Month: October 2021

OPEC+ considers options for releasing more oil to the market

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

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OPEC+ is considering going beyond its existing deal to boost production by 400,000 barrels per day (bpd) when it meets next week, sources said, against a backdrop of oil near a three-year high and pressure from consumers for more supply.

The Organization of the Petroleum Exporting Countries andallies led by Russia, known as OPEC+, agreed in July to boost output by 400,000 bpd a month to phase out 5.8 millionbpd in cuts. It meets on Monday to review its output policy.

Four OPEC+ sources said adding more oil was being looked at as a scenario, but none gave details on volumes or which month. Another OPEC+ source suggested an increase of 800,000 bpd for one month was a possible scenario, with zero the next month.

The nearest month any increase could occur is November since OPEC+’s last meeting decided the October volumes.

“We cannot exclude any option,” one of the OPEC+ sources said. The idea that the oil market might need more oil than what’s planned for in the existing deal was “one of the possible scenarios,” said another of the sources.

Sources told Reuters on Wednesday the most likely outcome was the group would stick to the existing plan.

It was not immediately clear what prompted the change of tone, but it follows a meeting of the OPEC+ Joint Technical Committee (JTC) which reviewed the market outlook and reduced the size of an expected supply surplus in 2022.

Talks among the members are continuing ahead of the virtual OPEC+ meeting on Oct. 4, and there is no guarantee an additional increase will be agreed.

Brent oil rose to a three-year high above $80 abarrel on Tuesday, boosted by unplanned outages in the UnitedStates and a strong demand recovery after the pandemichammering. Prices were trading just below $79 on Thursday.

The White House, which in August raised concerns about highprices, said on Tuesday it was in communication with OPEC andlooking at how to address the cost of oil.

India, the world’s third-biggest oil importer and consumer,signalled on Tuesday that a spike in crude prices would speed upthe transition to alternative energy sources.

Energy ministers from OPEC members Iraq, Nigeria and theUnited Arab Emirates said in recent weeks the group saw no needto take extraordinary measures to change the existing agreement.

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

Stock Market Highlights: Sensex ends 361 points lower, Nifty50 cracks below 17,550 as market extends losses to fourth day

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

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Stock Market Highlights:  Indian equity benchmarks Sensex and Nifty50 ended a choppy session lower on Friday tracking weakness across global markets. Both indices extended losses to the fourth day in a row amid losses in IT and select financial shares, though gains in metal and pharma counters limited the downside. Broader markets fared better than the headline indices, with the smallcap gauge ending 0.1 percent higher and the midcap counterpart finishing flat.

Here are key highlights of the Oct 1 session:

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, US on same page on many issues relating to Afghanistan: Jaishankar

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

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India was not taken into confidence on various aspects of the Doha deal struck between the US and the Taliban last year, External Affairs Minister S Jaishankar said on Thursday. At the same time, Jaishankar said India and the US are on the same page on many issues relating to the recent developments in Afghanistan including apprehensions about the possible use of Afghan soil for terrorism.

Speaking virtually at the annual leadership summit of the US-India Strategic Partnership Forum (USISPF), he also suggested that there are some aspects relating to the Afghan crisis where the positions of the two countries are not exactly the same. “I think to some degree, we would all be justified in having levels of concern and to some degree, I think the jury is still out. When I say levels of concern, the commitments which were made by the Taliban at Doha, the US knows it best. We were not taken into confidence on various aspects of that,” he said.

The deal was signed between the US and the Taliban in Doha in February last year in which the US promised to withdraw its troops from Afghanistan while the Taliban committed to several conditions including ending violence. The external affairs minister also noted that any question on according recognition to the Taliban dispensation has to be based on fulfilling of the commitments made by the group in the Doha agreement.

