The problem of saturation appears to be catching up with Reliance Jio too as it faced weaker subscriber addition for the month of October 2019. According to a report in the Business Standard, the monthly subscriber additions of Jio fell below 7 million for the first time in more than a year. Also, its monthly additions in October at 6.98 million were the lowest since November 2017. In the meanwhile, Reliance Jio has also decided to join Vodafone Idea and Bharti Airtel in hiking tariffs from the first week of December. There appears to be a unanimity that telcos will find it hard to thrive at these ARPUs.
The global ETFs appear to be exiting India consistently as India focused funds saw outflows for the sixth consecutive quarter. For the quarter ended September 2019, India focused offshore funds and ETFs saw net outflows of $1.4 billion. This marked the sixth consecutive quarter of withdrawal of funds. These offshore funds and ETFs broadly represent the passive flows into Indian indices and this is largely attributed to rich valuations, macro growth concerns and an overall caution with respect to emerging markets. However, FIIs continue to be net buyers in the Indian markets.
Public sector banks reported Rs.95,700 crore of frauds in first half of 2020; as per the data put out by the RBI. The finance minister has admitted to bank frauds to the tune of Rs.95,700 crore between April and September 2019. A total of 5,743 cases of frauds were reported. The PSBs with the largest volumes of frauds reported to the RBI were SBI, PNB, Bank of Baroda, Allahabad Bank and Bank of India. In many cases, ED probe has already been initiated. Even among the private banks, ICICI Bank saw a large number of frauds committed during the first half, calling for much tighter compliance.
Crude oil prices cracked sharply by 245 bps to $60.91/bbl as oversupply played spoilsport with the oil markets overall. The oil prices fell sharply on Tuesday after there where the twin fears of the prospects of the trade deal delay between the US and China as well as the fears of oversupply. Oil stockpiles are already at an all time high putting further pressure on the oil prices. On the other hand, the unwillingness of Russia to participate in any additional supply cuts with OPEC also put pressure on oil prices. Oil markets have been long betting on a revival in demand post the trade deal.
Indian markets showed a smart jump in the last hour of trade largely led by telecom sector, including RIL. The US markets, however, came under tremendous pressure on Tuesday after the weak outlook painted by the retail stocks on the back of weakening consumption demand. The dollar also strengthened during the day and that also put pressure on the equity markets. Meanwhile, the in the midst of the slowdown, Chinese central bank governor promises steps to revive the economy. Chinese central bank hinted on Tuesday that it would provide credit support to the economy and push real interest rates lower. The growth numbers have been quite weak for Chinese industrial production in the last few months. China has also promised to capitalize its banks to comfortable levels.
In a rather bizarre kind of move, the Kashmir traders’ body plans to sue the Indian government for shutdown related losses. The Kashmir trade body (KCCI) has decided to sue the government as directly responsible for losses caused by the closure of business since the abrogation of Section 370. According to the trade body, the losses due to the shutdown exceed $1 billion with no immediate respite seen. Kashmir has been under a virtual shutdown for over 100 days now, disrupting normal life and business in the erstwhile state with a near shutdown for all types of economic activity.
