Top Business News Today: Highlights of the Economic Survey 2019, Tesla Shares Surge as Second-Quarter Earnings Beat Expectations & Records

Economic Survey 2019 tabled in Parliament - some of its highlights. NCLAT approves ArcelorMittal's bid for Essar Steel. IndiaMart share price surges upon debut. Operations and management of airports at Mangaluru, Lucknow and Ahmedabad to be taken over by Adani Group. Uber launches driver reward programme ‘Uber Plus’ in India. DPIIT summons Swiggy, Zomato to address problems of “deep discounting” and “predatory pricing”. Telecom minister warns Indian suppliers of US-origin equipment to Huawei. Amazon’s acquisition spree faces hurdles in Washington. Bitcoin rallies to highest point since 2017. Tesla shares surge as second-quarter earnings beat expectations and records. The road ahead could be bumpy for Elon Musk.

 

Moving on to the top Business news of the day.

 

 ECONOMIC SURVEY 

Economic Survey tabled in Parliament - some of its highlights. Interestingly, the Survey is filled with references to and comparisons with China.

 

In Nirmala We Trust: The Economic Survey was tabled in the Parliament today by Finance Minister Nirmala Sitharaman.

 

Some key highlights:

 

  1. Real GDP growth for 2019-20 is projected at 7%
  2. To become $5tr economy by 2025, India needs to sustain GDP growth rate of 8%
  3. Gross NPA ratio of SCBs decreased from 11.5% to 10.1% between March 2018 and December 2018
  4. Investment is the "key driver" of simultaneous growth in demand, jobs, exports & productivity
  5. The working age population is expected to grow by roughly 9.7 million per year during 2021-31 and 4.2 million per year during 2031-41
  6. A minimum wage policy for the bottom rung of wage earners can drive up demand and strengthen the middle class
  7. Investment rate is expected to increase in FY20 on improved demand
  8. Oil prices seen declining in FY20

 

The Dragon In The Room: Interestingly, the Economic Survey was rife with comparisons of India with China. Be it when talking about savings, exports, investments, wages or demographics, the Survey repeatedly kept coming back to China as a comparison.

 

 COMPANIES 

NCLAT approves ArcelorMittal's bid for Essar Steel. IndiaMart shares surge upon debut. Operations and management of airports at Mangaluru, Lucknow and Ahmedabad to be taken over by Adani Group.

 

The What: The National Company Law Appellate Tribunal (NCLAT) has rejected all objections raised by the shareholders of Essar Steel and approved ArcelorMittal's bid for the debt-laden company with modifications.

 

The NCLAT has directed that all financial creditors having a claim amount of over INR1cr would be entitled to 60.7% of their admitted claim.

 

It has also awarded around 60% of the admitted claim to certain operational creditors having claims of more than INR1cr.

 

The NCLAT also stated that the profits of Essar Steel, if any, during the pendency of the insolvency, would also be distributed among the creditors on a pro rata basis.

 

Previously: ArcelorMittal had told NCLAT that it would pay INR42,000cr, including a minimum of guarantee of INR2,500cr as working capital, for acquiring debt-laden Essar Steel under the insolvency process.

 

A Stunning Debut: Shares of online business products and services marketplace IndiaMart InterMesh were listed at a 21% premium on Thursday, against its issue price of INR973.

 

IndiaMart’s INR475cr IPO was subscribed 36.16 times last week. The stock opened at INR1,180, rising 21.2% over the final issue price of INR973.

 

Upon debut, Indiamart shares surged as much as 35.40% to INR1,317.70.

 

Also This: The government has approved the proposal for leasing out airports at Ahmedabad, Lucknow and Mangaluru to Adani Enterprises. The Group will look after all services at these airports, barring air traffic control and communication, navigation and surveillance services.

 

Hit Refresh: Earlier in February this year, the Adani Group had emerged as the winner for airports in Guwahati, Jaipur and Thiruvananthapuram.

 

 STARTUPS 

Uber launches driver reward programme ‘Uber Plus’ in India. DPIIT summons Swiggy, Zomato to address problems of “deep discounting” and “predatory pricing”.
 


