RBI keeps repo rate unchanged at 5.15%. Reduces growth forecast for 2019-20 to 5% from 6.1%. Reliance Jio announces new all-in-one plans effective from December 6.
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Caught By Surprise: In a rather unexpected move, the Monetary Policy Committee of the Reserve Bank of India (RBI) has decided to keep repo rate unchanged at 5.15% and said that it will maintain an “accommodative stance as long as it is necessary" while ensuring that inflation remains within the target. The six members of the monetary policy committee (MPC) were unanimous in their decision to hold rates.
FYI: The RBI has cut policy rates by 135 basis points so far in 2019. Livemint
Read RBI's official press release here.
RBI also sharply reduced its growth forecast for 2019-20 to 5% from 6.1%, with the committee noting that a delay in revival of domestic demand, further slowdown in global economic activity and geo-political tensions could pose downside risks to growth. ET Policy
For Some Perspective: India’s economy grew at 4.5% in July-September, the weakest pace in more than 6 years.
New Plans In: Telecom operator Reliance Jio has announced its new all-in-one plans effective from December 6 in line with recent tariff hikes in the telecom industry. However, Jio’s revised tariffs remain at a meaningful discount to the tariffs announced by Vodafone Idea and Airtel. Unlimited plans in the one-month category are priced about 16-20% lower, and about 7-14% lower in the three-month category. The cheapest plan costs Rs 199, whereas the costliest plan has been priced at Rs 2,199. Livemint
All you need to know bout Jio's new plans here.
Tesla and SpaceX CEO Elon Musk on Wednesday opened up about his wealth when a lawyer for the plaintiff asked Musk to estimate his net worth during the defamation trial over his 2018 tweets, in which he called a British diver who took part in the 2018 rescue operation that freed 12 boys and a soccer coach trapped inside a cave in Thailand a "pedo guy".
Musk confirmed he has roughly a $20 billion fortune, but added that his liquid assets are relatively low. “Some people think I have a lot of cash,” he said. “I actually don’t.”
As much as 99% of Musk’s wealth is held in shares of those two companies, Forbes estimates. In 2018, for instance, the bulk of his compensation at Tesla came in the form of stock options.
The revelation adds to the stakes of the trial. If the jury levels a large judgment against Musk, he may have to sell part of his stake in Tesla or SpaceX, a move he has historically avoided. Another possibility could be that he borrows money, using his shares as collateral.
FYI: Musk currently owes more than $500mn in debts, including $208.9mn in liabilities owed to Morgan Stanley and $213mn borrowed from an affiliate of Goldman Sachs. Musk has pledged nearly half of his Tesla stake as collateral for those loans. Forbes
Sundar Pichai is set to take over as Google's parent Alphabet's CEO, and he has to hit the ground running. Apart from leading Google’s search, advertising and related products such as videos platform YouTube, Pichai’s purview will now extend to Alphabet’s futuristic ventures, like driverless cars, high-altitude balloons and efforts to prolong life. However, as per this report, Pichai's most challenging job will be to maintain Google’s dominance on the internet at a time of increased regulatory eye and rising competition from new technology startups from China. Read more for the full scoop. ET Tech
Bad News: Debt-ridden and cash-strapped infrastructure and lending company Infrastructure Leasing & Financial Services (IL&FS) reported a standalone net loss of INR22,527cr for the fiscal to March 2019 vs INR333cr in the previous fiscal.
IL&FS, which is currently led by a government-nominated board, reported revenue of INR824cr down from INR1,734cr in the previous year. The company’s assets shrunk to INR4148cr in FY19, from INR23,868cr in the previous year. At the same time, liabilities rose to INR21,083cr in FY19, from INR18,276cr in the previous year. Moneycontrol
Meanwhile...: After talks for stake sale with potential buyers collapsed, wind turbine maker Suzlon Energy and its bankers are now working on a debt restructuring programme.
Suzlon has submitted a restructuring plan to the lenders, which will split its INR7,000cr-debt into sustainable and unsustainable debt. It is also in discussion with its foreign currency convertible bondholders for settlement of borrowing which includes a waiver of considerable amount.
The Big Picture: Suzlon defaulted on loan repayments earlier this year and its loans were categorised as NPAs. In July, Suzlon’s secured creditors signed an inter-creditor agreement to resolve the debt crisis by working with the company.
This was the second instance of a major default by the wind turbine maker. In 2012, it had defaulted on FCCB repayment, the biggest of its kind at the time. In 2013, Suzlon underwent a corporate debt restructuring for its INR9,500cr loans as it faced severe liquidity crunch and could not service debt.
However, the company’s problems have persisted over the years as the Indian government rolled back incentives to the wind energy sector, the market shrank and competition intensified even as debt remained high. ET Power
Abe At Play: Japan's Prime minister Shinzo Abe has unveiled a $121bn (¥13.2tn) stimulus package to repair the recent typhoon damage, upgrade infrastructure and invest in new technologies.
Described as a “15-month budget”, the spending package is one of the largest since the 2008-09 financial crisis as Japan seeks to fend off weakness in the global economy, drag from a recent rise in consumption tax and the risk of a slowdown after next summer’s Tokyo Olympics.
The headline figure amounts to approximately 1.9% of Japan’s gross domestic product over 15 months, significantly more than last year’s supplementary budget of ¥3tn, and is expected to boost growth in the economy by about 1.4%. FT
The move comes amid a global move towards looser fiscal policy as governments seek to counter sluggish private demand, taking advantage of their ability to borrow at ultra-low or even negative interest rates.
More on the three-pillared package here.
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