Even as the Indian equity and other financial markets were shut, the global markets had a tough time on Thursday. US markets took a sharp hit in early trades on Thursday after the treasury yields on 10-year bonds moved higher again. The markets were also worried about the trade war between the US and China worsening, leading to a slowdown in growth. The S&P index was down nearly 3% in early trades and with strong dollar, treasury yields and gold prices, the markets could face more pressure. Asian markets could also feel the pressure on Friday of the impact of an escalating trade war.
In a surprising move, Jet Airways may end up in the lap of the Tatas. It is expected that Tata Sons may be looking to buy a stake in Jet Airways. It is well known that Jet Airways has been in financial trouble for quite some time and has even been delaying salaries to its staff. Etihad Airways currently has a 24% stake in Jet Airways. For Tata Sons, it could give them a big leap in the skies as it gels with its existing franchises in the form of Vistaara and Air Asia, which are already running. This will also enable Tata Airlines to get overseas licenses. It may end up being a synergistic bet for Jet.
RIL oil GRMs dipped in Q2 but petchem and telecom save the day for the company. Growth in profit was in line but revenues were below street expectations. The gross refining margins (GRM) in the refining business fell to $9.50/bbl, a sharp fall from the levels of $12/bbl just five quarters back. However, the petchem business saw solid traction during the September quarter. Reliance Jio now has 25 million subscribers although ARPUs have come down marginally to Rs.131. RIL also completed the Rs.5260 crore buying of majority stake in DEN Networks and Hathaway to expand its digital footprint.
After LIC funds, it may be small savings that may be funding PSU companies. Beleaguered Air India receives Rs.1,000 crore from National Small Savings Fund. In a move that could be quite debatable, the government has bailed out Air India with an Rs.1000 crore infusions from the NSSF. Air India will be using these funds to meet its working capital needs. While this is a loan guaranteed by the government, most economists have often complained that these kinds of off-balance sheet financing distort the real picture of India’s fiscal deficit. This could pose some serious questions by rating agencies.
The say surely belonged to the two regulators. On the one hand, RBI put its foot down and refused extension of term for Rana Kapoor as Yes Bank CEO. In fact, Yes Bank board had written to RBI requesting for an extension for the current CEO considering the business compulsions. RBI has rejected that request. The new CEO will have to be in place from Feb 2019 and Yes Bank has already hired Korn Ferry to look out for their next CEO candidate. In another order, SEBI directed the Singh Brothers to pay Rs.403 crore to Fortis Healthcare. The Singh brothers are alleged to have siphoned out Rs.403 crore from Fortis Healthcare. The 10 entities named in the order cannot dispose any assets in the meantime. Funds from Fortis were siphoned out as ICDs without showing as related party transactions.
There could be more trouble for Indian techies in the US. Trump administration plans major changes to H1-B visa rules. The Trump government will now look to redefine the H1-B visa as a pure specialty occupation category. Even the permission to H4 visa holders to enjoy gainful employment in the US is likely to be scrapped. Indian IT companies like Infosys, Wipro and TCS extensively rely on this window and that may cause some serious short term worries about meeting client delivery demands. This is likely to create some short term hassles for most IT driven families in the US.
