The ICICI Bank Board named Sandeep Bakshi as the interim CEO of the bank. Ms. Chanda Kochhar will continue to be on leave till the probe is completed. With the demands for Chanda’s resignation heating, the board appointed an independent inquiry commission under Justice Srikrishna to probe into the conflict of interest angle, as alleged by the whistleblower. These are trying times for the bank with its credibility having taken a major knock in the last few months. In the process, HDFC Bank has taken over the mantle of largest private sector bank by a huge margin.
When Xaomi of China plans its $10 billion IPO one of the market sit will have to thank for the revival is India. Xaomi, through its MI and Redmi brands, has become the largest selling brand of mobile phones in India, overtaking Samsung by a margin. Xaomi saw its share in India move up from 3% in 2014 to 30.3% in 2018 making it the largest brand in India, well above Samsung’s market share of 25% of the Indian market. Today, India is Xaomi’s largest mobile phone market outside of China. Interestingly, Xaomi’s India operations are already profitable as of March 2017 as per filings with the ROC.
India Ratings has cautioned that nearly Rs.4 trillion worth of loans may find it hard to be refinanced if liquidity conditions in the market do not improve. One of the key reasons for this worry is the elevated bond yields in the market. The 10-year benchmark rates have already crossed the psychological 8% mark although it did settle below that level. Borrowers are already facing higher borrowing costs to the tune of nearly 100 basis points and it could be much higher in case of mid cap companies. Most borrowers will have insufficient cash flows and hence will have to look at refinancing, adding to the worry.
Ahead of its all important meeting in Vienna, the OPEC is almost reconciled to increasing its output. While the US has asked the OPEC and Russia to reduce its output cuts from 1.8 million bpd to 0.8 million bpd, the OPEC may only agree to a milder increase in oil supply. While the OPEC may not accept an increase of 1 million barrels, the final figure may settle at around 3 lakh to 5 lakh barrels per day. Supply is already being disrupted by problems in Venezuela, Libya and Nigeria. Additionally, the latest US sanctions on Iran will only make matters worse for the OPEC and the oil market.
SEBI is finally planning a major makeover of its takeover regulations. This will include changes pertaining to the revision of offer price. SEBI has a crucial board meeting coming up on June 21st when this proposal is likely to be discussed in threadbare detail. Some of the changes are likely to include changes in the definition of frequently trade shares and the option to keep the cash component of the escrow account in an interest bearing account. Another proposed change is the facility to despatch a letter of offer through the electronic mode (typically via email). The regulator had put up the paper for public consultations and has now managed to take a final considered view on the subject. A much clearer picture of the new takeover regulations will emerge in the June 21st Board meet of SEBI.
Trump appears to be dead serious on his proposal to impose duties on $50 billion worth of Chinese imports. In fact, the first round of additional duties on goods worth $34 billion will take effect from July 06th itself. China has already made it clear that it proposes to retaliate to neutralize the impact. In fact, some of the pork farmers in the US are already worried as China is the largest buyer of pork from the US. China has chosen its tariffs strategically as to hit the constituencies that actually voted for Trump. The US runs a trade deficit of $375 billion with China, which is the genesis of this debate.
