.60% in September. Continued on Page 2 ● DOLLAR BONDS Bundled plans bail out telcos Data, voice volumes surge for legacy players Airtel, Vodafone and India but realisations dip DATA VOLUME Q3FY17 FE BUREAU New Delhi, November 14 THE JULY-SEPTEMBER earnings of the country’s top three telecom operators — Bharti Airtel, Vodafone India and Idea Cellular — show that while competitive pressures that began with the launch of commercial services Q2FY18 Growth, %, q-o-q 472 172 Q4FY17 Q1FY18 784 (billion MB) 439 384 238 225 105 -3.5 31 110 66 Bharti Airtel New jobs 253 129 109 127 -4.5 23 84 61 Vodafone India by Reliance Jio continue on the incumbents, thanks to bundled plans their voice and data volumes have surged. However, re- 1.3 17 99 74 Idea Cellular alisations on both counts continue to decline. Continued on Page 2 FE BUREAU Few and far between Workers’ social security cover may have improved in the Modi regime, but employment growth has been dismal, with decent jobs even more elusive. Jobs growth in the “private corporate manufacturing sector” fell from 3.1% in FY16 to a more sluggish 2.3% in FY17, says an Icrier study. NPS subscribers EPS members Job growth in ‘private corporate manufacturing’ Corporate sector (’000) (in lakh) March 2015 3,73,273 March 2016 4,73,515 1,934 Sept 1, 2016 Q2 NUMBERS 1,714 7.052 1,585 7.121 Jan 2017 5,54,000 June 2017 6,13,000 409 2015-16 315 2015 2016 2017 March 31 2016-17 Assuming employment elasticity of GVA computed at 0.29 for FY09-FY15 remained constant in subsequent years and applying this on new-series GVA data. Caveats: CSO's new GDP series with base year 2011-12 allows an increase in the size of “private corporate sector” (and to that extent a higher job growth result from Icrier methodology); discrepancies due to computing employment elasticity of GVA using ASI data base and applying the same on GVA as per new series Source: Icrier working paper RCom defaults in test for India Inc BLOOMBERG Hong Kong, November 14 THE FIRST DEFAULT on US dollar bonds by an Indian company in 15 months may become a closely-watched test case for how international creditors will fare under the country’s new bankruptcy laws. Reliance Communications, the Indian mobile phone operator controlled by billionaire Anil Ambani,failedtopayacouponon its 2020 dollar notes before the expiry of a grace period on Monday, according to a person familiar with the matter. It’s India’s most high-profile default on international debt since the nation’sInsolvencyandBankruptcy Code was passed in May 2016. The new rules, part of Prime MinisterNarendraModi’spushto make India more investorfriendly,aredesigned tospeedup debt restructurings in a country whosebankingsystemisplagued by the highest stressed-asset ratio in 17years.An improved resolutionprocesswouldnotonlyencourageforeignmoneymanagers toincreaseholdingsofIndiandistressed debt,it could also help reduce borrowing costs for companies across the credit spectrum. Continued on Page 2
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