Midnight News Update – Aug 30th 2017
In a call with key investors, Mr. Narayana Murthy, spoke at length on the recent top management crisis as well as his role in the entire saga. Murthy continued to focus on his passion for corporate governance and why, as a founding shareholder, he took it upon himself to raise the red flag on issues of disclosure and corporate governance. Murthy also expressed confidence that Nandan would be able to drive Infosys back to the glorious days of the past. The immediate agenda for Infosys is to appoint a full-time CEO and to also put the board of directors in place.
Global markets including Asia, Europe and the US were roiled by North Korea firing two missiles towards Japan. While Trump has warned that the US and South Korea on high alert and ready to respond, North Korea does not appear to be overly bothered. The worry is that any prolonged war with North Korea could automatically involve China, Russia and Japan and give it the colour of a full-fledged war. China has, for long, been one of the key allies of North Korea and that could queer the pitch if the US has to take North Korea head on. As of now, gold appears to be the big beneficiary of this uncertainty.
Arun Jaitley confirmed that the government had collected a total sum of Rs.91,283 crore as GST for the month of July representing a compliance of nearly 65%. Of course, in many cases the migration is yet to happen fully and that may be completed by the time the next returns come up for filing. Out of a total of 60 lakh eligible registrants, nearly 39 lakhs have already filed the returns for the month of July. It may be recollected that GST was launched effective July 01st subsuming a variety of indirect taxes including excise duty, sales tax, VAT, service tax, import cess, Octroi duty among others.
JSW Steel, part of the Sajjan Jindal group, is aggressively looking at acquisitions to expand its steel portfolio at a rapid pace. It is currently planning to acquire the Aferpi Steel Mill in Italy, which is part of Algeria’s Cevital group. The target for JSE Steel is to reach a capacity of 40 million tonnes and is currently opportunities both within India and abroad. In fact, the recent government decision to initiate insolvency proceedings against defaulting steel companies could be a major opportunity for steel makers like JSW to step and take over these assets. The route from here could be largely inorganic.
Reliance Infra, part of the ADAG group, is looking to unlock the value of its existing assets. It is also looking to monetize its Mumbai power business with a view to substantially reducing its debt burden over the next few years. In fact, renewable energy company, Greenko, is already rumoured to be in talks with the ADAG group for buying a stake in the Mumbai power business of Reliance Infra. In fact, Greenko was looking at an enterprise valuation of nearly $2 billion for the Mumbai power business alone. The company is also proposing an InvIT offering as well and sale of other non-core business units which do not fit into the long term plan of Reliance Infra. Like other ADAG companies, RINFRA had also taken on a massive debt burden during the heydays of the mid-2000s and that is still an overhang!
For investors who have seen the unprecedented technology bubble in the late 1990s, the recent rally in Bitcoin is fairly reminiscent of the heady days of IT. However, many experts believe that the rally in Bitcoin is infinitely larger than anything that has been seen before. Tech stocks rallied by just about 1000% during the entire stretch of the tech rally, but Bitcoin have gone up by over 2000% in a little over a year. Bitcoin being a crypto-currency has emerged as a strong alternative to gold although many countries are still quite sceptical about permitting transactions using Bitcoins.
