OPINION, P8 COMPANIES, P6 NO TAKERS Non-issue like net neutrality gets OK, zilch on telco costs Govt pampers cane farmers, wants rest of the country to pay for this through cesses BIDDING WAR Sahara's Aamby Valley fails to get buyers, Sebi tells SC EDITORIAL INTERNATIONAL, P14 Comcast increases cash offer for Sky to $34 bn, topping Fox NEW DELHI, FRIDAY, JULY 13, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM VOL.XLIV NO. 114, 18 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E READ TO LEAD SENSEX: 36,548.41 ▲ 282.48 NIFTY: 11,023.20 ▲ 74.90 NIKKEI 225: 22,187.96 ▲ 255.75 HANG SENG: 28,480.83 ▲ 169.14 `/$: 68.57 ▲ 0.20 `/€: 79.94 ▲ 0.64 BRENT: $73.83 ▲ $0.43 GOLD: `30,147 ▼ `256 LIFETIME-HIGH SENSEX UP, STOCKS DOWN 36,548.41 July 12, 2018 36,283.25 Broader market fared badly in 2018 Sensex 14 Nifty50 16 19 Nifty Mid cap (100) 28 YOOSEF KP Mumbai, July 12 THE SENSEX MAY have hit a new high at 36,548.41 points on Thursday but more than 75% of stocks in the broader market are down between January and now. That’s because onlyahandfulofstocksaredrivinguptheindices;therestare 72 2.6 1 0.4 0 Fiscal deficit Revenue deficit 3.5 3.1* -1 -0.2 FY15 FY16 FY17 FY18RE FY19BE *The actuals could be less than 3% as CAG data for 17 states analysed by FE showed that post-RE, they, in aggregate, cut expendtiture sharply to contain their combined fiscal deficit at 2.64% of their aggregate GDP States with the highest fiscal deficits 7.2 4.5 Punjab 3.5 3.5 Rajasthan Odisha WITH THE UDAY burden off their shoulders, state governments in aggregate were to revert to well below 3% fiscal deficit threshold in FY18 — 2.7% to be precise — but the Reserve Bank of India (RBI), analysing the revised estimates (REs) of 29 states, put their combined deficit in the year at 3.1%. Shortfalls in own tax revenues — even as goods and services tax (GST) revenuewas protected with 14% guaranteed growth under a compensation mechanism — and 3.4 3.4 3.4 MP Andhra Kerala Source: RBI % of GSDP (RE, FY18) FE BUREAU New Delhi, July 12 ■ BrandWagon, P13 (% of GDP) 2.6 0.4 0.3 0 372 Cos with `1000 cr Mcap (787) 722 190 597 Consultancy Services (TCS), Kotak Mahindra Bank, HDFC, HDFC Bank, Infosys and Reliance Industries (RIL). Of the Nifty 50 companies, 31 are trading in the red with just 10 companies driving up the benchmark. At 11,023.20 points, the Nifty is now is just around 100 points away from itsall-timehighclosinglevelof 11,130.40. But the Nifty midcap index,at 18473.9,is down 12% since January. At Thursday’s new high,the Sensex in 2018 so far has been flat in dollar terms while the Dow is up marginally by 0.7%. ● DOUBLE WHAMMY 2 Bihar Tarun Katial, CEO of ZEEL's freemium over-the-top (OTT) platform ZEE5, talks about the OTT space in India, monetisation issues, and the company’s roadmap ahead underperformers.An FE study showed more than 75% of all stocks with a market capitalisation of `1,000 crore and aboveareintheredsothisyear. As Bank of America Merrill Lynch put it,India’s version of a “Fin-Tech” re-rating is supporting the index amid a correction. The stocks that have done spectacularly are Tata State finances 3.1 128 ^417 of BSE SmallCap fell by more than 25% States’ FY18 fiscal deficit at 3.1% 3 31 133 RBI REVIEW 4 BSE 500* BSE Small Cap^ (855) With 72% of Nifty mid-cap stocks falling this year — and 28% by more than a fourth — the market is mostly in a bear grip ‘Traditional broadcasters are best placed on OTT’ BSE realty -19.9 BSE Power -19.1 BSE Metal -16.3 BSE CD -13.7 BSE Oil&Gas -13.1 higher revenue expenditure owing mainly to pay revisions and farm loan waivers drove up the deficit. While the budget estimates (Bes) unveiled by the states for 2018-19 indicate a consolidated gross fiscal deficit of 2.6% of GDP, the RBI cautioned that “visible fiscal pressures are emerging for several states on the expenditure side”and pinned hopes on the stabilisation of the GST “that should boost states’ revenue capacity and support the resumption of fiscal consolidation”. Continued on Page 2 June retail inflation up, May IIP slides FE BUREAU New Delhi, July 12 INDUSTRIAL PRODUCTION GREW just 3.2% in May, the slowest in seven months,while retail inflation jumped to a five-monthhighof5%inJune, in a double whammy for the economy. Importantly, core retail inflation jumped to a 47month high of 6.4% in June, raising chances of anotherrate hike by the monetary policy committee (MPC) in the comingmonths(theMPClasthiked the repo rate by25 basis points in June,after a gap of over four years).Thatboththeslowdown in industrial output growth