Top News Today: WPI Inflation in India Falls, Trade Deficit Narrows, WeWork Files for IPO, Trade War Fallout

Top News Today: India's WPI inflation falls to multi-year low of 1.08% in July. Trade deficit narrows to $13bn as exports rise. Amazon in talks to acquire c. 10% stake in Future Retail. RBI releases clarifications on "free ATM transactions". Facebook admits to paying contractors to transcribe user audio clips without their permission. WeWork files for IPO. China's industrial output falls to 17-year low in July. Germany gets adversely affected in trade war fallout. 

 

Moving on to the top Business news stories of the day: 

 

 INDIA 
 
India’s WPI inflation falls to multi-year low of 1.08% in July. Trade deficit narrows to $13bn as exports rise.

Easing Out: Wholesale price-based inflation fell to a multi-year low of 1.08% in July vs 2.02% last month and 5.27% in July 2018. 

 
The decline has been credited to cheaper fuel and food items. 
 
 
Also, This: India’s retail inflation too eased to 3.15%, breaking a 5-month-long rising streak, in the month of July.
 
 
Narrowing Down: India’s trade deficit in July narrowed to $13bn in July vs $18.63bn last year, on back of growing exports and declining imports.
 
 
During the period, exports grew by 2.25% to $26.33bn. Meanwhile, imports slipped by 10.43% to $39.76bn.
 
 
 CONSUMER 
 
Amazon in talks to acquire c. 10% stake in Future Retail. RBI releases clarifications on “free ATM transactions”. 
 
 
Gearing Up: Amazon is in talks to acquire c. 10% of Kishore Biyani’s Future Retail at a valuation of $281m – yet another attempt by the ecommerce giant to strengthen and expand its presence in India and take on its rival Walmart, which last year acquired Indian e-tailer Flipkart in a $16bn deal. 
 
 
Amazon has already picked up stakes in Shoppers Stop and Aditya Birla Retail ‘More’ through the FPI route.
 
 
The news comes after a period of lull in the plans of Amazon’s deal with Future Retail following the implementation of the ecommerce foreign direct investment rules.
 
 
Know Your Rights: The Reserve Bank of India has released clarifications regarding usage of ATMs and free ATM transactions
 

As per the clarification, banks can't include non-cash withdrawal transactions like balance enquiry, cheque book request, payment of taxes and funds transfer under free ATM transactions. Banks also can't include failed ATM balance enquiry, cheque book request, payment of taxes, or funds transfer. 
 

Currently, banks provide a certain number of free transactions at ATMs to their customers every month, beyond which they impose charges. 
 

More on this here

 
Dark Clouds in Food Paradise: As many as 300 restaurant brands in Gurgaon are opting out of aggregators and table reservation services including Zomato, EazyDiner, Nearbuy, MagicPin and Gourmet Passport, citing "unsustainable" deep discounting.
 

Read more here.
 
 
 TECH 
 
Facebook admits to paying contractors to transcribe user audio clips without their permission. 
 
 
 
The audio conversations were matched against transcriptions to see if they were properly interpreted by the company’s Artificial Intelligence (AI). According to Facebook, this was done to improve its products, including the AI behind how messages are transcribed from users who opted in to transcription on Messenger.
 
 
The social media giant added that the audio snippets were anonymized before being listened to by the workers and noted that it had paused human review of audio more than a week ago. 
 
 
Up and Up: Chinese internet giant Tencent reported 35% rise in profit to 24.1bn yuan ($3.4bn) in Q2 on back of new games hitting the market. Revenue rose 21% from a year earlier to 88.8bn yuan. 
 
 
The major driver of the company’s slowdown in recent quarters has been the freezing of gaming licenses by Chinese authorities last year. However, authorities have now begun green-lighting a number of games, helping Tencent recover in Q2. Subsequently, its revenue from online games rose 8% YoY to 27.3 billion yuan. 
 
 
Planning Ahead: Meanwhile, the company's shifting focus to financial technology and cloud computing seems to be paying off. The FinTech and Business Services segment generated 22.9 billion yuan, a rise of 37% YoY, during the second quarter.
 
 
 WEWORK 

WeWork files for IPO.
 
 
WeWork’s Debut: WeWork, rebranded to the We Company filed for its IPO on Wednesday and is widely expected to go public as soon as next month. 
 
 
It was recently valued at $47bn after existing investor SoftBank invested an additional $2bn in January. 
 
 
In the filing, the company reported revenues of $1.54bn and a net loss of more than $900m for the first six months of 2019.
 
 
Here are some revelations from the prospectus.
 
 
 MACRO 

China’s industrial output falls to 17-year low in July. Germany gets adversely affected in trade war fallout. 
 
 
No End in Sight: China’s industrial output declined to a 17-year low in July, on back of intensifying US-Sino trade wars. 
 
 
Industrial output growth slowed to 4.8% in July from a year earlier - the weakest pace since February 2002.
 
 
Retail sales and investment spending too expanded at slower-than-expected paces in July.
 
 
In Other News: “Germany’s economy shrank 0.1% from April through June, and it has been treading water for the past year”, as per official statistics. 
 
 
Much like China, Germany too has been severely hit by US President Donald Trump’s tariff, and more broadly by the disruption to the global economy that the trade conflict has caused. Germany is the world’s third largest exporter of goods and services, just after US and China, with exports accounting for almost half of its GDP. 

 
Germany is also under stress from Britain’s attempts to leave the EU. Moreover, tensions in the Persian Gulf have unnerved company executives about sales prospects in that important region, as a result of which they are reluctant to invest in new buildings or factory space in Germany.
 

A deep dive into the trade war fallout here

 
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