India Ready to Deal with the Impact of US Sanctions on Iranian Oil, India's Manufacturing Sector Growth Lowest in 8 Months in April, Spotify Hits 100 million Paid Users Globally et al.

 

India ready to deal with the impact of US sanctions on Iranian Oil. Global factory activity recovers in April, but remains sluggish overall. India's manufacturing sector growth lowest in 8 months in April. NSE to pay SEBI INR1,000cr disgorgement in co-location case. Barred from accessing the securities market for six months. SEBI directs NSE to review data sharing third party agreements since 2009. Samsung's Q1 profits plunge by 60%. Apple reports second quarter results. SoftBank Considers IPO for Vision Fund. WeWork files confidential documents for IPO. Spotify hits 100 million paid users globally. Avengers: Endgame grosses more than $1bn within 5 days. Clocks INR157cr within three days of release in India, ranking in the highest opening weekend for a Hollywood film.

 

Moving on to the top Business stories of the week.

 

 ECONOMY 

India ready to deal with the impact of US sanctions on Iranian Oil. Global factory activity recovers in April, but remains sluggish overall. India's manufacturing sector growth lowest in 8 months in April. 

 

Geared Up: As per Ministry of External Affairs spokesperson Raveesh Kumar, India is prepared to deal with the impact of the sanctions imposed by the US on buying oil from Iran.

 
He added that there will be additional supplies from other major oil producing countries based on India’s energy security, commercial consideration and economic interests.

 
In this respect, India is looking to secure an interest in Guyana’s oilfields, which according to energy firm ExxonMobil, have an estimated reserve of more than five billion oil-equivalent barrels in the offshore Stabroek block.

 
Hedging: India’s move comes against the backdrop of the need to find alternative sources of energy at a time when it needs to procure a total of about 12 million tonnes of extra crude over the year to bridge a supply gap that will be caused by the exit of Iran from its energy basket. Apart from Iran, the Donald Trump administration has also imposed sanctions on Venezuela’s state-owned oil firm Petróleos de Venezuela SA.

 
What You Need to Know: The US re-imposed sanctions in November on exports of Iranian oil after President Donald Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers. Washington, nevertheless, granted waivers to Iran’s eight main buyers - China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece - that allowed them limited purchases for six months. However, last month, the US announced that it will no longer grant sanctions waivers to any country that is currently importing Iranian oil. Subsequently, the six-month sanctions waiver for India and seven other countries to continue importing oil from Iran expired on Thursday, effectively shutting out Iranian crude beginning 3 May.

 

Slow Recovery: Global factory activity recovered marginally in April, but is still showing signs of struggle, on back of weak demand and lingering concerns around trade protectionism.
 

In the euro zone, business survey data pointed to a third straight month of contraction. In the US, while manufacturing might still be growing, it missed expectations by a wide margin. The picture was similarly gloomy across much of Asia.
 

Manufacturing Blues: India’s manufacturing sector performance dropped to an eight-month low of 51.8 in April 2019 vs 52.6 last month, below market expectations of 52.5, as new business growth moderated, amid cash flow difficulties and competitive pressures.
 

Chart: India’s Manufacturing PMI here.

 

 NSE 

NSE to pay SEBI INR1,000cr disgorgement in co-location case. Barred from accessing the securities market for six months. SEBI directs NSE to review data sharing third party agreements since 2009.
 

Preferential Treatment!: The stock market regulator Securities and Exchange Board of India has ordered NSE to pay over INR1000cr and barred it from accessing the securities market for six months over a scandal which allowed some brokers to make money through gaining preferential access to the stock exchange servers. 
 

Shame!: The case goes back to 2015, when a whistleblower wrote a letter to SEBI alleging that NSE, India's largest stock exchange, gave preferential access to a few high-frequency traders and brokers to the exchange's trading platform.
 

Here’s a deep dive into the case.

  

Under the Scanner: Markets regulator SEBI has directed stock exchange major, NSE to review all third-party agreements having a data sharing component entered by it from year 2009 onwards.
 

The development comes days after NSE was found involved in a co-location case. 
 

