General Awareness

BUSINESS AND ECONOMY - February 2017

Feb 2017

Oct 25, 2020

Goldman Sachs to Pay $3bn over 1MDB Corruption Scandal

Goldman Sachs has agreed to pay nearly $3bn (£2.3bn) to end a probe of its role in the 1MDB corruption scandal.
The bank's Malaysian subsidiary also admitted in US court that it had paid more than $1bn in bribes to win work raising money for the Malaysian state-owned wealth fund.
US officials said that the record settlement reflected Goldman's "central" role in a "massive corruption scheme".
Goldman admitted it had fallen short, calling it an institutional failure.
In all, the investment bank is due to pay about $5bn in penalties - about two thirds of its 2019 profits - to regulators around the world, including in the UK, to resolve cases that have severely tarnished the firm's reputation.
Goldman's board also said that it will recoup or withhold $174m in compensation awarded to executives, including retired boss Lloyd Blankfein, under whose watch the scandal happened.
The board views the 1MDB matter as an institutional failure, inconsistent with the high expectations it has for the firm.
The 1MDB scheme was a global web of fraud and corruption, in which billions of dollars ostensibly raised for public development projects in Malaysia, instead landed in private pockets, including those of the country's former Prime Minister Najib Razak.

New Management Takes Over Intu Braehead Shopping Complex

One of Scotland's largest shopping centres, Intu Braehead, has been taken over by new management after going into administration.
The complex on the outskirts of Glasgow will now operate under the management of Global Mutual and Savills.
Intu, which also owns the Trafford Centre and the Lakeside complex, said in June that it had not reached a financial agreement with its lenders.
Intu's 17 UK centres were partially shut during the coronavirus lockdown, with only essential shops remaining open.
The company had about 60% of shopping centre staff and about 20% of head office employees on furlough.
Earlier this month, the leisure and entertainment complex next to Intu Braehead was saved from administration.
The future of Soar, formerly Xscape, was secured after a takeover by Debenture PLC from Intu.

Dubai Announces $136 Million Extra Stimulus Package

Dubai has announced a new 500 million dirhams ($136.14 million) stimulus package to support the local economy, taking Dubai's total stimulus measures this year to 6.8 billion dirhams.
"The private sector is a major partner in Dubai's development process, and we have adopted a set of new exemptions for some fees and a reduction in rents for some sectors, as well as an extension of the validity of a previous set of exemptions from fees," said Hamdan Bin Mohammed Al-Maktoum.

Karnataka HC asks Franklin MF to not Proceed with Winding up of Schemes without Investor Consent

Karnataka High Court has asked Franklin Templeton Mutual Fund to not proceed with the winding up of its debt schemes without obtaining the consent of investors. Franklin Templeton Mutual Fund shut down six of its debt mutual funds on April 23, citing the difficult conditions in the bond market due to the Covid pandemic.
Franklin Templeton Mutual Fund voluntarily decided to wind up six of its fixed-income debt schemes -- Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund. These schemes cumulatively managed assets worth Rs. 26,000 crore.
The fund house was in the process of conducting e-voting to ratify the decision when group investors managed to obtain a stay from the court.

Oct 24, 2020

FIIs Hike Stake in Reliance

Foreign investors holding in billionaire Mukesh Ambani-led Reliance Industries (RIL) has increased to a record high of 27.2% in the quarter ended September 30.
The statement showed foreign portfolio investors holding 165.8 crore shares or 25.2% of the total shareholding. In the previous quarter ended June 30, foreign investors held 163.07 crore shares or 24.72%.
Besides, qualified institutional buyers (QIBs) held another 2.05% stake at the end of September 30, 2020, taking the total to 27.2%. In an investor note, JP Morgan said that FII ownership of RIL hit new highs and stood at 27.2%, up 60 bps quarter-on-quarter.

