Business News at 10:00 am on 29th February, 2024

Let’s begin – India on Wednesday blocked an attempt by some World Trade Organization members to get the China-inspired investment pact in the development agenda of 13th Ministerial Conference, which will ensure that it is unlikely to be part of the outcome document. India, in its attempt to block inclusion of ‘Investment Facilitation for Development’ in the WTO during the working session on Development, was joined by South Africa. Both countries in their submission said that as there is no exclusive consensus on the agreement, it cannot be included in the MC13. Though the IFD has the backing of 123 countries and on Sunday the text of the agreement was released, strictly speaking it is still not an agreement.

Up next – Mid-cap and small-cap stocks took a beating on Wednesday, falling almost 2% after the Association of Mutual Funds in India asked mutual fund houses to have a policy that will safeguard investors in mid- and small-cap schemes. The Amfi advisory came after a nudge from markets regulator Securities and Exchange Board of India, said industry players. According to the Amfi advisory, mutual funds should moderate inflows into these schemes and also rebalance the portfolio. Also, they should ensure that investors are protected from the first-mover advantage of redeeming members. The mid-cap index closed at 39,019.19, down 724 points or 1.82%, whereas the small-cap index closed at 44,998.14, down 890 points or 1.94.%

Moving on – India is expected to see 50% growth in ultra-high networth individuals in next five years, said a new report on Wednesday. This will be the highest for any country, globally. The UHNI count in the country is expected to rise from 13,263 in 2023, to 19,908 by 2028, according to The Wealth Report 2024 by global consultancy Knight Frank. UHNWI are defined as individuals with a net worth of US$ 30 million and above. Overall, the number of wealthy individuals globally is expected to surge by 28.1% to 8,02,891 by 2028. In 2023, the number of UHNIs globally rose to 4.2%, 626,619 from 601,300 a year earlier.
“In other news – A $1.3 billion outsourcing deal from Xerox bagged by HCLTech, the third largest Indian IT service firm, in 2019 seems to have become something of a concern for the latter. From seeing disruption during the pandemic and contractual work taken away by larger peer Tata Consultancy Services to revenue leakage, this account has been under stress for HCLTech since the pandemic. Even TCS has been affected by the same account. The digital printing company has a shared services arrangement with these two Indian IT services firms. As per regulatory filed documents, the firm’s contractual cash obligations towards both HCLTech and TCS for 2023 totalled $296 million.

Meanwhile – Amidst projection of a record wheat output, the government on Wednesday increased the grain procurement target for the 2024-25 season from April-June to around 30 – 32 million tonne against 26.2 mt purchased from the farmers under minimum support price operations. Sources told FE that following the meeting of state food secretaries of the key wheat producing states, the government decided to set higher purchase under MSP operations which is expected to bolster the Food Corporation of India’s stock which has plummeted to eight year low currently. Procurement in Punjab and Madhya Pradesh, two major contributors to the central pool wheat stock, is currently estimated at 13 mt and 80 mt respectively for next marketing season.

Moving ahead – Coal India and Bharat Heavy Electricals Ltd on Wednesday announced the signing of a joint venture agreement for setting up of an ammonium nitrate plant as a part of its coal gasification project. The joint venture will initiate the ‘coal to chemicals’ business by first setting up a 2,000 tonnes per day ammonium nitrate plant and will use Pressurized Fluidized Bed Gasification technology developed by BHEL, the company said in an exchange filing. Coal India will own 51% stake in the joint venture with BHEL acquiring the remaining 49%. The JV will be registered in Odisha, and incorporated as a “private limited” company with an initial paid-up share capital of Rs 1 lakh.
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Lastly – GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a positive opening on Thursday. Stocks in Focus: GIFT Nifty traded higher as the index was up 72 points or 0.33% at 21,956.50 indicating a positive start for domestic indices NSE Nifty 50 and BSE Sensex on Thursday. Previously, on Wednesday, the NSE Nifty 50 lost nearly 250 points or 1.11% to settle at 21,951.15, while the BSE Sensex closed 790.34 points or 1.08% lower at 72,304.88. The key stocks to watch in trade are Coal India, Vedanta, LTIMindtree, Jaiprakash Associates, NHPC, and Reliance Industries among others.