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Trump To Consider Eliminating Subsidies on Electric Cars, Quora Hacked et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Dec 4, 2018 12:39 PM 4 min read
Editorial

Good evening readers,

 

You may be one of the million WhatsApp users who earlier this year noticed a mysterious "₹ Payment" button while tinkering with your phone.

 

You may have indulged further by hitting that button, and just by selecting your bank magically revealed your account details - all ready to be linked at your fingertips. 

 

Did you feel a kick while sending your first couple of hundred Rupees to a friend or colleague sitting close by? Calling it a "transaction" would be an exaggeration. There were no annoying OTP requests, no IFSC codes or account numbers. It was just as easy as sending a message.

 

WhatsApp is now gearing to expand the million to 200 million. They've hired the former Head of Ezetap as their Payments CEO. Final discussions are ongoing and permissions are being sought from the RBI and NPCI for their full scale foray into India's payments ecosystem.

 

The incumbents, as expected, are getting nervous. Not only of WhatsApp's enormous reach in India, but also of any regulatory allowance they may end up snagging. They after all did manage to pull off a one million user "test launch" without needing you to login every time you transact, making your user experience rather seamless vs. the rest. 

 

While NPCI did assert that a full scale public launch would comply with all regulatory guidelines, the lack of a level playing field, especially favouring foreign players, is a recurring concern within the Indian business ecosystem.

 

Moving on to today’s Top 6 Business Stories through our End of Day Wrap Up:

 

Quora reports data breach affecting 100 million users.

 

The What: Question-and-answer platform Quora reported that about 100 million users were affected by the unauthorized access to one of its systems by a "malicious third party."

 

Up Close: User data including account information, name, email address, encrypted password and data imported from linked networks when authorized by users may have been compromised, officials said. Questions and answers that were written anonymously were however not affected by this breach.

 

Also, this: The news comes shortly after Marriott reported a breach affecting 500 million guests and Facebook earlier this year disclosed a breach affecting 29 million accounts.

 

Airtel to focus on premium customers, rejects Jio’s ambitious GigaFiber plan.

 

What You Need to Know: Unlike Reliance Jio’s plan to ramp up its push into high-speed broadband network through its recent INR5,230cr investment in Hathway Cable & Datacom, and DEN Networks, Airtel plans to focus on expanding its broadband service across India’s top 100 cities, eyeing only premier customers.

 

The Big Picture: The development comes shortly after Airtel’s announcement of minimum recharge plans starting at INR35, in a bid to reduce marginal or low-value customers.

 

Apollo to hive off pharma business into separate entity as it seeks to push growth and comply with foreign investment norms

 
The What: Apollo announced that it would hive off its pharma arm into a separate entity to unleash growth and comply with foreign investment norms as it seeks to raise c. INR750cr through a rights issue from foreign investors to reduce debt and fund expansion.

 

Zoom Out: Apollo Pharmacy will be a wholly owned subsidiary of Apollo Medicals. The listed parent company, Apollo Hospitals Enterprise will hold 25.5% stake in Apollo Medicals and the remaining 74.5 % will be held by investors, including Jhelum Investment Fund, Hemendra Kothari and ENAM Securities. Consisting of a large network of over 3,000 outlets, the pharmacy business accounted for nearly 40% of Apollo Hospital’s total revenue in 2017-18.

 

Mutual funds provide loans to listed entities against shares in promoter firms.

 

The What: According to a Livemint article, Franklin India, Aditya Birla Sun Life and Reliance Mutual Fund have provided loans to to promoter firms of Dewan Housing Finance Corp (DHFL), Piramal Enterprises and Bajaj Corp et al.

 

The Big Picture: Loan against securities/promoter funding has become an investment product for mutual funds wherein promoters’ shares held in a private firm are used as collateral to raise funds.

 

US/INTERNATIONAL

 

GSK to acquire Tesaro for $4.16bn.

 

The What: GlaxoSmithKline (GSK) to acquire cancer-focused pharmaceutical company, Tesaro for $4.16bn.

 

Up Close: The move will give GSK acquisition of Tesaro’s ovarian cancer drug Zejula - one of a new class of drugs known as PARP inhibitors, which have increased survival rates for women with recurrent ovarian cancer. It is also being evaluated as a potential treatment for lung, breast, and prostate cancer. 

 

Zoom Out: According to CEO, Emma Walmsley, the deal will strengthen GSK’s pharmaceuticals business by accelerating the build of their oncology pipeline and commercial footprint, along with providing access to new scientific capabilities. 

 

Donald Trump to consider eliminating subsidies on electric cars.

 

The What: The development comes after US President Donald Trump last week threatened to cut electric-vehicle and other subsidies that have benefited General Motors, after it announced its plan to lay off over 14,000 employees and shut down several factories in US next year.

 

Zoom Out: The subsidies are part of an Obama-era stimulus package that created a $7,500 consumer tax credit for the purchase of electric cars. However, it remains unclear whether the president has the authority to take this decision because the stimulus package was created by legislation.

 

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