Tech Mahindra to Acquire Tenzing Group and Momenton

IT Company Tech Mahindra will acquire complete stake in New Zealand-based Tenzing Group and Australian IT firm Momenton for a cumulative amount of around Rs. 293 crore. The company will acquire Auckland-headquartered consulting firm Tenzing Group for about Rs. 218 crore and Melbourne-based cloud and engineering services firm Momenton for about Rs. 75 crore.
The acquisition of Momenton and Tenzing is in line with the strategy to strengthen our digital capabilities, and offer our clients end-to-end transformation services.
Tenzing Group will bring in around 145 employees to Tech Mahindra and Momenton Pvt Ltd, 55 employees.
The acquisition of Tenzing Group is expected to close at the end of November, and the process for Momenton is expected to close by March 31.
Both Momenton and Tenzing Group have been operating in the Australia and New Zealand market with focus on financial services.

Flipkart Buys Stake in Aditya Birla Fashion

Walmart-owned Flipkart will buy a 7.8% stake in Aditya Birla Fashion and Retail for Rs. 1,500 crore as it taps into the offline retail player's large bank of apparel outlets to bolster its presence in the high-margin fashion business.
Billionaire Kumar Mangalam Birla's retail business will issue preference shares to Flipkart, giving it a 7.8% stake.
Aditya Birla Fashion's current owners will hold a 55.1% stake after the allotment.
While Flipkart will gain from Aditya Birla Fashion's range of international and Indian brands, the deal will help the company cut down debt, which stood at Rs. 2,776 crore as of March 31, 2020.

GST Compensation Transferred to 16 States

The Government of India transferred Rs. 6000 crores to 16 states and two union territories as the first tranche. The interest rate has been fixed at 5.19 %.
Over 21 states had opted for the borrowing scheme. And five other states did not have revenue shortfall to claim compensation. Out of these 21 States, 16 states and 2 union territories have received the compensation funds. They are Assam, Andhra Pradesh, Goa, Bihar, Haryana, Gujarat, Karnataka, Himachal Pradesh, Madhya Pradesh, Meghalaya, Maharashtra, Tamil Nadu, Odisha, Tripura, Uttarakhand, Uttar Pradesh, Delhi and Jammu and Kashmir.
The Government of India has borrowed 1.1 lakh crore rupees to meet the shortfall of GST compensation. The total shortfall has been estimated as 2.35 lakh crore rupees.
According to the ministry, this borrowing will not impact the fiscal deficit of India. This is because the borrowed amount will be reflected as capital receipt of the government.

Oct 23, 2020

Govt. Revises Base year for Consumer Price Index-IW from 2001 to 2016

The Union government revised the base year for computing Consumer Price Index (Industrial Workers) CPI-IW from the present 2001 to 2016 after a gap of 15 years.
As per the norm, base year of price index numbers should be revised at frequent intervals generally not exceeding 10 years to reflect the changes that take place in the consumption pattern of consumers.
The CPI-IW is used primarily for measuring the Dearness Allowance (DA) payable to workers in the organised sector including PSUs, banks and insurance companies, besides government employees.
It also provides inputs to government in macro policy planning.

Reserve Bank Bars Payment System Operators from Launching New QR Codes

The Reserve Bank barred Payment System Operators (PSOs) from launching any new proprietary QR code for payment transactions.
Currently, there are two interoperable QR codes—UPI QR and Bharat QR.
QR codes are two-dimensional machine-readable barcodes, which are increasingly used to facilitate mobile payments at the point-of-sale. QR codes can store a large amount of information.
The decision to continue with the two existing Quick Response (QR) codes was based on the recommendations of the committee which was set up by the Reserve Bank under the chairmanship of Deepak Phatak to review the current system of such codes in India and suggest measures for moving towards interoperable QR codes.

ONGC Wins 7 Oil Blocks, OIL 4 in Latest Bid Round

State-owned Oil and Natural Gas Corp (ONGC) has won 7 out of the 11 oil and gas exploration blocks offered for bidding in the latest licensing round. Oil India Ltd (OIL) won the remaining 4 blocks.
The government had offered 11 blocks for exploration and production of oil and gas in the fifth bid round under the Open Acreage Licensing Policy (OLAP).
A total of 12 bids — seven by ONGC and four by Oil India Ltd (OIL) — were received for the 11 blocks on offer at the close of bidding on June 30. Invenire Petrodyne Ltd was the only private bidder for one block.
While ONGC was the sole bidder for six blocks, OIL was the lone bidder in all the four blocks it bid for. ONGC won all six blocks where it was the sole bidder and also the one block where Invenire Petrodyne had bid.

