BQuick On Sept. 24: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Facebook’s Latest Buy Is Straight Out Of A Sci-Fi Book
Facebook Inc. agreed to acquire CTRL-Labs, a technology startup that is building software to let people control a digital avatar using only their thoughts.
- The world’s largest social network is paying between $500 million and $1 billion, according to people familiar with the deal.
- The closely held four-year-old startup, which has dozens of employees and has raised tens of millions in venture capital, uses a bracelet to measure neuron activity in a subject’s arm to determine movement that person is thinking about, even if they aren’t physically moving.
- That neuron activity is then translated into movement on a digital screen.
Technology like that may someday be a crucial part of products where a user might want to control a computer without the need for buttons or a keyboard.
2. The World’s Richest Are Stockpiling Cash
The world's wealthiest families are struggling to find areas where they can deploy cash. Many of them doubt that the bond market will provide any real return in the next decade and the equity market too will suffer a drop. The areas to invest in are few and the money looking to be invested is a lot.
- That view is shared by many of the 360 global single- and multi-family offices surveyed for the 2019 UBS Global Family Office Report, which was done in conjunction with Campden Research and released Monday.
- A majority expect the global economy to enter a recession by 2020, with the highest percentage of gloomy respondents in emerging markets.
- About 42 percent of family offices around the world are raising cash reserves.
- The UBS/Campden report offers an insight into the discreet world of family offices, which manage the fortunes, tax affairs and even lifestyles of the wealthy.
For the wealthiest families, this was the star asset class generating maximum returns.
3. Sensex Snaps Rally; U.S. Stocks Climb
Indian equity benchmarks halted a two-day rally, led by declines in financial companies.
- The S&P BSE Sensex and the NSE Nifty 50 ended little changed at 39,097 and 11,588.20 respectively.
- The broader markets represented by the NSE Nifty 500 Index ended 0.12 percent lower.
- Indian equity markets are expected to touch new highs before the bi-monthly monetary policy due in October. That’s according to Avendus Capital Alternate Strategies’ Andrew Holland.
- “We're not near the highs yet, but we will quickly get there,” Holland told BloombergQuint in an interaction.
- Seven of 11 sectoral gauges compiled by NSE ended lower.
Follow the day’s trading action here.
U.S. stocks rose as investors welcomed confirmation of high-level trade talks next month, though Treasuries also rose amid concern global growth is slowing. The pound climbed after a court ruling key to Brexit.
- The S&P 500 Index increased 0.5 percent as of 9:58 a.m. New York time.
- The Nasdaq 100 rose 0.7 percent.
- The Stoxx Europe 600 Index increased 0.2 percent.
- The Bloomberg Dollar Spot Index dipped 0.1 percent.
- The British pound jumped 0.4 percent to $1.2479.
Get your fix of global markets update here.
4. Indian Government Won’t Borrow More Than Budgeted Even After Tax Cuts
India’s government will maintain its borrowing plan for the remainder of this fiscal year, an official told reporters in New Delhi.
- Prime Minister Narendra Modi’s administration will likely sell about Rs 2.68 lakh crore ($37.8 billion) of bonds in the six months beginning Oct. 1, as part of its record Rs 7.1 lakh crore full-year plan.
- India had a target to borrow Rs 4.42 lakh crore in the fiscal first-half started April.
- A decision on the nation’s maiden foreign-currency sovereign bond sale, announced first in July, has not been made, the official said, asking not to be identified citing rules.
This is positive news for bonds which have declined as the corporate tax cut stoked fiscal slippage worries.
Here’s why the $20 billion tax-cut boost may keep borrowing costs high.
5. PMC Bank Customers Stare At Cash Crunch, Courtesy RBI’s Curbs
The Reserve Bank of India has capped withdrawals by customers of Punjab & Maharashtra Cooperative Bank for six months and placed the lender under certain restrictions, invoking powers under India’s Banking Regulation Act, 1949.
- The customers of PMC Bank will not be allowed to withdraw more than Rs 1,000 from their savings, current or any other deposit account, during the period of restriction, according to RBI’s notification on its website.
- PMC Bank is an urban cooperative bank regulated by the central bank. As such, deposits up to Rs 1 lakh per person held in the bank are insured by the Deposit Insurance and Credit Guarantee Corporation.
- The banking regulator also imposed restrictions on further lending by PMC Bank.
The bank said that it is making all efforts to remove the restrictions within six months.
