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A 'Super-Charged' Free-trade Deal, NBFCs To Come Under the Scanner et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Oct 6, 2018 1:11 PM 3 min read
Editorial

When was irony last in short supply?

 

In the age of instant reveals and off the cuff reactions, never! Why do we say that?

 

How else would you explain the near final confirmation of a judge accused of sexual misconduct for US Supreme Court; to happen on the same day when two anti-rape activists get the Nobel Peace Prize.

 

The former shows how partisan interests can blind, the latter how common threads can unite. Difficult to add up we know. But that's how life often unravels.

 

The stories of Nadia Murad and Denis Mukwege are incredible. Ms. Murad is a 25 year old Iraqi from the much discriminated Yazidi Community, surviving torture and rape in ISIS controlled Mosul. Once out, she became an activist for the Yazidi people - actively campaigning to help put an end to human trafficking and calling on the world to take a tougher line on rape as a weapon of war.

 

Mr. Mukwege is a 63 year old gynecologist who has treated over 30,000 rape victims in his native country, currently living under permanent protection of UN peacekeepers at his hospital. He has also previously called for a tougher line on rape as a weapon of war.

 

2018 has been the year of the #MeToo movement. Some lessons are being learnt. Some merely granted lip-service.

 

We wish any positive change will be robust and permanent. Not a transient fad. Not just a hashtag.

 

On that rather hopeful note, we head back to our musings on Business and Finance, through today's Top 6 Business Stories in our End Of Day Wrap Up:

 

India

 

RBI to revise asset-liability management norms for NBFCs.

RBI to tighten lending and borrowing norms for NBFCs following reports of mismatch between their assets and liabilities. This move comes in the wake of the recent IL&FS default wherein the infrastructure financing company, along with its subsidiaries defaulted on commercial paper repayments following severe capital crunch.

 

Ministry of Corporate Affairs seeks immunity against any criminal, civil liability or punitive action against the IL&FS group and its newly-formed Board.

Counsel for the Ministry of Corporate Affairs (MCA) has petitioned the National Company Law Tribunal (NCLT) to seek relief for the Infrastructure Leasing & Financial Services (IL&FS) Group and its newly-formed Board from any civil or criminal proceedings for decisions and actions taken by the ousted board. The government has set in place a team of 6 to be led by Uday Kotak to draw a resolution plan for the debt-laden company and its 348 associated companies.

 

US/International

 

US likely to waiver sanctions on countries that fail to stop importing oil from Iran, including India.

US had earlier in May withdrawn from a deal over Tehran's nuclear programme and is unilaterally re-imposing sanctions on consumers who import oil from Iran on Nov 4. The sanctions aim to force Tehran to stop its involvement in conflicts in Syria and Iraq and halt its ballistic missile programme. However, the US administration is now "in the midst of an internal process" of considering exceptions called SRE waivers, or significant reduction exemptions for countries that are reducing their imports on a case-by-case basis.

 

EU to offer UK a 'super-charged' free-trade deal.

It would accommodate “about 30-40%” of Theresa May’s pitch for a wide-ranging trade and security deal, but would not allow completely frictionless trade, because that would undermine the integrity of the single market. In return the EU will demand stronger “level playing field” conditions to ensure the UK does not gain a competitive advantage in areas such as regulatory standards, employment law and state aid.

 

Saudi Arabia's sovereign wealth fund to invest another $45bn in SoftBank's Vision Fund.

Saudi Arabia's sovereign wealth fund, Public Investment Fund (PIF) to invest another $45bn in SoftBank's Vision Fund. PIF seeks to make the investment following profits from the sale of a stake in Saudi Basic Industries Corp. and the initial public offering of state oil company Saudi Aramco.

 

US unemployment rate falls to 3.7%, the lowest level since December 1969.

While US Non-farm payrolls rose just 134,000, vs. expected estimates of 185,000 in September, the worst performance since last year, the unemployment rate dropped to 3.7%, hitting its lowest in nearly 50 years. Average hourly earnings increased 2.8% from previous year. The figures suggest a tight job market with hiring outpacing labor-force growth, perhaps pushing the economy beyond full employment. It is also illustrative of the impact of Hurricane Florence.

 

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