Latest News Today: Amazon's Lucky Star Dims, Aramco-Reliance Talks Continue, WhatsApp to Launch Payments Service in India

Amazon’s streak of four consecutive quarters of record profits comes to an end. eBay to create "Managed Delivery" for sellers to take on Amazon. Saudi Aramco's talks with Reliance Industries to buy a minority stake in the latter’s refining assets continue. Anil Agarwal, the biggest shareholder in Anglo American, to divest his nearly 20% stake in the mining company. WhatsApp to launch its payments service later this year. Indian authorities flag concerns regarding user data privacy. SoftBank to launch AI-focused $108bn Vision Fund 2. Top venture capital funds set to mop up profits worth $2.5bn from part-exits. India’s returns in commercial real estate market are highest in Asia Pacific, says report. RBI Governor says NBFC cash crunch should end soon.

 

Moving on to the top Business news of the day.

 

 ECOMMERCE 

 

Amazon’s streak of four consecutive quarters of record profits comes to an end. eBay to create "Managed Delivery" for sellers to take on Amazon.

 

End of an Era: Marking the end of a rather impressive streak of four consecutive quarters of record profits, Amazon on Thursday reported a weaker-than-expected profit of $2.6bn in Q2. Now while this is slightly up from the year prior, it is well below its record of $3.6bn set in Q1.

 

The weaker-than-expected profit comes on back of heavy investment in expediting deliveries.

 

Amazon Web Services (AWS) reported 37% growth (still lower than analysts’ expectations), accounting for $8.38bn of revenue. 

 

Net income increased to $2.6bn vs $2.5bn last year. 

 

Amazon's shares dropped more than 2% in after-trading hours.

 

Manage Your Delivery Better: Online retail platform eBay has reported that it will create "Managed Delivery" for sellers on its platform. The move is a part of its strategy to enhance brand recognition and compete with rivals such as Amazon.

 

The new service will allow sellers to store inventory closer to buyers in warehouses across the US.

 

 DEALS 

 

Saudi Aramco's talks with Reliance Industries to buy a minority stake in the latter’s refining assets continue. Anil Agarwal, the biggest shareholder in Anglo American, to divest his nearly 20% stake in the mining company.

 

Light at the End of the Tunnel: Saudi Arabia's Energy Minister Khalid al-Falih on Thursday said that state-run Saudi Aramco's talks with Reliance Industries to buy a minority stake in the Indian conglomerate's refining assets continue and hopefully a deal between the two companies would work out.

 

The news comes shortly after Reuters on Tuesday reported that talks between the companies had hit a roadblock as Reliance was keen on a higher valuation.

 

Cashing In: Anil Agarwal, the biggest shareholder in mining company Anglo American, has said that he was divesting the nearly 20% stake he has held since 2017.

 

Agarwal began buying into Anglo American through a JP Morgan mandatory convertible bond in March 2017 and announced he was buying a second tranche in September 2017, taking his holding in the mining group to a total of 19.3%.

 

 WHATSAPP 

 

WhatsApp to launch its payments service later this year. Indian authorities flag concerns regarding user data privacy. 

 

Pay As You Chat: Messaging platform WhatsApp is reportedly launching a payments system later this year, starting in India. 

 

WhatsApp has over 400 million users in India and 1.5 billion globally.

 

The Facebook-owned messaging platform rolled out WhatsApp Payments to a select user base of 1 million users in India last February.

 

The Heebie-Jeebies: Meanwhile, authorities in India are concerned that WhatsApp’s payments venture might share user data with its group companies Facebook & Instagram, thereby compromising the security, privacy and non-commercial information of its subscribers. 

 

The government has subsequently asked the National Payments Corporation of India (NPCI) to look into the matter. 

 

 FUNDING 

 

SoftBank to launch AI-focused $108bn Vision Fund 2. Top venture capital funds set to mop up profits worth $2.5bn from part-exits.

 

Un-Divided Attention: SoftBank has announced its second $108bn Vision Fundthat would focus on AI-based technology.

 

SoftBank plans to contribute $38bn into the new fund. The remaining is expected to come from other participants, including Apple, Microsoft, iPhone assembler Foxconn, Standard Chartered Bank, Japanese financial giants Mizuho Bank, Sumitomo Mitsui Banking Corporation and MUFG Bank.

 

Here it is worthy to note that the second Vision Fund’s list of expected limited partners does not currently include any participants from the Saudi Arabian government, which has often been a major source of concern for investors, companies and human rights observers.

 

Mopping Up Money: Top venture capital funds including Accel Partners, Chiratae Ventures, SAIF Partners, Tiger Global, Lightspeed Venture Partners and Nexus Venture Partners are set to gain returns of over $2.5bn as they sell a portion of their stake in some of India’s biggest startups such as Oyo, Byju’s, PolicyBazaar, BookMyShow, Freshworks, Lenskart, Delhivery and Swiggy.

 

These shares would in turn be bought by incoming investors, including Tencent, General Atlantic, SoftBank, Temasek and Hillhouse, as well as funds like NewQuest Capital, Epiq Capital and TR Capital. 

 

 INDIA 

 

India’s returns in commercial real estate market are highest in Asia Pacific, says report. RBI Governor says NBFC cash crunch should end soon.

 

Investors’ Darling: According to a Knight Frank report, India offers the best returns in the commercial real estate market in the Asia Pacific. India’s cap rate (which is the yield of a property over a time period of more than one year if it was purchased with cash and not on loan) is 8.8%, much higher than China, Hong Kong, Thailand or Indonesia.

 

Additionally, Ahmedabad, Hyderabad and Bengaluru are the top three cities when it comes to percentage change in new completion of office properties.

 

NBFC Matters: In an interview with Business Standard, RBI Governor Shaktikanta Das said the fund crunch at NBFCs ought to end now after the government’s assurances and the Central Bank’s massive liquidity infusion.

 

Credit flow will “gather greater momentum very soon”, Das said, adding that the RBI was monitoring the situation. Banks would still need to carry out risk assessments of such borrowers. But inter-creditor agreements and the Budget’s credit guarantees should improve flow of funds of lenders.

 

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