Newsletter: 20th-26th November 2017

 

INDIAN ECONOMY

Bond yield falls 15 bps, most in a year, as RBI scraps open market sale plan

Indian 10-year bond yield dropped most in a year on Monday after the Reserve Bank of India (RBI) scrapped plans to sell bonds worth Rs10,000 crore via open market operations (OMOs). The 10-year bond yield was down 15.8 basis points at 6.891%—its biggest slide since November 2016.

“Other than global headwinds and domestic fiscal worries, the reason for higher yield was the large amount of OMO sales in last few months, which increased overall bond supply and also soaked up liquidity. With this cancellation of OMO, it seems that the market might have taken signal that this will be the end of the OMO sales” said Soumyajit Niyogi associate director of India Ratings & Research.

Card transactions soar 84% in September 2017 to Rs 74,090 crore: Report

The debit and credit card transactions have jumped to Rs 74,090 crore in September this year, up a hefty 84 per cent as compared to the same month last year when it stood at Rs 40,130 crore, thanks to the government push for non-cash payments, says a study.

Government Seeks Rs 13,000 Crore Surplus From RBI After Dividend Falls Short 
The dividend payout of central public sector enterprises (CPSEs) in 2017-18 will be at least 25 per cent (Rs.170 billion) higher than the budgeted estimate of Rs.675.3 billion, as per a report in Financial Express. This will provide additional resources to compensate for the expected shortfall in Centre’s revenue receipts. The RBI has transferred just Rs.306 billion as dividend for the current year.

12% & 18% GST slabs may be merged, 28% for demerit goods: Arvind Subramanian

The government may combine the 12 per cent and 18 per cent slabs for goods and services tax (GST) into one in the near future and reserve the 28 per cent rate only for demerit goods, said chief economic adviser Arvind Subramanian.

While India will never move to a single GST rate, over time there would be a “poor man’s” rate (0 per cent and 5 per cent), a “core” rate (the 12 per cent-18 per cent combination), and the demerit rate (28 per cent), Subramanian said.

Cabinet approves setting up of 15th Finance Commission

The Union cabinet has approved constitution of the Fifteenth Finance Commission that will decide the formula for sharing of taxes between the Centre and states for five years starting April 1, 2020.

April-Oct trade deficit soars 60% to $88 billion: DBS report

The trade deficit has ballooned to $88 billion between April and October, up 60% from the comparable period a year ago due to weak exports and a sharp rise in imports, says a report.

“The problem is two-fold; weak export growth of 9% year-on-year, coupled with a sharp 23% rise in imports during the April-October of this fiscal year, taking the overall trade deficit to $88 billion, which is up 60% year-on-year,” Singaporean brokerage DBS said a report today.

Rs 600 billion revenue deficit, oil price spike can undo the goods in economy

The past fortnight has been quite eventful in the context of its medium-term impact on the currency and money markets in India. Moody’s upgraded India’s credit rating from Baa3 to Baa2 with stable outlook. The immediate impact has been observed in the renewed interest in the capital markets where the indices have recovered their earlier losses that had crept in due to profit booking, economic recovery in developed markets leading to minor flight of capital and sudden rise in crude oil prices.

India GDP growth rate in Q2 likely at 6.2-6.3 pct: NITI Aayog VC Rajiv Kumar

The Budget for 2018-19 should focus on the social sector and an attempt should be made to provide universal health insurance cover to citizens. In an interview with Prasanta Sahu and Saurabh Kumar, NITI Aayog vice-chairman Rajiv Kumar says the think-tank can play a role similar to the GST Council for the social sector to generate better outcomes.

S&P holds India rating, government says it’s standard, not poor

Standard & Poor’s retained its sovereign rating for India at BBB- with a stable outlook, dashing hopes of another upgrade after rival Moody’s last week lifted its rating by a notch after a gap of nearly 14 years. The government chose to focus on the positives, with railway minister Piyush Goyal calling it a “very satisfying” report that endorsed the administration’s reforms agenda.

OMCs to fast-track upgrade of refineries to BS-VI standard

To meet the national capital region (NCR)’s demand for cleaner fuel by April 2018, oil marketing companies (OMCs) have decided to hasten the process of upgrading their refineries, two senior officials from the refiners said.

The refiners would be investing more than Rs80,000 crore in upgrading petrol and diesel quality to meet BS-VI specifications by 2020. India has already implemented Euro-III across the country and Euro-IV in major cities.

Banks squeeze India firms harder in $207 billion bad loan fight

Indian lenders are stepping up efforts to have safeguards in place as they struggle to clean up $207 billion of stressed loans in the system, targeting new borrowers and older ones that are tapping the market again. The Reserve Bank of India has asked banks to resolve 50 of the biggest defaulters within a year.

