Business Bulletin Weekly 12 April 2023

Welcome to our roundup of the latest business news. This edition brings you a diverse mix of news stories from finance, technology, and consumer markets. We have covered you, from regulatory action by SEBI to Amazon's layoffs and the Adani Group's stocks. We also look at the impact of RBI's decision to pause rate hikes on realty, auto, and bank stocks. Additionally, we bring you insights into India's growing air conditioning market and Twitter's decision to unfollow all accounts under its verified program. So, let's delve into the week's top news and stay informed.

SEBI bans four entities for providing unregistered investment advisory services

The Securities and Exchange Board of India (SEBI) has banned four entities from the securities market for six months for providing unauthorized investment advisory services without registration. The banned entities are Course Work Focus of Shashank Hirwani, Capital Research, its proprietor Gopal Gupta, and Rahul Patel (proprietor of Capres). SEBI found that Course Work Focus and Hirwani had collected Rs 96 lakh from investors between March 2018 and July 2020, while Capital Research, Gupta, and Patel had collected Rs 60.84 lakh between June 2014 and November 2019 without registration. SEBI has directed these entities to refund the fees charged from clients and investors within three months. In addition, they are prohibited from any access or dealing in the securities market for the next six months or until the refunds are completed. The order was issued after SEBI received complaints against the entities for unregistered investment advisory activities.

Interest-rate sensitive sectors surge as RBI pauses rate hikes

Realty, auto, and bank stocks reacted positively to the Reserve Bank of India's decision to pause rate hikes as interest-rate-sensitive sectors gained momentum. Realty counters such as Godrej Properties and DLF, auto companies like Tata Motors and Maruti, and banks such as HDFC and Kotak Mahindra Bank saw a surge in their stock prices. The decision is good news for those looking to purchase homes, as stable interest rates make it easier to buy property. Overall, the market responded positively to the RBI's move to maintain interest rates at their current levels.

RBI Surprises Markets by Holding Repo Rate Unchanged

The Reserve Bank India's monetary policy committee surprised everyone by keeping the repo rate unchanged at 6.50%. Many were expecting a 25 basis point increase, but Governor Shaktikanta Das cited global financial market volatility and concerns over financial stability as reasons for the decision. He also stated that the banking and non-banking financial service sectors are healthy and financial markets orderly. Despite the fight against inflation, recent unseasonal rainfall and crude oil prices could further increase inflation. The RBI's optimistic forecast for GDP growth differs from the World Bank's, which has predicted 6.3% growth for India.

Amazon Cuts Over 100 Jobs in Gaming Sector and Reduces Employee Stock Awards

Amazon has announced the layoff of over 100 employees in its gaming sector and a reduction in employee stock awards. The company's Vice President, Christoph Hartmann, stated that the company decided to let go of employees with long-term goals in mind. However, Amazon is committed to supporting impacted employees with severance, health benefits, time, and assistance in finding their next role. The company plans to maintain a balance between cash compensation and stocks. This is the third round of layoffs announced by Amazon in recent years.

Ace investor Rajiv Jain sees potential in Adani Group stocks despite allegations

Rajiv Jain, co-founder and CIO of boutique investment firm GQG Partners, remains confident in Adani Group's stocks despite allegations of stock manipulation and offshore tax havens by Hindenburg Research. Jain has invested heavily in Adani Group's stocks, believing that they have the potential to become "multi-baggers" in the coming years. Despite concerns raised by short-sellers, Jain sees an attractive entry point due to the stocks being down 75-80%. Adani Group aims to transition from a debt-fuelled expansion spree to a slow and steady growth strategy, focusing on efficiency and expense control.

Cooling Market Heats Up: AC Sales in India to Surpass One Crore Units for the First Time

India's cooling market is heating up as the demand for air-conditioners (AC) rises due to the scorching summer. For the first time, AC sales in India are expected to surpass one crore units, with a target of two crore units in the next four years. Despite being lower than China's annual sales of 8.5 crores, it is a significant achievement for Indian AC makers. The Indian government's production-linked incentive for manufacturing has also benefited AC makers. The AC market is set to grow further after this year's milestone, driven by aggressive marketing and sales.

Twitter Verified accounts unfollow all users, indicating the potential removal of blue ticks

Twitter's CEO, Elon Musk, had encouraged people to pay for the blue checkmark verification badge, but some organizations, like the White House, refused. Musk had warned that legacy verified accounts that didn't sign up for the Twitter Blue service for $8 per month would lose their verification badge. Although he has not yet done so, Twitter Verified accounts recently unfollowed all users, indicating that the verification removal may be imminent. The New York Times lost its blue tick after refusing to pay for it, and other news outlets like The Washington Post and CNN have also declined. Twitter started the verification system in 2009 to help users identify genuine public figures, brands, and news organizations.