QBiz: US May Go Ahead with China Tariff Hike; GM Job Cuts Draw Ire

1. Trump Signals US Likely to Go Ahead with China Tariff Hike

US President Donald Trump said he’ll likely push forward with plans to increase tariffs on $200 billion of Chinese goods, indicating he would also slap duties on all remaining imports from the Asian nation if negotiations with China’s leader Xi Jinping fail to produce a trade deal.

Trump, in an interview with the Wall Street Journal published Monday, 26 November, said he’s prepared to impose tariffs on a final batch of $267 billion of Chinese imports if he can’t make a deal with Xi when they meet at the Group of 20 (G20) meeting in Argentina, which starts 30 November.

(Source: LiveMint)

2. Jet Airways Will Not Exit Jet Privilege Completely

Cash-strapped Jet Airways (India) Ltd has no plan to totally exit Jet Privilege Pvt Ltd, its frequent flyer programme, even if it receives a lucrative proposal, said a person with the direct knowledge of the matter. The airline is seeking to sell only a portion of its 49.9% stake in Jet Privilege, and will keep a significant stake after any deal, said the person, requesting anonymity.

“Jet Airways will not completely exit Jet Privilege even if it finds a buyer who’s willing to pay a good valuation,” said the person said. “At present, a large part of Jet Privilege’s revenue comes from redemption of Jet Privilege miles on Jet Airways flights or those on its network. Therefore, the airline will want to stay connected to its loyal customer base through Jet Privilege.”

(Source: LiveMint)

3. GM Job Cuts Draw Angry Reaction in Heartland That Backed Trump

General Motors Co’s (GM’s) plan to cancel production at US factories and cut thousands of jobs drew a swift rebuke in the industrial heartland where US President Donald Trump posted surprising electoral wins premised on his pledge to restore manufacturing. Members of both parties criticised the move announced Monday, citing the government aid the company has received in recent years, from the 2009 federal bailout of the auto industry to the $1.5 trillion tax cut that became law last December.

“The company reaped a massive tax break from last year’s GOP tax bill and failed to invest that money in American jobs,” Democratic Senator Sherrod Brown tweeted, calling GM’s move “corporate greed at its worst.”

(Source: LiveMint)

4. Sun Pharma to Acquire Japan’s Pola Pharma for $1 Million

Sun Pharmaceutical Industries Ltd has bought Japanese drugmaker Pola Pharma Inc for $1 million as part of plans to strengthen its global presence in dermatology, the Dilip Shanghvi-promoted pharma major said on Monday.

Part of Pola Orbis group, Pola Pharma is engaged in the research and development, manufacture, sale and distribution of branded and generic products, primarily in dermatology. It has two plants in Saitama, Japan, which can manufacture topical products and injectables, and has annual revenues of approximately $108 million.

(Source: LiveMint)

5. Yes Bank’s Kapoor Family Repays Rs 400 Crore To Two Mutual Funds

Entities linked to one of the promoters of Yes Bank Ltd have paid Rs 400 crore to two mutual funds from whom they had raised funds by pledging shares.

The entities are understood to be linked to the close family members of Rana Kapoor, the chief executive and one of the promoters of the bank. While Rana Kapoor and his family own 9.8 percent, Madhu Kapur, his sister-in-law and the widow of the deceased Ashok Kapur and her family, own around 9 percent in the fifth largest private sector lender.

The Kapoor family paid Rs 200 crore each to Reliance Mutual Fund and Franklin Templeton Mutual Fund, sources said Monday, adding this was a prepayment of the due amount. With this payment, the overall outstanding of the promoter group’s borrowing has come down to Rs 1,400 crore, they added.

(Source: PTI)

6. ICRA Downgrades Shapoorji Pallonji Ratings

ICRA has downgraded long-term ratings assigned to diversified firm Shapoorji Pallonji’s Rs 18,500-crore fund-based and non-fund based bank facilities citing muted sales and weak performance of the group’s real estate business.

The agency has downgraded the rating to AA from AA+ and has reaffirmed the short-term rating at A1+. It has also reaffirmed the short-term rating of A1+ on the Rs 2,500 crore commercial paper programme, it said in a statement issued Monday.

“The rating has been downgraded on account of muted sales and continued cost pressure, which has led to weak performance of the group’s real estate portfolio and slower-than-anticipated progress on asset monetisation,” ICRA said.

(Source: BloombergQuint)

7. RCom Tells Top Court Asset Sale to Jio at Risk From India Demand

Billionaire Anil Ambani’s Reliance Communications Ltd has told India’s top court that its asset sale to Reliance Jio Infocomm Ltd may not go through if approvals aren’t in place by mid-December, putting at risk planned debt repayments by the distressed company.

India’s government has moved the Supreme Court against allowing the sale unless it is given 29.4 billion rupees ($417 million) in bank guarantees from either company toward spectrum usage charges. The two-judge bench headed by Justice A.K. Sikri will next hear the case on 27 November.

Ambani agreed last year to sell RCom’s towers, spectrum and fiber assets to older brother Mukesh Ambani’s Reliance Jio for 173 billion rupees to fend off bankruptcy action by creditors.

(Source: BloombergQuint)

8. Gujarat will buy crisis-hit IL&FS stake in GIFT City, says CM Vijay Rupani

Gujarat will buy out the 50 per cent stake of beleaguered Infrastructure Leasing & Financial Services (IL&FS) in Gujarat International Finance Tec-City, or GIFT City, to ensure there are no delays to the project, said Chief Minister Vijay Rupani on Monday, 26 November.

“We have taken an in-principle decision to buy out the IL&FS stake in GIFT City as we think this project has a very good future. Already, some of the world’s biggest banks and India’s top financial institutions have opened their offices there. We are encouraging every finance company to set up base there,” he said.

The value of the IL&FS stake is being currently determined. The project was originally promoted by Gujarat Urban Development Company, a state government entity, and IL&FS. Both had equal stakes.

(Source: Business Standard)

9. Morgan Stanley, Credit Suisse Slowly Turn Positive on Indian Equities

Global brokerages – Credit Suisse and Morgan Stanley – are slowly turning positive on Indian equities despite the uncertainty regarding the state and General election outcome over the next few months.

Besides Japan, Brazil, Thailand and Indonesia, analysts at Morgan Stanley have reiterated their overweight stance on India for 2019 and prefer utilities, IT services/software and capital goods sectors in the Indian context.

“Alongside a managed slowdown in China, our economists are particularly upbeat on India and Indonesia, which will benefit from easier external conditions and macro-financial policies positioned for sustainable growth. India looks to be seeing a nascent recovery in capex spending,” the Morgan Stanley report co-authored by Jonathan Garner, their chief Asia & emerging markets equity strategist said.

(Source: Business Standard)

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