Wall Street slipped on Tuesday as the December 15th deadline for the next round of tariff imposition by the US on Chinese goods approaches. With no trade deal indications in place, is unclear how Donald Trump will proceed on this matter. The last round of tariff hike in October was put off as China and the US appeared to be inching towards a trade deal. As of now the deal is stuck on issues like winding down of previous tariffs and the Huawei issue. China has been insisting that the US must unwind all tariffs imposed post March 2018 before a trade deal. Trump needs the deal ahead of 2020 elections.
In a surprising revelation, the RBI auditors have disclosed that SBI had under-reported its net NPAs for the fiscal year 2018-19 by nearly Rs.11,932 crore. It may be recollected that SBI had reported net profits of Rs.862 crore. If the additional NPAs were factored in and the provisions for the same were taken into account, then the revised net profit of SBI for the fiscal year 2018-19 would stand at a net loss of Rs.(6,968) crore. However, the impact of this divergence may not be much overall as SBI had subsequently made up through upgrade and recovery as well as higher provisioning.
DOT has given clear deadlines to the telecom companies. It has to collect total dues of Rs.147,000 crore from all the telcos put together, of which nearly 80% has to come from four companies’ viz. Bharti Airtel, Vodafone Idea, Tata Tele and RCOM. DOT has asked the telecom companies to seek all clarifications not available in the Supreme Court order, by the 13th of December. The Supreme Court had passed the order on 24th October and telecom companies have a 3-month deadline till 24th January to pay the dues. Telcos have been asking for more time, waiver of interest and the penalty component.
The Public Sector Officers Association (PSOA) has pointed out that the current sale price of BPCL will entail a notional loss of Rs.4,50,000 crore for the government. The government plans to sell a 53% stake in the company at a price of Rs.74,000 crore but the asset value of this stake would be closer to Rs.5,20,000 crore entailing a clear loss of Rs.4.50 lakh crore to the government and to public money. The PSOA has pointed out that the loss is despite 30% controlling premium to the market price that BPCL buyers will be paying for the stake to the government. This could become a thorny issue for the sale.
Mutual funds may get some relaxation on group exposure norms from SEBI. It may be recollected that in October 2019, SEBI had directed mutual funds to wind up any exposure that debt funds had to their sponsor groups beyond 10%. However, SEBI has now relaxed these norms and allowed debt funds to continue with their exposure till the respective maturity of these debt papers. From that point, this new rule will begin to apply. In other words, the exposure to the sponsor group debt beyond 10% will be allowed to be grandfathered till their maturity dates; but not beyond that. This should come as a relief to most of the funds as liquidity was an issue in most cases. The restriction was put after some of the groups like Reliance MF and DHFL Pramerica MF had a high exposure to group debt.
The UK Pound slipped in late trades on Tuesday after the latest pre-poll surveys indicated that the gap between the Tories and the Labour party may be narrowing. The UK Pound had celebrated in the past after Boris Johnson had established a clear lead in early polls but the latest poll had shown that the lead had narrowed. The pound had strengthened as Johnson has already indicated that he would work towards complete BREXIT by January 31st and had assured that the deadline would not be breached. The BREXIT issue has been pending for over 3 years and the uncertainty has also hit the economy.
