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Employment on Steady Rise, Trump 'Stands With' Saudi Crown Prince et al

Professor of Financial Economics and Part-time Value Investor, Transfin.
Nov 21, 2018 1:42 PM 3 min read
Editorial

We're kinda hooked on the transformative role played by Video-On-Demand (VOD), which has forever changed the way we consume Entertainment. Case-in-point: Sharath's numerous pieces on this subject :) 

 

So any sign of convergence between NetflixAmazon Prime, or India's Homegrown Hotstar makes us pay attention, like Amazon's latest bid to acquire Disney's regional sports networks.

 

Perspective: Disney recently acquired Fox for $71.3bn, which included the latter's regional sports assets. Considering Disney already owns ESPN, competition concerns compel them to offload Fox's regional networks. Now Amazon has placed its first-round bid for the same.

 

Why the big deal?: Amazon's heightened push (and deep pockets) for sports puts traditional media (who still dominate sports programming) in a fix. Sports content has a short shelf life and commands significant spikes in live traffic, ideal for highly priced advertising windows.

 

You said convergence?: Hotstar is already doing this in a big way in India, leveraging on sports assets of Star India (its owner). They are, we bet, also nervous. 

 

More on this in tomorrow's LongShorts. Meanwhile, enjoy Today's (Other) Top 6 Business Stories through our End Of Day Wrap Up:

 

RBI relaxes deadline for capital adequacy, boosting banks’ lending capacity up to INR3tr.

Having retained the capital adequacy ratio to 9%, the Reserve Bank of India (RBI) extended its deadline for banks to meet increased capital requirements till March 31 2020. In effect, the Government would also see a reduction in the capitalization needs of Public Sector Banks (PSBs).

 

In other news: Arguing against the recent insistence on increased Surplus payout, the RBI said that the gains recorded specifically due to Revaluation would not be considered. 

 

Zooming Out: RBI’s perceived ‘Rating’ is under consideration. While RBI officials assert their top Rating, the Government nominees question whether they can technically be above the Sovereign Rating. 

 

Airtel formulates plans to take on Jio and Vodafone-Idea. 

 

As per a Business Standard report, Airtel is strategizing to compete with Jio and Vodafone-Idea to get the highest number of net additions to its 4G-subscriber base by:

 

  • Optimizing its spectrum
  • Aggressive infrastructure upgrade of towers to offer 1Gbps speed
  • Reduce subscriber base at the bottom by increasing minimum recharge tariffs

 

The telco plans to expand its fiber-to-home broadband services. Airtel is also targeting post-paid customers of Vodafone-Idea as it faces the effects of the merger.

 

Employment stands at 9.73 lakh in September, more than double of last year’s count.  

 

Highest monthly addition of jobs recorded since September 2017, according to Employees’ Provident Fund Organization (EPFO) payroll data. It states that over 79 lakh new subscribers were added to EPFO’s social security schemes from September 2017 to 2018.

 

What You Need To Know: EPFO manages social security funds of more than 6 crore active members in the organized/semi-organized sector in India.

 

Dr. Reddy’s share price rises on back of favorable US Court ruling. 

 

Up Close: Shares of the company peaked to INR2,655, closing at INR2,600 (+6.44%).

 

Perspective: US Court of Appeals allowed Dr. Reddy to sell its generic opioid treatment, Suboxone in US, which contributes c. 38% of the company’s total sales.

 

US/INTERNATIONAL

 

President Trump ‘stands with’ Saudi Crown Prince despite allegations of Khashoggi murder. 

 

A White House statement titled “Standing With Saudi Arabia” suggested that the US would not ‘punish’ Saudi Arabia over Jamal Khashoggi’s murder citing Crown Prince Mohammed bin Salman’s denial of involvement.

 

The Big Picture: Trump told reporters that the CIA had no conclusive reports of the Prince’s connection to the case, as opposed to what US officials told The Wall Street Journal.

 

Bitcoin records lowest value in 2018 as it breached the $4,300 mark. 

 

Bitcoin’s value dropped as much as 10% driving losses to 25% within a week. It sunk as far as $4,327, which is its lowest value since October 2017.

 

The Why: Traders lay the blame on heavy selling at leveraged exchanges in Asia like OKEx and Bitmex. Some associated the fall to the "hard fork", which led to Bitcoin Cash.

 

Ripple's XRP and Ethereum's Ether also fell 14% and 16% respectively.

 

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