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PM Narendra Modi Announces Cabinet Ministers of India 2019, World Stock Markets Shrink After Donald Trump’s Mexico Tariff Threat, Uber Reports Loss of $1bn in Q1 and Other Top Business News Today

Professor of Financial Economics and Part-time Value Investor, Transfin.
May 31, 2019 1:25 PM 4 min read
Editorial

Nirmala Sitharaman appointed as the next Finance Minister under Narendra Modi Govt 2.0. Global markets shrink after Donald Trump’s Mexico tariff threat. Uber reports loss of $1bn in Q1. Edtech company Byju’s triples revenue in FY 18-19. RBI unveils guidelines for ‘offline KYC’. 

 

Moving on to the top Business news today:

 

 MODI 2.0 

Nirmala Sitharaman appointed as the next Finance Minister under Narendra Modi Govt 2.0.
 

Former Defence Minister in the Modi administration, Nirmala Sitharaman has been appointed as the Finance Minister under the re-elected Prime Minister Narendra Modi’s Cabinet.

Sitharaman had also served as the Commerce and Industry Minister before she took up the Defence portfolio. Sitharaman will also hold the Ministry of Corporate Affairs. 
 

What You Need to Know: Arun Jaitley, who held the Finance and Corporate Affairs portfolios in the previous NDA government, had earlier this week opted out of formal responsibilities owing to health conditions.
 

A Rocky Road Ahead: As she takes charge, the immediate challenge before Sitharaman is to revitalize the slowing down economic growth rate and shape the full-year budget for FY20 amid concerns of slowing down revenue collection and surging welfare spending needs.
 

Here are some other challenges the new Finance Minister is likely to be tackling during her tenure. 
 

Who’s Who: The Narendra Modi government on Friday announced the allocation of the Cabinet portfolios. Here’s a look at who got what.

 

 BYJU  

 
Edtech company Byju’s triples revenue in FY 18-19.
 
 
Edtech Unicorn Turns Profitable: Bengaluru-based school learning app Byju’s announced today that it has tripled its revenue to INR1,430cr in FY 18-19, on back of its expanding paid user base. The platform is estimating a revenue of over INR3,000cr this fiscal. 
 
 
In an official statement, the company attributed this growth in revenue to “deeper penetration across India and significant growth in the number of paid subscribers”.
 
 
Launched in 2015 with programs in both Hindi and English, the app currently boasts 35 million registered students and 2.4 million annual paid subscriptions.
 
 
Going Global: After a successful innings in India, it seems that Byju’s now has plans to enter the global market. It recently acquired a US-based platform for educational games for $120m and is also partnering with Walt Disney to introduce a new early learning app for kids.
 
 
 UBER 
 
 
Uber reports loss of $1bn in Q1. Partners with IOC to offer discounts on fuels for driver-partners.
 
 
Disappointing Performance: Uber announced its Q1 results on Thursday and reported a loss of $1bn on a $ 3.1bn revenue
 
 
Shares initially fell about 1% on the news, but were up more than 3% in after-hours trading. 
 
 
The quarterly loss came despite a 20% rise in revenues to $3.1bn and increase in monthly active users to 93 million.
 
 
The news comes at a time when some analysts have expressed unease about the company ever making a profit post its IPO on May 10.
 
 
Uber Cares: As a part of its UberCARE programme for its driver-partners, the ride-hailing company has announced that it has joined hands with Indian Oil Corporation (IOC) to offer special benefits, including discount on fuel, to its driver-partners in India. It also stated that over 12,000 driver-partners have already registered for these benefits.
 
 
 TECH 
 

RBI unveils guidelines for ‘offline KYC’. 
 
 
Breathe Easy: The Reserve Bank of India has unveiled guidelines for offline ‘Know Your Customer’ verification, a major step towards easing the customer on boarding process for financial services companies.
 
 
For offline KYC verification, companies can capture customer details using a QR Code, or through an XML-based process, prescribed by the Unique Identification Authority of India (UIDAI) which manages the biometric database of consumers.
 
 
Did You Know: Flickr, a photo-sharing service acquired by Yahoo in 2005, was a major pivot by Stewart Butterfield after a failed attempt at a game called Game Neverending.
 
 
In order to chase his unfulfilled dreams, Butterfield joined forces with Flickr’s original chief software architect Cal Henderson, as well as former Flickr employees Eric Costello and Serguei Mourachov. Together, they would build Tiny Speck, the company behind an artful, non-combat massively multiplayer online game. Years later, they would pull off a pivot more massive than the last. Slack, which was born from the ashes of Butterfield’s fantastical game, would lead a shift toward online productivity tools that fundamentally change the way people work.
 
 
Here’s the tale of how a whimsical online game became an enterprise software giant.
 
 
 GEOPOLITICS 

 
Global markets shrink after Donald Trump’s Mexico tariff threat.
 
 
Warning Issued: US President Donald Trump on Thursday said that the US will impose a 5% tariff on all Mexican imports from June 10, and duties of up to 25% will be added in the coming months if Mexico does not take action to “reduce or eliminate the number of illegal aliens” crossing into the US.
 
 
Stocks and bond yields around the world fell on back of the tariff threat as investors moved to safer assets like government bonds, gold and the Japanese yen. 
 
 
The Mexican Peso fell 2.9% against the Dollar as investors reacted to concerns about the country’s ability to withstand tariffs from its largest trading partner.
 
 
The yield on 10-year US Treasury’s declined to 2.158% from 2.227% on Thursday, hitting a fresh 20-month low. Yields on German 10-year bonds fell to -0.204%, matching an all-time low reached in July 2016. Dutch 10-year government bond yields turned negative for the first time since October 2016, at -0.089%.
 
 
Reviving Hopes: Trump had earlier in March announced that the US may terminate India’s designation as a beneficiary of the Generalized System of Preferences (GSP), which allows $5.6bn worth of Indian exports to enter the US duty free. 
 
 
India Needs to Choose: As per the US administration, India’s suspension from the list of countries benefiting from a duty-free import scheme is a "done deal", but the door has been left open for restoring the benefits when India yielded, conceding more access to its markets to American firms. More on this here.

 

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