6. 8.65% Interest Rate On EPFO Deposits Notified
The Ministry of Labour and Employment has finally notified 8.65 percent interest rate on employees provident fund deposits for 2018-19, which will now be credited to the accounts of more than 6 crore subscribers of retirement fund body EPFO, Union minister Santosh Gangwar said.
The EPFO has been settling EPF withdrawal claims at 8.55 percent interest rate, approved for 2017-18. Now, the EPFO will settle accounts at a higher rate of 8.65 percent for 2018-19.
"This rate of interest rate was approved by the EPFO's apex decision making body Central Board of Trustees in February. We received concurrence of the Finance Ministry on Sept. 19, 2019. Thereafter, labour ministry issued a notification for providing 8.65 percent rate of interest for 2018-19," the minister said.
7. Amtek Auto Insolvency Process Goes Back To The Beginning
The Supreme Court on Tuesday ordered fresh bids for insolvent Amtek Auto Ltd., saving the auto components maker from liquidation after no resolution was found within the 270-day deadline as the successful bidder backed out.
The apex court bench, headed by Justice Arun Mishra and comprising Justice Vineet Saran and Justice Ravindra S Bhat, ordered the Committee of Creditors of Amtek Auto to publish advertisements inviting fresh bids. The lenders informed the court that as many as nine parties were interested.
Amtek Auto was admitted to insolvency in 2017 among the first 12 cases that Reserve Bank of India directed banks to resolve under the Insolvency and Bankruptcy Code, 2016. U.K.’s Liberty House Group had emerged as the top bidder but the Sanjeev Gupta-led firm backed out last minute and refused to furnish the bank guarantee for the acquisition. As per the timeline laid out under the IBC the company should have been sent to liquidation by now.
Here’s how much time the apex court has given the CoC to complete the process.
8. Why Ringer Duration Matters To Telecom Operators
Reliance Jio Infocomm Ltd.’s lower ringer duration sparked a debate if it’s trying to nudge users into making more calls to its network even as TRAI floated a consultation paper on the issue.
- In the consultation paper, TRAI said that a lower ring time when calls are made from one network to other could result in higher missed calls as there might be a good chance that these calls could have been answered if network would have waited.
- This might result into conversion of outgoing calls to incoming calls which in turn would create revenue and in reduction of asymmetric traffic artificially, it said.
- Mukesh Ambani’s telecom unit disconnects incoming and outgoing calls in 19 seconds. That’s at least 40 percent lower than the time allowed by rivals.
- A Bharti Airtel Ltd. spokesperson said the company has set ringer time at 45 seconds for normal voice calls and at 40 seconds for VoLTE (voice over long-term evolution) calls.
- Reliance Jio and Vodafone Idea Ltd. have yet to officially react and didn’t respond to emailed queries.
Here's how Reliance Jio benefits more than Airtel or Vodafone-Idea if a call disconnects sooner on its network.
9. Ayushman Bharat: A Step Closer To Universal Health Coverage
Ayushman Bharat was launched on April 4, 2018, to challenge the status quo in the healthcare delivery system, where for most Indian citizens quality healthcare has remained a luxury good. On Sept. 23, the Pradhan Mantri Jan Arogya Yojana completed a year of operation.
- States that are leaders and laggards
- Are many trying to game the system?
- What to do next to scale up further
ORF’s Oommen Kurian does a data dive to find the answers.
10. A ‘Forest’, A Congested City And A Trust Deficit
2,185 trees await the axe. To build a metro rail car shed in Mumbai, an area equivalent of 40 football fields will be denuded. The patch is part of a larger expanse whose survival could be tied to how the court rules on one question: is a swathe of green sheltered by 480,000 trees a forest?
- Aarey land was originally a forest that was acquired and given to the Diary Development Department in 1949, according to the government’s affidavit in the court and tribals living in the area.
- Now, it has handed 30 acres back for the car shed. The Forest Department has filed an affidavit in the court saying it’s not a forest.
- In revenue records, though, Aarey is still notified as ‘rakhiv 1’—a reserved forest.
- Vanashakti, an NGO that works for environment, filed a petition seeking to declare Aarey a forest and the Bombay High Court has reserved the judgment.
- Environmentalists and protesters allege the insistence on Aarey is a ruse for opening the green area for property development.
- And they connect the dots between the change of land use two years ago, a plan to resettle slumdwellers in the area, and a condition in granting funding for line 3.
So can the controversial metro car shed be shifted? Read about the urban project that has left Mumbai cleaved.