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Latest News Today: India's Manufacturing PMI at 2yr Low in October, Maruti Suzuki Salse Rise, Fiat-PSA Group Announce Merger Plan

Professor of Financial Economics and Part-time Value Investor, Transfin.
Nov 1, 2019 12:32 PM 5 min read

India manufacturing PMI falls to two-year low in October. Unemployment rate rises to 8.5%. Fiat and Peugeot-owner PSA Group announce merger plan. Maruti sales rise in October. WTO recommends India withdraw export subsidies in case filed by US. US House of Representatives votes to formalise Trump impeachment process.


Latest News Today: India's Manufacturing PMI at 2yr Low in October, Maruti Suzuki Salse Rise, Fiat-PSA Group Announce Merger Plan


India's manufacturing PMI falls to lowest point in two years. 

Down...: Slowdown clouds continue to hover gloomily over the Indian economy. In October, both factory orders and production rose at their weakest rate in two years. Subsequently, the headline seasonally adjusted IHS Markit India Manufacturing PMI climbed down from 51.4 in September to 50.6 in October, again a two-year low.


Further data offered no reprieve. Job creation softened to a six-month low, business confidence slipped to its lowest in two-and-a-half years, and input costs declined for the first time in more than four years. IIFL

Unemployment rate rises to 8.5%.

...And Downer: As per data released by the Centre for Monitoring Indian Economy, India's unemployment rate rose to 8.5% last month, which is the highest since August 2016. In September, the number was 7.2%. This reflects a further deterioration of economic parameters and the continuing slowdown that has affected virtually all sectors of the national economy. Deccan Herald



Maruti Suzuki India reports 4.5% increase in total sales in October. 

Better Day Ahead?: The country's largest carmaker Maruti Suzuki India on Friday reported a 4.5% increase in total sales YoY at 1,53,435 units in October vs 1,46,766 units sold in October last year led by compact and utility vehicle segments.


Passenger car sales rose 4.4% YoY to 1.06 lakh units. Exports too were up 5.7% at 9,158 units as against 8,666 units in the corresponding month last year.


Compact car segment (new WagonR, Celerio, Ignis, Swift, Baleno, Dzire), which contributed 49% to total sales, registered a 15.9% growth in October. The mini segment (Alto, S-Presso, old WagonR) however, showed a 13.1% decline YoY. Utility vehicles sales (Ertiga, XL6, Vitara Brezza etc) rose at 11.3%.


Breath of Fresh Air: This is the first time that sales have come out of negative this fiscal on the back of massive discounts and high inventory push during the festive season. ET Auto

Fiat Chrysler and Peugeot owner PSA Group announce $48bn merger plan.

"Auto-Mating": In what could create the world's third-largest automaker, Fiat Chrysler and Peugeot owner PSA Group yesterday announced the terms of a merger worth $48bn. 


The car-makers agreed on a 50-50 Netherlands-based holding company, which is to be headed by PSA Chief Executive Officer Carlos Tavares. The deal would lead to $4.1bn in annual synergies without factory closures. The merger would help the two companies spread the cost of developing electric and autonomous vehicles. 


However, to make the deal work, Mr. Tavares will have to solve a host of problems at Fiat Chrysler that include an aging model lineup, a lack of investment in new technologies and a dependence on one region, noted a WSJ report. CNN Business



Cellular Operators Association of India seeks 10 years to pay dues. 

The Cellular Operators Association of India (COAI) has sought from the government a ten-year staggered payment scheme with a two-year moratorium to pay the amount stipulated by the Supreme Court following the Adjusted Gross Revenue (AGR) verdict.


The COAI has also requested Department of Telecommunications (DoT) to waive off interest, penalty and interest on the penalty. BS

How and why is India's telecom industry turning into a duopoly?

Bonus Read: "In a market that had a dozen carriers two years ago, just three are left standing today - two of them, barely. High fees, frequent policy flip-flops, endless tax demands from an unsympathetic bureaucracy that treated carriers as cash cows have driven most of the operators aground." Here's an intriguing piece on how and why the Indian telecom industry is heading towards a duopoly. ET Telecom Policy 



Alibaba has not given up on its Hong Kong IPO. 

Alibaba and the Forty Peeves: Alibaba Group Holding Ltd is in a fix. Its long-planned Hong Kong IPO was supposed to be launched in early November but the ongoing pro-democracy protests that have engulfed the island since April have put a question over that schedule. At the same time, postponing the listing to 2020 is something Alibaba is not eager to do given US-China tensions and the bleak global economic outlook.


The initial time table placed an IPO either after the company's November 1 earnings call or its November 11 Singles' Day shopping gala. The listing is slated to be valued at $10bn - half the original target.


China's largest company might still be considering the coming week for the listing, given the strong reception for recently listed stocks in Hong Kong including beermaker Anheuser-Busch InBev NV’s Asian unit. Livemint


Southeast Asian e-commerce company Qoo10 acquires Gurugram-based ShopClues.

Merge Surge: ShopClues has announced its merger with Qoo10 Pte Ltd in a stock deal. The former is a Gurugram-based e-commerce platform while the latter is a Southeast Asia-based e-commerce platform that services SMEs via its localised online marketplaces.


This partnership presents new strategic opportunities for both companies, opening up cross border opportunities for consumers and sellers across Asia, the company said in a statement. YourStory



WTO recommends India withdraw export subsidies in case filed by US. 

A Victory for America at India's Expense: A WTO panel has recommended that India withdraw "prohibited subsidies" within 90-180 days.


The case was bought by the US, which had alleged that India's export subsidy measures to exporters, worth over $7bn, were in violation of WTO norms. The US Trade Representative (USTR) said these measures were unfair on importers and that India's exemption to the WTO rule prohibiting such concessions had expired in 2015.


“... India gives prohibited subsidies to producers of steel products, pharmaceuticals, chemicals, information technology products, textiles, and apparel, to the detriment of American workers and manufacturers,” the USTR said in a statement.


These schemes include the Merchandise Exports from India Scheme (MEIS); Export Oriented Units Scheme and related sector specific schemes (EOU); Special Economic Zones (SEZ); Export Promotion Capital Goods Scheme (EPCG); and a duty free imports for exporters programme (DFIS). HT


US House of Representatives votes to formalise Trump impeachment process.

Trump in Trouble: Meanwhile, the US House of Representatives has voted 232-196 to launch the next (and formal and public) stage in the effort to investigate President Donald Trump. The impeachment investigation revolves around Trump allegedly threatening to withhold aid to Ukraine unless it opened an official inquiry into the corruption allegations against Joe Biden, Trump's rival and candidate for the Presidential nomination of the opposition Democratic Party.


The divisive vote, which was split along party lines, showed the deep polarisation in Washington.


The impeachment process against Trump is not the first in US history, but it is the first time a first-term President will be subject to such a probe - that too in an election year. Business Today


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