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Yes Bank Shares Tumble, Air India to be Split For Sale, Bank Mergers et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Sep 23, 2018 1:21 PM 3 min read
Editorial

Good evening reader,

 

This week’s articles were testimony to the turbulent Indian Economy, and the financial sector in particular. Crude Oil clearly stood out as the hero in most of this week’s stories.

 

Monday’s LongShorts was an assessment of the key drivers stressing the Indian Economy as the Rupee continues to slide and crude oil prices sky-rocket. 

 

Sharath’s article on Tuesday was an attempt to understand the rumoured news of Flipkart acquiring a stake in Hotstar and the plausibility of such a deal.

 

Thursday was a busy day. The second LongShorts discussed the highlights of PM’s Five Point Action Plan - an attempt to revive the economy. Episode 3 of the Podcast was a informative chat on the key stories of the week. 

 

Nikhil’s article on Friday was a primer on crude oil – a global commodity which has much influence on the Indian Economy.

 

The weekend saw INSEAD’s spectacular article on advertisement and its effect on our minds and an enriching piece on Value Investing.  

 

It's time to refresh your memories with a recap of this week Top 6 Business News:

 

Govt to merge Vijaya Bank, Dena Bank, and Bank of Baroda to create country's 3rd largest lender.

Network synergies including low cost deposits, larger customer base and market reach cited as basis behind merger.

                                                                                                               

Walmart Inc owned Flipkart rumoured to be in talks to buy a stake in Hotstar as per press reports. Ola set to launch in New Zealand after UK and Australia.

As per press speculations, Walmart Inc's Flipkart is in talks to buy a stake in Star India's video digital delivery platform Hotstar. This is in the backdrop of a rapidly evolving domestic video content landscape and as such appears to be Flipkart's defense against Netflix and Amazon Prime video in the Indian marketplace. 

 

Air India to be sold in pieces as four subsidiaries are put in line.

Having found no buyers for Air India, the government shall now put on sale four of its subsidiaries - the Air India Engineering Service, which overlooks maintenance and repair, Air India Air Transport service that supervises ground and cargo handling along with the Hotel Corporation of India and the Airlines Allied Services which provide regional air connectivity. Government also plans to sell the its headquarter buildings in Delhi and other cities.

 

YES Bank shares drop by 34%, after announcement of CEO’s limited tenure.

Shares of Non-Banking Finance Companies tumbled as analysts say the fear of an IL&FS like situation nudged the selloff of stocks of companies like DHFL and Indiabulls Housing Finance, which fell by as much as 60% and 30% respectively, losing about INR10,000cr in market cap.

 

ICICI Bank opens talks with SEBI to settle case over regulatory lapses.

ICICI Bank looks to resolve its case over regulatory lapses involving MD & CEO Chanda Kochhar, Videocon Group and NuPower Renewables through consent mechanism. Cyril Amarchand Mangaldas under CBI scrutiny in PNB fraud case.

 

China retaliates with tariffs on $60 billion worth of US goods, soon after US announces imposition of 10% tariff later this month on $200 billion worth of Chinese goods, increasing to 25% at the end of the year.

 

US will impose a 10% tariff later this month on $200 billion worth of Chinese goods, increasing to 25% at the end of the year, the Trump administration announced Monday. In a counter move, China retaliated with tariffs on $60 billion worth of US goods which includes almost 5,000 US produced goods ranging from wheat, frozen vegetables to textiles, the rate of which will vary from 5-10%. Tariffs of both countries will come into effect on September 24.

 

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