Indiabulls share price drops 38%. Reliance Capital share price falls 5% following stake sale in RNAM. FPI inflows rise in the month of September. Govt thinking of cutting stake below 51% in PSUs. New e-commerce rules to cover video streaming, online ticket booking etc. Chinese manufacturing sector still struggling. Forever 21 files for bankruptcy.
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Tumbling Down: Indiabulls share price dipped over 38% (its maximum fall since listing) to hit an over five-year low today on the back of a probe launched by the Delhi High Court into allegations of fraud against the company.
A fall in share price of Lakshmi Vilas Bank (proposed to merge with Indiabulls) after the RBI initiated prompt corrective action (PCA) plan on the lender also put pressure on Indiabulls Housing. Livemint
...And Down: Reliance Capital share price fell c. 5% in intraday trading today - touching a 52-week low after the company concluded the sale of its stake in Reliance Nippon Life Asset Management.
Reliance Capital sold its 21.54% stake in Reliance Nippon Life Asset Management Ltd (RNAM) to Nippon Life Insurance of Japan for INR3,030cr. Moneycontrol
Finance Minister Nirmala Sitharaman recently announced a slew of economic reforms in an attempt to boost the slowing Indian economy, which included cut in corporate tax rate, recapitalisation of banks et al. And it seems to have helped.
Inflows: FPI inflow into Indian equities went up to the tune of c. INR8,000cr in September after selling INR30,000cr in July and August combined. Financial Express
Outflows: The news comes following steep selling by FPIs during July-September quarter. FPIs have pulled out over INR20,000cr from Indian equities between July and September 26 - the steepest quarterly outflow since the October–December 2016 quarter, when they had pulled out INR31,222cr. BS
A Hat Trick!: The Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das will announce the fourth bi-monthly monetary policy for 2019-20 on Friday, October 4, after its three-day meeting.
And this time around, the Central Bank is likely to cut interest rates once again by 25bps - the fifth in a row - in an attempt to support the government's multiple measures taken in the last couple of weeks to provide the much-needed filip to the slowing Indian economy.
The MPC has already cut rates by 110 bps so far this year in response to slowing growth and moderate inflation. ET Banking
There’s a Catch: However, another rate cut might not bode well for sovereign bond yields across most major emerging Asian economies , which are expected to slip in the months to come. As per latest consensus, government bond yields in India, South Korea, Indonesia, Malaysia, Philippines and Singapore will fall between 10 and 40 basis points over the coming year.
Plagued by the ongoing US-Sino trade war, these export-reliant economies have either trimmed rates significantly. This has led to increased demand for low-risk government debt in the region, pushing yield curves to invert in Singapore, Thailand and Hong Kong - meaning short-term yields are higher than long-term rates - which many experts in developed markets consider an indicator of an impending recession. Reuters
Letting Go: The government is looking to bring its equity holding down in a few Public Sector Units (PSUs), including oil refiner Bharat Petroleum Corporation, rail-hauler Container Corporation of India (CONCOR); ocean carrier Shipping Corporation of India (SCI), and two power producers, THDC India and NEEPCO below 51%. Business Today
The move comes as the government seeks to find other avenues such as disinvestment following the recent corporate tax rate cut.
To this effect, the Department of Investment and Public Asset Management (DIPAM) will soon hold inter-ministerial talks to outline the methods and strategies of bringing down the government's stake. Hindu BusinessLine
Spreading Out: Ecommerce guidelines will soon include sections on services such as video streaming, online ticket booking and ride-hailing.
This would be in addition to the current regulations, which largely aim to regulate the sale and quality of service on platforms such as Flipkart, Amazon and Snapdeal, which act as intermediaries between sellers and consumers. ET Tech
Stuck in a Tailspin: Chinese manufacturing sector remained contracted for the fifth consecutive month. The PMI (Purchasing Managers Index) rose to 49.8% in September, up from 49.5% in August.
The marginal improvement in September was credited to “double expansion” of new orders and increased productivity. South China Morning Post
Forever In My Heart: This Sunday Forever 21 filed for bankruptcy. The teenage clothing brand is going to file for shut down of 178 stores out of 800 stores although nothing has been decided on which stores will close down. Executive Vice President, Linda Chang while addressing the issue stated, “an important and necessary step to secure the future of our Company, which will enable us to reorganize our business and reposition Forever 21."
Forever 21 is the most recent brand that has fallen to the rise to the rise of online shopping, although high debt cost and rent costs have also added to the woes of traditional retailers. CNN
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