Month: December 2018

Core sectors’ output growth hits 16-month low at 3.5% in November

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Eight core industries grew at its slowest pace in 16 months at 3.5 percent in November due to fall in output of crude oil and fertilisers, official data showed.

The previous lowest expansion in output growth of these key industries was recorded at 2.9 percent in July 2017.

The growth rate of eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — was 6.9 percent in November last year.

Crude oil and fertiliser production recorded negative growth of 3.5 percent and 8.1 percent, respectively in November 2018.

The growth rate in the production of natural gas, refinery products, steel, and cement sectors slowed to 0.5 percent, 2.3 percent, 6 percent, and 8.8 percent in November, respectively.

Slow growth in key sectors would also have implications on the Index of Industrial Production (IIP) number as these segments account for about 41 percent to the total factory output.

However, growth in coal and electricity output grew by 3.7 percent and 5.4 percent in November as against 0.7 percent and 3.9 percent, respectively in the same period last year.

During April-November this fiscal, the eight core sectors grew by 5.1 percent as against 3.9 percent during the same period last fiscal.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US dollar ends sharply lower against rupee

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The US dollar ended sharply lower against the rupee at Rs 69.77 per dollar but the pound sterling finished higher at Rs 89.03 at the close of the Interbank Foreign Exchange (forex) market.

Following are the Interbank forex and FBIL rates :

(In Rs per unit) Unit Interbank FBIL Reference US Dollar 69.77

US Dollar 69.77 Pound Sterling 89.03 EURO 79.81 Euro 79.76 Japanese yen (100) 63.39

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

9 reasons the government decided to recast ecommerce rules

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Last week, the government recast rules for ecommerce companies, intending to prevent predatory pricing and deep discounting. That means ecommerce companies such as Amazon and Flipkart Group, now owned by American retailer Walmart, will not be able to sell products from companies in which they own equity or form exclusive agreements with sellers from February 1.

The new rules follow intense lobbying by large swathes of small shopkeepers, particularly after Walmart spent $16 billion to acquire Flipkart this year. Here are nine reasons why the government decided to rework the ecommerce rules.

1. Levelling the playing field: The new rules are aimed at levelling the playing field between online and offline retailers. Offline retailers have been lobbying with the government that online marketplaces, flush with foreign money, are driving brick-and-mortar stores out of business. E-tailers such as Amazon and Flipkart were adopting “discriminatory” and “predatory” pricing to attract customers by offering deep discounts, according to them. They cited smartphone flash sales, and festive season sales of fashion and electronic products as examples of such predatory pricing.
2. Case for mom-and-pop stores: The government’s move comes after Indian traders complained that they were being put out of business. E-tailers get into exclusive tie-ups for deep discounts with brands and also push products of preferred vendors which they partly own or have preferential contracts. Such heavy price markdowns, while very attractive for consumers, have seriously impacted the business of mom-and-pop stores as also large offline retailers selling the same brands.
3. Matter of livelihoods: The new rules appear to be the Modi government’s way of demonstrating its intent to walk the talk in support of the local traders. The government does not want to endanger the livelihoods of millions of local offline traders—from big retail chains to neighbourhood kirana stores.
4. Enforcing law in letter and spirit: Amazon has invested in joint ventures to create vendors — Cloudtail and Appario Retail — which sell on its platform. This is a roundabout way to stock inventory and disobey the spirit of guidelines of FDI in commerce. Under the new rules, ecommerce companies will have now furnish a certificate along with a report of a statutory auditor to the Reserve Bank of India (RBI), confirming compliance of these guidelines, by September 30 of every year for the preceding financial year, indicating that the violations will be strictly dealt with.
5. The importance of the unorganised and offline retail sector: The new rules put into perspective the vital significance of the unorganised and offline retail sector. The vast majority of retail still happens through brick-and-mortar stores (about 97 percent, according to government estimates. The rest is online). And the retail sector is mostly unorganised, to the extent of an estimated 92 percent.
6. The primary job creator: According to National Skill Development Corporation (NSDC), India will need 56 million skilled workers in the retail sector by 2022. The retail market itself is projected by the government to reach $1.3 trillion by 2020. The job growth, clearly, is not going to come from online retail. Flipkart’s full-time workforce, for instance, consists of about 10,000 people.
7. Bulwark against duopoly: Flipkart and Amazon together account for about 70 percent of the value of goods sold online. There is a danger that India could be heading towards a foreign-owned retail duopoly if Flipkart and Amazon continue to grow unchecked. Or an oligopoly, with China’s Alibaba also slugging it out. The losers will be Indian companies and, eventually, Indian consumers.
8. Lessons from America: The US retail landscape is littered with once-iconic brands that have become the casualties of Amazon. In India, retail could be killed off before it even grows to full potential if online marketplaces behave like online retailers and indulge in predatory pricing and anti-competitive behaviour. Big-name US retailers are shutting stores or filing for bankruptcy. In October, the 125-year-old Sears filed for bankruptcy, marking the end of an era. Last year, Toys ‘R’ Us, a revered brand founded in 1948, filed for bankruptcy. Every store shut means hundreds of jobs gone and families dislocated irrevocably. Shuttering stores and layoffs are commonplace now—think Target, Staples, Macy’s, Barnes & Noble. The list is endless.
9. Clarity of rules: There is an unreported subsidisation of products by ecommerce players that was increasingly taking place. In the marketplace model, the ecommerce entity should be neutral to all vendors. In July, the government came up with the first leg of the draft ecommerce policy, which talked about allowing these companies that have FDI of up to 49 percent to switch from a marketplace model to an inventory-led model. The idea was to promote the sale of domestically-produced goods on online platforms under the government’s Make in India initiative by allowing B2C online retail companies to keep limited inventory. However, offline traders didn’t take to the proposal kindly with Swadeshi Jagran Manch (SJM) and Confederation of All India Traders (CAIT), criticising it for allowing backdoor entry for FDI in B2C retail. The government is now expected to come out with a final ecommerce policy that will likely propose the setting up of a sector regulator—a quasi-judicial body empowered to enforce rules and crack down on violators.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Ring in the new: NYPD drone to oversee Times Square revelry