Because, We Care: Ride-hailing platform Uber has launched the pilot phase of its driver rewards programme called "Uber Plus" in Delhi, Mumbai and Chandigarh to enable drivers save more and access rewards.
 
 
The points can be earned over a fixed period of every three months and can be used to unlock rewards and different series of tiers - Blue, Gold, Platinum and Diamond. 
 

Looking Forward: Some benefits under the rewards programme would include: 
 
  • Access to free doctor’s consultation on call
  • Priority support
  • Discounted prices for educational modules
  • Additional savings on maintenance cost
  • Access to micro loans
 
Trouble Calling: The Department for Promotion of Industry and Internal Trade (DPIIT) has summoned food aggregators Swiggy, Zomato, Foodpanda and Uber Eats following complaints from restaurants that these platforms engage in “deep discounting” and “predatory pricing”.
 

Zooming Out: The news comes shortly after the Minister of Commerce and Industry, Piyush Goyal, reprimanded global e-commerce players for “hurting” local kiranas and small retailers through their “predatory pricing” practices.
 
 
 TECH 
Telecom minister warns Indian suppliers of US-origin equipment to Huawei. Amazon’s acquisition spree faces hurdles in Washington. Bitcoin rallies to highest point since 2017.
 
 
Be Wary Of Washington: Union telecom minister Ravi Shankar Prasad informed Parliament that Indian suppliers of US-origin tech equipment to Huawei could face penal action under American law.
 
 
Huawei was placed in a list of companies that were a threat to American national security and Washington had directed US companies to stop supplying software or hardware to Huawei.
 
 
At the recent G20 summit, however, Trump and Xi reached a consensus to restart talks and the US President agreed to ease up on Huawei. However, a week later, there is still ambiguity over what this means.
 

Slow Down, Amazon: Amazon has been on an acquisition and investment spree since 2017, striking more than USD20bn worth of deals.
 

But now, an increasingly suspicious US government, might force the e-commerce giant to pipe down its ambitions.
 

Reining in tech giants is one issue that finds bipartisan support in Washington, where politicians from both major US parties have called for Amazon to pay more in taxes and for its recent acquisitions of local competitors to face more antitrust scrutiny or be undone altogether.
 

Is Bitcoin Back?: The past week has been an emotional one for crypto enthusiasts. Major cryptocurrencies, especially Bitccoin, have rallied en masse. Bitcoin gaines $2000 in less than 24 hours and crossed the $11,000 and $13,000 barriers. It is currently fluctuating about that level.
 
 
The big question is - will this be like the massive 2017 rally when Bitcoin breached $20,000? It’s hard to say for sure – crytocurrencies are notoriously volatile.
 
 
The reasons behind the recent surge are probably recent unstable events that made many lose faith in fiat currency, as some commentators have opined. A potential war between US and Iran was apparently avoided in the last minute, oil prices are rising despite OPEC cuts, more sanctions threats, and continuing concerns over the China-US trade war – these are just some of the factors that have markets spooked.
 
 
 TESLA 
Tesla shares surge as second-quarter earnings beat expectations and records. The road ahead could be bumpy for Elon Musk.
 

Better Than Expected: Investors expected healthy second-quarter numbers given leaked emails and reports, but Tesla’s actual numbers beat all estimates.
 

The automotive company reported record production of 87,048 vehicles and record deliveries of approximately 95,200 vehicles.
 

Tesla shares surged on the news to USD235, their highest intraday price in two months.
 

A Storm Ahead?: Tesla’s recent second-quarter earnings might have beaten even the records set by its previous fourth-quarter highs, but CEO Elon Musk might want to follow the celebratory party with a critical review with his team if he wants numbers to continue being record-breaking.
 

Will Musk continue to pull out record out of his sleeves in the coming quarters? There are still questions over the company’s profits, decreasing sales of its higher-priced Model S and Model X sedans, and doubt over whether the company can meet even the lower end of its 2019 forecast of 360,000-40,000 car deliveries.
 
 
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