Top News Today: US Recession News, Gold As An Investment in Times of Crisis, DHFL Resolution Plan
Top News Today: RBI contemplates formalising linking of new loans to an external benchmark. DHFL lenders finalise 3-level resolution plan. A majority of economists expect the US economy to go into recession in the next two years. As recession fears rise, gold glitters brighter than ever. Tech giants are looking up north to Toronto but Canadians are wary of the influx. Disagreements rise between Fox and Disney over the former's poor numbers. SoftBank to lend employees $20bn to buy stakes in Vision Fund 2. Might lead $100m funding round in Snapdeal.
Moving on to the top Business news stories of the day:
RBI contemplates formalising linking of new loans to an external benchmark. DHFL lenders finalise 3-level resolution plan.
The development comes amidst challenges around fair rate cut transmission to the ground level, which has historically remained low.
RBI governor Shaktikanta Das at a banking conclave noted that as against a repo rate cut of 75 bps (excluding the 35 bps cut in August) in 2019, the transmission was merely 29 bps.
The news comes shortly after the RBI cut the repo rate by 35 basis points (bps) from 5.75% to 5.40% - the fourth one in a row - in an attempt to boost a slowing economy on back of decreasing consumption and accelerating slowdown.
Do You Want to Build a Plan, Man?: Lenders to Dewan Housing Finance have agreed on a three-level resolution plan that includes conversion of debt to equity and issuance of nonconvertible debentures.
The resolution plan, if approved by the RBI, will give creditors majority stake in the debt-ridden financier and help resume stalled credit lines.
MPower Financing raises $100m in debt funding from Goldman Sachs. RedDoorz raises $70m as part of Series C funding round.
MPower works with over 350 top universities and colleges across the US and Canada, helping students build their credit histories and providing them with personal finance education and career support post-school.
It's Raining Dollars:Singapore-based budget hotel booking startup RedDoorz has raised $70m as part of a Series C funding round led by Asia Partners, Rakuten Capital and Mirae Asset Naver Asia Growth Fund.
The news comes shortly after it closed its $45m Series B financing round led by Chinese investment firm Qiming Venture Partners.
Started by former MakeMyTrip executives Amit Saberwal and Kunwar Asheesh Saxena, RedDoorz has raised $140m to date.
SoftBank to lend employees $20bn to buy stakes in Vision Fund 2. Might lead $100m funding round in Snapdeal.
Chipping In:As per reports, SoftBank Group is planning to lend up to $20bn to its employees, including CEO Masayoshi Son, to buy stakes in its second Vision Fund.
The loans are likely to have an interest rate of about 5%.
The move would ensure that the employees are more accountable since the investments of the fund can be canceled if a manager leaves or is found to have engaged in a "reckless deal".
In addition to its employees, SoftBank is also expected to collect money from Apple, Microsoft, Foxconn and the sovereign wealth fund of Kazakhstan, apart from some Japanese financial institutions.
Vision Fund 2 will be the successor to a $100bn fund that was launched in 2017 and is nearly spent.
Tech giants are looking up north to Toronto but Canadians are wary of the influx. Disagreements rise between Fox and Disney over the former's poor numbers.
The North Remembers:Toronto has of late attracted quite a bit of activity, particularly on the tech-end of things.
Intel has announced plans to build a graphics-chip design lab in Toronto. Uber will be opening an engineering hub in the city. Alphabet has proposed building a new Toronto campus as part of a sensor-laden “smart city”. And Microsoft has said it would expand its Canadian workforce by more than 20%.
Subsequently, Silicon Valley Bank, the financier for some of the world’s largest venture-capital firms and startups, opened an office in the city in March after 19 years of handling Canadian business from Seattle and Boston.
However, many Canadians are wary of the influx. Read more on this here.
Simba vs Dark Phoenix:Disney’s Chief Executive Bob Iger opined that the Fox Studio’s performance “was well below where it had been, and well below where we hoped it would be when we made the acquisition”.
While he put most of the blame on a delayed acquisition process, with 17 months passing from when the deal was announced in late 2017 to its closing in March, Fox executives on the contrary believe it had more to do with uncertainty and indecisiveness stemming from Disney’s lack of communication during that time. More here.
A majority of economists expect the US economy to go into recession in the next two years. As recession fears rise, gold glitters brighter than ever.
Race to a Recession: As per a survey of economists by the National Association for Business Economists, a majority expect a US recession in the next two years. Additionally, only 2% think a recession will begin this year, down from the 10% in February’s survey.
The rise in optimism can be credited to the Fed signalling an easing of monetary policy. The survey itself was conducted before the US Central Bank cut rates for the first time in over a decade, and before the US-China trade war escalated further after Donald Trump announced an additional 10% tariff on Chinese goods.