Today’s Latest Business News, Finance and Share Market News at 10:00 am on 24 April 2024

Today’s Latest Business News Transcript at 10:00 AM on 24 April 2024

Let’s begin. India has sought details from food regulators of Hong Kong and Singapore who have banned sale of four products from well known Indian brands of spices citing high levels of pesticide residue that can cause cancer if consumed over a long period. The commerce ministry has also sought a detailed report from the Indian embassies on both these countries for a report on the entire issue. The ministry has also sought details from — MDH and Everest whose products faced a ban for containing pesticide ‘ethylene oxide’ beyond permissible limits. A commerce ministry official said, quote, “Details have been sought from the companies. Root cause of the rejection and corrective actions will be determined along with the exporters concerned,” unquote.


On to economy. Extreme weather events may pose a risk to India’s inflation in the near-term, along with geopolitical tensions that could keep crude oil prices “volatile”, the Reserve Bank of India said in its April Bulletin. Retail inflation in March eased 4.85%, after averaging 5.1% in January-March. Food inflation, despite some signs of moderation, remains elevated and a potential source of risk to the disinflation trajectory, according to a paper titled ‘State of the Economy’ released as part of the bulletin. The weather department has projected April-June to record “above-normal” temperatures, and some sections of the country to witness heatwaves. Many economists expect CPI inflation to average 5-5.2% in Q1 FY25, as against 4.9% projected by the central bank.


In other news, Housing price rise would be subdued at around 5% in FY25, due to the base effect and large amount of new launches planned, said a report by India Ratings & Research. Residential prices have moved up 22% y-o-y at the start of FY24 and would be subdued at around 5% y-o-y for FY25, the rating firm said. With most of the old stock cleared and existing inventory largely liquidated along with a continued pick up in demand and spike in commodity prices due to geopolitical tensions, prices surged by almost 14% y-o-y in FY23, along with an increase in land prices and rental yields, it said. India Ratings has maintained a neutral outlook for the residential real estate sector for FY25.


Speaking of houses, India’s household debt may have hit an all-time high of 39.1% of the gross domestic product in the third quarter of FY24, which is higher than the previous peak of 38.6% in fourth quarter of FY21. The debt is estimated to have jumped 16.5% year-on-year in third quarter of FY24, driven largely by a faster growth in non-housing debt, an analysis by Motilal Oswal reveals. The increasing household leverage is in sharp contrast with the rise in corporate borrowings, which are estimated to have risen by just 6.1% y-o-y in third quarter of FY24, easing to a 15-year low of 42.7% of GDP. Economists point out that household debt had gone up sharply towards the end of FY21.


Meanwhile, the government is aiming to boost investment in post-harvest infrastructure development at farm gates to help farmers handle their produce better and fetch remunerative prices. To bring in efficiency in the value chain of agriculture and allied sectors, the Narendra Modi government, if elected for a third term, may launch a separate Rs 750-crore fund called Agri-SURE for agri-startups and expedite the implementation of various initiatives such as the agriculture infrastructure fund and the integrated scheme for agricultural marketing. Sources said the Agri-SURE fund aims to help in scaling up of operations of about 85 startups in the next five years with a variable ticket size of up to Rs 25 crore each.


Moving on. After coming out with unified tariff for natural gas pipelines, the Petroleum and Natural Gas Regulatory Board is now seeking to revise the tariff policy for the product pipelines laid out by the state-owned oil marketing companies and private refiners, a member of the regulatory board, who did not wish to be identified told FE. The new tariff structure will depend upon the capacity utilisation, capex, and the internal rate of return of the pipeline. This will be a significant shift as the product pipeline tariffs are currently calculated as the 75 per cent of rail tariffs on equivalent rail distance, along the pipeline route, except for liquified petroleum gas where it is 100 per cent.


Lastly, the stocks that are in focus today. These include Hindustan Zinc, Tata Consumer, Tata Elxsi, Vedanta, and Reliance among others. The government has persisted with its opposition to Vedanta’s move to de-merge Hindustan Zinc, even after the promoter changed the plan from a three- to two-way split. A senior official, on condition if anonymity told FE that the Centre would not support the revised proposal either, as it felt that several issues could arise as a result of the split.

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