OPINION, P8 COMPANIES, P6 EDITORIAL Given fall in poverty, inter-generational mobility can’t be static INTERNATIONAL, P14 SURJIT BHALLA POSSIBLE VIOLATIONS BREXIT PLANS Dramatic fall in under-5 mortality is proof Modi's ODFIndia is working Goyal-led Jet says I-T officials conducting survey since Sept 19 May demands respect from EU as talks hit imapsse NEW DELHI, SATURDAY, SEPTEMBER 22, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 175, 22 PAGES, `10.00 (PATNA `9.00, RAIPUR `10.00) 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: 36,841.60 ▼ 279.62 NIFTY: 11,143.10 ▼ 91.25 NIKKEI 225: 23,869.93 ▲ 195 HANG SENG: 27,953.58 ▲ 475.91 `/$: 72.20 ▲ 0.18 `/€: 84.98 ▼ 0.42 BRENT: $79.63 ▲ $0.93 GOLD: `30,697 ▼ `25 Stocks fickle on Freaky Friday Intra-day, Sept 21 Intra-day, Sept 21 26,500 37,500 37,278.89 36,841.6 26,000 36,500 25,000 25,596.9 25,500 36,000 26,331.05 Previous close 37,121.22 35,500 Open Close theBankNifty,NSEMidCapand Small Cap indices. The Sensex tumbled about 280 points to close at 36,841.60, down 0.75%,afterinvestorswerejoltedbyanover1,000-pointdipin 24,500 Previous close 26,277.35 Open Close mid-afternoontrade.Thebroader Nifty too suffered a mid-session plunge and ended at 11,143.10,down 91.25 points. Theindicesclosedwithlossesfor thethirdstraightweek. BUOYING BONDS THE GOVERNMENT PLANS next week to announce lower than expected borrowing needsforthesecondhalfofthe fiscal year ending in March, said four people briefed on the matter, in a move that could remove some nervousness in the bond market. Senior government officials metwith a select group of market participants earlier this week and assured them that the bond market borrowing programme for October to March would be lower than expected, said the sources directly aware of the matter, who asked not to be named as EASING FEARS ■ Govt could avail a higher net amount from the NSSF: Icra ■ Govt had announced to borrow `2.88 lakh crore in H1 ■ Bond yield fell by 4 bps to 8.05% following the initial report ■ Revised borrowing number will be announced on Sept 28 the discussions were private. Themeeting,chairedbythe finance ministry’s economic affairs secretary Subhash ChandraGarg,wascalledtoget feedback on the current volatilityin bond and currency markets, as well as assure the market players about the government’s intention to stick to its fiscal deficit and borrowing targets,the sources said. “Itwasveryclearlycommunicatedthatthegovernmentis sensitive to market apprehensions and will steer away from anynegative orpopulist steps,” said one official.“There won’t be any rise in the borrowing programme, there can only be a reduction if any,” he said, adding that the government expected a pick up in revenues from the goods and services taxandsmallsavingsschemes. A cleaner, safer mobility future is in our hands We have to nurture engineers who can make combustion engines even more efficient, and help develop alternative propulsion technologies ■ Motobahn, P13 QuickPicks Fitch raises India’s growth forecast to 7.8% for FY19 FITCH RATINGS on Friday upped India's growth forecast for the current fiscal to 7.8%, from 7.4% projected earlier, reports PTI. In its Global Economic Outlook, Fitch, however, flagged tightening of financial conditions, a rising oil bill and weak bank balance sheets as headwinds to growth. Growth forecast for FY20 and FY21, however, have been cut by 0.2 percentage point to 7.3%. The rating agency expects inflation to rise to the upper end of the Reserve Bank of India's target band (4%, plus-minus 2%) on relatively high demand-pull pressures and rupee depreciation. PAGE 3 Choksi cites TV debate phone-in in plea to get NBW cancelled FUGITIVE JEWELLER Mehul Choksi, a co-accused in the PNB fraud case, on Friday moved the special CBI court for cancellation of a nonbailable warrant against him, reports PTI. He claims he has reasons to believe that his return to India might endanger his life. Choksi, in an application filed on Friday, said his apprehensions over his safety are based upon what transpired during a recent television debate on the fraud. On May 22 this year, a special CBI court had issued the non-bailable warrant against Choksi. PAGE 3 THE ROLL-OUTOFane-wallet mechanism for exporters under the goods and services tax (GST) regime may be delayed again beyond the proposed date of October 1,as the required systems are notyet in place, according to trade and official sources. As per the proposed e-wallet mechanism, a notional credit would be transferred to exporters’ accounts based on their past record and the credit can then be utilised to pay taxes on inputs. Once the Express photo: NEERAJ PRIYDARSHI PRESS TRUST OF INDIA New Delhi, September 21 e-wallet is in place, exporters do not have to pay taxes first and then seek refunds. It will typically act as a virtual payment system whereby the exporters will pay only notional duty and get notional refunds later. Exporters, especially MSMEs, have long been demanding an e-wallet-type