General Awareness

BUSINESS AND ECONOMY - June 2020

Jun 2020

Oct 28, 2020

India Extends Anti-dumping Duty on imports of Fluoroelastomers from China

According to a Central Board of Indirect Taxes and Customs (CBIC) notification, India has extended anti-dumping duty on imports of Fluoroelastomers from China by a month.
The decision has been taken after the Directorate General of Trade Remedies (DGTR) requested for further extension of the anti-dumping duty on the goods originating in or exported from China. The DGTR initiated a review in February, 2020 on whether the goods being imported were hurting domestic industry.
India had first imposed the duty in January 2019, which was extended in July this year till October 27.
In international trade parlance, dumping happens when a country or a firm exports an item at a price lower than the price of that product in its domestic market.

Implement Compound Interest Waiver

The RBI asked all lending institutions, including non-banking financial companies, to ensure that the scheme of waiver of interest on interest for loans up to Rs. 2 crore for the six-month moratorium period is implemented by November 5, as decided by the government.
Earlier the government had announced the scheme for grant of ex gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts.
Housing loans, education loans, credit card dues, auto loans, MSME loans, consumer durable loans and consumption loans are covered under the scheme.
The scheme mandates ex gratia payment to certain categories of borrowers by way of crediting the difference between simple interest and compound interest for the period between March 1, 2020 and August 31, 2020 by respective lending institutions.

NSDL Increases Airtel's Foreign Ownership Limits

National Securities Depository (NSDL) increased Bharti Airtel's foreign ownership limits (FOL) to 100% from 49%. With the increase in FOL limits, Bharti's weight in MSCI India index is likely to double from the current 1.92%.
The current Foreign Inclusion Factor (FIF) is 0.23 which will increase to 0.43 now. Assuming that the MSCI benchmarked index makes around $35 billion, it would imply buying of 64.9 million shares worth over Rs. 3,000 crore.
MSCI in August had reduced Bharti Airtel weight from 3.68% to 1.92% citing no clarity on the effective date of change in its foreign investment limit, a move which has led to massive sell-off in Bharti shares. As per analysts estimates, foreign investors have cut exposure to the stock by nearly Rs. 3,800 crore in September.

Kerala Becomes the First State to Fix Floor Price for Vegetables

Kerala became the first state to fix the floor price for vegetables, which would be 20 per cent above the production cost. The scheme would come into effect from November 1, 2020.
This is the first time that floor price is being fixed for 16 varieties of vegetables produced in Kerala.
Even if the market price went below this, the produce would be procured at the floor price from farmers.
The vegetables would be graded as per the quality and the floor price fixed accordingly.
Kerala Chief Minister said that 16 varieties of vegetables would be covered in the first phase and there was a provision to revise the floor price on a regular basis.

Hero MotoCorp, Harley-Davidson Join Hands

The country's largest two-wheeler maker Hero MotoCorp and US bike maker Harley-Davidson have joined hands for the Indian market.
As per the distribution agreement, Hero MotoCorp will sell and service Harley-Davidson motorcycles, and sell parts and accessories and general merchandise riding gear and apparel through a network of brand-exclusive Harley-Davidson dealers and Hero's existing dealership network in India.
According to a licensing agreement, Hero MotoCorp will develop and sell a range of premium motorcycles under the Harley-Davidson brand name.

Oct 27, 2020

BJP Announces Eight Candidates from UP, One from Uttarakhand

The BJP announced its eight candidates for the Rajya Sabha polls from Uttar Pradesh and one from Uttarakhand. Earlier this month the Election Commission had announced elections to 10 Rajya Sabha seats in Uttar Pradesh and one in Uttarakhand, falling vacant on November 25.
With the BJP having 304 members in the Uttar Pradesh assembly, the November 9 election for the ten Rajya Sabha seats from the state may turn out to be a nearly one-sided affair for the party, feel poll analyst.
The BJP's all eight nominees for Rajya Sabha from Uttar Pradesh are likely to win as the party has the three-fourth majority in the state assembly.

Jack Ma's Ant Seeks to raise $35 Billion

Jack Ma's Ant Group Co. is set to raise almost $35 billion through initial public offerings in Shanghai and Hong Kong, a blockbuster listing that will rank as the world's biggest share sale ever.
The fintech priced its Shanghai stock at 68.8 yuan ($10.27) apiece and its Hong Kong shares at HK $80 ($10.32) each. Ant will be valued at about $280 billion before the IPO, and will raise about $34.5 billion from Shanghai and Hong Kong before exercising its green shoe option, based on filings.
The company's much-anticipated IPO is on track to surpass Saudi Aramco's $29 billion sale last year.
The company may raise another $5.17 billion if it exercises it Hong Kong and Shanghai green shoe options. That would give Ant a valuation of about $320 billion, making it bigger than JPMorgan Chase & Co. and four times larger than Goldman Sachs Group Inc.

Paytm Money Launches ETFs, Targets 1 lakh Investors

Fintech major Paytm said that its wholly-owned subsidiary Paytm Money launched Exchange-Traded Funds (ETFs) on its platform after approval from the Securities and Exchange Board of India (SEBI).
An exchange-traded fund (ETF) is a collection of securities people can buy or sell through a brokerage firm on a stock exchange.
ETFs are investment avenues that everyone should add to their portfolio to earn index or market-linked returns at a lesser cost. The company is offering a user-friendly interface along with necessary factors that the user may need to make an informed decision and invest in ETFs of their choice conveniently.
The company is targeting 1 lakh users to invest in ETFs in the next 12-18 months through the platform.