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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It’s an Auld Lang Syne of the times: For the first time, a police drone will be keeping watch over the New Year’s Eve celebration in New York’s Times Square.

The unmanned eye-in-the-sky is the latest wrinkle in the New York City Police Department’s ever-evolving plan to keep revelers — and “Rockin’ Eve” host Ryan Seacrest — safe.

About 7,000 police officers will be on duty for Monday night’s festivities in Times Square, including counterterrorism teams with long guns and bomb-sniffing dogs. Police cars and sand-filled sanitation trucks will be positioned to stop vehicles from driving into the crowd.

And, above it all, a remote-controlled quadcopter will be giving police a unique view of the merriment — and any potential mayhem.

It’s the first time the NYPD is sending up a drone for a big event.

“That’s going to give us a visual aid and the flexibility of being able to move a camera to a certain spot with great rapidity through a tremendous crowd,” Deputy Commissioner of Intelligence and Counterterrorism John Miller said.

Police Commissioner James O’Neill said there are no known, credible threats to the city or the New Year’s Eve event. He encouraged spectators to remain vigilant and to alert officers if they suspect something is awry.

“There’s probably going to be a cop within 10 feet of you,” Miller said. “If you see something, you can go right to them directly.”

Mayor Bill de Blasio said on Friday that the city is expecting “up to 2 million people in Times Square itself” for the ball drop, repeating a figure often cited by city officials, organizers and television broadcasters.

Crowd-size experts say it’s impossible to cram that many people into the area, a bow-tie-shaped zone running five blocks between Broadway and 7th Avenue, and that the real total is likely fewer than 100,000.

No matter how many people actually show up, they’ll all be screened with metal detectors at security checkpoints and funneled into penned off areas to prevent overcrowding.

Umbrellas, backpacks and coolers are banned, but those kitschy “2019” glasses are most definitely allowed in. And there won’t be any popping champagne at midnight. The NYPD says alcohol is strictly prohibited.

That might be for the best. There aren’t any bathrooms, and anyone leaving the secure area won’t be allowed back to their original spot. That means they’ll risk missing the ball drop or having to squint hard to see it from a faraway vantage point.

Like last year, the NYPD is embedding detectives in hotels around Times Square in an attempt to thwart a potential attack like the one in Las Vegas last year in which a gunman shooting from a hotel room killed 59 people at an outdoor country music festival.

Police are also harnessing new technology to detect drones that aren’t authorized to fly.

The NYPD’s drone adds to a vast array of visual surveillance that includes more than 1,200 fixed cameras and feeds from police helicopters circling above.

The department started using drones this month. It says they’ll mainly be used for search-and-rescue missions, documenting crime scenes and monitoring large events.

Several of the NYPD’s drones are equipped with thermal-imaging and 3D-mapping capabilities and strong camera lenses that can greatly magnify a subject.

For safety, Chief of Department Terence Monahan said the New Year’s Eve drone will be tethered to a building and flown in a cordoned-off area so that no one gets hurt if it happens to fall. The drone will never fly directly above the crowd, he said.

