OPINION, P8 MONEY & MARKETS, P10 COMPANIES, P6 VOLATILE MARKETS BATTLE HEATS UP HDFC’s Keki Mistry urges RBI to open special window for MFs Kostin-led VTB group says to match Arcelor’s $5.8-bn Essar bid EDITORIAL With zero reforms, new telecom policy is just talk so far Hiking import duties won't work, cut imports by boosting local mining and fixing gold bonds NEW DELHI, FRIDAY, SEPTEMBER 28, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 180, 24 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 36,324.17 ▼ 218.10 NIFTY: 10,977.55 ▼ 76.25 NIKKEI 225: 23,796.74 ▼ 237.05 HANG SENG: 27,715.67 ▼ 101.20 `/$: 72.60 ▲ 0.02 `/€: 84.99 ▲ 0.27 BRENT: $81.97 ▲ $0.63 GOLD: `30,575.00 ▼ `97.00 RED SEA TRIMMING CAD Duty hikes to have Ahead of AGM, IL&FS trips up marginal impact ROUHAN SHARMA Mumbai, September 27 Won’t dent demand much, analysts feel boosting farm ● FOOTING IMPORT BILL exports and OMCs to try trimming coal imports would help direct $ buys from RBI Growth (%, y-o-y) April-Aug 2018 Total imports Oil imports 27% 17.34% 53.55% Share of oil in India's total imports of $217 bn in April-Aug 2019 SAURABH KUMAR New Delhi, September 27 INDIA IS EXPLORING a triedand-tested option of opening a windowforoilmarketingcompanies (OMCs) to buy US dollars directly from the Reserve Bank of India (RBI) in order to arrest the rupee’s slide. Continued on Page 2 FE BUREAU New Delhi, September 27 THE GOVERNMENT’S MOVE to raise customs duties on 19 products,including consumer goods and aviation turbine fuel (ATF), to trim the current account deficit (CAD) and ease the pressure on the rupee will have only a limited impact, as demand is unlikely to fall meaningfully due to the upcoming festival season,said analysts. As such, at `86,000 crore, imports of these items accounted for only 2.5% of totalmerchandiseimportsand 0.5% of nominal GDP in 2017-18. However, the move sends a signal that the country is willing to act to curb “nonessential imports”,they said. Even assuming that the dutyhikes cause these imports QuickPicks RBI eases SLR norms for banks WITH A view to infusing more liquidity into the system, the Reserve Bank of India (RBI) on Thursday allowed banks to use a bigger share of their statutory liquidity reserves (SLR) in order to meet their liquidity coverage ratio (LCR) requirement, reports fe Bureau in Mumbai. Banks can carve out up to 15% of holdings under the statutory liquidity reserves to meet their LCR requirements, against the earlier norm of 11-13%. PAGE 10 WTO lowers trade growth prospects WORLD TRADE growth is likely to be slower than previously thought in 2018 and 2019, though the direct economic effects of a trade war that has blown up this year have been modest so far, the World Trade Organisation said on Thursday, reports Reuters. It forecast world trade in goods would grow by 3.9% this year, less than the 4.4% it forecast in April, while in 2019, it’s expected to be 3.7%, a cut from the earlier 4.0% forecast. PAGE 14 Electricity trading hits new record SPOT POWER trading on Thursday at the Indian Energy Exchange (IEX) touched 293 million units (MU), making it the highest daily volume of electricity traded in the day-ahead market till date, reports fe Bureau in New Delhi. The volume is 146% higher than what was traded for same day last year. The average spot power price at the exchange was `6.76 per unit, a 52% rise year-on-year. PAGE 2 MINIMAL IMPACT 2.5% Share of imports of 19 items which saw import duty hike in country's total imports 0.13% Share of ATF imports in total oil and oil product bill so far in FY19 46% Drop (y-o-y) already witnessed in cut & polished diamond imports in FY19 to $482 million 22% Fall (y-o-y) in jewellery imports so far in FY19 to $208 million 14-18% CAGR of imports of ACs, washing machines, refrigerators and compressors from FY14 to FY18; growth in AC imports highest at 20% to drop by `10,000 crore this fiscal (which is an optimistic estimate), it will reduce the CAD (as a percentage of nominal GDP) by only 5-6 basis points in FY19, said analysts. This potential decline of `10,000 crore accounts for only about 2% of the estimated CAD for FY19. DK Joshi,chief economist at Crisil,saidthegovernmentmust take more measures to push exports immediately, apart from targeting imports of certainotheritemslikecoal,totrim the CAD.“Farm exports,in particular, need to be promoted aggressively. (Since China has imposed extra tariff on many American products due to the ongoing trade war)… there is a great scope for India to export more cotton, soyabean and maize to China,among others,” Joshi said. Goods and services tax (GST) refunds for exporters need to be expedited,he added. Bank of America Merrill Lynch chief economist Indranil Sengupta has argued that a $30-35 billion issuance of NRI bonds would help stabilise the rupee. On Monday, BofAML said a foreign currency swap window for oil marketing companies (OMCs), the largest consumers of dollars, is also unlikely to help. It favoured, once again, the idea tapping into the diaspora by doing an NRI bond issue. Continued on Page 2 PCI ON MDR SHARING Merchant discount