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Think Ahead with EZWealth – 03 Nov 2021
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UK, India plan to connect world’s green power grids
Britain and India introduced a plan on Tuesday to improve connections between the world’s electricity power grids to accelerate the transition to greener energy. Linking the grids would allow parts of the world with excess renewable power to send it to areas with deficits. For instance, countries where the sun has set could draw power from others still able to generate solar electricity.
The “Green Grids Initiative” at the COP26 climate talks in Glasgow, Scotland, was backed by more than 80 countries and could set a model for how rich countries help poorer ones to reduce their emissions and meet the goal of capping global warming at 1.5 degrees Celsius (2.7 Fahrenheit) above pre-industrial norms. “If the world has to move to a clean and green future, these interconnected transnational grids are going to be critical solutions,” Indian Prime Minister Narendra Modi said in a statement. U.S. independent energy expert Matthew Wald said the plan underscored how renewable energy sources need more transmission lines since they must often be built far from cities, unlike coal or gas-fired plants whose fuel can be shipped in.
China’s Property Developers struggle to find buyers for billions in assets
Property developers in China looking to raise badly needed cash by selling assets are finding it hard to strike deals as potential buyers in the sector hoard funds after home sales plunged and Beijing stepped up its borrowing crackdown. China Evergrande Group last month ended discussions to sell a controlling stake in its property-management business that would have raised about $2.6 billion. A plan to unload a trophy office tower in Hong Kong also stumbled, while Modern Land China Co. defaulted on a $250 million bond last week after it was unable to sell some assets, Cailian reported. Oceanwide Holdings Co. is seeking to offload its main office complex in Beijing after a unit defaulted.
The failure to sell holdings exacerbates the cash squeeze for some of the nation’s property giants, many of which are shut out of financial markets due to soaring borrowing costs and Beijing’s “three red lines” policy that limits lending in the industry. “The majority of prospective buyers of real estate assets under disposal are also developers, but under three red lines debt restrictions, many refrain from swallowing sizeable assets,” said Matthew Chow, a director at S&P Global Ratings. “In a down cycle, even those developers with abundant liquidity tend to hoard cash.”
For years, developers ranging from Dalian Wanda Group Co. to Seazen Group Ltd. were able to overcome financing stress by selling off parcels of land, construction projects or other assets. Big property rivals, including Evergrande, Sunac China Holdings Ltd. and China Vanke Co., were often willing buyers. That’s no longer the case, with Evergrande’s debt crisis engulfing the sector while Beijing’s crackdown puts a straitjacket on fresh borrowing. Among the country’s top 30 property firms by sales, two-thirds have breached at least one of the three red lines metrics, Bloomberg-compiled data show. A developer is banned from increasing its outstanding borrowings if it breaches all three lines.
Petrol crosses Rs 110 per litre in Delhi, LPG turning costlier too
Retail price of petrol in Delhi crossed the Rs 110-mark for the first time on Tuesday, as state-run oil marketing companies (OMCs) gradually increased the base-price of the product amid rising international crude rates. The surge in prices are likely to continue till the end of the year with the OPEC+ countries showing no signs of increasing production over the pre-determined levels till December, even as global crude demand is on the rise.
Pump price of petrol in Delhi was Rs 110.04 per litre on Tuesday and diesel was sold at Rs 98.42/litre. At present, the prices charged to dealers by Indian Oil Corporation Ltd (IOCL) are Rs 47.6/litre for petrol and Rs 49.6/litre for diesel. The Centre’s tax (basic excise, surcharge, agri-infra cess and road/infra cess) is currently Rs 32.9/litre for petrol and Rs 31.8/litre for diesel, while Delhi state VAT is Rs 25.3/litre on petrol and Rs 14.4/litre on diesel. The Central government taxes on auto fuels are constant while the state VAT changes with rise and fall in prices charged by OMCs. Thanks to rising petrol prices, VAT earned by Delhi has increased to the current level from Rs 23.4/litre in mid-September, when final petrol price was Rs 101.19/litre. High crude oil prices have also impacted the prices of liquefied petroleum gas (LPG) and OMCs have increased the prices of the standard 14.2-kg cylinder four times since April, to the current rate of Rs 899.5 in Delhi. India imports more than 55% of its LPG requirement. The government is not paying any subsidy on LPG since May 2020, contributing to higher impact on consumers. A recent study by the by the Council on Energy, Environment and Water (CEEW) pointed out that rural households are spending nearly 10% of their monthly expenditure on the cooking fuel.
