Transfin.

GST Rates May be Revised Annually, Says Finance Minister Nirmala Sitharaman

GST rates may be revised only annually to remove “uncertainty” for business and the Government. Domestic passenger vehicle sales decline 6.2% in January. SEBI to penalise rating companies for failing to warn bond investors of the crisis brewing at IL&FS. SoftBank Group expected to post drop in quarterly profit.

 

 

 

INDIAN ECONOMY

GST rates may be revised annually.

Once Upon a Year

Finance Minister Nirmala Sitharaman is reportedly set to make changes in GST rates an annual affair to remove “uncertainty” for business and the Government. Until now, GST rates were reviewed and revamped frequently, which Sitharaman says has led to an inverted duty structure where the raw materials ended up becoming costlier than the finished product.

 

“Therefore, when the rate of tax of one item is brought down, a whole lot of other ripple effects are created. With that ripple effect, refund is affected," Sitharaman said at a post budget interaction with reporters in Kolkata. [Livemint]

 

Spectrum sale may fetch only ?10,000cr ($1.39bn) initial payment.

Code Red

Telecom officials have said that, given the financial troubles of Vodafone Idea and Bharti Airtel, the Government may generate upfront payments of only ?10,000cr ($1.39bn) from spectrum auctions starting April 1st.

 

This implies that the next spectrum sale could fetch it only around ?40,000cr ($5.58bn) overall as against the ?5.86Lcr ($81.82bn) worth of airwaves that the government wants to put on sale at base price. [ET Telecom News]

 

TRENDS

Domestic passenger vehicle sales decline 6.2% in January.

Domestic passenger vehicle sales declined 6.2% to 262,714 units in January from 280,091 units in the year-ago month, automobile industry body SIAM reported. 

 

Car sales also witnessed a slump last month, falling  8.1% YoY at 1,64,793. Motorcycle sales was also down 15.17% to 8,71,886 units.

 

Sales of commercial vehicles were down 14.04 per cent to 75,289 units in January. [BS]

 

The world's cheapest solar storage power auction drives another nail into the coffin for coal.

Extra Crunch

The latest auction of storage-based solar project with assured peak-hour supply set the record for the world's cheapest solar storage power. The added commitment of almost round-the-clock supply costing 8% less than thermal power, broke the affordability barrier for storage-based energy solutions, driving another nail into the coffin for coal. Click here for the full scoop. 

 

 

COMPANIES

SEBI to penalise rating companies for failing to warn bond investors of the crisis brewing at IL&FS.

Silence is Compliance

As per sources, the markets regulator, Securities and Exchange Board of India (SEBI), has sent fresh notices to three rating companies - CRA Ltd, India Ratings and Research Pvt. Ltd and Credit Analysis and Research Ltd (CARE) - for failing to warn bond investors of Infrastructure Leasing and Financial Services Ltd (IL&FS) in time about the scam at the shadow lender. 

 

Bigger Picture

IL&FS defaulted on a series of debt obligations, triggering a crisis in the shadow banking sector as banks and mutual funds cut their exposure to non-bank lenders.

 

The move comes after SEBI's Board disapproved of the low penalty of ?25L ($3m) each imposed on the three rating companies on December 26th.

 

The agencies had assigned IL&FS the highest rating of AAA before the default in September 2018, even though its unit had defaulted in June of that year. [Livemint]

 

SoftBank Group expected to post drop in quarterly profit.

A Bleak House

Japanese technology conglomerate SoftBank is expected to post a slide in profits for the past quarter, further deepening concern about its ability to secure funding for a second Vision Fund.

 

This would also give New York-based activist fund Elliott Management more say in a potential shake-up at SoftBank. Elliott has already amassed a stake of almost $3bn in SoftBank and is now pushing for changes including $20bn in stock buybacks. Furthermore, the emergence of Elliott as a prominent shareholder in SoftBank is likely to highlight the latter's difficulties following its soured bet on office-sharing startup WeWork. [Reuters]

 

 

GLOBAL

Donald Trump prepares to unveil $4.8trn budget.

Trillion Dollar Baby

US President Donald Trump is expected to release a $4.8trn budget today, the final one before the November election. He is expected to propose increasing military spending and decreasing spending on social-safety-net programmes and foreign aid. More details here.

 

Despite having the most number of Oscar nominations, Netflix wins only two trophies. 

Netflix and Unfulfill

Netflix may have made headlines as the media company with the most number of Oscar nominations - more than industry giants like Disney and Sony. But after the 92nd Academy Awards, the streaming behemoth did not take home the most prizes. That honour was shared between Disney, Sony and South Korea's CJ Entertainment. Netflix, meanwhile, managed to win only two trophies out of its 24 nominations. [CNBC]

 

 

CORONAVIRUS FALLOUT

Foxconn told to postpone resumption of iPhone manufacturing over coronavirus fears.

An Apple Another Day

Foxconn, the world’s biggest iPhone assembler, was supposed to resume production on Monday. But its plans have been called off by Chinese authorities due to worries surrounding the coronavirus outbreak. Public health experts said Foxconn’s factories faced “high risk of coronavirus infection” after conducting on-site inspections.

 

This further worsens supply chain disruptions for electronic companies, including Apple, Amazon, Google and Huawei. [Nikkei Asian Review]

 

China could extend Lunar New Year holiday.

Extended Uncertainty

There’s no sign of an end to concerns as the prospect of another extension of suspension of work in Chinese cities looms. Chinese authorities could extend the Lunar New Year holiday till February 17th in some key provinces as the country battles a deadly coronavirus outbreak that has, officially, claimed over 800 lives. An extended suspension of work in China, “the world’s factory”, could further strain global supply chains, with the reverberations being felt around the world. [ET]

 

Analysts slash global growth forecasts over coronavirus outbreak.

Thus, China’s battle against the coronavirus is having implications on the global economy. So much so that most analysts have started lowered global growth forecasts. Some even argue GDP growth this year will see its weakest pace since the 2007-2008 financial crisis. [BS]

FIN.

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