Transfin.
HomeNewsGuidesReadsPodcastsTRANSFIN. EOD
  1. News
  2. Explained

India's Fiscal Deficit Close To Target, Crude Oil Prices Fall et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Oct 28, 2018 12:16 PM 3 min read
Editorial

Good evening reader, 

 

Rightly put, it's been a bizarre week. The global narrative was primarily driven by the glitzy annual investment forum known as the “Davos in the Desert” held in Riyadh this week.

 

Back home, after much hue and cry around payment systems, the RBI finally spoke, releasing its final guidelines on Interoperability. In other news which rocked the domestic markets, Reliance Industries Ltd acquired majority stakes in two of India's largest cable TV and broadband companies - Hathway Cable & Datacom, and DEN Networks, all "wired in" to gain traction on its own broadband service named Jio GigaFiber

 

We discuss these and much more on this week's Podcast: Pipes, Sandstorm, Ubernomics.

 

Moving on to this week's Top 6 Business Stories through our End Of Week Wrap Up:

 

RBI may bring UPI under its regulatory purview. SEBI considers creating a new industry body to ensure standardization of PMS schemes.

As per a report published by Factor Daily, the Unified Payments Interface (UPI), currently regulated by the National Payments Corporation of India (NPCI), might soon come under the purview of the RBI.

 

The Central Bank has recently released a dissent note stating that, “There is no case of having a regulator for payment systems outside the RBI."

 

Securities and Exchange Board of India plans to introduce an industry body to draft best practices for portfolio managers and a standard template to bring uniformity in marketing schemes.

 

Currently, there is no consistent document guiding marketing to prospective customers. Presently performance can be represented by weighted average returns, rolling returns or back-tested returns for newer schemes, even if it does not reflect true returns.

 

India’s fiscal deficit breaches 95.3% of its full year target in six months.

India’s fiscal deficit has reached 95.3% of its INR6.24tr target for this year within the first six months, worse than 91.3% at the same time last year. The govt. will have to rein in its expenditure to INR295bn in the remaining six months to stay within the estimated numbers, as per ICRA.

 

Direct tax collection grew by 16.9% this year, whereas indirect tax collection fell 2.8%.

 

Reliance and BP plan to partner to setup 2,000 petrol pumps in India. Reliance begins beta tests for Jio Payments Bank among employees before launch.

UK-based oil and gas ‘supermajor’ BP and Reliance Industries Limited (RIL) plan to set up 2,000 fuel retail outlets on national highways over the next three years. RIL runs 1,343 petrol pumps currently and BP had received a license to set up 3,500 outlets in 2016.

 

Post Q2 results, RIL CFO announced that the company had a memorandum of association with BP but there was no definitive agreement.

 

According to a report by Livemint, Reliance Industries Limited (RIL) is testing Jio Payments Bank services among its employees, similar to the testing process of Jio prior to its launch. The new project is a 70:30 joint venture between RIL and State Bank of India (SBI) formed in April this year.

 

RIL will move its customers from JioMoney, its prepaid mobile wallet, to Jio Payments Bank.

 

ArcelorMittal wins bid for debt-laden Essar Steel after offer of upfront payment of INR42,000cr. TPG-Manipal pursues Medanta after failed Fortis bid.

The Committee of Creditors (CoC) selected ArcelorMittal’s bid to buy out Essar Steel, even after company promoters tried to make last minute settlements with lenders, offering to clear all dues and asking for withdrawal of the Insolvency Bankruptcy Code (IBC) case.

 

ArcelorMittal altered its offer from INR35,000cr as upfront payment to INR42,000cr which outdid Vedanta’s bid, as Numetal stayed ineligible. The company also proposed to infuse INR8,000cr as capital into Essar Steel to enhance production and profitability.

 

Manipal and TPG Capital are in conversations to acquire a majority stake in Medanta after their failed attempt to acquire Fortis Healthcare.

 

The combination may offer a valuation of INR6,000cr for Medanta, as reported by Livemint. Medanta under pressure due to National Pharmaceutical Pricing Authority's price controls on knee implants, cardiac stents etc.

 

China opens world's longest bridge across the Pearl River Delta to link a regional economic zone comprising 70 million people and a GDP of $1.51tr.

The $20bn Hong Kong-Zhuhai-Macau Bridge has been opened to traffic to create an integrated region called the "Greater Bay Area”. Comprising of 11 cities, the Greater Bay Area produces 37% of Chinese exports and accounts for 12% of its GDP.

 

US Crude Oil prices fall c. 5% after Saudi Arabia’s declaration to meet market supply gaps.

Price for West Texas Intermediate (WTI) Crude Oil tumbled to $66.40/bbl after Saudi Energy Minister assured to fill supply gaps due to Iranian sanctions, in an announcement at the Future Investment Initiative conference in Riyadh.

 

(We are now on your favourite messaging app – WhatsApp. We highly recommend you SUBSCRIBE to start receiving your Fresh, Homegrown and Handpicked News Feed.)