US and China agree on an interim deal to halt the ongoing trade war. Govt increases ceiling prices of 21 medicines that are under price regulation to ensure availability. Indian carriers likely to post loss of over $600mn this fiscal, notes CAPA report. ArcelorMittal set to close INR42,000cr Essar Steel deal next week.
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A Deal in the Making: The US and China on Friday announced that they have reached a phase one trade deal, which would include some tariff relief, increased agricultural purchases and structural change to intellectual property and technology issue.
Zooming In: As part of the deal, China would purchase more products from American farmers and other exports. In return, the US would cancel its next round of tariffs on Chinese goods set to take effect from Sunday. The US would leave 25% tariffs on $250bn in imports in place while cutting existing duties on another $120bn in products to 7.5%.
US President Donald Trump called the deal “phenomenal” and said that the US would continue to use the remaining tariffs as leverage in future negotiations with China.
Experts Speak: "Rather than a comprehensive deal, he was settling for the one thing that he needed most to secure his re-election, which was a deal on agricultural exports that would boost US exports from farm country to a level higher than they had been before the trade war," noted James Lucier, Managing Director at Capital Alpha Partners. What does the interim US-China trade deal mean, and what it doesn't. More on this here. CNN Politics
In a first, India’s drug pricing regulator, National Pharmaceutical Pricing Authority (NPPA) has allowed an increase in the maximum retail prices of 21 formulations or medicines currently under price control by as much as 50% in an attempt to ensure their supply and prevent patients opting for costlier alternatives in the face of shortage of these drugs.
The pharma industry in India has been lobbying for a price hike for nearly two years, citing a steep rise in prices of active pharmaceutical ingredients (APIs) or bulk drugs largely imported from China.
FYI: The prices of APIs have gone up 5-88%, depending on the products. API prices constitute 40-80% of the formulation cost. For some medicines like paracetamol, the API cost is around 80% of the finished product.
These formulations include common medicines like BCG vaccines, penicillin, malaria and leprosy medicines (Dapsone), life-saving drugs like Furosemide (used to treat fluid build-up due to heart failure, liver scarring, or kidney disease), vitamin C, some common antibiotics, and anti-allergy medicines. Indian Express
Tightening the Noose: In an unprecedented move, the National Financial Reporting Authority (NFRA) has asked the country’s top audit firms to submit details about the audit processes, the number of clients, details of fees, the non-audit work done for these clients and details of audit qualifications on financial accounts, perhaps in a bid to introduce stricter regulations on the conflict of interest issue and to ensure that auditors are truly independent while giving audit opinion.
NFRA has taken over all the powers from Institute of Chartered Accountants of India (ICAI) to regulate auditors. ET Politics and Nation
A Bleak House: As per a report by aviation consultancy CAPA, Indian carriers are estimated to report a consolidated net loss of over $600mn (c. INR4,230cr) in 2019-20.
Flip Flop: CAPA has revised its earnings estimate for Indian carriers from its June forecast of $500-700mn in profit, following weak results by market leader IndiGo and SpiceJet.
In its quarterly market update report on aviation outlook FY2020, CAPA India said it is the “most significant downgrade within one quarter in more than 16 years”. Hindu BusinessLine
Thinking Over: The Central Board of Reserve Bank of India in its meeting on Friday discussed the policy for cooperative banks and non-banking financial companies (NBFCs).
The board's discussions focussed on issues related to urban cooperative banks, extension of enforcement policy and framework to cooperative banks and NBFCs, the RBI said in a statement. Business Today
Do We Have A Deal?: World's largest steel-maker ArcelorMittal is set to close INR42,000cr deal with Essar Steel's lenders next week.
The funds are in a State Bank of India (SBI) account and will be distributed to financial creditors and operational creditors on Monday, a lender said.
Essar Steel will be jointly owned and operated by ArcelorMittal and Nippon Steel Corporation (Nippon Steel), Japan’s largest steel producer and the third largest steel producer in the world. ArcelorMittal will hold 60% in the venture, while the rest will be with Nippon Steel. Both companies will have equal representation and voting rights on its board of directors.
The closing of the transaction will bring to an end the more than 800-day-long corporate insolvency resolution process. Essar was admitted to the National Company Law Tribunal on August 2, 2017. It was one of the 12 NPAs mandated by the RBI for resolution under the Insolvency and Bankruptcy Code (IBC). BS
Lining Them Up: Reliance Industries has acquired a majority stake in drone maker Asteria Aerospace, augmenting its push into the technology sector.
Reliance has bought a 51.78% stake in Asteria for INR23.12cr and will over time invest an additional INR125cr to increase its holding to 87.3%.
Asteria, incorporated in June 2011, is a full-stack drone technology company with in-house drone manufacturing capabilities. It also offers software solutions to provide insights from aerial data, intending to deliver "drone-as-a-service" digital platform.
The news comes on the heels of an announcement by Reliance Industries that its wholly-owned subsidiary Reliance Strategic Business Ventures Ltd (RSBVL) has acquired 85% stake in NowFloats Technologies for a cash consideration of INR141.63cr in a bid to strengthen the group's digital and new commerce initiatives. VCCircle
Feeding Screenagers: As per this intriguing report, streaming services such as Netflix, Amazon and Hotstar are helping drive sales of online food delivery entities, ready-to-eat products and single-serve snacks.
“Studies have shown spikes in ordering on weekends between 10 pm and 1 am, which is also the time for binge watching on OTT platforms. This has extended the traditional prime time that ended around 10 pm,” noted Ashu Phakey, Vice President and Business Head (frozen foods) at ITC.
“OTT provides an alternative for home entertainment and is among the key factors that have triggered a spike in delivery, the others being convenience and traffic,” said Riyaaz Amlani, Managing Director, Impresario Entertainment & Hospitality.
Food Wars: European food-delivery giant Delivery Hero has agreed to buy a South Korean rival for $4bn, heating up the global battle to meet growing consumer demand for delivered meals.
Online food-delivery businesses across the globe are joining forces and attracting investment as more consumers prefer to have their meals delivered to dining out. Asia in particular is seen as a hot market, where a rising middle class offers hundreds of millions of potential new customers. However, tapping that potential is costly and companies have struggled to make a profit. Get the full scoop here.
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