ECB Acts to Boost Struggling Eurozone, Goldman Sachs Rolls Out ETFs Focused on AI, Chinese Exports Fall Over 20% in February et al.

ECB acts to boost struggling Eurozone. Goldman Sachs rolls out ETFs focused on AI. E-commerce firms set to form a lobby group. Chinese exports tumbled over 20% in February.

 

MACRO

India seeks to keep Iran oil purchases at 300,000 bpd in extended waiver. Exports from China tumbled over 20% in February.

Pretty Please: India is seeking an extension on waiver of US sanctions on oil imports from Iran as it looks to maintain the current import level of 300,000 barrel per day limit. The waiver is set to expire on May 4.

Background: India’s request comes at a time of heightened political tension between the two countries, aggravated by  the termination of India’s membership from the preferential trade program by the Trump administration.


Recap: The US had re-imposed sanctions against Iran last November in a dispute over Tehran's nuclear and missile ambitions. It had however granted waiver's to Iran's biggest oil customers - China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece, allowing them to continue limited imports.

Sharp Fall: Export from China tumbled 20.7% vs previous year on the back of fears of global economic slowdown. Imports too dropped 5.2%.

The trade balance narrowed to $4bn vs $39bn in January. Trade surplus with the US also dipped sharply to $15bn vs $27bn a month earlier.

 

MARKETS

ECB acts to boost struggling Eurozone. Goldman Sachs rolls out ETFs focused on AI.

Back to Life: The ECB has rolled out a round of fresh stimulus, offering banks cheap loans in an attempt to revive the economy. The unexpected move came as the Central Bank made sharp cuts to its forecasts for both growth and inflation this year.

Holding Steady: ECB, acting less than three months after it phased out a $2.9tr bond-buying program, said it would hold interest rates at their current levels at least through the end of this year, longer than what it had previously signaled.

The announcement sent the Euro down by 0.6% against the Dollar and 0.1% against the Pound.

Rise of Machines: Goldman Sachs launched five new ETF funds that rely on indexes built with Machine Learning and Artificial Intelligence. Goldman has teamed up with Motif Investing to identify companies that will drive growth.


Not the First: Goldman’s foray into computer-driven ETFs is the latest sign of Wall Street’s increased reliance on sophisticated automation. Two years ago, BlackRock, the world’s largest money manager by assets, announced that it would overhaul its actively managed equities business to rely more on robots than humans.

 

STARTUPS

Dunzo in final stages to close c. $20m funding round. Coverfox in talks to raise $50m in Series D funding. Zoho acquires ePoise.

Close Enough: Bengaluru-based hyperlocal startup Dunzo is in final stages of closing its $15-$20m funding round. Existent investor Google is likely to participate in the round along with a new strategic investor. 


The news comes at a time when competition in the hyperlocal delivery space has intensified. Swiggy, which forayed into the on-demand hyperlocal space with the launch of Swiggy Stores is expected to be a major contender. The deal would give Dunzo enough resources to compete with the food delivery giant.

AI Assistant: Dunzo leverages AI to provide vendors for shipping of packages, buying products, repairing stuff, and home services. Users can also get their personal tasks done through the app, which includes paying bills, getting car services, repairing amongst others.

D Company: Online insurance platform Coverfox in discussions with investors from China, the US and the UK to raise c. $50-60m in Series D funding round.

Glitterbug Technologies, which runs Coverfox, has appointed the Industrial and Commercial Bank of China to identify investors. If the deal goes through, it will value the venture at $150-200mn.

Old Friends: SAIF Partners, Catamaran Ventures and Accel Partners, who had earlier invested in the company, are also expected to participate in the new round.

First Buy: Homegrown tech firm Zoho has bought Bengaluru-based hiring automation startup ePoise Systems for an undisclosed sum in its first-ever acquisition.


Digital Interview: ePoise offers an automated hiring software product targeted at mass recruiting companies.

 

COMPANIES

Max group's Analjit Singh likely to sell assets to repay loans. Jet’s lessor may redeploy its planes if restructuring fails this month.


Settling Scores: Max group promoter Analjit Singh is looking to sell assets to repay loans raised through the pledging of promoter shares.


Singh is planning to sell a minority stake in Max Financial Services (MFSL), the holding company of Max Life, as well as some real estate assets. Singh will sell 5% of his 12% stake in the entity formed after the merger of KKR-backed Radiant Life Care and Max Healthcare.

Giving it Back: So far the promoters have pledged c. 76% of their stake in MFSL and c. 74% in Max India (MIL), the holding company of its healthcare, health insurance and senior living businesses, to the lenders. 


Grounded: Jet Airways has grounded three more aircrafts bringing the total number of grounded aircrafts to 28. The grounded aircrafts were leased to Jet by FLY Leasing and were grounded on the back of outstanding payments. The lender has stated that it intends to reacquire the planes and redeploy them elsewhere if the airline cannot gain approvals for a restructuring plan this month.

Under the Scanner: The ED is investigating Philip Morris and its Indian partner Godfrey Phillips for alleged violation of FDI laws in India. The agency has been looking into both the companies and the scope of the investigation is allegedly much broader than the foreign investment law violations highlighted.

Since Forever: Philip Morris has for years paid manufacturing costs to Godfrey Phillips to make its Marlboro cigarettes, circumventing a nine-year-old government ban on foreign direct investment in the industry.

 

ECOMMERCE

E-commerce firms set to form a lobby group. RIL plans expansion into fashion store business.

 

Union: Around 10-11 e-commerce companies, including Snapdeal and ShopClues, are planning to form a lobby group – one where the majority shareholding would be Indian and would represent the interest of Indian e-commerce companies.  

The “E-commerce Council of India” will focus on topics including policy advocacy, exchange of best practices and a general engagement platform for the e-commerce companies in India. 

Big Dreams: Reliance Industries is planning to grow the number of low-cost Reliance Trends fashion stores across India to 2,500 from 557 over the next five years with the aim to integrate them with its online business.

Taking Advantage: The move comes as the recently released FDI in ecommerce policy and draft ecommerce policy has pushed foreign-owned retail giants like Amazon and Flipkart to realign their operations in the country. 

Growth Capital: Ecommerce and consumer internet companies raised over $7bn in private equity and venture capital funding in 2018. 


A majority of the funding went towards building supply chain, expanding into new segments, acquisition/consolidation, and bringing innovative product offerings. Read more on this here.

 

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