Festive season: Credit card spends jump 57% in September, shows data
Credit card spends jumped 57 per cent year-on-year (YoY) in September, aided by the festive season. According to the latest Reserve Bank of India (RBI) data, in September, credit card spends totalled Rs 80,477.18 crore compared to Rs 77,981 crore in August, thereby registering a 3.2 per cent growth sequentially, despite the high base. In the corresponding period last year, credit card spend was to the tune of Rs 51,356.68 crore.
In July, credit card spends were to the tune of Rs 75,119 crore. Credit card spends are much higher than pre-pandemic levels. In January and February of 2020, credit card spends were to the tune of Rs 67,402.25 crore and Rs 62,902.93 crore, respectively. In an analyst call after the Q2 results, Sandeep Bakshi, managing director (MD) & chief executive officer (CEO), ICICI Bank, said, “Spends across most categories other than travel crossed March 2021 levels in September. We expect the momentum in spends to continue in the festive season.”
“The festive season has begun well and we expect further momentum,” said Amitabh Chaudhury, MD & CEO, Axis Bank, post the Q2 earnings. Experts say, increased economic activity, coupled with the festive season, would keep the momentum in spends buoyant. Monthly spends per card for the industry increased to approximately Rs 12,400 from an average of Rs 10,700 over the past six months, Motilal Oswal said in a report.
Major edible oil players cut wholesale prices by Rs 4-7 a litre
To give relief to consumers during the festival season, major edible oil players, including Adani Wilmar and Ruchi Soya Industries, have cut wholesale prices by Rs 4-7 per litre and other companies are also expected to follow the suit, industry body Solvent Extractors Association (SEA) said on Tuesday. The other players that reduced the wholesale rates of edible oils are Gemini Edibles and Fats India Pvt Ltd (Hyderabad), Modi Naturals (Delhi), Gokul Refoils and Solvent Ltd (Sidhpur), Vijay Solvex Ltd (Alwar) Gokul Agro Resources Ltd and N K Proteins Pvt Ltd (Ahmedabad), it said.
These companies have reduced the wholesale prices after the SEA appealed to its members to do the same to give relief to consumers from high prices during the festival season. “The response from the industry is very encouraging,” SEA President Atul Chaturvedi said in a statement. They have already committed and reduced the wholesale bulk prices by Rs 4,000-7,000 per tonne (Rs 4-7 per litre) and others are also following to reduce the edible oil prices, the SEA said.[/vc_column_text][vc_column_text css=”.vc_custom_1635912795701{margin-top: 0px !important;margin-right: 0px !important;margin-bottom: 0px !important;margin-left: 0px !important;border-top-width: 1px !important;border-right-width: 1px !important;border-bottom-width: 1px !important;border-left-width: 1px !important;background-color: #ededed !important;border-left-color: #dd9933 !important;border-left-style: solid !important;border-right-color: #dd9933 !important;border-right-style: solid !important;border-top-color: #dd9933 !important;border-top-style: solid !important;border-bottom-color: #dd9933 !important;border-bottom-style: solid !important;border-radius: 3px !important;}”]
Stocks in the news
[/vc_column_text][vc_column_text]Results on November 3: State Bank of India, Eicher Motors, Aditya Birla Fashion and Retail, Bata India, DCM Shriram Industries, GPT Infraprojects, Grindwell Norton, Gujarat State Petronet, Gujarat Alkalies & Chemicals, Likhitha Infrastructure, Pfizer, RattanIndia Power, Sharon Bio-Medicine, and Uflex will release September quarter earnings on November 3.
Infosys: Infosys Finacle announced that the Finacle Digital Banking Solution Suite will be available on Red Hat OpenShift and IBM Cloud for financial services. This collaboration will help banks scale business transformation, become more agile, and power their growth with an on-demand portfolio of products and services.
