Newsletter: 12th February – 18th February, 2017

INDIAN ECONOMY

An integrated oil behemoth, big-bang PSU mergers are in pipeline 

The government plans to merge 13 government oil companies (to name a few ONGC, IOC, HPCL, BPCL, GAIL, MRPL, Chennai Petroleum, Numaligarh Refinery and Oil India), would not only give these companies capacity to bear higher risks, benefit economies of scale and take higher investment decisions, giving much stronger bargaining power with suppliers, and greater financial clout to secure oil resources.

GST council clears draft compensation bill 

“The Draft Compensation Bill has been approved in the GST Council meeting. The government will present the Bill to Parliament in next session,” Finance Minister Arun Jaitley said after the GST council meeting. Next GST meeting will be held on March 4-5 in Delhi and the government is expecting to clear IGST and SGST bills in this meeting. It will also discuss slabs for commodities in next meeting.

Trai floats paper to plug loopholes 

The Telecom Regulatory Authority of India (Trai) has kickstarted a process to address certain loopholes in rules around contentious issues such as predatory pricing and promotional offers, which have led to a bitter battle between Reliance Jio Infocomm and incumbents — Airtel, Idea Cellular and Vodafone India — that has already landed in court.

India’s sugar deficit widens to 15% from 10% on January 31, says ISMA 

India’s sugar deficit increased to 15% as on February 15 from 10% on January 31, according to the estimate of trade body Indian Sugar Mills Association (ISMA) as sugarcane crushing season in Karnataka has almost come to an end, while that of Maharashtra is at its fag end. As on February 15, 2017, sugar mills in the country have produced 146.72 lakh tonnes of sugar, as compared to 173.34 lakh tonnes produced as on 15th February 2016.

Jharkhand attracts over Rs 3.1 lakh crore worth of investment 

Jharkhand attracted over Rs 3.1 lakh crore worth of investment at the end of it’s maiden global investment summit, ‘Momentum Jharkhand’. A majority of these proposals, 121 out of a total of 210, were in mines and geology sector. While the mines sector topped the list by attracting some Rs 2.1 lakh crore worth of investments, it was followed by urban development & housing at Rs 38,320 crore and energy which saw proposals worth Rs 37,150 crore coming in.

India, UAE trade to hit $100 billion by 2020: CII 

Trade between India and the UAE is set to hit USD 100 billion by 2020, up from the current USD 60 billion, the Confederation of Indian Industry has said. “This is evident in the growing interest by the Indian companies towards the Middle East markets and in particular the UAE and efforts made by the Ministry of Commerce & Industry and CII to further strengthen the trade and investment ties,” Confederation of Indian Industry (CII) said in a statement.

Government gives green signal to merger of SBI and its five associate banks 

The Cabinet approved a proposal to merge the five subsidiaries of State Bank of India with the parent, kick-starting consolidation among public sector lenders. The merger will bring nearly a quarter of all outstanding loans in India’s banking sector to SBI’s books. The combined entity will have a mammoth network of nearly 23,000 branches, further increasing the dominance of the nation’s largest bank.

BUSINESS

Vodafone India may surrender payments bank licence 

One of the casualties of the Idea Cellular-Vodafone India merger could be a payments bank. The merged entity could lead to Vodafone surrendering its payments bank’s in-principle approval as it cannot compete with another group company Aditya Birla Nuvo which also has a similar approval from the Reserve Bank of India.

BSE Q3 net profit drops 17% to Rs 64 crore 

Leading stock exchange BSE has reported a 17 per cent decline in consolidate net profit to Rs 63.73 crore in the October-December quarter of the current fiscal. The exchange had posted a net profit of Rs 76.73 crore in the third quarter ended December 31, 2015-16.

SBI takes lead in blockchain, to use it to prevent fraud 

State Bank of India has taken the lead in bringing lenders and tech companies together for using blockchain technology to share information among banks. The SBI’s initiative, christened Bankchain, is in partnership with IBM, Microsoft, Skylark, KPMG and 10 commercial banks. It has also tied up with a startup firm Prime chain Technologies for this exercise.

Kotak-Axis merged entity to be among largest private banks: CLSA 

Amid market talk of a merger between Kotak Mahindra Bank and Axis Bank, global brokerage firm CLSA has released a note saying that if they do merge, the combined entity would be among the largest private sector banks with $120 billion in assets and a 6% share of loans and CASA.  “Its combined market cap would be US$40bn; we see a share-swap ratio of 0.6:1 for Axis,” said CLSA.

FIIs make big deposit in HDFC Bank 

Foreign investors made the biggest single-day purchase of shares in nearly two years on Friday, helping private sector lender HDFC Bank rise to a record high and overtake energy behemoth Reliance Industries as the second-most valuable company on the market. Broader market indices rose to levels not seen since September last year as RBI allowed FII purchases in HDFC Bank late on Thursday evening after a temporary freeze.

Havells likely to buy Lloyd Electric’s consumer business for Rs 1500 crore, to get toehold in room AC segment 

Havells India is in advance negotiations with Lloyd Electric and Engineering Limited to acquire its consumer durables business for around Rs 1200 -1500 crore, to get a toehold in the fast growing Indian air conditioners market that is dominated by global brands. In a market crammed with about two dozen brands, Lloyd is third largest player in the room AC segment after Voltas and LG.

Idea Cellular posts consolidated net loss of Rs 385.6 crore because of Jio 

Idea Cellular posted a consolidated net loss and an on year revenue fall – both a first ever for India’s No. 3 telco since listing – as a brutal price war triggered by the entry of Reliance Jio Infocomm hit both its voice and data business in the fiscal third quarter. For the quarter ended December 31, Idea posted a consolidated net loss of Rs 385.6 crore compared with a consolidated net profit of Rs 655.6 crore a year ago, and Rs 90 crore in the previous quarter.

