IndiGo share price drops to four-month low after differences between founders become public. Brooking Asset Management might invest in Suzlon Energy. DHFL auditors might resign ahead of board meeting. US removes cap on Green Card applicants; Indian IT professionals to benefit. US & Indian trade negotiators will meet on Friday to try to break the impasse and end the tariffs. Government to invalidate all PAN cards not linked to Aadhaar. No one saw zero MDR coming. US Fed Chairman calls for regulatory review of Facebook’s Libra. New York Fed’s key recession tracker hits its highest level since 2009. Is another recession in the offing? How moon-fever made life better for all of us on earth. Why are some people in Shanghai spraying pesticide over their trash?
Moving on to the top Business news of the day.
IndiGo share price drops to four-month low after differences between founders become public. Brooking Asset Management might invest in Suzlon Energy. DHFL auditors might resign ahead of board meeting.
Will The Bad Times IndiGo Away: The public spat between the two founders of India’s largest airline have hit InterGlobe Aviation, which operates IndiGo, hard.
The stock fell by almost 16.7% and its investors lost over $1.4bn in market value in the last two sessions. The stock has touched a rate of INR1313.4 a share, a level last seen on 15 March.
Meanwhile, the government will probe IndiGo’s shareholder pact for violations even as market regulator SEBI will look at the allegations made by one of the founders, Rakesh Gangwal.
Tidings From Toronto: Toronto-based investment firm Brooking Asset Management is planning an offer for a majority stake in Suzlon Energy.
As part of the proposed deal, Brooking will reportedly ask debt-laden Suzlon’s creditors to restructure outstanding bank loans worth more than INR11,000cr.
Lenders, including SBI, could be asked to take a haircut of as much as 50% of the loans.
I Knew You Were Trouble: DHFL’s grievances simply refuse to subside. Two statutory auditors, who are yet to complete the company’s FY19 audit, might resign ahead of the meeting of the company’s board of directors. And the auditors might not have signed the HFC’s financial results, even though its fourth quarter numbers are due in less than two days.
US removes cap on Green Card applicants; Indian IT professionals to benefit. US & Indian trade negotiators will meet on Friday to try to break the impasse and end the tariffs.
Green Going: The US House of Representatives overwhelmingly passed a law to remove the 7%-per-country cap on Green Card applicants.
Green Cards allow those from outside the US to live and work in that country. Now, the per-country limit will be 15% of all visas available that year. This is expected to benefit Indian IT officials, who usually enter the US using the H-1B work visa.
Back To The Arena: American and Indian trade representatives will return to the negotiating table tomorrow to restart talks between their two countries regarding the series of protectionist measures and tariffs that have strained ties.
While Modi has pushed up tariffs to respond to Washington’s revoking India from the GSP and to propel domestic companies, Trump has decried India’s protectionism as “unacceptable”. The negotiators will have a tricky time – neither side is eager to compromise, but the stakes are high to avoid a full-blown trade war.
Government to invalidate all PAN cards not linked to Aadhaar. No one saw zero MDR coming. US Fed Chairman calls for regulatory review of Facebook’s Libra.
Ban the PAN?: After announcing in the Budget that Aadhaar and PAN were interchangeable and that Aadhaar could be used to file income tax returns, the government will deactivate all PAN cards not linked to Aadhaar after August 31.
For those who don’t have PAN or haven’t done Aadhaar-PAN linking, a virtual PAN will reportedly be generated when they file their returns using Aadhaar.
Deer In The Headlights: Two expert committees on digital payments, one constituted by the Finance Ministry and the other by the RBI, had reportedly advised minimal government interference in setting of the merchant discount rate (MDR) and allowing it to be determined by market fluctuations.
Which is why many are still surprised that the government chose to waive all MDR and place the onus of paying this cost on the relevant banks. It must have hoped that this would bring more citizens into the digital economy, but many are concerned this will discourage new merchants and burden banks with additional costs.
Shut The Zuck Down: US Federal Reserve Chairman Jerome Powell did not appear undecided when testifying before the US Congress on his stance on Facebook’s digital currency project.
Libra, Powell said, “raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability”. He called for a “patient and careful” regulatory review of the project.
New York Fed’s key recession tracker hits its highest level since 2009. Is another recession in the offing?
An Impending Doom?: The New York Federal Reserve's probability model, which predicts the possibility of a US recession in the next 12 months delivered a reading of 32.9% for June, its highest level since 2009. The reading sat at 28% in the previous month.
The reading could suggest that an economic decline may be in the offing, considering that the measure has breached the 30% threshold before every recession since 1960.
The news comes at a time when economists, analysts and investors – all are on high alert for a potential economic downturn, especially since the yield curve between the 10-year and 3-month Treasurys inverted in March and then again in May.
A deep dive into how the recession probability is calculated and more here.
Believe Only That You See: View the Probability of US Recession Predicted by Treasury Spread chart here.
Another Omen?: Equity risk premium (ERP) for the S&P 500 stands at 5.67% on July 1, 2019. Whilst this is lower than 5.93% on June 1, it is well above historical averages, sustained by high cash returns and low interest rates, tweeted the finance rockstar, Aswath Damodaran.
TO THE MOON & BACK
How moon-fever made life better for all of us on earth. Why are some people in Shanghai spraying pesticide over their trash?
To The Moon...: India is poised to return to the moon on Sunday with Chandrayaan-II. The time is apt to look back at humanity’s long obsession with our lunar neighbour (and space in general) and reflect on how moon-fever fuelled research and helped life on earth over the years.
Perfecting rocket technology to cater more spacecraft, propelling satellites into orbit so that we could have everything from GPS to WhatsApp, fostering a tech culture focussed on miniaturisation – these are some of the countless benefits that the race to the moon and space research in general have given us.
... And Back: If you’re cooking in Shanghai, make sure to dispose of the chicken bones in the “wet” waste can and the pork bones in the “dry” one. If you don’t, the repercussions will be ugly.
China’s financial capital has adopted trash-sorting rules with very sharp teeth. 30,000 trash-can enforcers will sift through your waste-bins to see to it that you obeyed the official rule to divide waste into four categories – wet, dry, recyclable and hazardous.
If you are found violating the norms, you will be fined and your social credit score will be affected, which could hurt your chances at everything from getting a job to buying a train pass.
That doesn’t mean people haven’t found workarounds. Right now, spraying pesticide on all your waste to categorise all of it as “hazardous”, shipping your trash out-of-town, and hiring others to do the trash-sorting for you are in vogue.