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Yes Bank's Shares Tumble 34%, DHFL Crashes et al

Professor of Financial Economics and Part-time Value Investor, Transfin.
Sep 21, 2018 12:58 PM 3 min read
Editorial

Good evening reader,

 

Amidst all the backlash PSU banks have faced through the year, it appears Private Banks are no holy grail themselves. Recall Shikha Sharma (Axis Bank)...given her marching orders after RBI asked the board to reconsider her reappointment on back of deteriorating asset quality, leak of financial results, non-compliance and of course a falling share price. Think of Chanda Kochhar (ICICI), yet to be given a clean chit for alleged conflict of interest, quid pro quo and corporate governance violations. 

 

And now, Rana Kapoor. Yes Bank stock tanked 29.5%, after the Central Bank denied an extension to the bank’s MD and CEO.

 

This one is different. Unlike Ms. Kochhar and Ms. Sharma, Mr. Kapoor and family directly/indirectly own over 20% of the bank. The symbolism of RBI squeezing a promoter out of the leadership ensures its whip is heard well across D-Street. 

 

More on this and other Top Business stories through today's End Of Day Wrap Up:

 

INDIA

 

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

Registering its worst single day fall since listing, YES Bank’s share price tanked to its lowest at INR 210, today; finally closing at INR 225.15 (down 29.5%). The bank’s shares have plummeted by 19% in the last one month over RBI’s ruling of limiting Rana Kapoor’s tenure as Managing Director and CEO.

 

Government looks to lock in oil futures to limit decline of the Rupee.

As oil prices put pressure on the Indian economy, the government has decided to ask local oil firms to lock in crude oil futures purchasing price to help sustain the value of the rupee against the dollar, as the rupee hit its lowest ever against the foreign currency this year. It is expected that the government will also discourage non-essential imports in the wake of regaining rupee’s value.

 

NBFCs crash as IL&FS crisis create panic in the market.

Shares of Non Banking Finance Companies tumbled as analysts say the fear of an IL&FS like situation nudged the sell off of stocks of companies like DHFL and Indiabulls Housing Finance, which fell by as much as 60% and 30% respectively, losing about INR 10,000 crores in market-cap. The companies however, regained some of their losses and at market close were 44.8% and 8.5% respectively.

 

India’s trade-friendly policies push Morgan Stanley to invest further in the country.

Owing to the Prime Minister’s approach to governance and development through technology, James Morgan, CEO of Morgan Stanley, said that India makes for an exciting opportunity for investors, as he plans to expand his business and invest more capital in the country.

 

US/INTERNATIONAL

 

Sky takeover battle between Comcast and Fox to be settled in an auction over the weekend.

US giant, Comcast Corp and Murdoch’s 21st Century Fox will settle their buyout battle in a dramatic auction that is scheduled during the weekend for the purchase of Sky PLC. Auctions for the size of a public company like Sky are rare, and will consist of only three rounds of bidding. Sky, a British broadcaster has the market capitalization of over $35 billion.

 

Mazor Robotics to be sold to Medtronic for approximately $1.6 bn.

Medtronic, a medical technology maker, issued a statement saying that it plans to buy Israeli Mazor Robotic for $1.6 billion in cash. The deal is expected to close in Medtronic’s third fiscal quarter, which ends on 25th January 2019.

 

 

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