mechanism, arguing most of them take working capital loans to pay taxes, and since refunds are delayed, their money is blocked on a regular basis. This hits their ability to ship out in large volumes. Continued on Page 2 Continued on Page 2 Continued on Page 2 Already late, e-wallet to miss October deadline BANIKINKAR PATTANAYAK & SUMIT JHA New Delhi, September 21 Continued on Page 2 Sebi eases rules for foreign investors THE SECURITIES AND ExchangeBoardofIndia(Sebi)onFriday issued revised know your customer (KYC) norms for foreign portfolio investors (FPIs), whereinresidentaswellasnonresidentIndianshavebeenpermittedtoholdanon-controlling stakeinsuchentities.Twocirculars pertaining to KYC requirementsandeligibilityconditions forFPIs have been issued. These norms have been put in place weeks after a panel suggested various changes to the guidelines proposed earlier, amid concerns in certain quarters that overseas funds might face difficulties in ensuring compliance. NRIs,OCIs(overseascitizens of India) and resident Indians have been permitted to hold non-controlling stakes in FPIs. There would also be no restriction on them to manage noninvesting FPIs, Sebi-registered offshore funds as well as registered investment managers, according to the regulator. These entities would be allowed to be constituents of FPIs subject to certain conditions. If single and aggregate NRI/OCI/RI holding is below 25% and 50%, respectively, of the assets under management in the FPI, then such entities would be permitted to be constituents of the FPI. AccordingtoSebi,FPIscanbe controlled by investment managerswhich are controlled and/ orowned byNRIs,OCIs,orRIs. ● GST REFUNDS Special Feature Continued on Page 2 ● KYC NORMS Government to set out lower H2 borrowing programme REUTERS Mumbai/New Delhi, September 21 Continued on Page 2 A fourth of BSE500 stocks hit 52-week low, Page 10 ment Company.ABFL is being represented by Khaitan & Co. Lawyers said the move by ABFLwill put a temporary halt on the asset sale process. According to Karan Kalra,head of financial services at Nishith Desai Associates, the Arbitration Act, which lays down the process of arbitration, has a step to grant interim relief to not dispose assets. Director’s cut Filmmaker Vishal Bhardwaj with The Indian Express deputy editor Seema Chishti at the Express Adda in New Delhi US-CHINA TRADE WAR Cotton exports to China to surge PRABHUDATTA MISHRA New Delhi, September 21 INDIA’S COTTON EXPORTSto China may see a fivefold jump to4millionbalesinthemarketing year starting October 1 (2018-19),aftertheneighbouring country slapped a 25% additional duty on imports of the fibre from the US on July 6, amid the trade standoff betweentheworld’stwobiggest economies,trade sources said. Indian traders have already entered into a forward contract with Chinese buyers to deliver about 1.2 million bales between November and January, these sources added. Though some quantities have Exports of raw cotton & waste Total exports FY12 FY13 FY14 FY15 Exports to China FY16 (in $ mn) FY17 FY18 Source: Agri exchange portal of APEDA been contracted for exports to Bangladesh and Cambodia as well,maximum contracts have 817 Close 119 Open Bank Nifty S&P BSE SENSEX 37,000 Prev. close: 1,156.50 1,887 Close 0 133 Continued on Page 2 Open 250 RELIANCE INDUSTRIES AND StarIndiaonFridayannounced afive-yearcontentsyndication deal for the former’s video streaming platform JioTV. As perthe deal,all televised Indiacricket matches will now be available to users of JioTV besides Hotstar.The two companies,however,did not reveal the value of the deal. With this Jio users who had to earlier pay to watch live cricket tourneys such as the IndianPremierLeague(IPL)on Hotstar will be able to watch these for free.So far in order to watch a cricket match or any otherformofcontentaJiouser had to click on the Hotstarlink insidetheJioTVappthatwould then take her to Hotstar. With this cricket matches will be available as a separate feed inside the JioTV app. from selling assets till December 7 ■ IL&FS seeking legal advice ■ Most of the 25 projects identified for sale are under ITNL ■ IL&FS can still sell assets under other subsidiaries 1,627 283 FRANCOIS HOLLANDE, WHO was president of France when the deal for 36 Rafale fighteraircraftwasannounced and signedwith India,has said Anil Ambani’s Reliance Defencewas chosen as the offset partner by Dassault because the Indian government had“proposed”its name. “We didn’t have a say in that.It was the Indian government that proposed this service group (Reliance),and Dassault who negotiated with Ambani. We didn’t have a choice, we took the interlocutor who was given to us,” Hollande was quoted by French news website Mediapart.fr abouttheoffsetcontracttothe private Indian defence manufacturing firm. Hollande was responding to The Indian Express news report referred by Mediapart that Ambani’s Reliance entertainment had co-produced a French filmTout La-Haut with his partner Julie Gayet when India and France