US-India trade deal unlikely to be signed during Trump visit. Yes Bank dropped from Nifty50. RIL to consolidate media, distribution entities under Network18 Media & Investments. Salary increases in 2020 may be the lowest in a decade at 9.1%.
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Great Expectations (No More)
Many expected the long-awaited trade deal between the US and India to be signed when President Donald Trump would visit India on February 24th. But over the past few days, such expectations have more or less died down. First, US trade representative Robert Lighthizer said he would not be travelling to India for pre-scheduled end-stage discussions. Now, Trump has said he was “saving the big deal for later on”, possibly after the US Presidential election in November. [HT]
To Each His Own
Markets regulator SEBI has cleared norms that will require investment advisors and distributors of financial products to segregate their services.
The norms bar investment advisors from providing distribution services and vice-versa.
The new laws require firms that advise clients on buying, selling stocks or mutual funds to segregate their services from distribution of those products. SEBI said it will also introduce enhanced eligibility criteria for registration as an investment advisor, including for net-worth qualification and experience. There will be a provision for grandfathering existing individual advisors. [Hindu BusinessLine]
The Nifty 50 has said “No” to Yes Bank. From March 27th, shares of the private lender will exit the benchmark index and be replaced by Shree Cement, a Kolkata-based manufacturer of cement. [NDTV Profit]
Mukesh Ambani-led Reliance Industries is consolidating its media and distribution properties under a single entity - Network18 Media & Investments with a revenue of ?8,000cr ($1,122m).
Under the scheme of arrangement, TV18 Broadcast, Hathway Cable & Datacom and Den Networks will merge into Network18 Media & Investments. [Moneycontrol]
The restructuring will create value-chain integration and render substantial economies of scale. It also simplifies the corporate structure of the group by reducing the number of listed entities, said a statement by TV18 Broadcast Ltd.
Shares of Network 18 Media and Investments rose 4.87% to ?30.15, TV18 Broadcast rose 14.77% to ?28.75, Den Networks was up 9.97% and Hathway Cable & Datacom surged 20% on the back of the announcement. [CNBCTV18]
India’s biggest private airport infra player, GMR Group, has signed an agreement with Groupe ADP of France to sell 49% stake in its airport-holding company for ?10,780cr ($1,503m).
Good to Know
GMR had in March last year, signed a definitive agreement with a Tata group-led consortium to sell 44% in the company. In January this year, it decided to divest a 49% stake. But despite getting clearance from the Competition Commission of India (CCI), the deal faced hurdles because it violated a clause that prevents airline groups from holding more than a 10% stake in Delhi International Airport Limited (DIAL).
Tata Group holds a majority stake in Vistara and AirAsia India. GMR holds 64% stake in DIAL. [ToI]
Unacademy Gets a Like
Facebook has made its second bet in India’s startup space. After investing in social commerce platform Meesho last June, the social networking giant has participated in a $100m investment round in ed-tech firm Unacademy.
Founded in 2015, Bengaluru-based Unacademy provides online lessons and specialised courses on various competitive examinations such as UPSC, CAT and JEE. It has so far raised $88.5m in six rounds. [BS]
Money for Food
Moving on from ed-tech to food tech, Swiggy has announced that it has raised $113m in a Series I financing round led by Prosus Ventures. Coming on the heels of rival Zomato’s acquisition of Uber Eats India, this means Swiggy will have more ammunition in the fight to dominate India’s food delivery industry. [TechCrunch]
It’s the Economy, Stupid
The economic slowdown is coming for your paychecks, according to Aon Plc’s annual salary increase survey.
The average salary increase in 2020 is projected to be 9.1%, which is the lowest in a decade. In 2018 and 2019, this number was 9.5% and 9.3% respectively. In 2008, during the Great Recession, the hike had slowed down to 6.6%. However, 39% of companies still reportedly plan to offer increases of 10% or more. [BS]
Telecom users are likely to witness a rise in tariffs as telecom firms expect ARPU to more than double by next year.
“We had indicated that tariffs must go to generate at least ARPUs of ?200 (per month) by the end of 2020 and ?300 by 2021," said Rajan Mathews, Director General of the Cellular Operators Association of India. This is a c. 77% rise in average ARPU from around ?113 in March last year. [BS]
Loss in Japan
The world’s third-largest economy has seen brighter days.
Japan’s economy shrank at the fastest rate in five years in October-December 2019. Annualised GDP fell by a steep 6.3% in this period, raising fears the country could fall into recession. This is the first time GDP shrank in more than a year and the worst fall since 2014, when GDP plummeted by 7.4%.
A major typhoon, a sales tax rise and weak global demand were factors that worked against Japan’s prospects at the end of last year. And now, it also has to deal with fallout from the coronavirus outbreak. [BBC News]
The Sky is the Limit
SpaceX has officially entered the space tourism business. The private spacecraft company has struck a deal with Space Adventures to begin offering tourist flights on its first Crew Dragon flight. Up to four people will have the chance to go on the first ever private spaceflight, which is expected to take place sometime around late 2021. [Fortune]
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