YES Bank Reports INR600cr Loss, Flipkart Narrows Losses, Alibaba Beats Earnings Estimates, Saudi Crown Prince Approves Aramco IPO

YES Bank Reports INR600cr Loss in September Quarter, Says It Has Offers Worth $3bn On The Table. Flipkart Narrows Losses, Sees Revenues Increase, Alibaba Beats Earnings Estimates with 40% Rise in Revenue. Saudi Crown Prince Approves Aramco IPO, DGCA Directs IndiGo to Replace P&W Engines on 98 Airbus Aircraft. Amazon's Future Retail Deal Probed by CCI, Google Buys Fitbit for $2.1bn. US Adds 128,000 New Jobs in October, Unemployment Near Historic Low, US-China Trade Talks Reach Consensus in Principle.

 

Moving on to today's End-ofDay Wrap-up:

 

 

YES BANK

YES Bank reports INR600.08cr loss for September quarter.

YES Bank Says “Oh No”: On Friday, private lender YES Bank reported an INR600.08cr loss for the September quarter. This was the biggest loss for the bank since its listing after the INR1506.6cr loss in the quarter ending March this year.

 

The loss was mainly due to a one-off DTA adjustment of INR709cr due to the change in the corporate tax regime. Excluding this, the adjusted profit was INR109cr.

 

How Times Change: At the same time last year, YES Bank had reported a profit of INR964.7cr.

 

Meanwhile, gross NPAs for the quarter rose to 7.39% from 5.01% in the June quarter and the 1.6% last year. ET Markets

 

Lender says it is in discussion with investors to pump in $3bn in capital.

 

Options on the Table: The lender said it is in discussion with investors willing to pump in over $3bn in capital. YES Bank’s capital adequacy has dipped in recent quarters due to recognition of stressed assets.

 

These potential investors reportedly include a family office in the US, two groups of domestic investors, and six global private equity funds. BBG Quint

 

EARNINGS CALLS

Flipkart Pvt Ltd reports 63% drop in losses, 42% jump in consolidated revenue.

Flipping on Cloud 9: In its first yearly performance report since it was acquired by US-based retail chain Walmart, Flipkart reported a 63% drop in losses and a 42% jump in consolidated revenue in the FY ending March 31, 2019. The company also has decreased its overall expenses from INR46,895cr to INR17,281cr, it said in its filings in Singapore.

 

Flipkart Pvt Ltd is the parent company of e-commerce platforms Flipkart, Myntra and Jabong; logistics firms EKart; and digital payments company PhonePe. Despite the positive numbers, three key units – Flipkart Internet, Flipkart India and PhonePe – have incurred heavy losses this year. Inc42

 

Alibaba posts 40% rise in Q2 revenue, boosted by e-commerce and cloud computing businesses.

Chinese Juggernaut: Despite domestic consumption slowdown in China and trade doldrums apoad, Alibaba reported a 40% rise in Q2 revenue, exceeding expectations.


Total revenue rose to $16.91bn in the quarter ending in September. The company’s e-commerce business reported a 40% increase in sales while its cloud computing business posted a 64% jump in revenue.

 

Alibaba’s US-listed shares climbed c. 2% to $180.25 in trading before the bell.

 

The strong growth numbers come as China’s largest company gears for its annual Singles Day shopping gala, faces increased competition at home, and looks to launch a Hong Kong IPO. Reuters

 

PETROL & PLANES

Saudi Aramco IPO given go-ahead by Crown Prince.

Green Light: In a meeting he chaired on Friday, Saudi Crown Prince Muhammad bin Salman gave the go-ahead for the IPO of Saudi Aramco, reckoning there was sufficient support from local investors, Bloomberg reports. An official announcement could be expected as early as Sunday.

 

The IPO, first proposed three years ago, was delayed several times over the years as investors balked at the $2tr valuation. The actual valuation could likely be closer to $1.5tr but will still be a record sale.