Unlike a helicopter, a drone is small and makes little noise. Between the sounds of performers like Christina Aguilera and Bastille and the confetti that’ll be swirling at midnight, Monahan said some spectators might not even notice it.

“Once it’s up in the air, it will probably be hard to see,” he said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India, Mauritius to sign free trade agreement in January

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India and Mauritius are giving finishing touches to a landmark free trade agreement (FTA), which is aimed at liberalising norms to boost two-way commerce and investments, said sources familiar with the matter.

India is seeing this deal as a gateway to African countries for its products and a deal could be sealed in the next few weeks, sources told CNBC-TV18.

In an FTA, two trading partners cut or eliminate duties on majority of goods besides liberalising norms to promote services trade and boost investments. According to experts, India may not get a substantial benefit in the goods sector as Mauritius is a small market, but services sectors such as IT and tourism hold huge potential to enhance economic ties.

Interestingly, Mauritius is also holding negotiations for a similar pact with China, with which India has a huge trade deficit. The trade gap was $63 billion in 2017-18. The island nation is the top source of foreign direct investment (FDI) into India. In 2017-18, India received $15.94 billion as compared to $15.73 billion in the previous financial year.

The bilateral trade between the countries increased to $1.1 billion in 2017-18 from $900 million in 2016-17. India exports petroleum products, pharmaceuticals, cereals, cotton and electrical machinery, among others, to Mauritius. The island nation exports to New Delhi include iron and steel, pearls and precious/semi-precious stones.

With inputs from PTI.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RBI governor Shaktikanta Das says banking sector on course to recovery after prolonged period of stress

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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With various initiatives taken by the government in regards to bad loans of public sector banks yielding results, the Reserve Bank of India (RBI) governor Shaktikanta Das on Monday said banking sector appears to be on course to recovery after a prolonged period of stress.

The governor in RBI’s Financial Stability Report, said there is a first half-yearly decline in gross non-performing assets (NPAs) ratio since September 2015 and improving Provision Coverage Ratio positive signals. He said stress test results suggest further improvement in NPA ratio, though its current level remains still high for comfort.

Further, governor said enhanced recognition of impairment by public sector banks (PSBs) led to a greater discipline in credit assessment, higher sensitivity to market risk and better appreciation of operational risks, “Immense effort put in by stakeholders so far is required to be buttressed with reforms in governance, supported by recapitalisation of weak state-run banks.”

Talking on Insolvency and Bankruptcy Code (IBC), he said it has bridged an important institutional gap to strengthen the much needed credit discipline, but some of the IBC resolutions lagging behind the envisaged timelines, “A time-bound resolution of impaired assets will go a long way in unclogging the credit pipeline.”

On banking sector’s contribution, the governor said role of banks and non-banks in supporting growth needs of an emerging economy like India is well recognised and emphasis should continue to be on diligent, prudent and sound risk management practices by financial institutions.

He said under the baseline scenario, gross non-performing assets (GNPA) ratio of all scheduled commercial banks may come down from 10.8 percent in September 2018 to 10.3 percent by March 2019; PSBs’ gross NPA ratio may decline from 14.8 percent in September 2018 to 14.6 percent by March 2019 under baseline scenario; private sector banks’ gross NPA ratio may decline from 3.8 percent in September 2018 to 3.3 percent by March 2019 under baseline scenario and foreign banks’ PSB’s gross NPA ratio may decline from 3.6 percent in September 2018 to 3.1 percent by March 2019 under baseline scenario.

“Under the assumed baseline macro scenario, system level CRAR (Capital to Risk Weighted Assets Ratio) is projected to come down from 13.4 percent in September 2018 to 12.9 percent in March 2019. Further, deterioration of CRAR is projected under severe stress scenario to 12.1 percent by March 2019,” said the governor.

Das said eight PSBs under prompt corrective action (PCA) may have CRAR below minimum regulatory level of 9 percent by March 2019 without taking into account any further planned government recapitalisation and total of nine banks may have CRAR below minimum regulatory level of 9 percent by March 2019 under baseline scenario.

“If macroeconomic conditions deteriorate, 10 out of 11 PCA PSBs may record CRAR below 9 percent by March 2019 under severe macro stress scenario. In total, 13 banks may have CRAR below 9 percent by March 2019 under severe stress scenario,” he added.

On capital infusion in state-owned banks, the governor said under baseline scenario, CET 1 capital ratio may decline from 10.4 percent in September 2018 to 10.0 percent in March 2019, “Five banks, all PCA PSBs, may have common equity CET 1 capital ratio below minimum regulatory required level of 5.5 percent by March 2019 under baseline scenario.”

