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1. Meet HDFC Bank’s New CEO
Sashidhar Jagdishan will be the new chief executive officer of HDFC Bank Ltd., India’s largest private lender.
🌟The Reserve Bank of India has approved Jagdishan’s candidature from a list of three potential chief executives suggested by the board of the private lender, according to the lender’s press release.
🌟Jagdishan will replace Aditya Puri, who has led the bank since its inception, for a period of three years.
Jagdhisan takes over at a time when the bank has seen concerns emerge over pratices at its vehicle loans division.
The announcement of Jagdishan’s appointment hit exchanges on Tuesday, ending a long period of speculation over who would replace Puri when he retires.
🌟Many believed that Jagdishan was Puri’s choice after he was appointed as ‘strategic change agent’ in 2019.
🌟Jagdishan currently heads functions such as finance, human resources, legal and secretarial, administration, infrastructure, corporate communications and corporate social responsibility.
🌟Jagdishan is a hard taskmaster, which is essential to ensure the execution track record that HDFC Bank has built over the years, according to Macquarie analyst Suresh Ganapathy.
🌟According to Hemindra Hazari, an independent banking analyst, Jagdishan has acted as Puri’s right hand man for so long that he has a bird’s eye view of all key happenings at the bank and his understanding of its business is strong.
2. The Drugmaker That's Rallying The Most
Stocks of most Indian drugmakers have made large gains so far this year amid increasing demand for their products following the Covid-19 outbreak and the sector being classified as an essential business when the nation went into a lockdown. And one company has stood out.
🌟Till July 31, shares of Aurobindo Pharma Ltd. have returned gains of nearly 91.44% to investors. The Nifty Pharma Index rose nearly 40% during the same period.
🌟Dr. Reddy’s Laboratories Ltd. has been the second-best performing pharma stock during the same period, returning gains of 57.28%.
🌟That has reflected in the financial performance of the drugmaker in the quarter and year ended March 2020.
3. Nifty Snaps Losing Streak; U.S. Stocks Rise
India's benchmark indices snapped their longest losing streak in over four months with a strong rebound led by market heavyweights Reliance Industries Ltd. and HDFC Bank Ltd.
🌟The S&P BSE Sensex gained nearly 750 points, ending 2% higher at 37,687.
🌟The NSE Nifty 50 gained over 200 points, ending 1.87% higher at 11,095.
🌟RIL saw its biggest single-day gain in nearly four months, ending 7.5% higher.
🌟Broader markets ended with gains but could not keep up with the benchmarks.
U.S. equities edged higher as investors shook off disappointing earnings amid speculation that lawmakers would move forward on a stimulus bill.
🌟The auto sector was among the top performers as Ford Motor Co. rallied after naming a new chief.
🌟Financial shares dipped as American International Group Inc. fell after posting a $7.9 billion loss.
🌟Shares were mixed in Europe,with Diageo Plc tumbling after the drinks giant provided no 2021 guidance.
🌟Government bonds climbed and the dollar turned higher against its biggest peers.
4. Pandemic Shows Why Ambani’s Bets May Pay Off
Large retail chains struggled in the quarter ended June as Indians stayed indoors amid the raging pandemic and stores remained shut. But for Reliance Retail Ltd., India’s largest retailer, the period shows how Mukesh Ambani’s marriage of content, carriage and commerce is paying off.
🌟The pandemic forced Reliance Retail, operator of supermarkets, India’s largest consumer electronics retail chain, fast-fashion outlets and a cash-and-carry unit, to shut nearly half of the stores.
🌟Footfalls, the company said in its earnings presentation, tumbled nearly 57%, and about 39% in June alone. Revenue contracted 17%.
🌟Yet, it could have been much worse had it not been for connectivity, or the data recharges by Reliance Jio Infocomm Ltd.’s subscribers, and the grocery business
5. 2020: Annus Horribilis, But Not For Tech. Will That Sustain?
What will it take for Indian IT to move to higher valuation multiples? Niraj Shah studies the many market forces at play.
🌟Can earnings comfort in these disruptive times, coupled with strong balance sheets and cash flows draw a premium?
🌟Or would it need better margins and return ratios to do the trick?
🌟But Indian IT firms are not product companies. Where will non-linear growth opportunities come from?
6. JPMorgan’s Jahangir Aziz Wants RBI To Do ‘A Lot More’
The economic crisis caused by the Covid-19 pandemic is an unprecedented one. And the response to it also needs to be unprecedented and unorthodox, according to JPMorgan’s Jahangir Aziz who said the central banks, including the Reserve Bank of India, have a much larger role to play in reviving the country’s economy.
🌟Aziz, who is the head of emerging markets economic research at the investment bank, warns that if strong measures are not taken to ensure recovery, the economic crisis will turn into a financial sector crisis, which will not only delay the recovery but also affect medium-term growth.
🌟The Monetary Policy Committee has cut the policy repo rate by 115 basis points to 4%—a historic low.
🌟The rates, Aziz said, are still too high. “The size of the growth shock is so large that these interest rates are very high compared to the size of the growth shock. Therefore, they need to be brought down.”