SEBI Disposes off Proceedings against Bharti Telecom, Mittal

Markets regulator SEBI disposed off proceedings against four entities, including Bharti Telecom Ltd and Sunil Bharti Mittal, in a matter related to alleged violation of insider trading norms while dealing in Bharti Airtel's scrip.
The order follows a probe conducted by SEBI in respect of trading of certain entities in the scrip of Bharti Airtel to ascertain alleged violation of the Prohibition of Insider Trading norms.
During the period of investigation, Sunil Mittal was chairman of Airtel, Gopal Vittal was its director, Rohit Krishan Pal was the compliance officer and Bharti Telecom was the promoter.

Oct 22, 2020

World Economic Forum: The Future of Jobs Report, 2020

The world economic forum released the third edition of the future of jobs report 2020. According to the report, the Covid-19 and its impacts will disrupt more than 85 million jobs by 2025.
The report is based on the future of jobs. The report has been prepared by the forum based on the projections of senior business leaders from more than 300 global firms. These global leaders together employ over a million of workers.
As per the report, the automation and new division of labour between the machines and humans will be the major reason for disruption of jobs in the next five years.
According to the report, 50 percentage of the workers in the world require reskilling in order to secure their jobs in the next five years. The acceleration of technology might increase global inequality and reduce income of the workers. The most affected due to the acceleration of technology will be the young people, women and low skilled workers.
The report lists 20 market of tomorrow. These markets have the potential of transforming the economy in the future. They are antiviral, spaceflight, skills capital, water rights and quality credits, genes and DNA sequences, drugs, reskilling services, artificial intelligence, greenhouse gas allowances, satellite services, reforestation services and hydrogen.

RBI Finalises Contours for On-tap Liquidity Window

The RBI finalised the on tap long term repo lending (TLTRO) for Rs. 1 lakh crores where funds could be invested even in less than investment grade debt unlike the previous such special liquidity measures and in five sectors including agriculture, healthcare, secured retail, MSMEs (Micro, Small and Medium Enterprises), agri-infrastructure.
Banks will avail cash under this dedicated plan only to deploy through corporate bonds, commercial papers and non-convertible debentures. Such debt securities will be issued by companies from those five sectors. Liquidity availed under the scheme can also be used to extend loans to those companies.
this move may send bond yields of non-triple-A rated companies higher pulling prices down. At the same time, it is expected to raise demand for securitised loan portfolios with yields on those products dropping.
Investments made by banks under this facility will be classified as held to maturity (HTM) even in excess of 25 percent of total investment allowed to be included in the HTM portfolio.
All exposures under this facility will also be exempted from reckoning under the large exposure framework (LEF).

SAT Stays SEBI Penalty against LIC,SBI and BOB

The Securities Appellate Tribunal (SAT) has stayed a penalty the market regulator had imposed on three public-sector units for their supposed failure to comply with mutual fund regulations.
The Securities and Exchange Board of India had in August imposed a fine of Rs. 10 lakh each on Life Insurance Corp (LIC), State Bank of India (SBI), and Bank of Baroda (BoB) in a matter related to UTI Mutual Fund.
In its August order, SEBI observed that SBI, LIC and BOB were the sponsors of SBI Mutual Fund, LIC Mutual Fund and Baroda Mutual Fund, respectively, and they also hold more than 10% in these mutual funds. In addition, LIC, SBI and BoB are also sponsors of UTI MF and hold more than 10% stake individually in the asset management company (AMC) and the trustee company of UTI MF.
This ownership pattern was in conflict with a new set of MF ownership norms introduced by SEBI in March 2018. Under the new rules, a shareholder or a sponsor owning at least 10% stake in a fund house is not allowed to have 10 % or more stake in another mutual fund house operating in the country. Sebi had given time until March 2019 for the entities to comply with this new requirement.
However, currently all the three entities are in compliance with the SEBI requirements as they diluted their stakes through the initial public offering (IPO) of UTI MF. The share sale concluded on October 1, post which the stake of BOB, SBI and LIC came down to 9.99% each.