Reliance Communications to finalise 3 deals, including merger with Aircel, by mid-2017 

Reliance Communication (RCom) expects to complete three proposed deals, including a merger with Aircel, by the middle of 2017. The Anil Ambani-led telecom company agreed to sell a 51% stake in Reliance Infratel, the company’s tower unit, to Canada’s Brookfield Group for Rs 11,000 crore.

Vodafone-Idea combine to outshine Airtel & Jio: Credit Suisse 

A potential merger of Vodafone India and Idea Cellular would make the combined entity the biggest spectrum holder in India and knock off Reliance Jio Infocomm from the top slot on the overall network capacity market share metric, analysts at Credit Suisse said. If Vodafone and Idea were to merge, the combined entity would have 35% network capacity share, displacing Jio, which would have 31%.

Tata Communications completes sale of Neotel for Rs 3,200 crore 

Tata Communications and Nexus Connexion announced that they have completed sale of their South African communications network operator, Neotel, to Liquid Telecom, a privately owned, pan-African telecoms group, majority owned by Econet Wireless Global. On June 28, 2016, the shareholders of Neotel entered into an agreement with a Special Purpose Vehicle (SPV) which is 70 per cent owned by Liquid Telecom and the remaining 30 per cent by Royal Bafokeng Holdings.

Kraft Heinz to pursue merger despite Unilever rejection

Kraft Heinz signaled it will press ahead with a campaign to acquire Dutch-British consumer products giant Unilever after an initial bid worth about $143 billion was spurned. A deal would create a giant in global food, joining the maker of Kraft cheese and Heinz ketchup to its European counterpart, whose products include Q-tips, Hellmann’s mayonnaise and Ben & Jerry’s ice cream.

Apple tops Fortune’s most admired companies list

Tech giant Apple has been named the most admired company in the world, followed by Amazon and Starbucks in a list compiled by Fortune magazine, but no Indian firm could make the cut. Others in the top ten include Berkshire Hathaway, Disney, Alphabet, General Electric, Southwest Airlines, Facebook and Microsoft.

Telenor to roll out Google’s new messaging service in Asia, Europe 

Alphabet Inc’s Google said on Thursday it partnered with Telenor ASA to roll out Rich Communications Services (RCS), an upgraded messaging service, to the Norwegian telecommunications company’s subscribers in Asia and Europe. The messaging service includes features such as group chats, photo sharing and read receipts among other things, Google said in its official blog.

Verizon close to Yahoo deal, price cut of $250-350 million 

Verizon Communications Inc is close to a revised deal to buy Yahoo Inc’s core internet business for $250 million to $350 million less than the original agreed price of $4.83 billion, according to a source. Since last year, Verizon had been trying to persuade Yahoo to amend the terms of the acquisition agreement to reflect the economic damage from two cyber attacks.

Apple topples Samsung as No 1 in smartphone market 

Apple toppled Samsung as numero uno player in the global smartphone market with 17.9 per cent share in the December quarter, research firm Gartner said. The October-December quarter of last year — which clocked 7 per cent year-on-year growth in overall sales to 432 million units — saw Samsung finish second with a market share of 17.8 per cent.

Toshiba chairman quits after $ 6.3 billion nuclear write down 

Toshiba, the embattled technology conglomerate, said it would take a financial hit of more than $6 billion and its chairman would step down as the impact of its disastrous bet on American nuclear power continued to rock an icon of corporate Japan. The announcement of the planned write-down and resignation, which came after a day of uncertainty as Toshiba equivocated on whether it would release the news, reflected intense pressure on Toshiba executives over the writedown.

WORLD

China launches anti-dumping probe against Indian manufactures 

China launched anti-dumping and countervailing duties investigations against some Indian manufactures for allegedly exporting a chemical product – widely used in dyes and pharmaceutical – to the country at an artificially low price. The Chinese Ministry of Commerce had received requests from domestic producers, who accused Indian manufacturers of dumping Ortho Chloro Para Nitro Aniline, a type of dye intermediate, on the Chinese market and called for an inquiry, the ministry said.

Pak Senate passes landmark Hindu marriage bill 

The much-awaited landmark bill to regulate marriages of minority Hindus in Pakistan is set to become a law with the Senate unanimously passing it. The Hindu Marriage Bill 2017, which is the first elaborate Hindu community’s personal law, was adopted by the Senate on the 17th.

Donald Trump calls five media organisations ‘enemy of American people’ 

US President Donald Trump on Friday slammed the country’s five major media organisations by calling it “the enemy of the American people”. “The FAKE NEWS media (failing @nytimes, @NBCNews, @ABC, @CBS, @CNN) is not my enemy, it is the enemy of the American people!” he tweeted after arriving at his Mar-a-Lago home in Palm Beach, Florida, on Friday.

Former PM Tony Blair says Brexit not inevitable, urges revolt 

Former Prime Minister Tony Blair launched a new campaign to persuade Britons to change their minds about leaving the European Union, arguing that those who want to remain should rise up and have their voices heard. Blair urged voters to speak out against the government’s drive to exit the EU at any cost. He argued last year’s vote to leave was “based on imperfect knowledge,” and that Britons voted without knowledge of the true terms of Brexit.

India, China to discuss Masood Azhar, NSG next week 

Amid marked strain in bilateral ties, India and China are likely to discuss a host of issues, including Beijing repeatedly blocking a UN ban on JeM chief Masood Azhar and stymeing India’s NSG membership, when Foreign Secretary S. Jaishankar meets the Chinese Vice Foreign Minister Zhang Yesui next week in Beijing. Jaishankar will attend the first India-China Strategic Dialogue to be held in Beijing on February 22.

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