“I think we are on similar pages at a principle level on many of these issues, certainly say terrorism. The use of Afghan soil for terrorism is something both of us feel so strongly and it was something which was discussed when Prime Minister Narendra Modi met President Joe Biden,” he said when asked about the position of the US and India towards the Afghan crisis. The developments in Afghanistan figured in talks between Modi and Biden in Washington last week.

“There will be issues on which we will agree more, there will be issues on which we will agree less. Our experiences in some respects are different from yours (the US). We have been victims of cross-border terrorism ourselves from that region and that has shaped in many ways our view of some of the neighbours of Afghanistan,” he said, in an apparent reference to Pakistan. The external affairs minister said it is for the US to decide whether it shares that view, adding that India has concerns over the developments in Afghanistan.

Jaishankar said the most pertinent questions relating to Afghanistan are whether it will have an inclusive government and whether the rights of women, children and minorities are going to be ensured. “Most importantly, are we going to see an Afghanistan whose soil is not used for terrorism against other states and the rest of the world. I think these are the concerns and these concerns were captured by a UN Security Council resolution in August,” he said.

“When we look at what happened in Afghanistan and the region, I think these are going to have very very significant consequences for all of us. And we are so close to the region. There are a set of concerns and issues that flow from that,” Jaishankar said. To a question on recognising the Taliban dispensation, he suggested that New Delhi would take its time and study the situation.

On the Quad or Quadrilateral coalition, the external affairs minister said it has a broad agenda of cooperation including in the Indo-Pacific region. He said Quad should not be seen as “some kind of ganging up” against China. Asked about India’s ties with the US, he said they are at an important juncture and that the discussions in Washington opened up many more new possibilities.

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

DHFL Resolution: A feather in the cap of RBI and IBC

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

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The Dewan Housing Finance Corporation (DHFL) deal needs to be celebrated. Its resolution has given us a template to resolve future stressed finance companies. It’s a path breaker of sorts. Here’s an attempt to see what worked in favour of the deal and what we can learn for the future.

First, the firsts: DHFL is the first finance company to be resolved under the Insolvency and Bankruptcy Code (IBC). At Rs 38,000 crore, it is also the second largest asset resolved under the IBC. And for the first time, the effective resolution professional (RP) was appointed by the Reserve Bank of India (RBI), and not the creditors in a process.

So let’s begin by giving credit where it is first due. The DHFL resolution is a feather in RBI’s cap. When we were losing hope, the regulator defied the skeptic and sought a resolution under 227 of IBC (the provision for finance companies). And the RBI did it smartly.

First, it dissolved the board under Article 45 of the RBI Act, and appointed veteran banker R. Subramaniakumar as the administrator and then converted him into the RP. This turned out to be a smart move because the DHFL board members, even without an active role, could have pulled strings or represented some interests, during the resolution.

As Subramaniakumar told CNBC-TV18, dissolving the board, rather than merely suspending it, was a sagacious act. RBI did more. During the process of the resolution, it provided small but crucial low-key flexibility in the matter of paying ECB dues etc., thus shepherding the deal from falling prey to minor technical handicaps.

An equal measure of credit goes to the administrator, Mr Subramaniakumar. Almost all parties to the deal admired his in-depth knowledge of banking, his leadership in being able to boost the sagging morale of DHFL employees, ensure collection of dues even under COVID conditions and keep the firm as a going concern. It would have been easy, in mid or late 2019, for disillusioned employees to quit and that could have resulted in sheer implosion of the company. He stopped the hemorrhage in just 10 days of joining, say insiders.

Kumar’s efficiency and integrity has also come for all-round praise. He kept offers and negotiations tightly confidential. Video presentations were all password protected, he said. More importantly, as Piramal retail CEO Jairam Sridharan said, Kumar’s knowledge and known integrity and the backing of RBI, helped bidders trust the book that was disclosed to them.

The running of the investment banking process wasn’t easy under COVID-19 conditions. The EY team leader Abizer Diwanji said they went proactively to make presentations to bidders. Diwanji’s knowledge of the IBC process and banking nuances was a great help, as were AZBs appropriate legal advice at each stage.

