The US has promised punitive sanctions on Venezuela which could have a big impact on crude oil prices While Trump has been aiming to drive Venezuelan Marudo out of power, the Venezuelan oil sanctions could have larger repercussions. Both China and Russia have protested against this case of blatant interference by the US. Venezuela exports nearly $11 billion worth of oil to the US and sanctions could hurt Venezuela badly. Apart from being exports of crude being the key to Venezuela, the US is the biggest trade partner for Venezuela. Brent went up more than 1.2% during the day.
After the 35-day shutdown of the US government, there could be another round but Moody’s warns that it could spell extra pain for the US economy. The US economy had managed to survive through the previous 35-day shutdown which began in late December. However, according to Moody’s, another shutdown within 3 weeks could actually worsen the situation for the Fed workers and also for the Fed contractors. Trump has only agreed to fund the US government till Feb 15th by when an agreement on the wall was necessary. This may influence the Fed meet and the US-China trade talks.
Ecommerce giant, Flipkart, has warned of major customer disruption if new ecommerce rules were implemented by the Indian government. Flipkart, which is now part of the Wal-Mart group, has cautioned that the government decision to protect the local players at the cost of global ecommerce players could hurt the ecommerce business in a big way. Flipkart has called for delaying the implementation by 6 months. The government had barred global ecommerce players from exclusive selling and owning equity stakes in vendors. US government has also been lobbying against this move.
Ahmadabad bench of NCLT has ruled against Essar promoters’ Rs.54,000 crore bid for its own assets as non-sustainable. Ruias had made an Rs.54,389 crore bid to retain control of Essar Steel, which was substantially better than the Rs.42,000 crore winning bid made by Arcelor Mittal. NCLT Ahmadabad Bench has struck down the petition by promoters allowing them to bid for their own assets. NCLT ruled that Essar promotes had not followed due process and hence were not eligible. This was expected after the court ruling overturning the plea of the promoter to be allowed to bid.
According to an estimate put out by India Ratings, the total cost of the Universal Basic Income scheme proposed by the Congress could be closer to Rs.150,000 crore per year. This is nearly 0.7% of the GDP as per a report in Business Standard and could be instrumental in taking the fiscal deficit sharply higher. Experts have considered this a better measure than debt waivers. Just 2 days back, Rahul Gandhi in his speech had promised Minimum Income Guarantee (MIG) to poor Indians. It is now expected that the Modi government may respond with an actual announcement of Universal Basic Income in the Interim Budget to be announced on February. The UBI was first put forth in the 2016 Union Budget and entails assuring minimum family income on the lines of what was first implemented in Finland.
Indian companies expected to hike hiring budgets by 34% in the year 2019. The report by Mercer has projected a sharp growth in hiring in this year both on the volumes and value front. The survey had been done across nearly 900 hiring decision makers at a senior level of the hierarchy. A sharp rise in hiring is normally a lead indicator of a turnaround in production and demand. As per the note, the hunt for quality talent was getting tougher in India. Normally, a sharp rise in hiring volumes is seen ahead of a major expansion proposed or ahead of a major turnaround in economic fortunes.