7. Sun Pharma Launches Covid-19 Drug Favipiravir, And A Price War
Sun Pharmaceutical Industries Ltd. has launched Favipiravir for the treatment of mild to moderate cases of Covid-19, at Rs 35 per tablet in India. Called FluGuard, the drug will be available in the market from this week.
🌟Favipiravir is the only oral anti-viral treatment approved in India for potential treatment of patients with mild to moderate symptoms of the Covid-19 disease, said a statement by Sun Pharma.
🌟The company said it will work closely with the government and the medical community to ensure availability of FluGuard (Favipiravir 200 mg) to patients across the country.
8. Covid-19: India 'Flying Blind' As Tally Tops 18.5 Lakh
Covid-19 cases in India continue to rise at the fastest pace in the world with another addition of over 50,000 new infections in a day.
🌟India added over 52,000 fresh cases in 24 hours, taking the total tally to over 18.5 lakh in the world’s third-worst infected country.
🌟India has added over 3 lakh cases in just six days.
🌟The rise in cases can be partially attributed to the increased rate of testing. The total number of tests carried out in India for detection of Covid-19 has crossed the two-crore mark, according to the Indian Council of Medical Research data.
Officially India’s death rate is nearly 20 times lower than the U.S., even though it has the world’s fastest-growing epidemic and the third-highest number of total cases.
🌟But independent experts are warning India has failed to properly record fatalities, and say better data collection is needed if the country is going to get a handle on the epidemic.
🌟“The problem is a mix of poor data culture and a bloated, corrupt bureaucracy,” said Steve H. Hanke, professor of Applied Economics and the founder and co-director of the Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise at the Johns Hopkins University in Baltimore, pointing to a report by the Carnegie Endowment for International Peace.
🌟“Missing or low-quality data are always a major problem when attempting to form public policy in the health -- or any other -- field,” he said.
9. Debt-Ridden HDIL Attracts Suitors
Adani Properties, Suraksha Asset Reconstruction and Sunteck Realty are among six players that have shown initial interest to acquire debt-laden Housing Development and Infrastructure Ltd. through the insolvency resolution process, according to a regulatory filing.
🌟HDIL is under corporate insolvency resolution process pursuant to the provisions of the Insolvency and Bankruptcy Code, 2016.
🌟The invitation for expressions of interest for resolution applicants was first published in February and subsequently revised several times.
🌟International Asset Reconstruction Company, NS Software and Harsha Vardhan Reddy have also submitted the EOI, but were found ineligible.
10. IPL: Title Sponsor To Pull Out?
Chinese smartphone maker Vivo is likely to pull out as the Indian Premier League’s title sponsor for this year and is in talks with the BCCI for an “amicable separation” amid rising diplomatic tensions between India and China, according to the Press Trust of India.
🌟The one-year pullout could be treated as a moratorium period and if the relations improve, the Board of Control for Cricket in India may look at inking a fresh three-year deal with the company from 2021 to 2023 on revised terms.
🌟Chinese sponsorship became a bone of contention after the BCCI declared itwould review the deals following the violent clashes between the armies ofboth the countries in eastern Ladakh
A day for new CEOs: SBI Cards & Payment Services says that Ashwini Kumar Tewari has taken charge as the company's new Managing Director and CEO. The RBI has also approved Sashidhar Jagdishan's appointment as HDFC Bank's new MD and CEO.
Markets closed up today. Nifty 50 closed at 11095.25 (203.7, 1.9%) , BSE Sensex closed at 37687.91 (748.3, 2.0%) while the broader Nifty 500 closed at 9074.95 (142.9, 1.6%). Market breadth is ticking up strongly. Of the 1655 stocks traded today, 1064 were on the uptrend, and 520 went down.
Axis Direct is a BUY on Endurance Tech, the auto ancillary tech company, with a price target of Rs. 1190.
Firstsource Solutions gains more than 10% today, rising to a fresh year high.
Vaibhav Global, which sells jewellery online and via TV channels with its major market in the US, is rising today on high volumes.
KEC International is up today after the company said that it had won orders worth Rs 1,192 crore across various businesses.
IT stocks with a significant US presence are lower today after President Trump passed an executive order banning H1B workers on federal government contracts. While this doesn't impact private sector contracts, US central government funded, as well as defense contracts to IT companies would be among those where H1B workers wouldn't be allowed.
Torrent Pharma hits a fresh lifetime high today.
Essel Propack, Bliss GVS Pharma among the top gainers today.
Markets are higher in early trading. Nifty 50 was trading at 10933.60 (42, 0.4%) , BSE Sensex was trading at 37038.39 (98.8, 0.3%) while the broader Nifty 500 was trading at 8972.65 (40.6, 0.5%). Market breadth is overwhelmingly positive. Of the 1489 stocks traded today, 1025 were on the uptrend, and 382 went down.
Largecap and midcap gainers today include Rajesh Exports Ltd. (478.55, 8.27%), Reliance Industries Ltd. (2150.60, 7.05%) and Apollo Tyres Ltd. (115.15, 6.52%).
Largecap and midcap losers today include MphasiS Ltd. (1103.85, -3.56%), Tech Mahindra Ltd. (652.65, -3.11%) and Jubilant Life Sciences Ltd. (835.45, -2.99%). #NIFTY50