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Business News/ Mint-lounge / Mint-on-sunday/  GDP forecast cut, HUL’s lacklustre results and Dalit protests
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GDP forecast cut, HUL’s lacklustre results and Dalit protests

IMF pares India's growth projection; HUL has a forgettable June quarter; and caste violence sparks outrage in Gujarat

Photo: PTIPremium
Photo: PTI

1. IMF cuts India growth projections

The International Monetary Fund (IMF) reduced its 2016-17 India growth forecast from 7.5% to 7.4% on Tuesday. The change was made as part of an update to its World Economic Outlook document. It blamed the cut on sluggish private investment. The earlier projection was made in April. Meanwhile, the Asian Development Bank on Monday maintained its growth target for the country. However, it had projected India’s growth at 7.4%, lower than the IMF’s April prediction. The IMF also cut its global growth forecast from 3.2% to 3.1%.

2. Govt to infuse capital in public sector banks

The government announced on Tuesday that it would invest Rs22,915 crore in order to recapitalize public sector banks. The plan would cover 13 entities, including State Bank of India. The finance ministry had allocated Rs25,000 crore during the year for recapitalization. Analysts had said that the amount was insufficient. Meanwhile, public sector banks have reported record losses on account of a rise in bad loans. Such stressed assets accounted for 14.5% of total advances at the end of March.

3. Tata is India’s most valuable brand

The biggest brand in India is worth $13.7 billion. Tata came on top, according to Brand Finance, a global brand valuation and strategy consultancy, which released its 2016 report on Tuesday. It showed that Tata had actually lost some value over the previous year (it is down 10.83%). The erosion was blamed on a fall in group revenues and troubles with its steel business in the UK. The biggest gainers in the brand value stakes include Life Insurance Corporation of India and software company Infosys. The report put the value of India’s top 100 brands at $120 billion.

4. US markets hit all-time high

American stock market indices touched their highest levels ever on Wednesday on the back of better-than-expected earnings and improved economic sentiment. Both the S&P 500 index and the Dow Jones Industrial Average have been on a winning streak in recent times, and touched a new peak on Wednesday. The markets had fallen after the UK voted to leave the European Union, but has since reversed their losses. Indices were up 6-7% for the year by Wednesday, showed Bloomberg data.

5. Pokémon Go buoys Nintendo stock

Nintendo saw a significant rally in its shares following the popularity of augmented reality game Pokémon Go. Bloomberg data as of Wednesday showed that Nintendo’s stock is up 93% over a dozen trading sessions. The company released the game on 6 July. It has become a viral sensation in many countries including the US and Australia. Some analysts have pointed to the need for caution. Deutsche Bank downgraded its outlook on the stock from “buy" to “hold" after the sharp rally. UBS said that the surge is hard to justify looking at the company’s fundamentals.

6. SoftBank buys ARM Holdings

Japanese company SoftBank Group announced on Monday that it would buy chip designer ARM Holdings Plc for $32 billion. The move is said to be a bet on artificial intelligence and the Internet of things (where electronic devices from washing machines to watches are all connected to each other via the web). The price was a 43% premium on the company’s valuation before the deal was announced. ARM shares rose after the deal was made public, while SoftBank shares plunged 10%. It is the biggest Japanese acquisition of a European firm, according to Bloomberg.

7. HDFC Bank net profit jumps 20%

HDFC Bank Ltd on Thursday announced a 20.15% year-on-year increase in net profit for the first quarter of fiscal 2016. Higher net interest income and other income helped contribute to the rise. Net interest income is the money a bank makes by giving out loans. The asset quality of the bank also came in steady, even as several of its large peers have recorded issues with bad loans. The RBI had asked banks to recognize bad loans and provision for them after an asset quality review in December.

8. HUL recovery remains elusive

Hindustan Unilever Ltd showed little signs of a demand recovery in its June-quarter results on Tuesday. Volume growth came in at 4%. This is the same growth figure as the March quarter. Sales in value terms grew at 2.9%, compared to 3.4% in the previous quarter. Sales measured in volume refers to the number of units sold, while value takes into account the price at which they were sold. The home care segment, which accounts for 31.5% of HUL’s sales, did better than personal care (48.1%).

9. Monsoon coverage picks up

Rains are likely to get even better in the days ahead on account of a change in weather patterns. Cumulative rainfall has already slightly exceeded the norm, according to India Meteorological Department data up to 20 July. A news report on Tuesday cited two officials who noted that the disruptive El Nino phenomenon is likely to make way for the more beneficial La Nina in early August, which will help improve rainfall. Better rainfall comes on the back of two straight years of drought in India.

10. Dalit protests in Gujarat

Gujarat continues to simmer following protests against the flogging of four Dalits by a vigilante group claiming to protect cows in Una district. A video of the incident went viral, triggering mass outrage and violent protests. The developments, coupled with a BJP leader’s derogatory comments against BSP leader Mayawati, have created difficulties for the ruling party. While the Gujarat government has promised swift action, National Crime Records Bureau data shows that the crime rate against Dalits in the state has been higher, compared to the all-India average in recent years.

Graphics by Ajay Negi.

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Published: 23 Jul 2016, 11:37 PM IST
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