Finally, the change of guard at Yes Bank has been formalized. Yes Bank has announced the appointment of Ravneet Gill as the next CEO. The hunt for the CEO had begun after the RBI had refused to permit Rana Kapoor to continue as CEO beyond January 31st 2019. Ravneet Gill will take charge on March 01st. Gill has been a career Deutsche Banker and is expected to bring an international perspective to Yes Bank. According to a Reuters report, the stock saw the sharpest intraday jump in price since September 2013. The stock has corrected over 60% from the peak on asset quality issues.
Speaking at the WEF in Davos, Aditya Mittal of Arcelor gave a new twist to the Essar saga. He said that Essar was employing tactics to delay the Essar resolution to retain their control despite defaulting on loans to banks. Mittal has squarely put the blame on the Essar promoters. Ruia had put in a delayed offer for Essar Steel promising to repay all the financial and operational creditors. Mittal emphasised that such tactics could undermine the entire NCLT process. Arcelor Mittal had emerged as the best bidder with a bid of Rs.42,000 crore for Essar. Now Ruias had put in an Rs.54,000 crore bid.
Could we have a rate cut in February; probably not! But Reuters’ survey sees RBI turning neutral in its February monetary policy. The RBI is expected to shift its stance to neutral from hawkish on the back of sharply lower CPI inflation and a global trend towards easy money. Most economists polled by Reuters believed that the risk of global slowdown and the US-China trade war may induce the RBI to adopt a more dovish stance and ensure sufficient liquidity in the system. However, rate cuts could be undertaken towards the middle of the year based on the US Fed approach.
In the aftermath of the ecommerce restrictions, the US is trying to lobby with the Indian government for concessions and has voiced concerns over India’s ecommerce restrictions. Two American giants, Wal-Mart and Amazon, have been hit hard by the ecommerce restrictions on global players. Wal-Mart had recently forayed into the Indian ecommerce market by taking a $16 billion stake in Flipkart. US government has been lobbying for some relaxation for the US ecommerce giants. India had put restrictions on exclusive selling by foreign ecommerce players.
According to the US Commerce secretary, Wilbur Ross, the trade deal between the US and China was unlikely to happen in a hurry. Both countries have a deadline of March 01st to resolve the deadlock. According to Ross, the US has been insisting on structural reforms which the Chinese were unwilling to commit. Trump’s higher tariffs again kick in from March 01st onward. But the fracas has resulted in good news for India. Indian exports to China increased by 25% for the April-November period at $8.5 billion. During this period, China had raised customs duties on US imports in retaliation and this led to Indian exports becoming more attractive in the Chinese markets. Some of the key exports to China include petroleum products, chemicals, plastics, cotton yarn and marine products.
In the midst of the dollar weakness and lower crude prices, the rupee has firmed up against the US dollar by 26 paisa. The weakness in the dollar index led to the rupee appreciating to 71.07/$ at close on Thursday. Softer crude oil prices also bolstered the rupee as per a report in the Economic Times. The rupee had weakened in the last week after tepid growth numbers from China had flagged the risk of a likely Yuan devaluation. That risk appears to be a tad remote now and the dollar is under pressure. A lot will depend on how the Bloomberg Dollar Index (DXY) pans out from here on.
