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BQuick On Dec. 17: Top 10 Stories In Under 10 Minutes

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This is a roundup of the day’s top stories in brief.

1. No Relief For Kotak Mahindra Bank

The Bombay High Court denied interim relief to Kotak Mahindra Bank Ltd. regarding the Reserve Bank of India’s direction to dilute its promoter shareholding.

  • The case has been adjourned till Jan. 17 and the RBI will have to respond with its submission before that.
  • As per RBI’s timeline, Uday Kotak needs to bring down his stake in the bank to 20 percent from 29.73 percent by Dec. 31.
  • Kotak’s counsel urged the court to prevent the RBI from taking any coercive regulatory action till the next hearing.
  • The banking regulator had changed its stance in an Aug. 13 letter to the lender and asked it to reduce promoter holding as percentage of “paid-up equity voting capital” from an earlier communication that mentioned “paid up capital”, he said.

Kotak “tried to act smart”, the counsel representing the RBI said in court.

2. Another High Court Bans Online Sale Of Medicines

The Madras High Court on Monday banned the online sale of medicines until the central government notifies its rules.

  • The court has asked the central government to finalise the regulations by Jan. 31, SK Chandrakumar, a lawyer representing the Tamil Nadu Chemists and Druggists Association, a representative body of brick-and-mortar pharmacies, told BloombergQuint over the phone. “The court has ordered complete ban until players obtain a licence to sell it online.”
  • Justice Pushpa Sathyanarayana, who passed the order on a writ petition, held that e-pharmacies in the country can sell medicines online only after obtaining licences under the rules, which are currently in the “draft stage”. The petitioner claimed that there are more than 3,500 such websites in the country.
  • The judgment comes days after Delhi High Court prohibited e-pharmacies from selling medicines online and asked competent authorities to enforce the ban on online sales. The court had given online pharmacies four weeks to file a counter affidavit.

The norms for sale of drugs online are yet to be finalised.

3. Will Modi Do For Investors What Manmohan Did?

Analysts are fretting over uncertainty about chances of Prime Minister Narendra Modi getting a second term as India heads towards a general election in five months. The concerns may be overblown.

  • That’s because Indian markets have surged in the last two decades irrespective of the government in power. If at all, Modi’s term hasn’t matched what investors gained during the tenure of Manmohan Singh.
  • NSE Nifty 50 Index rose more than 40 percent from 1998 to 2004 when Atal Bihari Vajpayee was the prime minister for around six years across two terms. To be sure, the index only rose a little over 5 percent during Vajpayee’s only full term from October 1999 to May 2004.
  • The benchmark index surged 169 percent in Singh’s first term from 2004 to 2009, and then jumped 73 percent during his second term from 2009 to 2014.
  • By contrast, it has returned less than 50 percent gains under the Modi administration so far.

Economic challenges faced by each of the last four governments were different.

4. Indian Markets Extend Winning Streak

Indian equity benchmarks rose for the fifth day in a row to their highest level since Oct. 1 led by HDFC twins, Reliance Industries Ltd. and Tata Motors Ltd.

  • The S&P BSE Sensex rose 0.85 percent or 307 points to 36,270.
  • The NSE Nifty 50 Index climbed 0.77 percent or 83 points to 10,888.
  • Thirteen of the 19 sector gauges compiled by the BSE ended higher led by the S&P BSE Metal Index's 2 percent gain.
  • On the flipside, S&P BSE Information Technology Index was top loser, down 0.35 percent.

Follow the day’s trading action here.

U.S. equity futures fell with Europe stocks after a mixed session in Asia as markets looked to the Federal Reserve for hints on how a volatile year may end.

  • The Bloomberg Dollar Spot Index declined 0.2 percent.
  • Benchmark Treasury yields steadied at around 2.88 percent.
  • Brent crude rose 0.6 percent to $60.64 a barrel.

Get your daily fix of global markets.

5. Power Stocks Jump On New Draft Tariff Norms

Shares of NTPC Ltd. and Power Grid Corporation of India Ltd. jumped after the power regulator kept the return-on-equity caps unchanged and also allowed additional security expenses in the five-year draft tariff norms.

