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No More Sears, Store In India et al

Professor of Financial Economics and Part-time Value Investor, Transfin.
Oct 12, 2018 12:54 PM 3 min read
Editorial

Good evening reader,

 

Come Monday and you can sleep easy that your payments data while you transact on apps such as Google Pay or WhatsApp Payment would be stored in Bharat-based servers, allowing our distinguished regulator to gain "unfettered supervisory access" (RBI's words, not ours) in the future. Yay?!

 

While this may be in preparation of the much awaited (and thrown around) Data Protection Bill, it’s also a reflection of RBI's retrospective tough stance, especially towards consumer-interest oriented regulations. The Central Bank has threaded its way this time through intense lobbying, even refusing the government its more liberal 'data mirroring' approach (i.e. to ask providers to merely keep a 'copy' of the original data in India, instead of pushing for exclusive storage)!

 

On a slightly sardonic note, and what better day than Friday to push for one, we feel this ties well with our (anecdotal) understanding of the regulator's recent strategy at showcasing its fierce independence (Bank CEO firings, rate hold, and now data localization), especially when it hardly expressed its distance from the Executive in the early stages of this government (demonetization, crypto-currencies etc.).

 

All in all, ignoring their motivations, we believe this is a good move and directionally in-line with an increased focus on data protection. Execution of the above with checks and balances to control supervisory access would now be key.

 

With this out of the way, here's a look at today's Top 6 Business Stories through our End Of Day Wrap-Up:

 

INDIA

 

Government hikes import duties on telecom equipment from 10% to 20% to narrow Current Account Deficit.

In an attempt to rein in the country’s widening current account deficit, the government has increased import duties on telecom equipment including components for mobile devices. Interestingly, mobile phones and their components, make up the third-biggest chunk of import bill after crude oil and gold. The move comes shortly after the Centre hiked import duties on 19 non-essential goods last month. Aimed at curbing outflow of foreign exchange from India and to boost Make in India, this could mean your mobile phones, speakers, air conditioners, household refrigerators, and washing machines will now cost more.

 

Internet may shut down globally over the next 48 hours.

In light of increasing episodes of cyber-attacks, the Internet Corporation of Assigned Names and Numbers (ICANN) will be carrying out maintenance work in the next 48 hours due to which internet users worldwide may experience network failures.

 

Airtel ties up with Netflix, Flipkart and MakeMytrip for customized offers.

In a bid to ensure customer retention, Airtel partners with the likes of Netflix, Flipkart and MakeMyTrip to provide bundled offers including free subscriptions, cash backs etc. The move comes amidst tough competition from companies like Reliance Jio and Vodafone Idea. The offers come under the telco’s privilege membership package #AirtelThanks.

 

Sensex and Nifty50 rise over 2% as oil prices lower.

Sensex and Nifty bounce back, gaining 2.15% and 2.32% respectively, as oil prices fall. Rupee also gained momentum as the equity market recovered. Sensex recorded its largest single-day gain in two years, on back of rise in auto, energy and metal stocks.

 

US/INTERNATIONAL

 

Elon Musk denies reports of James Murdoch’s appointment as Chairman of Tesla.

Considering that Elon Musk takes to Twitter to make all important announcements, after reports emerged about outgoing CEO of 21st Century Fox, James Murdoch’s taking over as Chairman of Tesla Inc., Musk tweeted his denial, “This is incorrect”. Post Musk’s scuffle with Securities and Exchange Commission over his tweet to take the company private, Tesla was given till 13 November to appoint a new Chairman.

 

Lenders urge to liquidate Sears Holdings as the company inches closer to bankruptcy.

The 125-year-old US-based retailer, last profitable in 2010, is working to put together a bankruptcy plan ahead of its Monday debt payment of $134m, which is more than 3x its market value. The Co. has approached Bank of America and Wells Fargo for emergent financing. Last month, Mr. Eddie Lampert, the CEO proposed an out-of-court restructuring that would reduce more than $1bn from Sears’s $5.5bn debt load, divest another $1.5bn of real estate and sell $1.75bn of assets, including the Kenmore appliance brand, which Mr. Lampert offered to buy for $400m.

 

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