were negotiating the Rafale deal,“That’s why, on the other hand, this group (Reliance) did not have to give me any thanks for anything. I couldn’t even imagine that there was any connection to a film by Julie Gayet.” OnbeingaskedbyTheIndian Express,the French embassy in NewDelhi refused to comment on Hollande’s statement. Prev. close: 610.60 ■ Delhi HC restrains ITNL 1,938 150 ORDER, ORDER 196 SUSHANT SINGH New Delhi, September 21 500 IN A FILING to the BSE late on Friday,IL&FSFinancialServices saidRameshCBawa,managing director and chief executive officer of the“has tendered his resignation with effect from September 21,2018”. The move comes after the company in an earlier filing said it has received an order fromtheDelhiHighCourt(HC) restrainingitsroadsarmIL&FS Transportation Networks (ITNL) from selling any of its assets till December 7,2018. Thecompanysaidtheorder was passed on September 18, after Aditya Birla Finance (ABFL), a creditor of two of ITNL’s road projects, filed an arbitration application under Section9oftheIndianArbitrationandConciliationActbefore the Delhi HC.According to the Delhi HC website, the cases pertain to ITNL’s Chenani NashriTunnelwayLimitedand Pune Sholapur Road Develop- 1,900 Francois Hollande, former French President VOLATILITY RULED IN India’s stock markets on Friday after a liquidity scare resulting from the sale of debentures of housing finance company (HFC) Dewan Housing Finance (DHFL) at yields higher than expectedledtoahugesell-offin the shares of non banking financial companies (NBFCs) and HFCs. The DHFL stock ended42.4%downat`351.55, Indiabulls Housing Finance ended8.2%lowerat`1,061.90 and Can Fin Homes closed 5.7% down at `290.25. The session sawwild swings in the indices and sharp falls in 750 FE BUREAUS Mumbai/New Delhi, September 21 743 300 1,061.90 ROUHAN SHARMA Mumbai, September 21 3,638 FE BUREAU/AGENCIES Mumbai, September 21 1,000 351.55 450 0 Intra-day on BSE (`) 1,250 1,156.50 So far in September (till September19),foreign portfolio investors have sold stocks worth $533 millionwhile local wholesale investors have bought shares worth $563 million. Goldman Sachs cautioned in a recent report that India’s stocks were overvalued and downgraded the country to market-weight. The massive sell-off in stocks of NBFCs on Friday was ledbythefallinsharesofDHFL, which tumbled over 50% on fears of a liquidity crisis. The apprehensions arose after DSP Mutual Fund sold debentures of DHFL at a reported yield of 11%.Thisyieldwashigherthan expected given the company had, in the last round of fundraising two months ago, borrowed at around 9.5%. The market believes debt paper is being sold ahead of a tightening in the money marketsandthattheremaybemore supply in the coming weeks sinceyields are on an uptrend. Reliance, Star in deal for cricket on Jio 1,913 Intra-day on BSE (`) 750 615.60 600 Indiabulls Housing Finance HC bar on IL&FS, CEO Bawa quits 3,748 Dewan Housing Finance ● A NEW PITCH 2,237 NBFC, HFC shares tank on liquidity scare; Sensex regains some ground after over 1,000-point flash crash TWIN SETBACK 4,328 ‘India gave R-Defence name as Rafale partner’ EXTREME VOLATILITY 3,442 ● HOLLANDESPEAK FY19 (Apr-Jul) been with China. Continued on Page 2 PRODUCT PUSH With Amazon’s new gizmos, it could soon be ‘Hey,Alexa, defrost my peas’ NEW YORK TIMES Seattle, September 21 IFYOU’RE ONE of the millions of people without a smart speakerinyourhome,Amazon wants to talk to you. On Thursday, the company announced not one, not six, but more than a dozen devices for its Alexa voice assistant — all meant to solve problems in yourlife thatyou maynot have even known you had. There’s even a microwave. “If you have ever tried to defrost peas, it’s a number of clicks,” said Dave Limp, Amazon’s senior vice-president for devices and services. Limp said the $59.99 microwave, made by AmazonBasics, the company’s house brand,wasawayforAmazonto tryout the smart home tools it is building out. The company wants the devices to be easier to set up out of the box and for other companies that make kitchenappliances—fromrice makers to ovens — to tap into the Alexa platform. “Whenwe imagine a future with thousands of devices like this, this is going to become essential,”Limp said. Themicrowavewasperhaps the cheekiest in a blizzard of announcements at the event insideAmazon’s headquarters. “We took advantage of the hands-free moments,” Tom Taylor,seniorvice-president of Alexa, said in an interview. “How do we continue to expand? Where else are those opportunities?” So far, Amazon’s answer appears to be“everywhere”. The company has a long history of introducing productsandservicesatarapidclip, in sharp contrast to competitors like Apple, which focuses onafewveryrefinedreleasesat atime.SomeofAmazon’sideas work, like its Kindle e-reader, and the company keeps buildingonthem.Butmanyofthem fail, like its Fire smartphone, and the company quickly drops them. Continued on Page 2
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