rate (MDR) for debit card transactions (as a % of transaction value) Merchant category Physical PoS infrastruc- QR code-based ture including online card acceptance card transactions infrastructure Small merchants (with turnover up to `20 lakh during the previous FY) Not exceeding 0.40% (MDR cap of `200/ transaction) Not exceeding 0.30% (MDR cap of `200/ transaction) Other merchants (with Not exceeding 0.90% turnover above `20 lakh (MDR cap of `1,000/ during the previous FY) transaction) Not exceeding 0.80% (MDR cap of `1,000/ transaction) Nifty Smallcap 100.6 62.9 Term deposit 103.53 Short-term deposit 52.43 `103.53 crore of term deposits and`52.43croreof short-term deposits. In addition, IL&FS is behindpaymentoncommercial paperworthapproximatelyover `500 crore over the last one FE BUREAU Intra-day, September 27 Nifty Midcap Continued on Page 2 Special Feature 6,700 6,657.55 6,650 17,900 6,600 17,775 6,550 6,480.75 17,650 Intra-day, September 27 18,025 17,915.75 6,500 6,450 Previous close 6,647.95 Open Apex court strikes down adultery law FE BUREAU New Delhi, September 27 Continued on Page 2 Details on Page 22 In a first, Maruti shifts gears to discounts on top models WITH DEMAND FOR cars somewhat muted, partly due to the inauspicious Shrad period and partly due to an excess of inventory, dealers are offering discounts on models such as Maruti Suzuki’s premium hatchback Baleno,the new Swift andthenewDzire,possibly for the first time since theirlaunch.TheSwiftand Dzire can be bought at cash Sept 27 50.2 50.3 The Nifty Midcap index fell 2.3% on Thursday to end at 17,509.85, and the Nifty Smallcap, which hit a 52-week low in intra-day trade, closed at 6,480.75, down 2.5%. thechargeamerchantpaystoa bank for availing digital payment serviceswhich,in turn,is shared with non-bank acquirers enabling transactions. The ministry of electronics and information technology (MeitY) had stepped in to ease the pain. discounts of up to `15,000 and `10,000 on diesel and petrol variants,respectively. The Baleno can be picked up at a cash discount of up to `10,001 till the end September if the dealer has it in stock. Some dealers have been offering a discount of up to `15,000 on the Ignis fora couple of months now.In addition to cash,select dealers are also offering corporate discounts and consumer offers. Dealers said it was possible the discounts would be offered right through to the Sept 25 20.5 month.A senior IL&FS official did not respond to emails seeking comments over this period. Several of the company’s borrowing programmes have been downgradedtonon-investment gradeorjunkstatusasaresultof the missed payments. Ahead of IL&FS’ all-important annual general meeting (AGM) on September 29, FE understands the company has appointed Ernst & Young India to conduct a valuation exercise fortheroadassetsitislookingto dispose in orderto raise funds. Mid-size and small stocks lose big time BRAKING POINT KRITIKAARORA & ARUN NAYAL Mumbai, September 27 ` crore Bank loan (including interest) Sept 12 Sept 16 Sept 24 Sept 24 Sept 26 Declining trend IN A HISTORIC judgment, the Supreme Court on Thursday struckdownacolonial-eraantiadultery law, saying it was unconstitutionalanddiscriminatory,dentedtheindividuality of women and treated them as “chattel of husbands”. While adultery would no longer be a criminal offence, the bench held that it should continue to be treated as a civil wrong, and can be a ground fordivorce. “Awomancannotbeaskedto think as a man or as how the society desires. Such a thought is abominable,for it slaughters her core identity.And,it is time to say that a husband is not the master,” the court held. Source: RBI THE PAYMENTS COUNCIL of India (PCI) on Thursday accused banks of not sharing the merchant discount rate (MDR) reimbursement for small-value digital transactions with merchant aggregators and acquirers.The MDR is AHEAD OF A possible meeting ofthetopshareholdersofIL&FS withReserveBankofIndia(RBI) on Friday, the financier said on Thursday it has defaulted on several repayment obligations. These include bank loans,term and short-term deposits,startingSeptember12,andtotalling `440.46 crore till date. In a notice to the stock exchanges, IL&FS said that of the total defaulted amount, it defaulted on `284.50 crore of bank loans including interest, ● MORE EQUAL Banks not playing fair with acquirers FE BUREAU Mumbai, September 27 Defaults in September festivalseasoninearlyNovember. While the rising prices of auto fuels are a concerns,there is some concern also about the availabilityof financing due to the liquidity crunch in the money markets and rising interest rates. Theavailabilityofadequate stocks has led to a reduction in the waiting period for models such as the best-selling Baleno — from three to four months, the waiting period in one Noida dealership is down to two to three weeks. Continued on Page 2 17,525 Close 17,400 ‘Video is a opportunity’ 17,509.85 Previous close 17,920.75 Open Close Oath's Erin Chao speaks about opportunities and challenges in the digital world ■ BrandWagon, P13
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