Morning Scan: All the big stories to get you started for the day

A round-up of the biggest articles from newspapers

A round-up of the biggest articles from newspapers

1. India’s merchandise exports shrink in October for the first time in 19 months

India’s goods exports contracted in October for the first time in almost two years, as slowing demand in the west started impacting shipments, worsened by more holidays during the festive month. Exports declined 16.65 percent in October to $ 29.78 billion, commerce ministry data showed. Imports moderated to their lowest level in eight months, growing at 5.7 percent to $ 56.69 billion. Exports had previously shrunk by 8.74 percent in November 2020. In October, 24 out of the 30 key export items showed contraction, while only six saw expansion.

Why it’s important: India’s trade deficit has risen to $ 26.91 billion, above $ 25 billion for the fifth consecutive month. There could be tough times ahead, the government has warned.

2. Corporate profits fall in second quarter for the first time in over two years

The combined net profit of 2,725 listed companies across all sectors in India was down 6.3 percent year-on-year (YoY) in the fiscal second quarter, the first contraction after eight straight quarters of continuous expansion. In comparison, corporate earnings were up 22.3 percent in the three months to March and up 37.8 percent on an annualized basis in the year-ago period. The companies reported a combined net profit of Rs 2.06 trillion, down from Rs 2.20 lakh crore a year ago and Rs 2.08 lakh in the previous quarter. This compares with combined net sales of all listed companies rising 25.9 per cent to Rs 29.3 lakh crore.

Why it’s important: The post-Covid boom in corporate earnings seems to have ended due to higher input and borrowing costs, but sales growth remained robust.

3. November end deadline for division of $ 14 billion Hinduja conglomerate

The division of the assets of the $ 14 billion Hinduja group between family members could happen by the end of November, six months after lawyers of Gopichand Hinduja, brother of family patriarch Srichand, told a London court that the family had agreed to set aside a 2014 agreement. The group comprises 38 companies, of which half a dozen is listed, including IndusInd Bank.

Why it’s important: If there is no settlement by the end of November, the matter may go back to court to divide one of the biggest business empires in the world.

4. Reliance, Nykaa and Trent in race to buy stake in women’s wear firm TCNS Clothing

Reliance Retail, Nykaa, Aditya Birla Fashion and Trent, as well as private equity investors such as TPG Capital and Advent International, have shown interest in buying TA Associates’ 29.24 percent stake in TCNS Clothing, owner of women’s wear brands W and Aurelia. The discussions may also see the promoters sell all or a part of their 32 percent stake.

Why it’s important: There is increased investor interest in clothes makers as the pandemic has receded and people are refreshing their wardrobes to return to work or go on vacations after staying at home for over two years.

5. WhatsApp India chief leaves company, as does Meta India public policy head

The Indian unit of Meta, which runs Facebook and WhatsApp, has seen two top exits, with WhatsApp India chief Abhijit Bose and Meta India director for public policy Rajiv Aggarwal stepping down from their roles. Shivnath Thukral, WhatsApp’s director for public policy in India, will take charge as director of public policy for Facebook, Instagram, and WhatsApp in India.

Why it’s important: Both the departures come at a time Meta has been retrenching staff at its global offices. Mark Zuckerberg has said his firm will be laying off about 13 percent of its personnel.

6. No to restricting energy supply, Narendra Modi says at G20 Bali meeting

Amid efforts by western nations to curb the use of Russian oil and gas, Prime Minister Narendra Modi has told G20 leaders that restriction on energy supply must not be promoted. Speaking at the G20 summit in Bali in Indonesia, Modi said energy security in important for the country, currently the world’s fastest-growing major economy. Modi interacted with US President Joe Biden, UK Prime Minister Rishi Sunak, and French President Emmanuel Macron. He also met Chinese President Xi Jinping during the welcome dinner.

Why it’s important: India has assumed the presidency of the G20 group of nations at a time when there are geopolitical tensions owing to the Ukraine conflict. India has been buying cheap crude oil from Russia despite Western sanctions.

7. Proposed data law in India may allow storage in trusted overseas locations

The central government will allow transfer of data and its storage in trusted geographies in the revised draft of the data protection Bill, doing away with the data localisation requirement proposed in the earlier version. It will define the trusted geographies from time to time. Criminal penalties proposed on staff of companies involved in data breach will be scrapped in the new draft, likely to be released for public consultation this week.

Why it’s important: Data localisation has been a sticking point in the proposed law. There would be financial penalties instead of criminal prosecution on proven breaches.

8. Hindustan Unilever stops fast-track career development scheme

Hindustan Unilever has halted its Lister program that identified young talent with leadership potential and put them on the fast track with global postings. India’s largest FMCG company has now democratised employee development to focus on early identification and acceleration to offer faster growth opportunities on a broader level.

Why it’s important: the company feels that the Lister program that assured rapid career growth has lost relevance in a competitive market where more young employees are unwilling to wait until they are in their 40s or 50s for leadership roles.

9. Personal guarantors face tribunal heat under insolvency and bankruptcy code

Personal guarantors to corporations in India are facing legal action under the Insolvency and Bankruptcy Code (IBC) by companies backed by them. Since 2019-20, over 1,400 personal guarantors have been taken to bankruptcy tribunals by lenders for recovery of about Rs 1.25 lakh crore, according to latest data with the Insolvency and Bankruptcy Board of India (IBBI).

Why it’s important: The recovery action under the bankruptcy code has picked up momentum. It will now make many promoters carefully evaluate extending personal guarantees.

10. Rajasthan emerges as top beneficiary in central jobs scheme

Rajasthan has become the top beneficiary among states under the Atmanirbhar Bharat Rojgar Yojana launched during the COVID-19 pandemic by the central government to boost formal employment. Under the scheme notified in December 2020, 20.4 percent of formal workers in Rajasthan benefited from the scheme until June 18, followed by Gujarat (14.9 percent) and Uttar Pradesh (14.15 percent), according to the Labour Ministry. In terms of total numbers, Maharashtra (960,000) topped the charts, followed by Tamil Nadu (800,000) and Gujarat (640,000).Why it’s important: There is an employment crisis in the country and the jobs scheme by the central government could be further extended to boost jobs numbers in the formal economy.