>>Watch: Indianomics: Experts decode DHFL resolution process

Repeatedly, as bidders made a pitch between Rs 30,000 crore and Rs 40,000 crore, a note from Kapil Wadhwan, the erstwhile owner of DHFL, would announce an offer of over Rs 90,000 crore, leading to outcry from fixed deposit holders who were to lose more under the Piramal deal.

That was the toughest part of the negotiations, said lead banker Rajkiran Rai, MD & CEO of Union Bank.

The bankers formed the majority of lenders. NCD holders and public depositors also had substantial exposures. The IBC law is clear that in the waterfall, primacy is to be given to banks. But this required bankers to present a united front at all times, since they didn’t have the luxury of an overwhelming majority in the creditor group.

Most of those involved in the deal agree that the fact that the RP was appointed by RBI and not the creditors greatly helped in strengthening his hands to run a clean process. This can’t be replicated in non-finance cases under IBC. But for stressed finance companies, clearly the DHFL template will work and could perhaps be applied to companies like SREI.

Could RBI have run a similar process for Infrastructure Leasing & Financial Services (IL&FS)? Experts aren’t sure, but it would have been worth a try. IL&FS was a group of finance companies and the entire group would have to be taken under IBC. Perhaps some new rules need to be written for resolving group companies, say Diwanji and Baharam Vakil of AZB.

Likewise, selling the company piecemeal may have helped, says Diwanji. DHFL had a good retail book, while the wholesale book was contaminated with related party issues. If the IBC process allowed piecemeal sale, banks would have got their money earlier, and money in the bank even one year earlier would have meant a bigger gain for the creditors.

Incidentally, a parliamentary committee has also recommended that piecemeal selling be considered, though that may complicate things or give sub-optimal results in some cases.

But these are valuable suggestions that will be debated in the days to come.
Finally, the successful resolution of DHFL in reasonably quick time, given COVID, also restores faith in the IBC process.

All parties: bankers, lawyers, the NCLT tribunals, regulators, investment bankers and even bidders have become more adepts at the IBC process. The IBC process has settled, and that is perhaps one of the best outcomes of the DHFL deal.

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

Closing prices for crude oil, gold, dollar and other commodities

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

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Benchmark US crude oil for November delivery rose 20 cents to $75.03 a barrel Thursday. Brent crude oil for November delivery fell 12 cents to $78.52 a barrel.

Wholesale gasoline for October delivery rose 2 cents to $2.25 a gallon. October heating oil rose 3 cents to $2.34 a gallon. November natural gas rose 39 cents $5.87 per 1,000 cubic feet.

Gold for December delivery rose $34.10 to $1,757 an ounce. Silver for December delivery rose 56 cents to $22.05 an ounce and December copper fell 11 cents to $4.09 a pound.

The dollar fell to 111.40 Japanese yen from 111.98 yen. The euro fell to $1.1583 from $1.1601.

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

North Korea says 4th new test-firing was anti-aircraft missile

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

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North Korea said Friday it had test-fired a newly developed anti-aircraft missile in the fourth round of weapons firings in recent weeks, even as it pushes to reopen dormant communication channels with South Korea in a small reconciliation step.

In September, North Korea resumed its first missile tests in six months but still offered conditional talks with Seoul in what some experts say is an attempt to extract concessions in its nuclear diplomacy with the U.S. Earlier this week, North Korea leader Kim Jong Un expressed his willingness to restore communication hotlines with South Korea in coming days to promote peace on the Korean Peninsula.

The Korean Central News Agency said the anti-aircraft missile test is of very practical significance in studying and developing various prospective anti-aircraft missile system.

It said the test was aimed at confirming the practicality of operation of the launcher, radar and battle command vehicle as well as the combat performance of the missile.

South Korea, Japan and the United States typically publicly confirm North Korean missile launches soon after they occur, but did not do so for Thursday’s test, indicating it may not have been a major weapons test.

While Kim said he intended to reopen inter-Korean hotlines during his speech at parliament, he also shrugged off U.S. offers for dialogue as a cunning concealment of its hostility against the North. He also reiterated the North’s demands that South Korea abandon a double-dealing attitude over the Norths missile tests if Seoul wants to see the resumption of talks and major cooperation steps.

South Korea has said it would prepare for the restoration of the hotlines, which it called necessary to discuss and resolve many pending issues. The cross-border phone and fax lines have been largely dormant for more than a year.

Some experts say North Korea wants South Korea to persuade the United States to ease punishing economic international sanctions on it. Other say North Korea is pressuring South Korea not to criticize its ballistic missile tests, which are banned by U.N. Security Council resolutions, as part of its quest to be recognized internationally as a nuclear power.

North Korea also recently has test-fired a new hypersonic missile, a newly developed cruise missile and a ballistic missile launched from a train. South Koreas military assessed the hypersonic missile to be at an early stage of development, but experts say the two previous missile tests displayed the Norths ability to attack targets in South Korea and Japan, both key U.S. allies that host U.S. troops.

The North’s recent tests were in line with Kim Jong Un’s earlier vows to introduce sophisticated weapons and enlarge his nuclear arsenal to defend itself against U.S. hostility a reference to U.S.-led sanctions on the North and regular military drills between Washington and Seoul that North Korea believes are an invasion rehearsal.

Nuclear diplomacy between Pyongyang and Washington has been largely deadlocked since early 2019.

North Korea hasnt tested a long-range missile capable of reaching the U.S. mainland for about four years, an indication it wants to keep alive its chances for diplomacy.

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

Bitcoin price rises 5.2% to $43,717

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

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Bitcoin price on Thursday increased 5.23 percent to $43,716.97 as of 22:08 GMT, adding $2,174.07 to its previous close.

The world’s biggest and best-known cryptocurrency has appreciated 57.6 percent from the year’s low of $27,734 on Jan. 4.

Ether, the coin linked to the ethereum blockchain network, rose 5.26 percent to $3,001.48, adding $150.08 to its previous close.

Professor Eswar Prasad of Cornell University, in an interview to CNBC-TV18, on September 27, said he believed that the underlying notion that Bitcoin is scarce and thus has value is false. He had also warned that Bitcoin may not end well especially for the naïve retail investors.

–With agency inputs

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 stock market: How S&P 500, Dow Jones, Nasdaq, Russell 2000 fared on Thursday

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

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Stocks fell broadly on Thursday and closed out September with their worst monthly loss since the beginning of the pandemic.

The S&P 500 notched its first monthly drop since January and the biggest since March 2020. After climbing steadily for much of the year, the stock market became unsettled in recent weeks with the spread of the more contagious delta variant of COVID-19, a sudden spike in long-term bond yields and word that the Federal Reserve may start to unwind its support for the economy.

On Thursday:

The S&P 500 fell 51.92 points, or 1.2%, to 4,307.54.

The Dow Jones Industrial Average fell 546.80 points, or 1.6%, to 33,843.92.

The Nasdaq fell 63.86 points, or 0.4%, to 14,448.58.

The Russell 2000 index of smaller companies fell 20.94 points, or 0.9%, to 2,204.37.

For the week:

The S&P 500 is down 147.94 points, or 3.3%.

The Dow is down 954.08 points, or 2.7%.

The Nasdaq is down 599.12 points, or 4%.

The Russell 2000 is down 43.70 points, or 1.9%.

For the year:

The S&P 500 is up 551.47 points, or 14.7%.

The Dow is up 3,237.44 points, or 10.6%.

The Nasdaq is up 1,560.30 points, or 12.1.

The Russell 2000 is up 229.52 points, or 11.6%.

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