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Top Business News Today: World Bank Forecasts 5% Growth in FY20 for India in Global Economic Prospects Report

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 9, 2020 1:13 PM 5 min read

World Bank forecasts 5% growth in FY20 for India in Global Economic Prospects report. Cabinet clears strategic disinvestment of five small PSUs. Government reportedly considering waiving MDR on all debit cards. SBI launches scheme to safeguard homebuyers if builder delays project. Chinese Vice Premier expected to sign “Phase 1” trade deal with the US next week.



World Bank forecasts 5% growth in FY20 for India in Global Economic Prospects report.

It Feels Like We Only Go Backwards: In its latest edition of the Global Economic Prospects report, the World Bank has projected a 5% growth rate for India in FY19-20. Growth in the following financial year, it said, is likely to rise to 5.8%.


Among large economies, India’s growth forecast stands at number two, behind China’s. The World Bank blamed "weak confidence, liquidity issues in the financial sector" and "weakness in credit from non-bank financial companies" for the ongoing slowdown. "In India, activity was constrained by insufficient credit availability, as well as by subdued private consumption." CNBC TV18


Globally, economic growth is forecast to be 2.5% in 2020 as investment and trade slowly recover from 2019’s shocks and uncertainties. But risks of a downturn persist.


The US economy is projected to slow to 1.8% while the Euro area will witness growth of 1%. China is forecasted to see the swiftest growth among large economies. BS


You can read the entire World Bank report here.



Cabinet clears strategic disinvestment of five small PSUs.

Private Matters: Yesterday, the Union Cabinet cleared the proposal for the strategic disinvestment of five small PSUs. These are Neelachal Ispat Nigam Ltd, Minerals and Metals Trading Corporation Ltd, National Mineral Development Corp, MECON and Bharat Heavy Electrals Ltd. Business Today


Government reportedly considering waiving MDR on all debit cards.

Digital Dilemmas: The government is reportedly planning to waive the Merchant Discount Rate (MDR) on all debit cards. The move could be announced on February 1st, when the Union Budget will be unveiled.


Recently, MDR on payments made through Rupay debit cards and Unified Payments Interface (UPI) was scrapped. While scrapping MDR can incentivise digital payments, it also results in revenue loss for commercial banks and digital payments platforms. Moneycontrol


CCI bats for self-regulation by ecommerce companies.

Help Youselves: In a recent report published by the Competition Commission of India (CCI), it has called for self-regulation by ecommerce companies to mitigate some of the issues plaguing the sector. The CCI batted for ecommerce companies setting out a clear and transparent policy on data that is collected on [their platforms], the use of such data...and also the potential and actual sharing of such data with third parties or related entities.” More details here.



SBI launches scheme to safeguard homebuyers if builder delays project.

Buy Home Without Fear: The State Bank of India (SBI) has launched a scheme to safeguard home buyers if a builder delays project. Under the Residential Builder Finance with Buyer Guarantee (RBBG), SBI guarantees the refund of the principal amount if a builder fails to complete the project within the stipulated time.


The scheme is applicable for apartment projects, wherein the SBI is the sole lender. RBBG will focus on affordable housing segment with home prices of up to ₹2.50cr in seven cities initially. Hindu BusinessLine


Net flows in mutual funds continue remain subdued in December.

Mixed Bag: Net inflows in equity funds remained rather subdued in December at ₹4,499.39cr.


Meanwhile, retail investors were seemingly bullish on SIP plans which saw record high inflows at ₹8,518cr. Financial Express



Telecom industry reports 4.5% fall in AGR in Q2.

Down and Down: Telecom industry reported 4.5% fall in Adjusted Gross Revenue (AGR) to ₹37,338cr Y-o-Y in Q2, on the back of seasonal weakness in call volumes and the shutdown of mobile services in Jammu and Kashmir. ET Telecom News


Airtel launches QIP worth $2bn.

Gathering Monies: Telecom operator Airtel has launched a qualified institutional placement (QIP) worth $2bn at a floor price of 452 per share. Alongside this, a separate fundraise exercise is also being undertaken through issue of foreign currency convertible bonds (FCCBs) of up to $1bn.


The proceeds from the fundraise is likely be used to meet the ₹35,586cr-worth AGR dues the operator is supposed to pay the Department of Telecommunications (DoT) by 24 January. Business Today


Extra Crunch: Total voice volumes on Airtel’s network grew 5.9% sequentially last quarter. In the September quarter they had dropped 2.8%. The growth comes in the backdrop of Jio’s decision to charge for outgoing voice calls, which seems to have boded well for Airtel. Click link here to know how Jio’s extra levy for outgoing calls could have benefitted Airtel, Vodafone Idea.



Chinese Vice Premier expected to sign “Phase 1” trade deal with the US next week.

January Jubilation: Liu He, China’s Vice Premier, will be in Washington next week to sign a “Phase 1” deal between the US and China. Liu is expected to visit the US between January 13th and 15th. While the terms of the deal are yet to be made public, it is expected to involve Beijing buying more American agricultural goods and some issues surrounding intellectual property rights being resolved. Reuters


More SoftBank-backed companies lay off workers.

Three is Company: Zume Inc. is a pizza delivery and food logistics unicorn based out of Mountain View, California. Getaround is a San Francisco-based car rental company. And OYO is one of the largest hotel chains on the planet.


What do these three companies have in common? One, they are funded by SoftBank. And two, they are all cutting their work force and laying off employees. And they follow in the footsteps of other job-slashing, SoftBank-backed firms like Uber, WeWork, Fair, Katerra and Opendoor. Silicon Valley Business Journal


Carlos Ghosn makes first public appearance since his escape from Japan.

Ghosn is Gone No More: Carlos Ghosn has made his first public appearance since fleeing the clutches of Japanese authorities and flying to Lebanon in a wild, James Bond-styled escape. In a two-hour-plus press conference on Wednesday, the former Nissan CEO defended himself against charges of financial crimes, accused prosecutors and former colleagues of orchestrating his downfall, and critiqued the recent performance of Nissan and Renault, admonishing that “there is no more alliance”. WSJ


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