India industrial output growth slumps to 20-month low in February. Naresh Goyal files for an expression of interest in Jet Airways; Fleet drops to 11 aircraft. Uber anticipates major cash burn as it tries to win significant market share in India. J.P. Morgan Chase reports record high profit and revenue. US announces initiatives to accelerate rollout of 5G.
Moving on to the top Business stories of the day.
India industrial output growth slumps to 20-month low in February. Policy rate changes need not be in tranches of 25 bps, says RBI Governor. RBI should not cut its policy interest rate any further, says IMF.
Massive Slump: Industrial output growth slowed to a 20-month low of 0.1% in February vs 6.9% last year, primarily on back of contraction in the manufacturing sector.
The Breakdown: The manufacturing segment, which constitutes a majority of the index of industrial production (IIP) at 77.6%, contracted by 0.3% in February vs a marginal rise of 0.93% in January.
Capital goods output declined by 8.8% in February vs 16.6% growth last year. Power sector growth also slowed to 1.2% as compared to 4.5% a year ago.
Mining sector output grew 2% in the month compared to contraction of 0.4% earlier.
Not Sacrosanct: In his address at the ‘governor talks’ event on the sidelines of IMF-World Bank spring meetings in Washington, RBI Governor Shaktikanta Das proposed to his counterparts that interest rate changes need not be in tranches of 25 basis points or multiples of it and instead, could be tailored to suit the dynamics of the economic situation. More of his views here.
No More Cuts: The RBI should not cut its policy interest rate any further, noted the IMF. It should, instead, keep the powder dry to fight an unexpected financial market turmoil that may hit after June this year if the US and China don’t reach a long-term trade agreement, it warned.
Previously: RBI had cut rates by 25 basis points each in February and April to support economic growth.
Founder Naresh Goyal files for an expression of interest in Jet Airways; Fleet drops to 11 aircraft.
Reclaiming the Throne: Jet Airways Founder Naresh Goyal has filed an expression of interest (EoI) for a stake in the beleaguered carrier as the deadline for submission of EoI ended on Friday.
The move has reportedly come as a surprise for lenders who have put the equity on sale as part of a rescue plan for the airline. They have asked for legal advice on how to respond to the move by Goyal, who recently quit as Chairman and Director and had previously said he was ready to sacrifice control of the carrier to ensure its survival.
Etihad, which currently owns 24% in Jet had submitted its EoI on Thursday, joining a host of private equity firms including TPG Capital and Indigo Partners in the bid for stake in Jet.
Down to 11: The Prime Minister’s Office yesterday held an urgent meeting, promoted by Jet’s fleet dropping to a mere 11 and its decision to extend its cancellation of international operations till Monday.
Uber anticipates major cash burn as it tries to win significant market share in India.
As it filed for its IPO recently, Uber identified its India business as the largest after the US, and as such anticipates significant cash burn as it forsees substantial investments in incentives and promotions to help drive growth in India.
Besides the core ride-hailing business, Uber’s food delivery arm, UberEats is also expected to require significant investments, in its bid to take on competitors such as Ola, Swiggy, and Zomato.
Equity Shot: Here’s a deep dive into Uber S1. If podcasts are right up your alley, listen in…
J.P. Morgan Chase reports record high profit and revenue; signals growth in US economy amidst global geopolitical uncertainty.
Breaking Records: J.P. Morgan Chase on Friday reported record Q1 profit and revenue, beating analysts’ expectations.
The company reported 5% rise in profit to $9.18bn, well ahead of expectations. Revenue also rose 5% to $29.9bn, exceeding estimates by about $1.5bn as net interest income grew 8% on back of higher interest rates.
Bellweather: The record performance by J.P. Morgan perhaps suggests that the US is still motoring along, even as the global markets are deeply impacted by the ongoing Brexit discussions and as the boost from last year’s tax cuts fades.
“Even amid some global geopolitical uncertainty, the US economy continues to grow, employment and wages are going up, inflation is moderate, financial markets are healthy and consumer and business confidence remains strong”, noted JPMorgan CEO Jamie Dimon.
US announces initiatives to accelerate rollout of 5G.
A Race America Must Win: President Donald Trump and the Federal Communications Commission on Friday announced several initiatives to spur 5G network growth in the US.
Trump announced that 92 5G markets will be ready by the end of 2019, outpacing South Korea, which is on pace to have 48 markets live by the end of the year.
To facilitate the development of these 5G markets, the Trump administration will free up as much wireless spectrum as needed, removing regularity barriers to the buildout of networks.
Along Similar Lines...: The FCC, which regulates the spectrum space has said that starting Dec 10, it will offer the largest spectrum auction in the US history.
Wait...There's More: Additionally, the FCC proposed new rules that allow Fixed Satellite Service operators to provide faster, more advanced services to their customers using 50 GHz spectrum. It also noted that current rules impair the ability of users to deploy small, next-generation networking devices on their own property, and therefore proposed changes that would allow people to install hub and relay antennas on their property to help spur 5G networks. It would also create a new $20bn funding program to assist in deployment of broadband in hard-to-serve rural areas.
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