Latest News Today: RBI Might Cut Rates Again, IndiGo Promoters Reach Truce, Facebook's Earnings Surge

Latest News Today: Government likely to begin selling sovereign bonds in October. RBI expected to cut rates again in its upcoming meeting. IndiGo share price surges as promoters reach a truce of sorts. Digital Communications Commission approves cumulative penalty of INR3,050cr on Bharti Airtel and Vodafone Idea. Byju's to replace Oppo on Team India's jersey. Toyota to invest $600m in Didi Chuxing, to set up a JV for driver services. Tencent bets on Indian tech startups amid China slowdown. Boeing posts largest-ever quarterly loss of $2.9bn. Facebook posts robust second-quarter earnings despite negative headlines and regulatory action. Crude oil futures fall on back of weak global cues. Uber joins hands with Sun Mobility in India.

 

Moving on to the top Business news of the day. 

 

 INDIA 

 

Government likely to begin selling sovereign bonds in October. RBI expected to cut rates again in its upcoming meeting.

 

Sovereign Roll Out: The Centre will roll out its plan to sell sovereign bonds in October, as per reports.

 

Yen, Euro and Dollar bonds are being considered and the first round of sales is expected to raise $10bn in one go. The bonds’ maturity period will be 10 years.

 

The government expects to generate considerable interest given that bond yields are plummeting and the pile of negative-yielding bonds has reached a record $13.4tr. But given that India has one of the highest budget deficits in Asia, raising such an amount in one go might be challenging.

 

When Doves Cry: When the RBI meets in August 7, it is widely expected to cut rates for the fourth time in a row by 25bp, bringing down repo rates to 5.5%. Low growth, weak inflation and uninspiring growth forecasts are reportedly in the Central Bank’s purview as it seeks to revive economic growth.

 

If it does cut interest rates, it will make it one of the more aggressive central banks in Asia. The last time it cut rates this frequently was in the aftermath of the 2008-09 financial crisis.

 

Revamp & Reshuffle: In the first bureaucratic shake-up since it returned to power, the Modi government replaced SC Garg with Atanu Chakraborty as Economic Affairs Secretary. Read more about Chakraborty and other appointments here.

 

 COMPANIES 

 

IndiGo share price surges as promoters reach a truce of sorts. Digital Communications Commission approves cumulative penalty of INR3,050cr on Bharti Airtel and Vodafone Idea. Byju's to replace Oppo on Team India's jersey.

 

Can We Be Friends?: Shares of InterGlobe Aviation on Wednesday surged the most in two months after news of its warring promoters reaching a truce of sorts came in. 

 

As per reports, IndiGo Chairman M Damodaran assisted a truce between the feuding co-promoters Rakesh Gangwal and Rahul Bhatia. IndiGo will now have four independent directors instead of the current two. While Gangwal will have one nominee on the board, Bhatia will be able to nominate five board members. 

 

Guilty As Charged: The Digital Communications Commission (DCC) - the apex decision-making body of the department of telecommunications - has approved TRAI’s proposal to impose a cumulative penalty of INR3,050cr on Bharti Airtel and Vodafone Idea for not providing points of interconnection to Reliance Jio in 2016 when it commenced operations.

 

India Says Bye-ju to Oppo: Chinese mobile-maker Oppo in March 2017 had made a winning bid of INR1,079cr for Team India jerseys for a five-year period. It is now making way for Byju’s - the Bangalore-based educational technology and online tutorial platform. 

 

As per reports, Oppo’s decision to forgo the rights come on back of its realization that the bid for the rights were "extremely high" and "unsustainable". 

 

 INVESTMENT 

 

Toyota to invest $600m in Didi Chuxing, to set up a JV for driver services. Tencent bets on Indian tech startups amid China slowdown. 

 

The What: Toyota Motor is set to invest $600m in China’s biggest ride-hailing company, Didi Chuxing.

 

As part of the deal, the two companies will also set up a joint venture with GAC Toyota Motor to provide vehicle-related services to drivers on Didi’s ride-sharing platform. 

 

The deal with Didi Chuxing follows Toyota's investments last year of $500m in Uber Technologies and $1bn in Southeast Asia’s Grab. 

 

Betting On You: Chinese internet giant Tencent is looking to increase its bets on Indian technology companies at a time when its home market is seeing a slowdown in venture capital investments.

 

Tencent counts Flipkart, Ola, Swiggy and Byju’s in its portfolio.

 

As per reports, Tencent made four fresh investments last year. In 2019, it has made one fresh investment in digital banking services provider Niyo. It is also in talks to invest in video streaming service MX Player, regional language content startup ShareChat and online insurance marketplace Policybazaar, and payments app PhonePe. 

 

 EARNINGS 

 

Boeing posts largest-ever quarterly loss of $2.9bn. Facebook posts robust second-quarter earnings despite negative headlines and regulatory action. 

 

A Whopping Loss: Boeing has posted its largest-ever quarterly loss of $2.9bnon back of rising costs as its flagship 737 Max jet remains grounded after two fatal crashes.

 

The aircraft manufacturer delivered 104 fewer airplanes to customers in Q2 vs last year as deliveries of the company's mass-produced 737 Max aircraft are halted. Boeing took a $4.9bn charge last week because of the Max.

 

Boeing Chief Executive Dennis Muilenburg has said that he was confident that the 737 MAX would be back in service as early as October. However, for the first time, he also acknowledged that Boeing may have to slow or completely halt production of the aircraft. 

 

Some Gains, Some Losses: Social media giant Facebook has posted robust second-quarter earnings despite incurring a record privacy fine of $5bn. 

 

Facebook reported $16.9bn in revenue, up 28% from a year ago. Profit posted at $2.6bn or $0.91 a share reflected a one-time $2 billion charge as part of its $5 billion settlement with the Federal Trade Commission.

 

 ENERGY 

 

Crude oil futures fall on back of weak global cues. Uber joins hands with Sun Mobility in India.

 

Weak Trends: Crude Oil Future dropped 0.77% to INR3,878 per barrel on Thursday due to weak trends in overseas markets.

 

Trading Low: Crude oil for delivery in August contracts was trading lower by INR30, or 0.77%, at INR3,878 per barrel with a business volume of 21,162 lots on Multi Commodity Exchange.

 

Meanwhile, West Texas Intermediate dropped by 0.50% at $56.16 and global benchmark Brent was down 0.44% at $63.46 a barrel.

 

New Trade Mate: Uber Technologies is set to partner with Bengaluru-based startup Sun Mobility to offer commuters in India electric auto-rickshaws in the coming months. The move comes amid the push by policymakers to encourage use of clean fuel.

 

Previously: As per a report last month, India plans to order taxi aggregators like Uber and local rival Ola to convert 40% of their fleet of cars to electric by April 2026.

 

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