TRIFED Launches New Forest Organic Products

The Tribal Cooperative Marketing Development Federation of India (TRIFED) launched 100 new forest fresh organic products. These products are to be available to 125 tribes in India.
These products include
Gold and green Apples from Kinnaur, Himachal Pradesh
Baskets and boxes from Uttarakhand. They were made from Munj grass
Cloves, seeded tamarind, coffee powder and eucalyptus oil from Nilgri tribes
Masks made by Meena tribes of Rajasthan
Immunity boosters such as kadha and churan made by the Bhul and Gond tribes of Madhya Pradesh
Range of pulses, jamun powder and giloy powder made from Gujarat and Maharashtra
Pickles, red rice, bel juices, from the North-East.
Of these products, some are processed and packaged by the Van Dhan tribal startups. It acts as source of employment for tribal gatherers, home bound artisans and forest dwellers.
The TRIFED has also launched the E-Market platform called the Tribes India E-Mart Channel. It is an omni-channel for the tribal to sell their goods to the international and national audience.

SEBI Bans Birla Pacific Medspa, Yashovardhan Birla, 8 others for 2 Years

SEBI has barred Birla Pacific Medspa Ltd, Yashovardhan Birla and eight others from the securities market for two years for misutilisation of the IPO proceeds. Birla Pacific Medspa Ltd (BPML), which came out with offer documents in March 2011, had floated its over Rs. 65-core initial public offering (IPO) in June 2011.
The regulator found that the company made misstatements in the prospectus in respect of the objects of the IPO.
While around 75 per cent of the IPO proceeds were promised to be utilised in setting up of Evolve Medspa centres under the 'objects of the issue' in the prospectus, no such centres ultimately have been set up.
Accordingly, SEBI has barred the company, Yashovardhan Birla and eight other individuals from accessing the securities market and further prohibited them from buying, selling or otherwise dealing in securities for two years, while one individual has been prohibited from the capital markets for six months.
These individuals were the signatories to the prospectus of Birla Pacific Medspa.

Airtel Rolls Out Cloud-based Communications Platform for Business

Telecom operator Bharti Airtel entered the rapidly-growing cloud communications market with the launch of business-centric 'Airtel IQ'.
A cloud-based omni-channel communications platform, Airtel IQ, aimed to enable brands to deepen engagement with customers through timely and secure communication, terming the move as a "game changer" for the fast-evolving Indian enterprise communication segment.
The Indian cloud communications market, estimated at $1 billion, is seen growing nearly 20 per cent annually.
Airtel IQ aims to eliminate the need for multiple communication platforms for different channels, and already companies, including Swiggy, Justdial, Urban Company, Havells, Dr. Lal Path Labs and Rapido, have signed up as customers for Airtel IQ in the beta phase.
The platform, now commercially available, runs on a pay-as-you-go model meaning that the costs for enterprises would depend on the consumption levels.

Oct 26, 2020

India and Philippines Commence Negotiations on Investment Treaty

India and the Philippines have commenced negotiations on a new bilateral investment treaty even as there has been a recent upswing in economic engagement that both sides are keen to accelerate.
The first round of talks on a new treaty took place in a virtual meeting between the Department of Economic Affairs and the Philippines department of trade and industry.
Both sides had exchanged their respective drafts a few years ago after India had decided to work on a new model Bilateral Investment Treaty text.
Indian companies have made significant investments in the Philippines. These include Wipro Enterprises completing a $200 million acquisition of Philippines personal care brand Splash in 2019 and GMR completing two major airport projects in Cebu and Clark.

Britain and Japan Sign Post-Brexit Trade Deal

Britain and Japan have formally signed a trade agreement, marking the UK's first big post-Brexit deal.
The deal means nearly all its exports to Japan will be tariff free while removing British tariffs on Japanese cars by 2026.
UK International Trade Secretary Liz Truss called it a ground-breaking, British-shaped deal.
But critics have said that it will boost UK GDP by only 0.07%, a fraction of the trade that could be lost with the EU.
The two countries had reached a broad agreement in September, and the deal is expected to boost trade between the UK and Japan by about £15bn.
The deal, which was negotiated over the summer, will take effect from 1 January 2021.
But some experts said it was a missed opportunity between the UK and its 11th biggest trading partner.

Future-Reliance Retail Deal Put on Hold

Amazon.com has won an interim order against partner Future Group selling its retail business to Reliance Industries (RIL) for Rs. 24,713. The order, passed in a Singapore-based arbitration panel, effectively puts a pause to the Future-RIL deal.
Amazon had taken the case to the panel alleging violation of contract by the Kishore Biyani-owned group. As per the deal, Future Retail signed off stake to Reliance Retail Ventures (RRVL) in August 2020.
RRVL has entered into the transaction for acquisition of assets and business of Future Retail under proper legal advice and the rights and obligations are fully enforceable under Indian Law.
RRVL intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay.

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.

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