Saudi Aramco in Talks to Acquire up to 25% stake in Reliance Industries' Refining and Petrochemicals Businesses, China reports GDP Growth of 6.4%, Reliance in Talks to Buy Hamleys et al.

Saudi Aramco in talks to acquire up to 25% stake in Reliance Industries’ refining and petrochemicals businesses. Wipro hires independent forensics firm to investigate a cyber-attack on its computer systems; reports 38% increase in net profit in Q4. China reports GDP growth of 6.4% in Q1, topping expectations. Reliance Retail in talks to buy Hamleys. 

 

Moving on to the top Business stories of the day. 

 

ENERGY 

Saudi Aramco in talks to acquire up to 25% stake in Reliance Industries’ refining and petrochemicals businesses. Oil prices rise on bullish US stocks data.

While Giants Dance: Saudi Aramco, the world’s largest crude oil producer, is in talks to acquire up to a 25% stake in Reliance Industries’ refining and petrochemicals businesses. A minority stake sale could fetch around $10bn-$15bn, valuing the latter at c. $55bn-$60bn. 


Aramco’s interest in Reliance comes after Saudi Arabia’s Crown Prince Mohammed bin Salman’s visit to Delhi in February when he said that he expected investment opportunities worth more than $100bn in India over the next two years.

Oil Edges Higher: Oil prices traded slightly higher on Tuesday ahead of incoming information on the state of US crude stockpiles.

West Texas Intermediate crude futures gained 13 cents, or 0.2%, at $63.53 a barrel.

Brent crude futures edged forward 9 cents, or 0.1%, to $71.27.

 

CYBERSECURITY 

Wipro hires independent forensics firm to investigate a cyber-attack on its computer systems; reports 38% increase in net profit in Q4.
 

Under Attack: Wipro has hired an independent forensics firm to investigate a phishing attack on its computer systems. 
 

The software services company confirmed a report by KrebsOnSecurity which said that attackers had used Wipro’s employee accounts to target its customers over several months.
 

Guards Up: As the world gets increasingly online, cybercrime is on an all-time rise. In India alone, 76% organizations were hit by online attacks in the last year vs 68% across the globe. As cybercriminals employ automation and machine learning to propagate attacks, security organizations need to do the same to combat these advanced methods. More on this here.
 

Results Out: Wipro reported 38% increase in net profit to INR2,483cr in Q4 vs INR1,803cr last year. Total revenue for the quarter stood at INR15,006cr, a growth of 9% vs last year. 
 

However, the IT and digital services firm offered a rather disappointing revenue growth outlook of -1% to 1.0% for the June quarter.

Also This: Wipro also announced a bonus of one free share for every three shares held by shareholders. The Wipro board also approved a INR10,500cr buyback plan under which it will acquire up to 323 million shares at INR325 apiece.

 

CHINA 

China reports GDP growth of 6.4% in Q1, topping expectations.
 

China reported GDP growth of 6.4% in Q1, topping expectations, amidst ongoing trade wars and rising debt in the economy, on back of strong manufacturing production and greater spending by Chinese consumers.
 

Chinese economy expanded by 6.4% Y-o-Y in Q1 2019, beating analyst expectation of 6.3%. 
 

China’s economy had grown by 6.4% Y-o-Y in Q4 of last year, and 6.8% in the Q1 of 2018.
 

The key drivers of this growth were: 

  • Industrial production, which jumped 8.5% Y-o-Y in March
  • Retail sales, which grew by 8.7% Y-o-Y for March
  • Fixed asset investment, which increased by 6.3% Y-o-Y

 

While China’s economy has been on a slow downtrend off late weighed down by debt and excess capacity, further exacerbated by severe trade tensions with the US, the government is now stepping up work to arrest the slide. More on this here.

 

TECH 

Qualcomm surges 23% upon settlement with Apple. 5G users will touch 2.8 billion by 2025, as per Huawei.
 

Settling In: Shares of Qualcomm jumped 23% to $70.45 in regular trading, their biggest gain in more than 19 years, then hit $75.25 in after-hours trading as it settled a two-year-old battle over patent licensing with Apple. 

 
As part of the settlement, Apple will make an unspecified payment to Qualcomm. The companies have also reached a six-year licensing agreement that includes a two-year option to extend and a multiyear chipset supply agreement.

 
Taking Over: 5G subscriber base will touch 2.8 billion by 2025, covering 58% of population. Over 6.5 million base stations will be in use to support such a huge customer base, said Huawei Technologies Deputy Chairman Ken Hu as part of the keynote address of the two-day Huawei Global Analysts Summit 2019.

 

COMPANIES 

Whistleblower alleges kickbacks to Kochhar brothers in loans sanctioned by ICICI Bank. Reliance Retail in talks to buy Hamleys. 
 

Added Trouble: As per a whistle-blower letter, former ICICI Bank MD and CEO Chanda Kochhar’s husband Deepak Kochhar and brother-in-law Rajiv Kochhar were running multiple companies in Singapore, Cayman Islands and India where they used to take kickbacks from various corporate promoters for loans sanctioned by ICICI Bank.
 

As per the letter, “the primary activity of the firms was that of taking advisory or consultancy fees on the loans to be arranged/restructured from the banking system, namely ICICI Bank”.
 

The firms from where kickbacks were taken included Jaiprakash Group, Suzlon, Bhushan Power and Steel and Sterling Group etc. The suspected firms were in gross violation of tax evasion, routing transaction for other counter parties, and violating FEMA. 
 

More on the case here.
 

Noah's Ark May Sink: C Banner International, owner of British toy store chain, Hamleys is exploring the possibility of selling the loss-making chain to Mukesh Ambani's Reliance Retail. 
 

The news comes as the 260-yr-old toymaker is facing intense competition from online stores such as Amazon. The acquisition will provide Reliance Reliance will a global footprint.
 

Flashback: Founded in 1760 as a one store shop called Noah’s Ark, Hamleys opened its London flagship store in 1881 and now has 129 outlets across Europe, Asia, the Middle East and Africa. In India, it already has a tie up with Reliance Brands Ltd to open 20 more Hamleys stores.

 

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