1. What Can We Expect From New RBI Governor Urjit Patel
Media commentators are known to follow a herd mentality, and there are times one sees that happen. When Dr Urjit Patel’s name was announced as the new Reserve Bank of India Governor, we came across descriptions like “low profile” or that we don’t know much about him since he has “rarely spoken” his mind on many issues.
While most commentators agreed that he is the best choice in the current fiscal-monetary policy context, there were apprehensions in some quarters. After all, he’s the one who has to step into the illustrious shoes of outgoing governor Raghuram Rajan.
Dr Patel has spoken or written (working/research papers) on 15 occasions in the last 30 months. He interacts but does not speak unnecessarily.
The news junkies who are hoping for Dr Patel to make sweeping statements on crony capitalism at news conferences during his time as the RBI governor will be disappointed.
(Source: BloombergQuint)
2. Indian E-Commerce Giants Will Take 10 Years to Become Large Business
India’s most valued internet companies like online retail marketplaces Flipkart and Snapdeal may have a ten-year wait ahead of them to transform into mega businesses as purchasing power of consumers today is not yet sufficient to help internet companies deliver profits.
And while internet adoption and usage is increasing rapidly, the country’s largest startups are yet to devise solutions that will attract this new set of customers, according to Rajan Anandan, head of Google India and Southeast Asia.
He sounded the alarm bell at an event organized by venture capital firm IDG Ventures India on Thursday in Bengaluru.
(Source: The Economic Times)
3. UTI AMC May Put Rs 2,000 Crore Stake on Sale
UTI Asset Management Co Ltd (UTI AMC) is likely to sell shares worth around Rs 2,000 crore through an initial public offering and a subsequent offer for sale by March.
The share sale will allow UTI AMC’s four state-run sponsors—State Bank of India (SBI), Life Insurance Corporation of India (LIC), Bank of Baroda (BoB) and Punjab National Bank (PNB)—to partially sell their stakes, two UTI AMC officials said on condition of anonymity, as the decision has not been cleared by its board.
We have also got an in-principle approval from the government for adopting the public issue route for enabling partial exit of the four original sponsors. We are now waiting for the government’s NOC (no objection certificate) to formalize the process.UTI official
(Source: Livemint)
4. RIL Clears The Air, Won’t Withdraw Ongoing Cost Recovery Arbitration For KG-D6
Reliance Industries chairman Mukesh Ambani told shareholders last week that the company will continue with the cost recovery arbitration over the Krishna Godavari - D6 (KG) basin, thereby clearing the air on speculation that Reliance along with its joint venture partner was close to dropping the arbitration.
Our upstream business is in partnership with BP and we want to constructively make sure that we are not going to withdraw the arbitration and we are hopeful of finding an acceptable solution.Mukesh Abmani
With this statement, Reliance Industries ended all speculations about the group and its partners opting out of arbitration to avail the benefits of higher gas pricing made available under the government’s new policy announced in March this year.
(Source: BloombergQuint)
5. Reliance Jio’s Aggressive Rates to Shake up Industry: Experts
Reliance Jio Infocomm kicks off its much awaited but delayed 4G services on Monday, shaking up the industry with free voice and dirt cheap data, which top rivals Bharti AirtelBSE 2.66 percent, Vodafone and Idea will be forced to react to, draining their finances.
Mukesh Ambani-owned Jio’s management is counting on its introductory offer of free calls and data to grab a 100 million customers rapidly.
Prashant Singhal, global telecom leader at EY, expects Jio’s aggressive pricing to impact incumbent operators’ profitability and sustainability while Hemant Joshi, partner at Deloitte, said it would change the paradigms for the telecom sector.
(Source: The Economic Times)
6. Is The Indian Equities Market Overvalued?
Market rallies have seldom been so unloved. Scarcely a day passes without some market analyst sounding the alarm that equities are now above “fair value”. One big reason is the global financial markets. With strange fauna such as “quantitative easing” and negative interest rates proliferating, while we eagerly await “helicopter money”. There is no shortage of Cassandras predicting it will all end in tears.
Indian markets have been far from immune to the massive flows of liquidity spilling over from the unconventional monetary policies adopted by central banks in the advanced economies. But are they overvalued?
(Source: Livemint)
7. As Bonds See Steep Decline in Past Six Months, Market Awaits Cut in Policy Rates
While the capital markets await a cut in policy rates, small investors and salaried workers should brace for a reduction in interest rates on retirement savings.
Given the steep decline in bond yields in the past six months, it seems unlikely that Employees’ Provident Fund will be able to maintain last year’s interest rate of 8.8 percent. Also, the finance ministry may have to reduce rates on small savings schemes, including Public Provident Fund and Senior Citizens’ Saving Scheme.
The yields of government bonds to which these rates are linked have fallen 60-70 basis points since the last rate cut in March.
A basis point is 0.01 percentage point. Economic Times reached out to 25 finance professionals, including mutual fund managers, investment analysts and independent financial advisers, for their views.
(Source: The Economic Times)
8. Lower Gas Price to Boost Fertilizer Subsidy Savings
Depressed commodity prices in world markets are continuing to aid the exchequer.
The softer natural gas prices in world markets are likely to help the government keep the subsidy for the most commonly used fertilizer, urea, well below the original estimate of Rs 51,000 crore for 2016-17.
The softer prices of gas are benefiting the exchequer in two ways. Firstly, they help lower the cost of domestic urea production using locally available gas, the price of which is administered as per global trends.
Secondly, they make for cheaper urea imports, which meet nearly a third of the country’s 27 million tonne urea requirement.
(Source: Livemint)
9. Ed Tech Startups Draw $197 mn Worth Investment in 2016
Ed tech are back in fashion this year, drawing PE/VC investments worth $197 million (across 21 deals) till end of August 2016 — almost 3 times compared to the $67 million in 2015 (17 investments).
The sector is well on its way to surpass the highest ever figure reported of $235 million in 2012, according to data from Venture Intelligence, a research firm.
Within the sector, test preparation, vocational startups and certification firms were most favoured by investors.
The $70 million attracted by Byjus in March 2016 led by Belgium-based Sofina marks the largest investment for a startup education company and takes the total funding raised by the company to almost $100 million.
(Source: Times of India)
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