and jump in price pressure are somewhat broad-based add to the worries of policymakers who are already concerned about sticky global oil prices. Continued on Page 2 IIP (% rise, y-o-y) 10 8 6 4 2.9 3.2 2 0 -2 May 2017 May 2018 QuickPicks E-comm FDI: Group ‘Bond trading set to India’s fuel demand proposes regulator get a shot in the arm’ jumps 8.6% in June AMID GROWING demand for action against e-commerce players, including Amazon and Flipkart, for alleged violation of FDI policies, a governmentindustry subgroup has suggested that a dedicated regulator be set up to oversee any contravention of FDI rules in e-commerce, among others, reports fe Bureau in New Delhi. Until such a watchdog comes into being, the government should, as a temporary measure, form a wing comprising officials from the DIPP and ED to address any “grievances” relating to FDI in e-commerce, including violations of such rules. PAGE 2 INDIA IS headed for a pickup in corporate bond trading after major stock exchanges started offering electronic platforms for repurchase agreements for the securities, according to Crisil, reports Bloomberg. The NSE started a repo market platform last month on corporate debt securities. The BSE started a similar platform in May, allowing MFs, primary dealers, banks and insurers to use the repos to manage liquidity and asset-liability mismatches. Such platforms act as intermediaries between parties for, essentially, pawning bonds for short-term loans. They will help boost liquidity. PAGE 10 -7.9 -6.2 -4.3 THE COUNTRY’S fuel demand jumped 8.6% in June as falling rates led to rise in consumption, reports PTI. Fuel consumption in June totalled 17.99 million tonnes (mt) compared to 16.56 mt a year ago . The rise was more than double of the 3.8% growth seen in May when demand totalled 18.1 mt. During June, petrol sales were up 14.9% at 2.37 mt while diesel consumption was up 7.75% to 7.32 mt. While a `3.8 a litre hike in petrol and `3.38 in diesel propelled rates to an alltime high of `78.43 a litre and `69.31, respectively, on May 29 in Delhi, prices cooled off in June. PAGE 12 BSE IT 27.1 BSE Tech YTD returns,% *153 of BSE500 fell by more than 25% No. of cos in bracket Special Feature -20.7 BSE HC Govt to garner just `6,000-cr benefit Continued on Page 2 BSE PSU BSE CG ● FEWER TAX APPEALS AS MUCH AS 66% of the tax disputes atvarious forawill be withdrawn under the government’s plan to increase the monetary threshold for departmental appeals, finance ministerPiyush Goyal said on Thursday. However, the move would impact only around `6,000 crore under litigation, a tiny fraction of the total disputed amount of `7.6 lakh crore. The government on Wednesday raised threshold monetary limit for the tax department to file appeal before Income Tax Appellate Tribunal/Customs, Excise and Service Tax Appellate Tribunal (ITAT/CESTAT) to `20 lakh from `10 lakh earlier; forcases before high courts, the limit was revised to `50 lakh from `20 lakh; and as for those before the Supreme Court,the thresholdwashikedto`1crore from `25 lakh. YTD change, % BSE Auto Jan 29, 2018 FE BUREAU New Delhi, July 12 More red than green 14.1 BSE FMCG Sensex 8.3 7.3 NIFTY 4.7 BSE Bankex 3.8 India is a very expensive market. At 36,548.41, the benchmark Sensex trades at a priceearnings(PE) multiple of 18.01 timestotheestimatedone-year forwardearnings,apremiumof 12.4%tothelong-termaverage PE of 16.03 times. This compares with 8.6 times for South Korea’s Kospi and 14.2 for the Jakarta Composite. Brazil’s Bovespa and the Shanghai Composite are trading at a price-earningsmultipleof10.4 and 10.6, respectively, data from Bloomberg show. Continued on Page 2 SC judge Ranjan Gogoi delivering the Ramnath Goenka Lecture EXPRESS PHOTOS: TASHI TOBGYAL RAMNATH GOENKA LECTURE Gogoi: Judiciary must remain independent EXPRESS NEWS SERVICE New Delhi, July 12 UNDERLINING THE DIVIDE betweenthe“twoIndias”—one that“believesitistheneworder” and another that lives below a “ridiculously drawn poverty line” — both of which are “at conflict”, Supreme Court judge Ranjan Gogoi on Thursday called for a “constitutional moment”ofthejudiciarywhich, hesaid,“hasbeenlongoverdue”. “There is an India that believes that it is the new order and there is an India that lives below a ridiculously drawn poverty line on daily wages in night shelters with no access to education or healthcare, let alone access to the courts of law,” said Gogoi, delivering theThird Ramnath Goenka Memorial Lecture on Thursday. Continued on Page 2
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