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Daily Financial News Analysis – 4th Sep’19 | PDF Download

US-China deal

  • Trump warned Beijing: Deal would get  MUCH TOUGHER! in 2nd term
  • China’s deteriorating economy could not withstand a long wait for a resolution.
  • Negotiations are due to resume this month after a sharp deterioration in the year-long trade war in August.

 Oil Price

  • Oil prices fell on Tuesday
  • U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $1.16, or 2.1%.
  • Brent crude LCOc1 futures lost 40 cents, or 0.7%.
  • Reason: manufacturing data raised concerns about a weakening global economy.
  •  U.S. manufacturing activity in August  contracted for the first time in three years.
  • Earlier, separate data showed euro  zone manufacturing activity contracted for a seventh month in August.
  • Oil prices have fallen around 20% since a 2019 peak reached in April.
  • Venezuela’s oil exports fell in August  to their lowest level in 2019.
  • Russian oil production C-RU-OUT in August rose to 11.294 million barrels per day (bpd).
  • Russia is reportedly producing beyond  agreed upon quota with the Organization of Petroleum Exporting Countries (OPEC).

Steps to Control Imports

  •  Commerce and industry minister Piyush Goyal had an interactive session with the Confederation of Indian Industry (CII).
  • Government is monitoring import  trends of important goods.
  • Govt. will take corrective steps to control sudden surges that harm Indian industry, especially due to dumping.
  • Discussed strategies to promote  exports of high-technology products.
  •  Organisation for Economic Cooperation and Development: India’s  exports of hightechnology products were $14 billion in 2015.
  •  CII: Share in total exports has  stagnated at less than 5% since 2000.
  • For manufacturing to grow: a) higher exports b) import substitution c) domestic demand

Ethanol price

  • Cabinet committee on economic  affairs.
  • CCEA approved higher price for the  product derived from different raw materials under the Ethanol Blended Petrol (EBP) programme.
  •  Petroleum minister Dharmendra  Pradhan: oil marketing companies will procure 2.6 billion litres of ethanol in 2019-20.
  • Major boost to the sugar industry.
  • The move is expected to help the  sugar industry clear dues of farmers.
  •  The government for the first time  allowed use of sugar and sugar syrup for ethanol making, fixing the price at Rs 59.48 per litre.
  • Uttar Pradesh, Karnataka and  Maharashtra farmers will benefit.

MSMEs issues

  •  Nitin Gadkari has called a meeting of heads of banks, finance ministry officials, and CEOs of various of central PSUs.
  •  In addition to representatives of the micro, small and medium enterprises (MSMEs), the meeting will be attended by official from UTs and state governments, they added.
  • Reason: to sort out the problem of delayed payments being faced by small and medium enterprises.
  • MSMEs have been expressing concern over failure of the Micro and Small Enterprise Facilitation Council (MSEFC) in resolving cases of delayed payments within the stipulated 90 days.
  • Proposal of setting up of more than oneMSEFC in each state is on the agenda.
  • The provisions under the MSMED Act are implemented by MSEFC chaired by Director of Industries of the State /UT having administrative control of the MSE units.
  • State Government/UTs are expected to ensure that the MSE Facilitation Council hold meetings regularly and delayed payment cases are decided by the Councils within a period of 90 days.
  • As per the Act, a buyer from MSME is liable to pay compound interest with the monthly installments to the supplier on the amount at the three times of the bank rate notified by RBI in case he does not make payment within 45 days
  • . NPA The Indian banking system’s gross nonperforming assets (NPAs) may come down.
  •  As on March 31, 2019: Rs 9.4 lakh crore
  • By March 31, 2020: Rs 9.1 lakh crore
  •  Corporate segment account for 70% Large stressed borrowers have debt aggregating to Rs 5.4 lakh crore.
  • Power, infrastructure and steel sectors together constitute about half of Rs 4.1 lakh crore worth stressed assets.
  • RBI’s resolution framework and the IBC have paved the way for attracting investors into the stressed-assets space and helped speed up resolution, ironing out issues regarding legal aspects and resolution timelines will be critical to boost investor confidence.



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