Telecom Minister, Ravi Shankar Prasad, denies plans to waive telecom dues post SC Judgement. R S Prasad denied any plans to waive dues although the cabinet approved a 2-year moratorium for telcos. As per the SC order on AGR charges, telecom companies owe the government Rs.92,000 crore towards AGR charges and Rs.55,000 crore towards spectrum usage charges taking the total dues to Rs.1.47 trillion. Bharti and Vodafone have written off the full AGR dues in Q2. That was the result, both these telecom companies had reported record losses in the second quarter and were looking for relief.
SEBI is finally out with its regulations on disclosure of default by listed companies in India. As per the regulation, listed companies will be mandated to disclose default details within 31 days from January 01st 2020. In the light of the recent spate of defaults and sudden downgrades, SEBI in its board meeting made it mandatory for listed companies to disclose default within 31 days of missing the payment to a financial institution. Earlier, the regulator had mandated that such defaults must be disclosed within 24 hours but they had to retract after corporates pointed out that it was not practical.
China has stepped on the monetary loosening accelerator. The People’s Bank of China, PBOC, cuts repo rates for the second time in a week. Even as the Chinese economy has been bearing the brunt of the prolonged trade war with the US, the central bank has cut rates for the second time this week. The idea was to give credit support and to lower lending rates to boost the economy. Growth in China is already at a 30-year low and the world also needs China to grow faster. Of course, China also risks inflation from rising pork prices and that has led to economists warning about stagflation in China.
For the fourth time in the current year, the Nifty managed to scale the 12,000 mark. The rally in the markets was led by TCS last week and by Reliance this week. Telecom stocks rallied on hopes of relief for the telcos. However, global markets were not too impressed after relations between the US and China soured over Hong Kong. The US senate passed a legislation condemning Chinese action in Hong Kong and called to protect human rights in HK. China hinted that this could imperil the proposed trade deal and has asked the US to stay from Hong Kong, which was an internal problem of China.
In a swift move, the RBI superseded the board of Dewan Housing and appointed the former MD of IOB as the administrator. Effective, November 15th, all NBFCs with assets above Rs.500 crore come under the direct control of RBI and can be liquidated under the NCLT regulations. This will allow a more organized liquidation of assets and repayment of creditors as per the waterfall. Meanwhile, SEBI chairman confirmed that the mutual funds that had debt exposure to the DHFL group would also join the banks in the resolution process. MFs had kept away from previous attempts at resolution but their exposure to DHFL group is too large to ignore. This will entail drawing a line of distinction between the Inter-Creditor Agreement (ICA) and the IBC process to avoid confusion and delineate accountability.
Crude oil spurted by 300 bps to $62.74/bbl after US inventories turn favorable. After 2 days of losing close to $3/bbl, Brent Crude recovered most of its losses on Wednesday. US inventory data was a lot more conducive for oil prices to go up even as China and the US hinted at being closer to a trade deal. The crude prices also got a boost after Russia agreed to cooperate with the OPEC in a bigger way towards supporting price by enhancing supply cuts if required. Earlier, Russia had refused to participate in further supply cuts beyond the existing 1.20 million bpd that they have committed to.