Wipro Ltd has partnered with TEOCO to develop solutions that help communication service providers improve network automation, flexibility, efficiency, and reliability. Together, Wipro and TEOCO will provide CSPs with comprehensive solutions to plan, analyze, optimize, and monitor next-generation networks.
Vodafone Idea: Aditya Birla Group chairman Kumar Mangalam Birla is close to investing at least $150 million in Vodafone Idea Ltd in his personal capacity, two people aware of the matter said, as an immediate measure to keep the group’s cash-strapped telecom business afloat. Also, in line with ongoing 5G trials in India, Vodafone Idea and Ericsson have teamed up to showcase the power of 5G to transform the healthcare sector in India.
Vedanta Ltd on Tuesday said the board of its indirect wholly-owned arm Sesa Mining Corp Ltd (SMCL) has approved the acquisition of Desai Cement Company Pvt Ltd. The acquisition will enhance the group’s portfolio with cement and help develop additional synergies through vertical integration.
BEL: The Defence Acquisition Council headed by Union defence minister Rajnath Singh on Tuesday approved proposals worth ₹7,695 crore for the Armed Forces Modernization under ‘Make in India’. Under the approvals, Lynx U2 Fire Control System will be acquired from Bharat Electronics Limited (BEL). It will enhance the detection tracking and engagement possibilities of Naval warships.
Spicejet: Crisil Ratings has withdrawn its ‘Crisil D’ credit rating for SpiceJet Ltd stating that the airline has not provided it with adequate information to carry out a rating review, the international rating agency said in a press release.
Sterling and Wilson Solar Ltd (SWSL) on Tuesday said it has got shareholders’ approval to issue equity shares on a preferential basis to Reliance New Energy Solar Ltd (RNESL) in its extraordinary general meeting (EGM).
Tata Power will seek shareholders’ nod to amend a scheme of arrangement to keep Tata Power Solar Systems Ltd (TPSSL) as an independent entity, contrary to its earlier plan to merge it with itself through a postal ballot notice.
IL&FS: The National Company Law Tribunal (NCLT) has approved the crisis-hit IL&FS’ three proposed transactions to divest its stake in ONGC Tripura Power to GAIL, its offshore entity IL&FS Prime Terminals FZC in the United Arab Emirates (UAE), and Warora Chandrapur Ballarpur Toll Road (WCBTRL).
Bharti Airtel has reported a higher profit at ₹1,134 crore in Q2FY22 against ₹283.5 crore in Q1FY22; its revenue rose to ₹28,326.4 crore from ₹26,853.6 crore year-on-year.
BSE has signed a memorandum of understanding with HDFC Bank to further encourage and promote listing of startups and SMEs across India. Through this MoU, HDFC Bank and BSE shall evaluate banking & lending solutions for startups undergoing listing process on start-ups and SME platform.
GE Power India: The company reported higher profit at Rs 39.3 crore in Q2FY22 against Rs 37.4 crore in Q2FY21, revenue fell to Rs 732.1 crore from Rs 887.5 crore YoY.
eClerx Services: The company reported sharply higher profit at Rs 100.7 crore in Q2FY22 against Rs 61.4 crore in Q2FY21, revenue jumped to Rs 523.2 crore from Rs 360.7 crore YoY.
Century Plyboards: The company reported sharply higher profit after tax of Rs 99 crore in Q2FY22 against Rs 50.2 crore in Q2FY21, revenue spiked to Rs 813.6 crore from Rs 522.2 crore YoY.
Minda Corporation: The company reported higher profit at Rs 39.1 crore in Q2FY22 against Rs 25.8 crore in Q2FY21, revenue climbed to Rs 731.3 crore from Rs 656.1 crore YoY.
Ramky Infrastructure: The company reported consolidated profit at Rs 58 crore in Q2FY22 against loss of Rs 52.86 crore in Q2FY21, revenue rose to Rs 258.76 crore from Rs 178.77 crore YoY.
PSP Projects: The company received Letter of Acceptance for two projects – one government project in Gujarat and another government residential project in Uttar Pradesh totalling to Rs 288.27 crore.[/vc_column_text][vc_column_text]
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