Fed Rate Cut News, Apple iPhone Sales Drop, CCD Appoints New interim Chairman Following Demise of Founder V G Siddhartha

US Federal Reserve “almost certainly” set to announce first rate cut since 2008 financial crisis. Coffee Day Enterprises appoints SV Ranganath as interim Chairman following demise of Founder V G Siddhartha. Apple iPhone sales down by 12%. To cope with dipping smartphone sales, Apple is diversifying into other services. Semiconductor slump sees Samsung’s operating profit halve. National Pension System to become expensive. Lok Sabha passes the Code on Wages Bill, 2019. EssilorLuxottica to acquire GrandVision. Airbus reports 72% increase in profit to $2.20bn in Q2.

 

 Moving on to the top Business news of the day.

 

 CCD 

 

Coffee Day Enterprises appoints SV Ranganath as interim Chairman following demise of Founder V G Siddhartha. 

 

The What: Coffee Day Enterprises has appointed Non-Executive Independent Director SV Ranganath as the company’s interim Chairman following the demise of Founder V G Siddhartha. 

 

Nitin Bagmane, a Director on the Board of Tanglin Developments, a subsidiary of Coffee Day Enterprises has been appointed as the company’s interim Chief Operating Officer.

 

Also This: The company has also announced that its Board has initiated a probe into past transactions made by the company and Siddhartha following allegations made by Siddhartha relating to financial transactions outside the knowledge of the senior management, auditors and the board.

 

As per reports, body of Cafe Coffee Day founder V G Siddhartha was found from the Nethravathi river after he was reported missing on Monday night.

 

 SMARTPHONE 

 

Apple iPhone sales down by 12%. To cope with dipping smartphone sales, Apple is diversifying into other services. Semiconductor slump sees Samsung’s operating profit halve.

 

Apple Today Kept the Estimates Away: Apple’s Q3 earnings reported iPhone revenue of $25.99bn, missing Wall Street estimates of $26.31bn. YoY, iPhone revenue was down 12%.

 

Although Apple’s overall results were strong and drove its share price up, the dipping iPhone revenue reflects public weariness of the smartphone line and unwillingness to upgrade every year or so. The iPhone now represents less than a half of Apple’s revenue.

 

iDiversify: Apple understands the ramifications of being an exclusively-iPhone company, and is duly diversifying into other fields. Services, wearables, accessories, AppleTV+, Apple Arcade and a foray into the credit card business are on the table.

 

Samsung Sung a Sad Song: Across the Pacific, Apple’s South Korean tech peer, Samsung Electronics, might be cancelling its after-quarter party. Operating profit halved in Q2 to $5.6bn, a fall of 55.6% from April-June last year. Revenue and net income tumbled by 4% and 53.1% respectively.

 

The slump in the semiconductor business can be semi-blamed. Declining chip prices aren’t the only things Samsung is worried about. Souring Seoul-Tokyo relations led to Japan imposing export restrictions on materials indispensable for Samsung. A full-fledged trade war will hurt it further.

 

 RULES 

 

National Pension System to become expensive. Lok Sabha passes the Code on Wages Bill, 2019.

 

Ageing Gracefully?: Expense ratio of National Pension System (NPS) is set to rise as NPS Trust will be allowed to recover administrative charges and expenses on daily accrual basis, August onwards.

 

Shelling Out More: NPS Trust will restart recovering administrative charges/expenses @ 0.005% per annum of the Asset under Management (AUM) on daily accrual basis to meet its expenditure, as per a notice by NPS Trust General Manager Akhilesh Kumar. 

 

For the Common Good: The Lok Sabha, on Tuesday, passed the Code on Wages Bill, 2019.

 

The Bill aims to extend provisions of minimum wage and timely payments to employees across all sectors. This would also ensure that workers of unorganised sectors receive timely payments. 

 

Read more about the Code on Wages Bill, 2019 here

 

 GLOBAL BUSINESS 

 

EssilorLuxottica to acquire GrandVision. Airbus reports 72% increase in profit to $2.20bn in Q2. 

 

EssilorLuxottica’s Grand Vision: EssilorLuxottica, the owner of the sunglasses brand Ray Ban, is set to acquire Dutch opticians group GrandVision in a $8bn deal.

 

GrandVision, whose chains include Vision Express in Britain and For Eyes in the United States, would give EssilorLuxottica control of more than 7,000 outlets across the world where it already sells brands including Varilux lenses and Ray-Ban sunglasses.

 

Owning the Sky: Aircraft-manufacturer, Airbus has reported a 72% increase in profit to $2.2bn in Q2, fueled by ramp-up in production of A320 Family aircraft and transition to the more efficient NEO version, as well as further progress on the A350 financial performance.

 

It reported a 23% increase in revenues to $20.4bn with net income up 443% to $1.2bn. Profits in the commercial aircraft division were up 127% to $1.9bn.

 

TransfinPicks: Financial services firm Capital One recently revealed a data breach affecting the personal details of about 106 million individuals across the US and Canada. Here’s all you need to know about the breach. 

 

 FOMC 

 

US Federal Reserve “almost certainly” set to announce first rate cut since 2008 financial crisis.

 

Cut the Rate?: The Federal Open Market Committee will “almost certainly” deliver a 25bp rate cut as it meets in Washington for its two-day-long deliberations. This cut would be the Fed’s first since the 2008 financial crisis, and the first to be announced by incumbent Fed Chairman Jerome Powell.

 

Desperately Seeking Clarity: As we prepare for the Central Bank’s statement and Powell’s press conference, a few things are up for consideration. Beside the cut itself, the Fed will have to clearly explain the rationale behind easing policy despite healthy economic indicators. It will also have to give a clear picture of whether it will continue easing in the near future of whether this was just an insurance cut.

 

Two More Things: What will the markets’ reaction be to the rate cut? And if there are dissenters to the Fed’s vote (there could be as many as three), who are they and what are their disagreements? (Also in play: did Trump’s public chiding of Powell to cut rates influence his decision?)

 

You can watch Powell’s press conference live here.

 

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