Manipal Hospitals, which had made a bid for Fortis Hospitals, decided to sweeten its bid after the market reacted negatively to the bid. Manipal has now raised its offer to buy Fortis Hospitals by 21% to make the bid more friendly for the shareholders. The revised bid values Fortis Hospitals at Rs.116/share which gives it an overall market cap of $933 million. The deal will create the largest healthcare brand in India. While the stock has been quite volatile in the recent past, this news should help the stock find a reasonable bottom in the next few days. This is still subject to shareholder approval.
Stocks markets across the world rallied on Tuesday after the trade tiff showed signs of tapering down. While the US and China are still holding on to their horses, the conciliatory remarks coming from Xi Jinping of China raised hopes that China may not go all out in its retaliation. US markets are already positive because the tax cuts are likely to positive impact corporate results in the US in the first quarter of the year. With Trump also adopting a more friendly tone, the markets are building in the possibility that the trade war may not really exacerbate too much to damage world trade.
With the Saudi Government finances in a tight situation, the Kingdom has expressed its interest to see oil price at around $80/bbl, which should be acceptable to both the buyers and the sellers. Currently, Brent Crude is trading around $70/bbl. Riyadh is also keen on pushing prices up as that will ensure good valuations and the smooth sailing of its proposed Saudi Aramco IPO. OPEC has succeeded in cutting crude inventories in developed countries to their 5-year average but Saudi oil minister continues to be hawkish on oil prices. Trillions of dollars of oil investments are held up due to low prices.
Anil Agarwal of Vedanta expects the price of aluminium to spurt by nearly 50% after the US imposed sanctions on Russian aluminium maker, Rusal. Rusal is the world’s largest aluminium producer outside of China. Agarwal expects that the price could move up $2000/metric ton to nearly $3000/metric ton due to these fresh sanctions which could drastically cut supply. Rusal already accounts for 13% of global aluminium production outside of China. Vedanta wants to expand its aluminium capacity from 2 million tons to 3 million tons. For now, the aluminium stocks may be headed higher.
SEBI has put in place a detailed framework for beneficial owners of foreign portfolio investors (FPIs). The framework will help SEBI to verify the ultimate beneficial ownership of FPIs operating out of India. To begin with, SEBI has already asked Category II and Category III FPIs to provide a complete list of all their Beneficial Owners (BO). All FPIs are required to provide this list within a period of 6 months. The first major shift in FPI regulation took place in 2014 when the FPIs were classified into 3 categories with different levels of compliance requirement for each of them. NRIs and OCBs can only be the BO for Category II FPIs. Resident Indians cannot be the BO for any FPI structure. The idea of this stringency is to ensure that the FPI route is not used for round tripping of funds of dubious nature.
Shortly after Indigo walked out of the Air India bid, Jet Airways has also expressed its inability in participating in the Air India divestment. Like in case of Indigo, Jet Airways has also walked out as it was unhappy with the terms of the divestment. The big hassle for the buyers is that debt to the tune of Rs.34,000 crore will come into the books of the buyer. In the current market conditions with oil prices at above $70/bbl, most aviation companies do not have the appetite to take on so much debt. Apart from the debt, the government holding of 24% and mandatory IPO are also major dampeners.
