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China left benchmark lending rates unchanged at a monthly fixing on Wednesday, in line with market expectations, after the central bank kept a key policy rate steady last week amid some signs of improvement in the broad economy. WHY IT'S IMPORTANT China has set an economic growth target of "around 5%" for 2024, a rate that economists say is ambitious and calls for more stimulus, including monetary and fiscal easing. In particular, China needs to revive a battered property sector. Most new and outstanding loans in China are based on the one-year loan prime rate (LPR), while the five-year rate influences the pricing of mortgages. But any sharp cuts to interest rates may put pressure on the yuan and banks whose net interest margins (NIMs) have been falling since last year. BY THE NUMBERS The one-year loan prime rate (LPR) was kept at 3.45%, while the five-year LPR was unchanged at 3.95%. In a Reuters poll of 27 market watchers conducted this week, all respondents expected both rates would stay unchanged. While China's factory output and retail sales beat expectations in the January-February period, property investment in China fell 9% year-on-year in the first two months of 2024, after a sharp 24% fall in December. Property sales also slid. Credit growth has also slowed. Outstanding yuan loans grew 10.1% in February from a year earlier - the lowest on record. CONTEXT China's central bank left its medium-term lending facility (MLF) rate unchanged last week. The MLF rate serves as a guide for LPR, which is set by 20 designated commercial banks. But PBOC Governor Pan Gongsheng said earlier this month that the bank would keep the yuan basically stable and sent a dovish message to the market by saying China had "rich monetary policy tools at its disposal." Investors have since ramped up bets that authorities will roll out more monetary easing measures, including a further reduction to bank reserves, to support the economy.

Mumbai: Anil Ambani-led Reliance Power settled the debts owed to three banks - ICICI Bank, Axis Bank, and DBS Bank - last week while its parent Reliance Infrastructure is working towards settling dues of Rs 2,100 crore to JC Flowers Asset Reconstruction Company, said people with knowledge of the matter."Reliance Power aims to be a debt-free company by the end of this fiscal year. The only debt on its books will be the working capital loan from IDBI Bank," said a senior executive from a commercial bank. The three lenders jointly had about Rs 400 crore and have recovered close to 30-35% of their principal loans, another lender said.Reliance Infrastructure and JC Flowers ARC had entered into a standstill agreement, according to notice issued to the exchanges on January 7. Initially, the standstill was until March 20, 2024, according to a separate stock exchange disclosure. "This was recently extended to March 31, 2024," said a spokesperson of Reliance Infrastructure. 108627246As per the standstill agreement, JC Flowers ARC will not take legal action against Reliance Infrastructure until March 31, giving the company time to arrange funds. ICICI, Axis and DBS Bank did not respond to ET's request for comments. Reliance Power did not comment on details of settlement of the loan. Reliance Power raised Rs 240 crore equity from VFSI Holdings on March 13, a stock exchange disclosure showed. The proceeds were probably used to settle the dues of the banks, one of the bankers cited above said. VFSI Holdings is a subsidiary of Varde Partners, a global asset manager.Yes Bank, the original lender, has transferred its Rs 48,000-crore distressed loan book to JC Flowers ARC, including loans given to Reliance Infrastructure and Reliance Power.Reliance Power disclosed to the exchanges that as of December 31, 2023, its total financial indebtedness stood at Rs 765 crore. Separately, Reliance Infrastructure stated its total financial indebtedness was Rs 4,233 crore for the same period. In April 2023, Reliance Power settled loans with two lenders - JC Flowers ARC and Canara Bank - according to exchange disclosures.Reliance Power had allotted 200 million equity shares to VFSI Holdings in September 2022 at Rs 15.55 per share; of this, 25% was subscribed at Rs 80 crore then, while the remaining were issued as warrants. VFSI exercised the right to convert warrants into shares resulting in an infusion of Rs240 crore.In August this year, Reliance Commercial Finance, which Authum Investment & Infrastructure acquired, invested Rs 1,043 crore in both the Reliance companies. It invested Rs 891 crore in Reliance Infrastructure and Rs 152 crore in Reliance Power.

