BackIndia beats Australia, UK triggers Brexit and monsoon worries
India win Border Gavaskar trophy; UK initiates exit from EU; El Nino seen affecting rainfall from July onwards
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1. Below-normal monsoon predicted
Private weather forecaster Skymet on Monday said that India may face a below-normal monsoon in 2017. The rains are expected to be at 95% of the long-period average. Monsoons are considered normal if rainfall is between 96% and 104%. The El Nino effect is expected to affect rainfall from July onwards. The effect is a weather phenomenon which results in the heating up of the Pacific Ocean. This in turn disrupts the rainfall pattern during the crucial monsoon months.
2. India wins Border-Gavaskar Trophy
The Indian cricket team topped off an acrimonious series by registering a win against Australia on Tuesday. Their eight-wicket victory which came before lunch on the fourth day helped it reclaim the Border Gavaskar trophy. Ravindra Jadeja scored 63 runs and took three wickets to help India clinch the series. Stand-in skipper Ajinkya Rahane scored 38 runs and remained unbeaten as India cruised to victory. The win also helped India finish as the No. 1 Test side in the world.
3. Supreme Court bans old vehicles
The Supreme Court on Wednesday barred the sale of Bharat Stage III (BS III) vehicles from 1 April over environmental concerns. The move is expected to affect auto makers who carry unsold vehicles in inventory. It is expected to have the greatest impact on two-wheelers, in terms of the number of units in inventory. Commercial vehicles have the highest affected inventory by value (Rs11,600 crore). The auto industry is expected to be carrying nearly Rs17,000 crore worth of these vehicles which can no longer be sold, according to a note by rating agency Crisil.
4. UK takes concrete step towards EU exit
The UK on Wednesday filed formal documents for its exit from the European Union. This marked the beginning of a two-year window for negotiating its withdrawal from the EU. The move began nine months ago, when the country unexpectedly voted in favour of an exit in a national referendum. Major reasons for the exit include a bid to reduce migration into the UK and greater control over lawmaking.
5. Bharti Airtel sells stake in tower arm
Telecom major Bharti Airtel Ltd sold a 10.3% stake in its tower arm Bharti Infratel Ltd on Tuesday. A group of investors including the Canada Pension Plan Investment Board and private equity firm KKR and Co. bought the stake for Rs6,193.9 crore. The move is said to be part of a plan to reduce debt, and help meet rising competition in the telecom space. The buying price of Rs325 per share was at a 4% premium to Monday’s closing price of Rs312.55.
6. India’s FDI problem
India’s foreign direct investment (FDI) touched an eight-year high of $46.4 billion in 2016. However, the rising FDI has not created jobs, according to a Mint analysis published on Tuesday. The growth in FDI has been 28.2% over the last three years, compared to limited growth seen in the previous years. The lack of investment in manufacturing, and a large number of acquisitions (which don’t create new jobs unlike when new units are set up) has contributed to the lack of job creation, it was noted. In terms of FDI as percentage of GDP, other emerging markets have received more investments than India.
7. Record year for M&As
The value of mergers and acquisitions more than doubled over the previous financial year. There have been $61.26 billion worth of deals for the current year. There were deals worth $27.62 billion in 2015-16. The rise was the outcome of factors including consolidation in the telecom, cement and energy sectors, according to a Mint report published on Thursday. There were inbound deals worth $21.2 billion in 2016-17 and $35.6 billion of domestic deals. Major deals included Essar Oil Ltd’s acquisition by Rosneft PJSC and the merger between Ideal Cellular Ltd and Vodafone India Ltd.
8. India becomes third largest domestic aviation market
India overtook Japan to become the third largest aviation market in the world. An industry report by the Capa Centre of Aviation said that India’s domestic passenger traffic was 100 million in 2016. This is higher than Japan’s 97 million, according to media reports on Sunday. India now ranks behind only the US and China. Both the countries have more than four times India’s number in terms of passengers who travel by air.
9. Cement prices rise
Cement prices in the eastern part of the country have seen a rising trend in recent times. Prices have risen Rs10-30 per 50kg bag in March over the previous month. Mint reported on Thursday that the rise is on account of states like Bihar, Jharkhand and Chhattisgarh seeing higher demand. Government projects are among the contributors to increased cement requirements. However, the higher prices are not expected to last because of additional supply entering the market. Companies would benefit in the interim.
10. Rupee rises
The rupee touched a near 18-month high against the dollar on Tuesday, and continued to climb. Foreign institutional investors have been pumping money into the domestic bond market because of this trend. Equity markets have also seen a similar buying trend. A rising rupee adds to the returns of foreign investors. Foreign investments so far this year have been in excess of 10 billion, including debt and equity. The outlook was more cautious until December. Indian markets also received a boost from state election results which were positive for the government, and seen to help it push through reforms.
Graphics by Prajakta Patil/Mint.
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