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Data Breaches, Google Bids Farewell, Video Rising et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Oct 14, 2018 2:52 PM 3 min read
Editorial

Good evening reader,

 

The festive season is in full swing, and so are the offers and discounts that come with it. Think it's a good time to splurge? Considering that these might now cost more with the government hiking import duties on 30+ non-essential goods and telecom equipment to rein in the widening Current Account Deficit?

 

Electronics aside, Gold shall always be in vogue, even more so in choppier markets like recently. Nikhil's article on Gold loans and this week’s LongShorts on Sovereign Gold Bond Scheme demonstrate the government seems to agree.

 

Festive season also bears witness to a lot of advertising and marketing gimmicks. Saturday's article by INSEAD discusses how unrestrained repetition of ads may just be a waste of money. 

 

On this note, let's move on to more sombre issues. Moving on to top 6 Business Stories of the week through our End Of Week Wrap Up:

 

INDIA

 

Government hikes import duties on telecom equipment from 10% to 20% to narrow Current Account Deficit.

In an attempt to rein in the country’s widening current account deficit, the government has increased import duties on telecom equipment including components for mobile devices. Interestingly, mobile phones and their components, make up the third-biggest component of import bill after crude oil and gold. The move comes shortly after the Centre hiked import duties on 19 non-essential goods last month. Aimed at curbing outflow of foreign exchange from India and to boost Make in India, this could mean your mobile phones, speakers, air conditioners, household refrigerators, and washing machines will now cost more.

 

Government launches Sovereign Gold Bond Scheme FY19; to open from October 15.

Government launched the Sovereign Gold Bond Scheme for FY19 today, which will open subscriptions from October 15, 2018 till February 2019. The new scheme comes as an effort to reduce gold imports and limit current account deficit. The interest rate on these government bonds is set at 2.5% and capital gains tax is exempted on conversion. Sovereign Gold Bonds are government securities denominated in gold, substituting the need to hold the physical form of the metal.

 

Government to provide final financial assistance and significant autonomy to debt-ridden Air India, but conditions apply. Tata Group takes control of AirAsia India, new Board and CEO appointed.

The government has planned steps to give a significant autonomous status to Air India’s Board for commercial and financial decision making, with a final boost of INR150bn. However, the deal also entails that the airline will not seek any more financial support from the government after 2018-19. Air India till date, needs permission from the Ministry of Civil Aviation for taking business decisions.

Sunil Bhaskaran, Vice President of Corporate Affairs at Tata Steel, has been appointed as the new CEO of AirAsia India, with effect from 15 November. CEO and the Deputy CEO of AirAsia Group, Tony Fernandes and Bo Lingam, to step down. S. Ramadorai, company’s Chairman, is to be replaced by Banmali Agarwala, who currently heads Tata Group's Aerospace and Defence business. The restructuring implies that Tata Group will henceforth manage the airline’s India operations.

 

US/INTERNATIONAL

 

IMF cut its estimate for Global Growth for 2018-19 to 3.7% from 3.9%.

International Monetary Fund lowered it’s forecast of global growth for 2018-19 to 3.7% as opposed to a previous estimate of 3.9% in April. Reasons cited for slowed growth rate include “rising trade protectionism” and the effects of US-China trade war.

 

Parent Company, Alphabet, to shut down Google+ in the wake of data leak compromising 500,000 users.

Google Plus, the company’s social networking site, is to be shut down after the information of 500,000 users was leaked. The company hid the discovery of a bug that made user information vulnerable for months, due to fear of regulatory inspection. The bug was discovered by Google’s internal company review, Project Strobe.

 

Walmart partners with MGM to advance its video-on-demand service, Vudu. AT&T set to introduce its own video streaming service in 2019.

Walmart will partner with Metro Goldwyn Mayer (MGM) Studios to boost Vudu, its VOD service that was acquired eight years ago.

AT&T announced the launch of its video streaming service. The platform shall feature films, documentaries, animated and TV shows, acquired from purchase of Time Warner (now called WarnerMedia). The online service is expected to launch in the last quarter of 2019, centered on HBO content. John Stankey, Chief of WarnerMedia, said that this product is ‘HBO and more’.

 

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