BUSINESS

IndusInd Bank, shareholders to invest Rs 205 crore in Satin Creditcare network

Asian Development Bank-backed microfinance lender Satin Creditcare Network is in the process of raising Rs 205 crore from private sector lender IndusInd Bank, as well as from existing overseas shareholders, in a combination of equity and fixed income securities to augment capital base and support growth.

Uber to partner with Mahindra for electric vehicles in India

Automaker Mahindra & Mahindra has entered into a partnership with Uber India to deploy electric vehicles on the US cab aggregator’s platform, beginning with a few hundred vehicles in Delhi and Hyderabad in February next year before expanding to other cities in the country.

Jio reports positive AGR of Rs 4,270 crore for the first time in September quarter 

Jio reports positive AGR of Rs 4,270 crore for the first time in September quarter transaction at an early stage with Western Digital Corp, Toshiba’s joint venture partner.

BSE to auction investment limits for Rs 4,000-cr govt bonds

Leading stock exchange BSE on Friday said it will auction investment limits on Monday, enabling foreign investors to purchase government bonds nearly worth Rs 4,000 crore.

The auction will be conducted on BSE’s ‘ebidexchange’ platform from 1530 hrs to 1730 hrs, after the close of market hours, the exchange said in a circular.

FM To Launch SBI’s First Comprehensive Digital Service Platform, YONO

State Bank of India (SBI) is all set to launch India’s first comprehensive digital service platform, YONO, which stands for ‘You Only Need One’.

An integrated omni-channel digital platform that offers just about everything related to financial services and lifestyle products, YONO will be launched by Union Finance Minister Arun Jaitley in New Delhi on November 24.

RBI allows strong ARCs hold more than 26% in sick units 
In a move that would allow asset reconstruction companies (ARCs) taking management control of sick companies, the Reserve Bank of India has removed the 26% cap on shareholding after conversion of the debt of the borrowing firm under reconstruction into equity.

In a note to ARCs sent late Thursday, the central bank said ARCs that maintain Rs 100 crore net owned fund consistently and follow good corporate governance would be exempted from the 26% shareholding limit prescribed in 2014.

Oil, gas PSU mergers exempt from CCI approval 
Merger and acquisition deals involving public sector oil and gas companies have been exempted from seeking the Competition Commission approval, says a notification. The corporate affairs ministry’s decision to exempt such deals from the ambit of the Competition Commission of India (CCI) comes against the backdrop of the proposed consolidation and stake purchases among state-owned oil and gas companies.

 

WORLD

China signs deal to build new nuclear reactor in Pakistan: WNN

China has signed a deal to build a third large nuclear reactor in Pakistan, which wants to get a fifth of its electricity from nuclear by 2030.

World Nuclear News, supported by industry lobby World Nuclear Association, reported that China National Nuclear Corporation (CNNC) and the Pakistan Atomic Energy Commission (PAEC) have signed a cooperation agreement for the construction of a 1,000 megawatt (MW) HPR1000 “Hualong One” reactor at the Chashma nuclear power plant in Punjab.

Apple files patent for foldable iPhone: Report

Following earlier reports that Apple was working with LG on a future foldable iPhone, the company has filed a patent application for a yet-unnamed foldable device that can be “opened and closed like a book”.

China imports no iron ore, lead, coal from North Korea in October

China imported no iron ore, lead or coal from North Korea in October as sanctions against the isolated nation came into force, while the world’s second-largest economy didn’t export any diesel, gasoline or corn, data showed on Friday.

The data represents the first whole month since the latest UN penalties came into force on Sept. 5, banning Pyongyang from selling coal, iron ore, lead, lead ore and seafood abroad.

Jobs growth in eurozone at ‘highest since dotcom era’
Jobs are being created across the 19-country eurozone at a pace not seen since the turn of the millennium thanks to stronger economic growth, particularly in a resurgent France, according to a closely watched survey Thursday.
In another sign that a robust economic recovery across the single currency bloc is gathering momentum, financial information company IHS Markit said its purchasing managers’ index – a broad gauge of business activity across manufacturing and services – rose to 57.5 points in November from 56 the previous month.

 

US crude tops 2-yr high as Keystone outage hits supply

US oil prices hit their highest levels in more than two years on Friday after the continued shutdown of a key pipeline running from Canada to the United States was expected to reduce supply into a major storage facility.

US West Texas Intermediate crude futures hit $58.92 a barrel, their highest since July 2015, before easing to trade up 79 cents on the day at $58.81.

 

 

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