  • The Central Electricity Regulatory Commission retained the return-on-equity at 15.5 percent. A consultation paper had earlier said that the cap may be lowered to 14-15 percent.
  • The new draft norms provide for:
  1. Additional security expenses over and above operational and maintenance spending.
  2. A higher allowance for losses due to the quality of coal.
  3. A special allowance to cover inflation.
  4. A lower plant availability factor from 85 percent earlier to 83 percent.

Brokerages said the draft, if finally accepted, will boost earnings for NTPC and Power Grid.

6. JLR To Fire Thousands?

Jaguar Land Rover will announce plans early next year to cut thousands of jobs as part of a turnaround strategy, the Financial Times reported, citing several unidentified people close to the company.

  • The U.K. luxury carmaker, owned by India’s Tata Motors Ltd., will outline the measures in January as part of a three-year cost-cutting program, the report said.
  • In October, it outlined plans to deliver cost and cash flow improvements of 2.5 billion pounds ($3.15 billion) within 18 months.
  • “Jaguar Land Rover does not comment on rumours concerning any part of these plans,” a spokesman for the company said by email on Sunday.

JLR has hired Boston Consulting Group to help with its $3.2-billion turnaround plan.

7. Growth In Banking ≠ More Banking Jobs

There was a time when the image of the teller sitting behind the bars of cash window in a bank branch was synonymous with banking. But with time and technology, the job of the cash teller has becoming increasingly redundant.

  • Last week, Standard Chartered downsized its operations by a count of 200. Most of the jobs lost were in branch banking functions such as cash tellers, which have become less useful to banks in an age of digital banking. Standard Chartered is not alone.
  • With payments, customer acquisition and now lending increasingly moving online, banks are reviewing the employment needs.
  • The result is that while the banking sector, particularly private banks, continue to grow, banking jobs may not grow at the same pace.

Data is reflecting this shift.

8. Indians Are Drinking More Premium Liquor

The rising affluence of India’s middle class will drive growth of as much as 10 percent a year in the $33 billion spirits market, according to one of the nation’s oldest distillers.

  • After three years of stagnation when the industry faced sales restrictions, Indians are drinking more and spending on premium alcohol, said Abhishek Khaitan, the managing director of Radico Khaitan Ltd.
  • The trend will likely continue as urban dual-income families in the nation of 1.3 billion follow peers in the U.S. and Singapore when it comes to eating and drinking out, he said.
  • India’s spirit sector -- which includes whiskey, brandy, rum and vodka -- is estimated to expand 25 percent to Rs 2.92 lakh crore ($41 billion) by 2022, according to Euromonitor International.

“There’s a cultural change happening,” Khaitan said.

Also Read: TV’s Not Dead! Indian Soap Producer Won’t Abandon Small Screen

9. Farm Loan Waivers: ‘1 Done, 2 To Go’

Hours after taking oath of office on Monday, Madhya Pradesh Chief Minister Kamal Nath cleared the proposal to waive farm loans up to Rs 2 lakh as promised by Congress President Rahul Gandhi ahead of the assembly polls.

  • After Nath signed the relevant file, Rajesh Rajora, principal secretary, Farmers' Welfare and Agriculture Development Department, issued an order in this regard.
  • According to the order, "Madhya Pradesh Government has taken a decision to write off short-term crop loan of eligible farmers up to the limit of Rs two lakh, as on Mar. 31, from nationalised and cooperative banks."
  • Addressing a public rally on June 7 at Pipliya Mandi in Mandsaur district, Gandhi had announced his party would waive farm loans within 10 days of coming to power in the state.
  • Soon after Nath signed the file, Gandhi tweeted:

Nath was sworn in as the 18th chief minister of Madhya Pradesh this afternoon.

10. The Bulls Vs Bears Guide To The World Economy In 2019

2019 is shaping up to be a testing year for the world economy.

Bears say bubbly credit markets, protracted trade wars and uncertain politics will put the brakes on growth. Optimists argue that global demand remains solid, inflation is under control and that any slowdown will be shallow.