“Under severe stress scenario, the system level CET 1 capital ratio may decline to 9.3 percent by March 2019. Seven SCBs, including six PCA PSBs and one non-PCA PSB may have CET1 ratio below 5.5 percent by March 2019 under severe stress,” Das said.

Das said recent developments in non-banking financial companies (NBFCs) has underscored the need for greater prudence in risk-taking and there is a need for some rebalancing as excessive credit growth, especially if funded with short-term financing is not stability-enhancing.

Cautioning of mismanagement in financial institutions, Das said framework for oversight of financial conglomerates like the troubled Infrastructure Leasing & Financial Services (IL&FS) requires closer attention.

Global economic prospects have noticeably softened although risk of a recession in major economies appears modest, he observed, “Stricter enforcement of global trade, investment rules could potentially lead to market stability and win-win bargains in trade going forward.”

Going forward, the governor said uptick in gross fixed capital formation coupled with recent decline in crude oil prices bodes well for sustained growth  in the future.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Market wrap: Sensex, Nifty end 2018 with minor gains, indexes rise for 3rd straight year

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian shares failed to hold on to gains on the last trading day of 2018, settling largely flat on Monday amid mixed cues from global markets. For the year, market eked out minor gains with the Sensex and Nifty seeing minor gains of 3 percent and 6 percent, respectively for the third consecutive year. On Monday, the Sensex settled down by 8.39 points or 0.02 percent at 36,068 at the close of market hours, and the Nifty was up 2.60 points, or 0.02 percent, at 10,862.

The US-China trade war dispute, volatility in oil prices and its impact on macro sentiments, dented investor appetite in equities. For India, the liquidity concerns emanating as a fallout of IL&FS’ default and further downgrade caused a massive meltdown in equities in mid-year.

Broader markets ended with gains on Monday, outperforming its peers by almost half a percent higher. But the midcap index fell 15 percent in the outgoing year, posting its worst performance since 2011.

Among sectoral indexes, Nifty IT gained 27 percent this week despite growth worries amid concerns over H1B visa regime in the US under an aggressive Trump administration. Nifty FMCG saw gains of 14 percent this year, while Nifty Realty was the worst performer in 2018 with the index down 33 percent.

Among stocks, Axis Bank, HDFC, Kotak Mahindra Bank and Maruti Suzuki dragged indexes, while Kotak Mahindra Bank and JSW Steel supported. Metal stocks also surged largely on the back of JSW Steel, Tata Steel and Vedanta.

For the year, Bajaj Finance returned the highest with a gain of 51 percent, while Tech Mahindra, TCS, Hindustan Unilever, Infosys, Bajaj Finserv, Kotak Mahindra Bank, Reliance Industries, Asian Paints, HDFC, ICICI Bank, L&T, gained between 15 percent and 43 percent.

#MarketIn2018 |Here’s the list of top Nifty losers & Midcap gainers in the year 2018 pic.twitter.com/uLa5G2pIMk

— CNBC-TV18 (@CNBCTV18Live) December 31, 2018

Shares of Tata Motors fell 60 percent this year largely on account of underperformance in Jaguar-Land Rover (JLR) due to Brexit woes. Yes Bank shares also slumped more than 42 percent this year after the Reserve Bank of India (RBI) refused to extend another term to co-founder and chief executive officer Rana Kapoor. Bharti Airtel, Vedanta, HPCL were other major laggards this year.

In currency space, the rupee traded at 69.91 per US dollar at 4.30 pm. The home currency opened stronger at 69.80 per US dollar on Monday, up 14 paise from its Friday’s close of 69.94. So far, this year, the rupee was down nearly 9 percent and remained Asia’s weakest currency.

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IL&FS puts commercial, residential properties up for sale

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The debt-laden IL&FS group has further put up its properties for sale to garner funds in order to settle loan dues. It has invited bids from interested buyers for properties (commercial and residential) in Mumbai and one in Kolkata.

Properties on sale include a 1,376 square feet residential property located at upscale Malabar Hill besides three commercial properties in Mumbai and one commercial space in Kolkata.

The embattled infrastructure and financial sector major has asked bidders to submit their bids on or before January 15.

The Infrastructure Leasing & Financial Services (IL&FS) group has loans due of nearly Rs 91,000 crore.

Earlier, it has invited bids to sell its various road, solar energy and education assets to generate funds.

The spree of defaults is continuing with the group, which until Friday said that the company would not be able to service its obligations in respect of the interest of non-convertible debentures due on December 29, 2018.

The group has been resorting to various measures, including selling-off the luxury cars owned by it as well as office furniture and white goods to pay-off its debt.

Sources said the company may be able to fetch nearly Rs 200 crore by selling these properties.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow