PSB Merger Latest News, NIFTY Auto Index Falls, Saudi Aramco IPO

How will government’s mega PSB merger pan out? “Can 10 ‘weak’ banks together create four large, strong banks?” Investors of Tata Motors' have lost INR1.13L cr in last three years. What has plagued Tata Motors and its share price? Nifty Auto index witnesses massive fall amidst sectoral slowdown. Telegram to allow users to hide their telephone numbers to safeguard Hong Kong protesters. Twitter’s Chief Executive Officer’s Twitter account hacked. 15% tariffs on $112bn in Chinese imports to go into effect on Sept 1. Trump tweets classified military imagery, says US 'not involved' in failed launch. Saudi Aramco considers conducting its IPO in two stages.
 

Moving on to the top Business news of the day:

 
 PSB MERGERS 
 
How will government’s mega bank merger pan out? “Can 10 ‘weak’ banks together create four large, strong banks?”
 
10 - 6 = 12: In a bid to increase the efficiency of public sector banks (PSBs), create national banks with global presence and in turn provide the slowing Indian economy with a much-needed fillip, Finance Minister Nirmala Sitharaman had yesterday announced a mega merger plan for PSBs wherein 10 PSBs will be merged into four. After the amalgamation, only 12 PSBs will be left in India from the 27 earlier.
 
 
This would be followed by a capital infusion of over INR70,000cr among the merging entities. 
 
 
What You Need to Know: Now while the consolidation is likely to aid economies of scale for these banks, spike credit provisions, improve cost of funds and operating efficiency, merger related issues including HR/IT related synchronization, branch rationalization, and realigning of NPAs could impact interim profitability. 
 
 
Here’s how the new merged banks will look like.
 
 
However, amidst all the cheer, a very pertinent question that is being sidelined is…“Can 10 ‘weak’ banks together create four large, strong banks?” Read this article for a deep dive into the matter. 
 
 
 TATA MOTORS 
 
Investors of Tata Motors' have lost INR1.13L cr in last three years. What has plagued Tata Motors and its share price? Nifty Auto index witnesses massive fall amidst sectoral slowdown. 
 
 
The Golden Era for Tata Motors: Tata Motors share price, which closed at INR524.7 on August 29, 2016 ended at INR114 level on BSE on Thursday. An investment of INRL lakh in Tata Motors share on August 29, 2016 would have decreased to INR21,726 on Friday.

 
A series of credit rating downgrades, fall in domestic demand and weakness in global sales of its UK arm Jaguar Land Rover (JLR) has led to a massive erosion in Tata Motor’s market capitalisation during the last three years.
 
 
Here’s a look at what went wrong over these years. 
 
 
Free Fall: The auto sector has been experiencing a progressive downfall amid economic slowdown, delay in purchases, sluggish lending and confusion among consumers over BS-VI transition.
 
 
The Nifty Auto index fell 35% vs 4% fall in Nifty50.
 
 
Auto as well as auto ancillaries like Tata Motors, Motherson Sumi, Ashok Leyland, Eicher Motors, M&M, Bharat Forge, Exide Industries, TVS Motor Company, Maruti Suzuki and Apollo Tyres were down 30-54% in last one year. And experts expect the slump to continue, with no sign of recovery in sight.
 
 
Find a closer look at the sector here
 
 
 TECH 

Telegram to allow users to hide their telephone numbers to safeguard Hong Kong protesters. Twitter’s Chief Executive Officer’s Twitter account hacked. 
 
 
Access Blocked: Messaging app Telegram will allow users to hide their telephone numbers, in a move to safeguard Hong Kong protesters against monitoring by mainland Chinese and Hong Kong authorities and discovering their identities in the app’s large group chats.
 
 
Why is this Important?: As per a report published by Reuters, protesters use encrypted apps like Telegram to mobilize swiftly through multiple group chats, with less risk of police infiltration. 
 
 
 
The hackers who appeared to refer to themselves as the “Chuckling Squad”, began publishing a series of tweets including racial slurs, profanity, praise for Adolf Hitler and a reference to “a bomb at Twitter HQ”.
 
 
Control of the account, however, was regained within 30 minutes.
 
Twitter reported that “The phone number associated with the account was compromised due to a security oversight by the mobile provider…This allowed an unauthorized person to compose and send tweets via text message from the phone number.”
 
 
 TRUMP 

15% tariffs on $112bn in Chinese imports to go into effect on Sept 1. Trump tweets classified military imagery, says US 'not involved' in failed launch. 
 
 
No Turning Back: President Donald Trump on Friday said that 15% tariffs on $112bn in Chinese imports are still set to go into effect Sunday. 
 
 
The news comes despite severe backlash from a number of companies and over 160 industry groups having written a letter to the President, asking him to postpone the tariff increase.
 
 
He Does it Again!: It is a known fact that US President Donald Trump, more often than not, turns to Twitter to make important announcements, including those of national relevance. And he never fails to baffle.
 
 
This time around, he has tweeted what would normally be a highly classified, military-quality satellite image showing the devastation around the launch pad at Iran's main space centre following a significant explosion.
 
 
Wait…There’s More: He went further by apparently taunting the Iranians, insisting that the US was not involved in the catastrophic accident during final launch preparations," but also wishing Iran "good luck in determining what happened".
 
 
 ARAMCO 

Saudi Aramco considers conducting its IPO in two stages.
 
 
Oil Split: Saudi Aramco is considering conducting its initial public offering (IPO) in two stages.
 
The two stages would include:
  • Debuting a portion of its shares on the Saudi stock exchange later this year
  • This would be followed by an international offering in 2020 or 2021
 
Tokyo Stock Exchange has emerged as the international frontrunner, particularly following the political uncertainty in the UK and China, which has reduced the appeal of London and Hong Kong’s markets.

 
A Tokyo listing by the world’s largest oil firm would boost Japan’s effort to re-establish itself as a global financial center. But it could also highlight areas in which the country has laxer disclosure standards.

 
Know more here.
 
 
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