Corruption or Hubris?: The National Stock Exchange, born out of the Pherwani Committee recommendations in early ’90s to neutralise the `broker mafia’ controlled Bombay Stock Exchange, today stands convicted of wrongdoings it intended to end – favouritism and unethical practices. Here’s an article which probes as to what caused the fall of NSE: Corruption or hubris?

 

 EARNINGS 

Samsung's Q1 profits plunge by 60%. Apple reports second quarter results.

 

The Fall: Samsung posted revenues of $45.1bn in Q1 FY19, down 20% from the $56.5bn it posted previous year. Operating profit fell 63% to $5.3bn vs $15.6bn last year. 
 

Samsung noted that while the sales of its new Galaxy S10 smartphone were “solid”, memory chip and display businesses, didn’t perform well and “weighed down” the company’s results overall.


Bonus Read: Google’s parent Alphabet Inc. in the first quarter posted its slowest revenue growth since 2015. The tech giant’s once-untouchable online-advertising operation took a body blow, hurt by mounting competition and struggles within its increasingly high-profile YouTube unit. 
 

The poor results highlight the risks for one of Silicon Valley’s biggest names in effectively leaning on one massive, if lucrative, business. Read this article to understand how Google might be showing its first cracks in years.

 

Q2: Apple posted quarterly revenue of $58bn in Q2, a decline of 5% vs last year. Profit dropped 16% to $11.56 bn.

Sales of the iPhones fell 17% to c. $31bn on back of increased replacement cycles and stiff competition from China which is offering lower-price, feature-rich handsets. 

The tech giant also announced a 5% increase in its quarterly dividend to 77 cents per share.
 

From the Horse’s Mouth: Read Apple’s Press Release here.

 

 IPO 

SoftBank Considers IPO for Vision Fund. WeWork files confidential documents for IPO. 

 

What Does The Future Hold?: SoftBank is considering an IPO for its $100bn Vision Fund. 

As per reports, the fund might consider a direct listing rather than a traditional IPO.

The fund was set up in 2017 and has become the world's largest technology investment fund, with investments including ride-hailing pioneer Uber, chip designer ARM and shared workspace firm WeWork.

SoftBank is also in talks with Oman for an investment in the Vision Fund, which has raised nearly all of its funding so far from Saudi Arabia and Abu Dhabi.

 

Joining the Ranks: Co-working giant, WeWork, which was rebranded as the We Company early this year, has filed paperwork confidentially with the US Securities and Exchange Commission to hold an initial public offering(IPO), joining the ranks of Slack, Lyft, Uber and Pinterest.
 

WeWork, valued at $47bn in January, has raised $8.4bn in a combination of debt and equity funding since it was founded by Adam Neumann and Miguel McKelvey in 2010.

 

 ENTERTAINMENT 
 

Spotify hits 100 million paid users globally. Avengers: Endgame grosses more than $1bn within 5 days. Clocks INR157cr within three days of release in India, ranking in the highest opening weekend for a Hollywood film.

 

Joining the Ranks: Co-working giant, WeWork, which was rebranded as the We Company early this year, has filed paperwork confidentially with the US Securities and Exchange Commission to hold an initial public offering(IPO), joining the ranks of Slack, Lyft, Uber and Pinterest.
 

WeWork, valued at $47bn in January, has raised $8.4bn in a combination of debt and equity funding since it was founded by Adam Neumann and Miguel McKelvey in 2010.
 

A Record 100 Million: Music-streaming platform, Spotify topped 100 million paid users globally in Q1, after growing subscribers 32% since it went public about a year ago. This is twice as many as Apple's paid subscribers at 50 million.
 

Spotify is the first music service to have hit this milestone.

 

Walt Disney’s Avenger: Endgame has collected an estimated $1.2bn in its first five days of release.

Of this c. $350m came from the US and Canada – breaking the previous opening-weekend record set last year by “Avengers: Infinity War” by about $92m. 

Endgame could become the highest-grossing movie of all time, beating the record set by Avatar, which made $2.79bn globally in 2009.

The latest offering from Marvel has taken the Indian box office by storm, making INR157cr within three days of release. This ranks the move in the highest opening weekend for a Hollywood film in the country so far, breaking the record previously held by Avengers: Infinity War.

 

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