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Sensex Surges Over 500pts as Govt Considers Scrapping LTCG Tax, Dividend Distribution Tax, Saudi Aramco Eyeing November 3 For IPO

Professor of Financial Economics and Part-time Value Investor, Transfin.
Oct 29, 2019 12:27 PM 4 min read

Sensex surges over 500pts as government considers scrapping LTCG tax, dividend distribution tax. Alphabet share price drops on the back of declining profits. Makes bid to acquire Fitbit. Saudi Aramco is reportedly eyeing November 3 for IPO. 



Govt reportedly considering scrapping Dividend Distribution Tax, revamping income tax structure on equities.

Taxation is Heft: The government is reportedly considering revamping the income tax structure on equities to boost investor sentiment at a time when the country endures an economic slowdown. Livemint
Among the measures being considered are the scrapping of the Dividend Distribution Tax (DDT) and a review of existing slabs relared to long-term and short-term capital gains and the Securities Transaction Tax (STT). ET Personal Finance
ELI5: DDT is the tax on Indian companies according to the dividend paid to its investors. STT is the levy on securities listed on stock exchanges. And in Budget 2018, long-term capital gains on equities including equity mutual funds were made taxable.



Alphabet share price dips as the company posted 23% decline in profits on the back of rising expenses. 

Money and Other Things: Google's parent, Alphabet’s share price fell as much as 4% in after hours trading after it reported a 23% decline in profit, missing analyst expectations, on the back of rising expenses.

Google’s parent company posted earnings of $10.12 per share in Q3, lower than the $12.42 per share expected. CNBC

Makes bid to acquire Fitbit.

But Fitness First: Alphabet has reportedly made an offer to acquire US wearable device maker Fitbit. 

While Google has joined other major technology companies such as Apple Inc and Samsung Electronics Co Ltd in developing smartphones, it is yet to develop any wearable offerings.

Fitbit shares rose 27% on the news. TechCrunch



Microsoft reports 14% rise in revenue in Q1. Ola in talks to raise c. $200mn funding from Microsoft.

On Cloud 9: Tech giant Microsoft reported a 14% rise in Q1 revenue to $33.1bn. Net income has increased 21% to $10.7bn.

The rise in revenue and net profit was spurred by Microsoft’s cloud-computing business and Office revenues, while revenue from Surface and overall gaming revenue decreased. The Verge

Ola to You Too: Indian ride-hailing firm, Ola is in talks to raise $150-$200mn in funding from Microsoft. As per sources, the discussions are at an advanced stage and likely to be closed in the next 10-15 days. 

Ola has so far raised c. $3bn in funding. ET NewsBuzz



BP sees net profit fall by 41%. 

Petroleum Conundrum: Citing lower upstream earnings, weaker oil prices and maintainance and weather impacts, BP reported a 41% fall in Q3 net profit.
The oil giant posted net profit of $2.3bn. In Q2 that number was $2.8bn while in Q3 last FY it was $3.8bn.
While the numbers exceeded analysts’ expectations, the sharp drop in profits led to BP shares dipping 0.5% shortly after opening bell. CNBC 

Saudi Aramco reportedly eyeing November 3 for IPO.

Arabian November: According to a Reuters report, Saudi Aramco is aiming to start its IPO on November 3. Reuters
The public listing of the world’s most valuable company – which will help Riyadh’s eagerness to fund the diversification of the petrostate’s economy – will likely take place in Tokyo. Although, given the several times the listing was postponed and given the troubles surrounding the IPO, it is possible the event will be delayed yet again. OilPrice.Com



RIL restructuring might help Jio save on future payments to the Govt. Uber announces Uber Money, marking a deeper foray into financial services.

Whatta Plan: Mukesh Ambani’s Reliance Industries Limited (RIL) on Friday announced restructuring of its digital and telecom business, including Jio, as it looks for potential investors.

The move is also likely to help Jio save on future payments to the Govt based on its adjusted gross revenue, and has prompted rivals to consider adopting a similar arrangement. 

The recast is expected to help the new digital entity, Jio Platforms Ltd, command a valuation of $60-65bn and make it more attractive for strategic investors.

“Moving Jio’s non-core digital businesses to a new unit would contain the telco’s AGR-linked licence fee/SUC payouts in future and in turn insulate the company from potential financial shocks, ahead of a potential listing in about a year,'' noted Sanjiv Bhasin, Executive Vice President (Markets & Corporate Affairs) at IIFL Securities. ET Telecom

Tomorrow Begins Today: Ride-hailing platform Uber has announced a deeper foray into financial services with its new division called Uber Money, which will oversee everything from the company’s credit and debit card offerings, to digital wallets for riders, to products used by drivers.

The initial emphasis will be on expanding Uber’s efforts to give its 4 million-plus drivers and couriers around the world access to a mobile bank account so they can get paid after each ride. Inc42


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