 

The partial privatisation of Saudi Aramco will be a watershed moment for the world’s most valuable company, and the biggest change in the Saudi oil industry since its nationalisation in the 1970s. It is also the cornerstone of Riyadh’s long-term plan to decrease the reliance of the petro-state on its oil wealth and diversify its economy. BBG

 

YES Bank Reports INR500cr Loss, Flipkart Narrows Losses, Alibaba Beats Earnings Estimates, Saudi Crown Prince Approves Aramco IPO

 

DGCA asks IndiGo to update Airbus Neo planes before accepting new deliveries.

Revamp, then Proceed: The Directorate General of Civil Aviation (DGCA) has asked IndiGo to change and update the P&W engines of all 98 Airbus A320 new engine option (Neo) planes it has in its fleet by January 31, 2020. The Neos that don’t meet the new requirements will not be allowed to fly after this date.

 

IndiGo is the largest customer in the world for Airbus’s Neo aircraft and is yet receive over 638 of them. It will be asked to defer future deliveries until the 98 aircraft it already has can get replacement engines. ToI

 

WHAT'S IN A DEAL

Competition Commission of India seeks more information on planned Amazon-Future Group deal.

Antitrust Interject: In what could potentially delay the deal, the Competition Commission of India (CCI) has probed for more details about Amazon’s planned acquisition of a stake in India’s Future Retail.

 

In August, Amazon was reportedly set to acquire a 49% stake in a unit of Future Group, which owns 7.3% of Future Retail. This could have given the US giant a 3.58% stake in the retailer which operates more than 1,500 stores in the country.

 

In a notice to Amazon, the CCI said “in certain overlapping segments and areas of operation of the parties, the combined market share exceeds the threshold specified in the combination regulations.” Firstpost

 

Google buys Fitbit for $2.1bn.

Fitbit Joins the Google Family: In a blog post, Google has announced that it’s buying wearable fitness tracker company Fitness for $2.1bn. The deal is “an opportunity to invest even more in Wear OS as well as introduce Made by Google wearable devices into the market,” Google said.

 

In its press release, Fitbit confirmed the move, adding that it will continue to take privacy for health and fitness data seriously. “Fitbit health and wellness data will not be used for Google ads,” it added. The Verge

 

The deal is likely to the benefit of both sides. Google has spent years trying – and largely failing – to peak into the wearables market. Fitbit, on the other hand, has struggled to meet investor expectations, facing declining sales and challenging margins. CNBC

 

YES Bank Reports INR500cr Loss, Flipkart Narrows Losses, Alibaba Beats Earnings Estimates, Saudi Crown Prince Approves Aramco IPO

 

GLOBE-TROTTING

Positive jobs and unemployment numbers send US markets up, keep recession fears at bay.

Recession Stays Away: The US economy is cooling, but it is still resilient as the recently-released October jobs report shows. 128,000 jobs were added last month, according to Labour Department data. The number would have been higher were it not for the lengthy strike at General Motors, a car-making giant, which let go of almost 50,000 workers from employment rolls. Furthermore, revisions to the last jobs report added another 95,000 to that tally.

 

The unemployment rate ticked up to 3.6%, still near a half-century low. The positive numbers propelled stocks upwards, with the S&P reaching a record high. NYT

 

YES Bank Reports INR500cr Loss, Flipkart Narrows Losses, Alibaba Beats Earnings Estimates, Saudi Crown Prince Approves Aramco IPO

 

Washington and Beijing have reached consensus in principle in trade negotiations, China says.

When a Tornado Meets a Volcano: The US and China are still at loggerheads over what a comprehensive trade deal should or would look like. But both sides have apparently reached a consensus “in principle” after a phone call between trade negotiators. Chinese Vice Premier Liu He had a phone call with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Friday. The Chinese Ministry of Commerce said the two sides conducted “serious and constructive” discussions on “core” trade points and talked about arrangements for the next round of talks.  

 

The White House confirmed the phone call, saying the representatives “made progress in a variety of areas and are in the process of resolving outstanding issues. Discussions will continue at the deputy level.” CNBC

 

FIN.

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