The gold research division of Reuters estimates gold prices to touch $1500/oz during the year. While political and economic uncertainty is likely to be one reason for the rise in the price of gold, Reuters also sees genuine demand for gold to pick up during the year. In fact, if gold crosses $1500/oz during then it will be the best performance in the last 5 years. Gold had last touched a peak of $1900/oz in September 2011 and has been on a downslide ever since. According to Reuters, Jewellery demand is likely to pick up and also central banking buying, led by PBOC buying 400 tonnes, will drive gold prices up.
Dewan Housing has approached SEBI for permission to raise Rs.15,000 crore ($2.3 billion) through the issue of non convertible debentures (NCDs) to give a capital boost to its lending operations. NCDs offer higher rates of interest since they cannot be converted into equity. These debentures will be issued in the face value of Rs.1000 each. The proceeds of the issue will be used for onward lending, financing and for payment of existing borrowings which entail a higher cost. Dewan Housing has been among the best performing stocks among housing finance companies in the last 1 year.
Vijay Mallya has lost his $1.55 billion lawsuit over Indian claims. Judge Henshaw announced that the lenders including IDBI Bank can enforce an Indian court ruling that relates to allegations that Mallya wilfully defaulted on loans worth $1.4 billion. Henshaw even refused to overturn a worldwide order freezing Mallya’s global assets. Mallya, who had absconded to UK, after defaulting is also fighting an extradition attempt to send him back to India to face trial under the Indian laws. Mallya had left for UK in 2016 but has refused to return ever since.
The big announcement of Trump withdrawing the US from the Iran Nuclear Deal looks almost likely to happen. Trump had apparently been under pressure from its close ally, Saudi Arabia, to cancel the nuclear deal with Iran. While Saudi represents Sunni power in the Middle East, Iran represents Shia power and the two nations have rarely been able to see eye to eye. This will mean that the US could now impose fresh sanctions on Iran. The Iran Nuclear deal was negotiated by Barrack Obama and Trump had always felt that it weakened America’s position in the Middle East.
For those shareholders and observers who were expecting greater clarity from ICICI Bank on the Conflict of Interest issue, there was a sense of foreboding and disappointment. In fact, the government had clearly distanced itself from the issue with the government nominee on the board of ICICI, Lok Ranjan, skipping the meeting on both days. Incidentally, ICICI Bank had convened a special meeting on Tuesday a day after its AGM to discuss the future strategy of the group. Apparently, the government did not want to attend meeting and appear to be endorsing the decision of the board. However, in the process the government has done little to enforce higher standards of corporate governance at a bank that is not only big in size but also systemically extremely important. The board was non-committal.
Tata Steel Europe has started the process of hiving off its non-core assets in Europe. In fact, Tata Steel Europe will be seeking buyers for its five key units. These include; Cogent a manufacturer of electrical steels, Kalzip an aluminium roofing company, Firsteel which coats steel, Tata Steel Istanbul which is a coil coating company and ESS which is a stockholder. The idea of these divestitures is to focus on its core strip business to emerge as the most efficient and sustainable steel manufacturer in the whole of Europe. Nearly 1100 people are expected to be impacted by these divestitures.
