Axis Bank tanks 7% as asset quality worsens in Q2

Axis Bank dipped 7% to Rs 475 on the BSE in early morning trade after the bank’s asset quality worsen in July-September 2017 quarter (Q2FY18).

The bank’s gross non-performing assets (NPAs) and net NPAs stood at 5.9% and 3.12% in Q2FY18 against 5.03% and 2.30% in Q1FY18, respectively. In the year-ago quarter, gross NPAs were at 4.17% and net NPA were at 2.02% of the loan book.

Asset quality numbers worsened significantly on the Reserve Bank of India’s (RBI’s) assessment of its previous financial year numbers. According to rules, if the RBI’s assessment of bad debt numbers for a financial year differs from the bank’s assessment by more than 15%, the divergence should be disclosed.

However, the bank reported 36% year-on-year growth in its second-quarter net profit, aided by low provisioning. Profit for the quarter stood at Rs 432 crore, against Rs 319 crore in the year-ago quarter. Gross slippages or good assets turning bad, in the quarter rose significantly to Rs 8,936 crore, of which Rs 8,110 crore was in the corporate sector. Total slippages in the June quarter were at Rs 3,519 crore.

“High slippages in the quarter were driven by divergence assessment. Slippages largely from the low rated pool of stressed accounts. The sizeable reduction in stressed pool improves our confidence in the trajectory of the Bank’s credit costs,” Axis Bank said in a statement.

iPhone X debut: Should Apple worry as model 7 outsells 8 in US?

Apple Inc’s older iPhone 7 models are outselling the recently launched iPhone 8 ahead of the early November debut of the premium iPhone X, broker KeyBanc Capital Markets said, citing carrier store surveys.

Traditionally, new editions of the iPhone have sold quickly as fans queue for the latest upgrade, but early surveys have added to chatter that the iPhone 8 is not proving as popular as its predecessors.

US wireless carrier AT&T said last week its third-quarter postpaid handset upgrades were fewer by nearly 900,000 from a year ago, and brokerage Jefferies attributed it to weak iPhone 8 demand.

“Many respondents indicated that a meaningful portion of customers are buying iPhone 7 in lieu of the new iPhone 8, given the lack of significant enhancements in the new phone,” KeyBanc analyst John Vinh wrote in a client note.

Vinh also said feedback from stores indicated that customers were waiting to purchase the iPhone X or to compare the iPhone X with other models before buying the iPhone 8.

Apple last month introduced the iPhone 8 and iPhone 8 Plus, which resemble the iPhone 7 but have a glass back for wireless charging. While iPhone 8 starts from $699 in the United States, iPhone 7 is retailing from $549 after a price cut.

Flipkart beats Amazon in festive season sales, captures 50% market share

Flipkart beat Amazon in sales during this year's festive season by a huge margin, reported the Economic Times. The Indian e-marketplace captured 50% of the festive market, while the American e-commerce behemoth trailed as the runner-up with a 35% share.

The Indian e-commerce market is reported to have grown by 40% in value over the last year. Online sales during the September-October festive season is estimated to have increased to $2.9 billion from $2 billion last year.

Amazon is said to have pocketed just Rs 2,500-2,700 cr during its Great Indian Festival Sale in September as compared to Flipkart's Big Billion day jackpot of Rs 5,000 cr, according to Livemint. (However, ET reports that Flipkart may have sold only Rs 4,300 cr worth of products, a number that is still way ahead of Amazon India's)

Livemint quotes Manish Tiwary, vice president (category management) at Amazon India as saying, “Amazon.in remains the largest marketplace and the fastest growing one in Indian e-commerce landscape. The recently concluded Great Indian Festival has been our biggest shopping event till date with a remarkable spike in customer acquisition from tier-II and tier-III cities across India, with 85% of new customers coming from these areas. We saw a tremendous customer response across categories—from high-value products such as smartphones and appliances to everyday essentials such as shampoos, biscuits and pet supplies.”

Sebi's one-scheme-per-category rule is harsh: Morningstar's Anthony Serhan

Market regulator Securities and Exchange Board of India (Sebi) has said a mutual fund house can have only one scheme per category. The move will impact many fund houses, particularly the larger ones operating as many as a dozen schemes in some categories. Anthony Serhan, managing director (research strategy), Morningstar Asia-Pacific, calls the new rule harsh. In an interview with Samie Modak, Australia-based Serhan, an expert on investment themes and trends, says the Indian mutual fund industry has a lot of potential to grow.

Edited excerpts:
Indian equity mutual funds are getting over $3 billion every month. Do you think that is sustainable?

The record inflows that are coming into equity mutual funds (MFs) are on an incredibly small base. I still think there is more potential to grow. This is a secular change of moving away from gold and property to financial assets. That’s just part of any developing economy: As the rates of urbanisation and modernisation increase, you will see more money going into financial assets. Most Indian investors have not been anywhere near the equities market before. The first thing that you have to do is getting them to recognise equities as an investment. You can grow the number of people by educating them about returns, downturns and upturns. In Australia, the adult participation rate in equities is about 40 per cent; for India it is not even 10 per cent. In the next five years, the inflow number will be many time more. The industry is going to keep growing. If you look at the size of the Indian markets compared to other markets, it still doesn’t have the same economies of scale. Partly, this is because of the absolute size. Distribution-wise, the geographic spread of India is very wide.

Jaitley launches MCX gold options, says move will help formalise trade

Finance Minister Arun Jaitley on Tuesday launched gold options trading on the leading commodity bourse MCX and said this is one of the steps towards formalising trade in the yellow metal.

Options are derivatives which give a buyer the right but not the obligation to buy or sell an underlying asset or instrument at a specific price on or before a certain date.

"This marks a very important evolution in trading of yellow metal itself. It hedges all risks by giving them (traders) the option of futures," Jaitley said after launching the options trade on the auspicious day of Dhanteras.

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Indians are great buyers of gold. This new product will be extremely successful, he said.

Emphasising that the government is taking efforts to formalise gold trade, Jaitley said, "I am sure more it formalises, better it is for consumers, jewellers and those trading in this. That's in consonance with the business environment for future that we see for us".