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Sensex up 97 points, Nifty above 11,000

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Sensex equity Nifty

Mumbai, Sep 12 Sensex was up nearly 100 points during the early trade on Thursday led by buying in banking and financial sector stocks.

The benchmark Sensex at 10.38 a.m., was trading at 37,367.18, higher by 96.36 points from its previous close.

Sensex opened higher at 37,330.47, from its previous close of 37,270.82.

The broader Nifty traded at 11,059.50, higher by 23.80 points or 0.22 per cent.

Tata Motors Group on Wednesday reported a decline of 32 per cent in August’s global wholesales, including that of Jaguar Land Rover, over the corresponding period of last year.

According to the company, the global wholesales during the month under review declined to 72,464 units.

“Global wholesales of all Tata Motors’ commercial vehicles and Tata Daewoo range in August 2019 were at 25,366 nos, lower by 45 per cent, over August 2018,” the company said in a statement.

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‘Traditional wholesale lost half its revenue share post DeMo, GST’

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Modi Notebandi

Mumbai, Nov 13 : A report on consumer goods distribution channels has revealed that while modern trade and e-commerce have gained significant revenue share after the “twin shock” to the economy, demonetisation and Goods and Services Tax (GST), traditional wholesale has lost half its revenue share.

“In rural towns or villages, wholesale accounts for 60-70 per cent of sales. However, demonetisation and GST compliance nearly crippled this channel, which is still reeling from it,” said the report by financial services group Centrum .

Post the twin shocks to the economy, Centrum said, the traditional wholesale channel was reeling under pressure as they operated on a purely cash basis.

Wholesale accounts declined from 135,000 before GST to 66,000 now, as per the estimates built on various interactions, Centrum said. This has led to loss of sales of 8-10 per cent and inventory correction in these outlets.

“Thus, companies which were highly reliant on the wholesale channel saw their revenue decline, forcing them to rebuild distribution,” the report said.

The report further stressed that organised wholesale and cash-and-carry are replacing traditional wholesale providing GST compliance and no credit. In the past three years, they have doubled their store count to 100.

Centrum said its top picks in such a scenario are Britannia (has low wholesale dependence and focus on central India belt) and Dabur (uses a cluster-based distribution strategy in rural areas and on focus-on-power brands strategy).

“We feel the most impacted would be Colgate (weak wholesale channel and yet to build full direct distribution).” it said.

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Rupee tumbles 63 paise, falls to Rs 72 per dollar

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Rupee Falls Vs Dollar

Mumbai, Nov 13 : The domestic currency ended sharply lower on Wednesday over weak macro numbers and soft capital market sentiments. The rupee slipped to its lowest in two months at Rs 72.09 a dollar from its previous close of Rs 71.46.

The rupee surpassed the crucial level after a series of macro-data indicated weak economic outlook. The Index of Industrial Production (IIP) declined 4.3 per cent in September 2019 compared to a growth of 4.6 per cent in the year-ago period. The contraction was steeper than street estimates and was the sharpest since the new series began in 2011.

Analysts said that the rupee tumbled over expectations that Consumer Price Inflation (CPI) would be higher than the previous month. The CPI data released after market hours showed that retail inflation jumped above RBI’s medium term target of 4 per cent to 4.2 per cent in October. The retail inflation was 3.99 per cent in September.

The State Bank of India had said earlier that the second quarter GDP growth may further slip to 4.2 per cent on low automobile sales, deceleration in air traffic movements, flattening of core sector growth and declining investment in construction and infrastructure.

“Based on our composite leading indicator that suggests the GDP growth to slow down further from 5.0 per cent in Q1 of FY20 to 4.2 per cent on account of low automobile sales, deceleration in air traffic movements, flattening of core sector growth and declining investment in construction and infrastructure,” the bank had said in a report.

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BSNL to raise Rs 15000 cr through sovereign bonds next month

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BSNL Building

New Delhi, Nov 13 : State run BSNL plans to issue sovereign bonds for raising Rs 15,000 crore next month, its chairman and MD P. K. Purwar has said.

“We have written to DoT already asking for approval for the Rs 15,000 crore sovereign bonds. DoT is in the process of sending it to finance ministry for approval. We can raise all Rs 15,000 crore in one tranche. We expect to get the approval soon for the bonds to raise the funds”, P K Purwar, CMD of BSNL told IANS.

Government bond or sovereign bond is a bond issued by a national government, generally with a promise to pay periodic interest payments called coupon payments and to repay the face value on maturity.

The package includes raising of Rs 15,000 crore sovereign bonds to meet the immediate capital requirement. BSNL is slated to start 4G services next year and before that it will have to take network upgrade, float a new 4G tender as well.

On November 1, state-run MTNL said it has received communications from the Government on the cabinet decision. As per this decision, MTNL will be a subsidiary of BSNL by transferring the government’s shareholding to it following the Union Cabinet’s in-principle approval to their merger. Government holds 56.25 per cent in MTNL. The cabinet decision last month had paved the way for MTNL to be a subsidiary of BSNL and the firms can raise Rs 15,000 crore on sovereign bonds.

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