SEBI may be planning a wide ranging re-haul of algo trading norms. This includes mandating the stock exchanges to provide the co-location services for free to avoid a repeat of the kind of cases that we saw at the NSE. Additionally, the board meeting of SEBI this month also plans to discuss regulations for fiduciaries in the stock market and a new framework for compliance in case of listed entities under the insolvency resolution code. The bone of contention in the NSE case was that it had provided favoured access to a handful of brokers and the investigation of the same is still under progress.
In the midst of all its generic woes, Sun Pharma may have just got a specialty boost from the US FDA. The FDA approved Sun Pharma’s high margin Ilyumya used to treat the skin disease, Psoriasis. Sun Pharma had in-licensed the drug from Merck in September 2014 and Sun will pay the milestones and royalties to Merck who will continue to manufacture the same. Ilumya has the capacity to generate revenues to the tune of $200 million for Sun Pharma annually. Sun Pharma had paid Merck $80 million for the two clinical trials and had spent an additional $250 million in developing the drug.
The early trends are that Jerome Power of the US Federal Reserve may choose to adopt a hawkish tone in his after meet statement. That would effectively imply that the Fed may consider 4 rate hikes instead of 3 in the current year, while a 25 basis rate hike in March is already factored in. The Fed is also likely to build in the inflationary impact of the $1.5 trillion tax cuts and the $300 million in spending. The Fed is also expected to shift the long range interest target higher from 2.8% to 3%. A hawkish Fed trajectory will be negative for the colour of fund flows into emerging markets due to the reduced spread.
Dalmia Cement has termed the Ultratech backdoor agreement to buy out the entire stake of Binani Cement for Rs.7266 crore as illegal and against the spirit of the NCLT. Dalmia Cement has already filed an affidavit to that effect with the NCLT. While Dalmia Cement had emerged as the highest bidder in the auction at Rs.6350 crore, Ultratech had later offered Rs.7266 crore to the Binani promoters outside the NCLT purview and had also agreed to give a Letter of Comfort to that effect. In fact, post the offer from Ultratech had applied to the NCLT to be recused from the NCLT process.
With the controversy over the misuse of Facebook data by Cambridge Analyttica becoming an international issue, the Facebook founder Mark Zuckerberg is expected to make a statement. There is already a global campaign against Facebook for compromising data of millions of customers. Cambridge Analyttica is alleged to have illegally used the data obtained from Facebook for their private business use. Facebook shares have been crashing in value over the last few days and it has also led other data heavy stocks like Uber and Apple also down. It is alleged that Facebook had allowed the confidential data of individuals to be used for political purposes. It is now likely that some of these social media CEOs will be summoned for Congressional hearings. The impact has already been felt in India too!
The lenders of Essar Steel have rejected the resolution plans proposed by Arcelor Mittal and Numetal considering them ineligible to participate in the process. However, both Arcelor Mittal and Numetal will be eligible to resubmit their bids after rectifying the points that made them ineligible to bid under the IBC. The other 4 companies that have submitted bids include Nippon Steel, Tata Steel, Vedanta and SAIL. Numetal is ineligible as Ravi Ruia’s son is a minority shareholder in the company. Arcelor has a 29% stake in Uttam Galva where the loans have already been declared as a non-performing asset.
