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A Bizarre Week, RBI on Crypto Future in India et al

Professor of Financial Economics and Part-time Value Investor, Transfin.
Oct 27, 2018 1:14 PM 3 min read
Editorial
Good evening reader,
 
 
What a bizarre week?! Top officers from the nation's "premier investigating police agency" sparring in public?**
 
 
**okay, we've mentioned something "political". It is highly recommended you soak that in as we don't do it often. Also no names on this. In case you need help, well you're already living under a rock, so no point ;)
 
 
What else was bizarre? How about top execs withdrawing from a glitzy investment forum in light of Journalist Jamal Khashoggi's mysterious killing, at hands of the host nation's government?
 
 
Or Tesla generating a profit, with Elon Musk not tweeting about it!! Or ArcelorMittal winning the Essar deal, but Ruias saying "I'll see you and raise you".
 
 
Considering the wide-range of the aforementioned matters, perhaps every week is bizarre in its own way.
 
 
Ok, a last one to trump it all. An Australian businessman called Clive Palmer six years ago declared that he's going to build the replica of an older ship, with the same interiors and cabin layout as the original vessel, including its ballroom and Turkish baths. Would be passengers will be given period costumes to wear. With the project halted due to several legal disputes, this week it was announced that work has finally resumed.
 
 
The new ship's name will be Titanic II. Of course.
 
 
Signing off for the weekend with Today's Top 6 Business Stories through our End Of Day Wrap Up:
 
 
 
INDIA

 

ICICI Bank reports 56% drop in Q2 net profit on back of rising NPAs.

Net profit in Q2 falls by c. 56% to c. INR909cr against INR2,058cr last year on back of rising Non-performing assets (NPAs) and treasury losses. Gross NPAs grew c. 23% to INR54,490cr this quarter vs. INR44,488cr pervious year.

 

Net interest income, however increased to INR6,418cr, c. 12% up from INR5,709 last year. 

 

ICICI had reported its first-ever loss, amounting to INR120cr in Q1. It also saw the exit of its MD and CEO Chanda Kochhar after facing allegations of conflict of interest.

 

Supreme Court asks Govt. to clear stance on cryptocurrency within two weeks.

Earlier this year, cryptocurrency exchanges had approached the Supreme Court challenging a RBI circular that restricted any regulated entity such as banks from conducting business with cryptocurrency exchanges.

 

RBI to inject INR40,000cr into banking system via Open Market Operations.

 

The Reserve Bank of India will infuse INR40,000cr in the banking system through purchase of government securities next month, in an attempt to ease cash shortage in the system and stabilise debt markets.

 

The Central Bank had already injected INR36,000cr into the system in October.

 

Cox & Kings to sell its education business to Midlothian Capital for INR4,387cr.

The tour operator is set to sell its education business to the UK-based investor for an all-cash enterprise value of INR4,387cr.

 

The education business of Cox & Kings comprises HB Education Limited which is a wholly owned subsidiary of Holiday break. Cox & Kings owns a 51% stake in the business and is likely receive c. INR2,400cr from the sale proceeds.

 

The sale is in line with the company’s stated goal of unlocking value and maximizing shareholder returns.

 

US/INTERNATIONAL

 

US Economy reports 3.5% growth in GDP in Q3, on back of increasing consumer and government spending. 

The US economy grew at a faster-than-expected rate in Q3, reporting 3.5% growth in GDP. Consumer spending, which accounts for more than two thirds of US economic activity, grew by 4% in Q3, strongest since Q4, 2014.

 

While stronger than expected, the overall expansion was a slower than in the previous quarter. The announcement comes amidst growing concerns about rising interest rates slowing the economy and tepid business spending.

 

FBI reviews Tesla's Model 3 production numbers as part of an ongoing criminal probe into whether the company misled investors.

As per a WSJ article, the FBI is examining whether Tesla misstated information about production of its Model 3 sedans and misled investors about the company’s business in early 2017.

 

This comes shortly after the Securities and Exchange Commission settled separate civil charges with Tesla and CEO Elon Musk over a tweet about taking the company private.

 

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