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US-China Trade War Heats Up Again After Trump's Tweets, National Medical Commission Bill, SBI Q1 Results

Professor of Financial Economics and Part-time Value Investor, Transfin.
Aug 2, 2019 12:55 PM 4 min read
Editorial

After Lok Sabha, Rajya Sabha passes National Medical Commission Bill. Doctors and students take to streets to protest NMC Bill. Parliament passes Bill to establish international arbitration body in India. Tax-hit SBI misses first-quarter profit estimates. Gruh Finance stake sale helps boost HDFC Q1 profit by 46%. UrbanClap raises $75m in Series E funding. Walmart invests $50m in NinjaCart. US-China trade war heats up again after Trump tweets that US will impose 10% additional tariffs on Chinese imports. Global markets plunge.

 

Moving on to the top Business news of the day.

 

 HEALTHCARE 

 

After Lok Sabha, Rajya Sabha passes National Medical Commission Bill. Doctors and students take to streets to protest NMC Bill.

 

Rite of Passage: Three days after the Lok Sabha passed it, the Rajya Sabha too passed the National Medical Commission (NMC) Bill 2019, albeit with two amendments. The Bill will now go back to the Lower House, which will consider the changes, and then land on the President’s desk for his assent.

 

What Does the Bill Propose? The Bill seeks to annul the Indian Medical Council Act, 1956. It proposes to replace the Medical Council of India (MCI) with a National Medical Commission, which would be the overarching central authority regulating medical education. It also provides for a common final-year MBBS exam named National Exit Test (NEXT). More on the Bill and its provisions here.

 

Opposition to the Bill: While the government touted it as a “major reform”, the Opposition decried it as being “anti-poor” and an assault on federalism. Several medical students, doctors and members of the Indian Medical Association (IMA) have taken to the streets to protest the Bill. This has caused healthcare services across the country to be disrupted.

 

 ARBITRATION 

 

Parliament passes Bill to establish international arbitration body in India.

 

Both Houses of Parliament have passed a Bill to make India an international arbitration hub for settlement of commercial disputes.

 

Resolve Your Disputes in Incredible India: The Arbitration and Conciliation (Amendment) Bill 2019 aims to establish an Arbitration Council of India for alternative dispute resolution services through arbitration, mediation and conciliation. The ACI would hear domestic and international disputes. Its Chairperson will be appointed by the government in consultation with the Chief Justice of India.

 

With the establishment of an ACI, India would join other countries like France, UK, Singapore and US in having an internal arbitration institution. Besides making a mark on the arbitration world map, an ACI could also help in reducing the burden on courts and speed up the arbitration process.

 

 BANKING RESULTS 

 

Tax-hit SBI misses first-quarter profit estimates. Gruh Finance stake sale helps boost HDFC Q1 profit by 46%.  

 

Tax Pain: SBI on Friday reported a lower-than-expected Q1 profit of INR23.12bn due to high tax expenses even as its bad loan provisions fell.

 

About Last Year: SBI recorded a tax expense of INR17.51bn the first quarter this year as compared to a tax gain of INR23.79bn last year. Prior to taxes, the company earned INR40.63bn in profits.

 

Profit Jump: HDFC on Friday reported a 46% growth in net standalone profit of INR3,203cr when compared to last year’s INR2,109cr in the same quarter.

 

At INR4.16L, the company’s loan book grew 11.2%. Gross NPAs experienced a marginal growth of 1.29% against 1.22% on QoQ basis. HDFC's profits were boosted by the INR1,894cr sale of its stake in Gruh Finance. 

 

 STARTUPS 

 

UrbanClap raises $75m in Series E funding. Walmart invests $50m in NinjaCart.

 

UrbanClap Your Hands: UrbanClap has raised $75m in a Series E financing round led by Tiger Global. The freelance labour startup has raised $185m to date.

 

UrbanClap currently operates in ten cities in India and the UAE (Dubai + Abu Dhabi). It reportedly supports 20,000 service professional and each month 450,000 transactions take place on its platform.

 

Walmart Goes Vegetable Shopping: The US retail giant, which also owns Flipkart, will invest almost $50m in NinjaCart, a B2B fruit and vegetable supply chain.

 

The deal includes provisions to reserve a NinjaCart board seat for Walmart and allow the Bentonville-based behemoth to increase its investment in the future. The deal is expected to also benefit Flipkart in the grocery retail sector.

 

 TRADE WAR 

 

US-China trade war heats up again after Trump tweets that US will impose 10% additional tariffs on Chinese imports. Global markets plunge.

 

Wake Me Up When September Begins: On September 1, America will impose a “small additional tariff of 10%” on the remaining $300bn of Chinese imports, President Donald Trump tweeted. More than two months after the last set of tariffs, the US-China trade war is brewing again.

 

Onerous in Osaka: During the recent G20 summit in Osaka, Trump and Xi had agreed to restart trade talks. Trump consented to withhold imposing new tariffs and pull back his anti-Huawei campaign while Xi agreed to buy more agricultural products from America. Trump has accused Beijing of not keeping its promise.

 

Trump Sneezes and the World Catches a Cold: Global stock markets plunged on Friday after Trump’s tweets on additional Chinese tariffs. London lost 2% and Frankfurt fell 2.5% while markets in Shanghai, Sydney, Paris and Hong Kong climbed down. Markets in India and New Zealand, meanwhile, edged slightly higher.

 

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