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WhatsApp Appoints India Head, Committee to Report on RBI Reserves et al

Professor of Financial Economics and Part-time Value Investor, Transfin.
Nov 22, 2018 1:13 PM 3 min read
Editorial

Good evening reader,

 

Do you use Google News to fulfill your daily information diet?

 

Okay. Say you found an article from The Wall Street Journal on Google News; how much do you think Google pays WSJ for showcasing its content? 

 

You guessed it. Its zilch.

 

However, if the EU has its way - this may change soon. As per a proposed European legislation, Google News could in future be liable to pay a "link tax" i.e. a license fee, to publishers (such as WSJ) to showcase their links. 

 

In a world where News media is dominated by Google and Facebook, i.e., tech-driven distributors, the link tax can be a game changer. 

 

What does Google say?: They've claim to be ready to shut down Google News in Europe, rather than pay the link tax. 

 

Now that's smart: Google knows how dependent publishers are on them for distribution. They're after all the gatekeepers of the Internet. But does Google also need publishers? It's a chicken and egg story.

 

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

 

WhatsApp names Ezetap CEO Abhijit Bose as India Head.

 
What You Need To Know: After appointing Komal Lahiri as their WhatsApp Grievance Officer, the messaging platform has now appointed Abhijit Bose as India Head following a fairly extensive search for the position. Perhaps, this appointment would also ease the Indian govt.'s push for having someone who could be held accountable for WhatsApp's operations in India.
 

The Big Picture: Appointment of Bose, who is the Co-Founder and CEO of Bengaluru-based payment solutions company, Ezetap as WhatsApp’s India Chief does indicate the messaging platform's focus on payments in India.

 

Etihad may negotiate an increased stake in Jet Airways.

 

According to a report by The Business Standard, Jet Airways is said to have begun discussions with Etihad Airways for financial support.

 

Perspective: Currently, Etihad holds a 24% stake in the cash-strapped airline, which can be increased up to 49%, as per FDI guidelines for foreign airlines.

 

This development comes after Tata’s announcement of initial negotiations to buy a majority stake.

 

Vodafone-Idea joins row after Airtel ups game.

 

Vodafone-Idea has also begun steering plans to take on competition from Reliance Jio and Airtel. The telco plans to:

  • Aggressively expand its network of 4G tower sites
  • Divide its target market into four segments, based on profitability with different strategies for each
  • Hike minimum recharge tariff to increase profitability

 

Zooming Out: These steps are being devised to cover 70% of the Indian 4G market in the next six months and address the company’s lack of free-cash flow generation.

 

ECF Committee to be formed within a week, to submit reports on RBI’s Reserves by February end. 

A committee to review RBI's Economic Capital Framework (ECF) is to be formed within a week. The RBI and Government will jointly decide its membership and terms, which may also include external experts.

The Why: The committee is to examine the maximum level of reserves to be maintained by the Central Bank.

Up Close: If the findings endorse the Government’s take on these reserves, the excess amount may be used to achieve the fiscal deficit target before the year ends.

 

1MDB Scandal deepens as Abu Dhabi Fund sues Goldman Sachs.

 

International Petroleum Investment Company (IPIC) filed a summons in a New York state court against Goldman Sachs appealing that it played a “central role” in the 1Malaysia Development Berhad (1MDB) scam, which involved embezzlement of money from Malaysia's sovereign-wealth fund. 

 

The Why: Goldman Sachs is claimed to have involved former officials of IPIC in a scheme to launder money from Malaysia’s sovereign wealth fund. IPIC was a business partner of 1MDB before the scandal came to light.

 

Perspective: Goldman earned c. $600mn as fees in two years for advising 1MDB on bond sales.

 

Regulators press for transparency on safety systems of Boeing 737 after Lion Air crash. 

 
US officials are pushing for clarity on automated flight-control systems in Boeing’s 737 aircrafts, following the crash of Lion Air’s flight from Jakarta.

 

Recap: Boeing has been publicly criticized for failing to highlight operating principles and possible risks of the system that automatically pushes down the nose of the aircraft when there is a threat of loss of lift. 

 

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