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Markets rally after appointment of new RBI chief, Modi Govt may announce farm loan waivers worth INR4L crore et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Dec 12, 2018 2:53 PM 4 min read
Editorial

Another Tech CEO paraded before US Congress for questioning. 

 

Another testament to policymakers' incapability in understanding technology.  

 

US Republican Ted Poe asked: "I have an iPhone, and if I move from here and go over there and sit with my Democrat friends, which would make them real nervous, does Google track my movement?" 

 

While Mr. Pichai searched for words, Poe pushed for a hard "Yes or No" response, raising his voice: "Its not a trick question! You know you make $100 million a year, you ought to be able to answer that question."

 

Here's a test for you: Do you understand Mr. Pichai's predicament? 

 

Well if you do...you, my friend, understand technology. 

 

And as some wise man said: You are its product!

 

Moving on to today’s Top 6 Business Stories through our End of Day Wrap Up:

 

Markets rally after appointment of new RBI chief. Yes Bank shares surge over 12% in 2 sessions.

 

Up Close: BSE Sensex shot up 629 points (+1.79%) to 35,779 while NSE Nifty gained 188 points (+1.79%) to 10,737.60 at close of day. The indices were boosted by gains in realty (+4.36%), auto (+3.5%) and metal (+2.58%) amongst others.

 

Some Perspective: The surge comes following the appointment of the new RBI Governor which has raised expectations of an easing of regulations for the banking industry and monetary policy to support economic growth.

 

Dive In: Yes Bank stock closed at INR186.5 (+4.86%) after gaining over 12% in 2 consecutive sessions, a day ahead of the board meeting to discuss the names of candidates for the position of next MD and CEO after Rana Kapoor's term ends on January 31, 2019. Perhaps Urjit Patel's departure and the subsequent appointment of Shaktikanta Das as RBI Governor is viewed with a get-out-of-jail-card narrative with the issue of bad loans looming

 

Modi Govt may announce farm loan waivers worth INR4L crore.

 

The What: The news comes ahead of the 2019 General Elections and a day after the opposition won in three states where agriculture is core.

 

The Big Picture: Economists however caution that increased farm loans waivers could further widen the fiscal deficit that the government has aimed to cap at 3.3% of the GDP.

 

India set to increase its public health spending to 2.5% of its GDP by 2025, announces PM Modi. 

 

What You Need to Know: PM Modi addressing the 2018 Partners' Forum announced that the govt will be committed to increasing India’s health spending to 2.5% of GDP by 2025, reaching to more than $100bn.

 

Zoom Out: The incumbent govt has launched multiple programmes aimed at enhancing primary and secondary healthcare including schemes such as Ujwala, Indradhanush and Ayushman Bharat.

 

Byju’s raises $400m led by Canada’s CPP Investment Board, Naspers Ventures, General Atlantic and some existing investors. Indian multilingual video-entertainment app, Roposo raises $10m from Tiger Global and Bertelsmann. Federation of Hotel and Restaurant Associations of India warns OYO of misleading clients and consumers. 


Up Close: The latest round of funding values, Byju's, the online tutoring start-up at $3.6bn, making it the fourth most valuable start-up in India, after Paytm, Ola, and OYO Rooms.
 

Wait…there’s more: Indian multilingual video-entertainment app, Roposo raises $10m in Series C funding from returning investor Tiger Global and Bertelsmann. The funding will be put towards product technology, talent acquisition and further expanding the 25m Roposo community. Including this round, Roposo has raised a total of $31m to date.

 

Wondering What Exactly Do They Do?: Founded in April 2015, Roposo was originally launched as a fashion social network, before pivoting to a complete social network in August 2017.

Also, this: As per a YourStory article, the Federation of Hotel and Restaurant Associations of India (FHRAI) sent a letter to OYO, warning an action against hospitality company for ''large-scale breach of contracts, jeopardising the safety of consumers and violation of laws.”

 

Zoom Out: OYO has been accused of unfair and arbitrary revisions of commission rates, threatening legal notices, levying of convenience charges, obtaining Hotel client data base and approaching them directly amongst other charges.

 

Theresa May to face no-confidence vote. Beijing to reduce tariffs on US autos to 15%, down from 40%. Bail granted to Huawei’s CFO Meng Wanzhou.

The What: British Prime Minister Theresa May to face a no-confidence vote after 48 Conservative lawmakers sent in letters of no confidence to a special party committee.

What if she wins?: If May wins the confidence vote she cannot be challenged as the Conservative leader for at least another year.

What if she doesn’t?: If she does not win the vote there would be a Conservative leadership contest in which she could not stand, meanwhile she will be entitled to remain as prime minister.

Zoom Out: The news comes at a crucial time when the Brexit deal hangs in balance.

The 90-day Trade Truce: As part of its 90-day trade truce, Beijing would reduce tariffs on US autos to 15%, down from 40%, in line with what other countries pay.

And this: Huawei CFO's bail which was set at $7.5m requires her to submit to a curfew, electronic monitoring and a limited range of travel in the Vancouver area.

The Big Picture: The development comes as US authorities seeking Meng’s extradition over charges that she misled US banks over the company’s business dealings with Iran.

 

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