Apple is pulling out all stops in a bid to reach a double-digit smartphone market share in India as soon as possible, from around 7% now. The iPhone maker has expanded its reach by onboarding thousands of authorised resellers in recent times across the country, along with organised retail outlets like Croma and Reliance Retail.Retailers ET spoke to said Apple was earlier hesitant to get displayed in small retail outlets, but that has changed now. The company is also helping with finance options, even for retailers doing very small volumes. Further, additional incentives are being given to retailers for meeting targeted sales like increased margins, freebies etc."Apple has been very noticeable in the India market for the past year or so with its high-decibel marketing, opening of new Apple stores, distribution expansion and favourable channel earning structure," Navkendar Singh, associate vice-president with IDC India, told ET. 108627207Apple has been doubling down on India -the world's second largest smartphone market - particularly due to geopolitical conditions with the company also witnessing a slowdown or stagnation in key markets of the US and China. The retail push comes on the back of India emerging as Apple's second-largest manufacturing hub after China. The US major produced smartphones worth ₹1 lakh crore in 2023, on the back of the smartphone production-linked incentive (PLI) scheme. While a majority of iPhones manufactured in India are exported, the domestic market too is growing sharply for Apple - at over 38% on year. Apple chief executive Tim Cook has previously described India as an "incredibly exciting market" with the company achieving record revenue."Apple has set a standard with perfect push and pull (brand equity and marketing) strategy and how much margins or incentive it offers for its channel partners to make the sale effortless and still earn 4-6% on an expensive premium device versus 6-10% on a low-cost sub $200 device," Neil Shah, vice-president of Counterpoint Research, told ET.As per executives, typically, Apple offers 10% margins to its premium resellers, 8% to LFRs (large-format retail) and 6-8% to other distributors while the small, authorised retailers get around 4-6%. Rival Samsung typically offers 8-10% margins, depending on the models while Chinese players offer upwards of 10%."In a 'mobile first' country like India, the young and growing middle-class consumers are looking to purchase their second or third smartphones, Apple is the North Star," Shah said. As per IDC's Singh, Apple is trying to attract new aspirational consumers from smaller towns/cities by opening more exclusive outlets, special deals with etailers, especially during the festive period, and attractive channel support/schemes to multiple brand outlets and (MBOs) and LFR chains like Croma and Reliance Retail.A query sent by ET to Apple remained unanswered at the time of going to press.

The Union Public Service Commission (UPSC) on Tuesday postponed the civil services preliminary examination to June 16 from May 26 due to the Lok Sabha elections. The civil services examination is conducted annually by the UPSC to select officers of the Indian Administrative Service (IAS), the Indian Foreign Service (IFS) and the Indian Police Service (IPS) among others. "Due to the schedule of the impending general election, the commission has decided to postpone the civil services (preliminary) examination-2024 which also serves as screening test for Indian Forest Service examination, 2024, from 26-05-2024 to 16-06-2024," it said. The Lok Sabha polls will be held in seven phases starting April 19. Counting of votes will be on June 4.

ET Intelligence Group: Largecap companies continue to show better growth and profitability at the aggregate level despite having a higher base for financial comparison owing to their large-scale operations compared with their midcap and smallcap counterparts. According to the ETIG’s latest analysis of quarterly results, the aggregate operating margin of largecap companies was in the range of 17% to 23% over the past 13 quarters compared with 12-15% for mid caps and 3-5% for small caps. In addition, small caps showed a higher volatility in net profit with nine out of 13 quarters of net loss.The comparison becomes critical at a time when investors are becoming cautious about the sustainability of the returns in mid and small cap stocks. Over the past 12 months, the S&P BSE MidCap and SmallCap indices have gained 57% and 54% compared with the 25% gain in the S&P BSE Sensex. However, over the past month, large caps have shown greater resilience. The Sensex has lost around 1% while the fall in the mid cap and the small cap index has been steeper at nearly 6% and 10%. For the December 2023 quarter, a sample of 316 large cap companies (market cap above Rs 15,000 crore) reported an aggregate operating margin of 18.3%. For a sample of 762 mid cap companies (market cap between Rs 1,000 crore and Rs 15,000 crore), it was 13.3% and for 2,271 small cap companies (market cap below Rs 1,000 crore), the margin was 5.7%.108631091During the period of observation, large caps showed a higher year-on-year revenue growth in each of the 13 quarters to December 2023 compared with the mid and small caps. The revenue volatility for small caps was greater as it fell year-on-year in four out of thirteen quarters.Largecaps also exhibited better cost control and therefore higher interest coverage ratio. Excluding banks and finance companies, the large cap sample’s raw material cost as a percentage of revenue was 30-38% during the 13 quarters to December 2023 while the proportion was 42-49% for mid caps and small caps. The interest coverage ratio for large caps was 4-6%, for mid caps 3-5% and for small caps below 2%. The ratio is calculated by dividing earnings before interest and taxes by interest outgo and indicates a company’s ability to service debt.The revenue share of large caps has been gradually improving. It expanded to 82.5% in the December 2023 quarter from 80.3% three years ago. During the period, revenue share of mid caps dropped to 14.5% from around 16% and for small caps, it fell to 3% from nearly 4%.