Ola to Set up New Tech Centre in Pune

Ride hailing platform Ola plans to set up a new technology centre in Pune and hire about 1,000 engineers over the next few years.
As per reports, the tech centre in Pune will be the second such centre for the company in India after Bengaluru, and will cater to global and local solutions for all businesses of Ola across the group.
The Pune facility - which will be operational by the end of this quarter - will help create jobs for 1,000 skilled technology professionals over the next three years.
In June last year, Ola had opened an Advanced Technology Centre in San Francisco Bay to accelerate its work across electric and connected vehicles.
Pune is well-known for its tech talent and IT infrastructure, making it a favoured destination for many tech-led companies like Ola.

Oct 21, 2020

Singapore-based Bond Trade Platform Set for New Year Launch in India

Singapore-based bond exchange, BondEvalue, developed by India-origin entrepreneurs, is targeting to launch a blockchain-platform in the New Year to facilitate investment in bonds by individuals and common man.
The RMO allows BondbloX Bond Exchange (BBX), the world's first blockchain-based bond exchange, to trade globally a wide range of fixed-income securities to the mass markets.
BondEvalue officially graduated from the MAS' regulatory sandbox on October 1, 2020. The move means that BondEvalue has successfully concluded proof of technology and business model.

India-ADB Sign Agreement to Develop Roadways

The Government of India and the Asian Development Bank (ADB) signed an agreement of 177 million USD to upgrade 450 km of district roads and state highways in the state of Maharashtra.
The loan agreement was signed between the Department of Economic Affairs operating under Ministry of Finance, Maharashtra State Road Improvement Project and ADB. These roads will improve the connectivity between urban and rural areas.
It will enable better access to markets in the rural areas. Also, the roads will improve mobility and livelihood opportunities outside the major urban centres reducing income disparities.
The project will also train Public Works Department staff to build their capacity in climate change adaptation and disaster resilient features.
The power supply loan is being provided under results-based lending (RBL) modality of ADB.

Sweden Bans Huawei, ZTE Gear for Use by Firms Taking Part in 5G Spectrum Auction

The Swedish Post and Telecom Authority (PTS) banned the use of products from China's Huawei and ZTE by companies taking part in a 5G spectrum auction scheduled for next month.
The PTS said that the setting of the licence conditions followed assessments made by the Swedish Armed Forces and the Swedish Security Service.
It has approved the participation of Hi3G Access, Net4Mobility, Telia Sverige and Teracom in the planned auction of 3.5 GHz and 2.3 GHz bands.

InvITs to Buy Rs. 4 Lakh crore of Infra Assets

According to a domestic ratings agency, Infrastructure Investment Trusts (InvITs) are likely to acquire infrastructure assets worth over Rs. 4 lakh crore in the next five years as the market matures. At present, there are six InvITs which have raised over Rs. 27,600 crore from investors, while a seventh entity is in advanced stage of raising Rs. 25,200 crore.
The total value of assets under these seven InvITs is estimated at Rs. 1.3 lakh crore and InvITs are likely to gain significant traction in the next few years.
An InvIT is like a mutual fund, which enables direct investment of small amounts of money from individual/institutional investors in infrastructure projects to earn a portion of the income as return.
InvITs have the potential of channelising significant long-term capital (like pension and insurance funds) into the infrastructure sector.

Government Pushes Strategic PSU Sales

The department of investment and public asset management (Dipam) is ready to push ahead with the strategic sale of several public sector companies with bids and expressions of interest (EoIs) for oil marketing company BPCL, Shipping Corporation, Concor and BEML planned next month.
These four companies can help the government realise close to Rs. 49,000 crore, based on current market value of their shares.
In the case of Air India, one of the most keenly watched disinvestment deals, a ministerial panel headed by the home minister is expected to clear the process this month, paving the way for calling expressions of interest around mid-December. But the transaction is only expected to be closed during the first quarter of the next financial year.

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