dfa-6-nov

Daily Financial News Analysis – 6th Nov’20 – Free PDF Download

WhatsApp Payment Service

  • WhatsApp has received approval in India to go live with a payment feature on its messaging platform using the Unified Payments Interface.
  • WhatsApp faced many regulatory hurdles and courtroom battles
  • WhatsApp has about 400 million users in India.
  • NPCI: WhatsApp Pay would now go live in a “graded manner” from its current registered user base of 1 million who were using the service in a beta mode.
  • NPCI’s nod for WhatsApp Pay limits the number of users who can use the feature on the platform to 20 million in the first phase
  • Market participants expect the UPI volume in India to further increase, aided by the entry of WhatsApp Pay
  • PhonePe has nearly 40% market share – 835 million transactions in October
  • Google Pay is a close second with about 820 million transactions.
  • NPCI: Both these applications backed by US-based giants in the past months had exceeded the 30% transaction share.
  • These companies have been given time till 2023 to bring down their market share.
  • Industry executives said the entry of WhatsApp Pay would bring down the transaction volumes of both PhonePe and Google.

PM on Invest in India

  • Virtual Global Investor Roundtable
  • PM said if “investors wanted returns with reliability” India is the place to be, and the country offers 4Ds.
  • “A strong and vibrant India can contribute to stabilisation of the world economic order and we would do whatever it takes to make India the engine of global growth resurgence.”
  • “It is a strategy that aims to use our strength in technology to become a global centre for innovations; a strategy that aims to contribute to global development using our immense human resources and talents,” he said.
  • He said investors are moving towards companies that have “a high environmental, social and governance (ESG) score” and emphasised that the country has systems and companies which rank high on this.

Japan to fund companies to set up plant in India

  • Japan will provide financial assistance to two companies Toyota-Tsusho and Sumida for setting up a manufacturing base in India
  • Toyota-Tsusho is a trading arm of the Toyota group and it is looking at investment in rare earths.
  • Sumida makes parts for auto, consumer electronics and industrial sectors.

Basmati Exports to Iran

  • Iran is the largest importer of Indian basmati rice and absorbs about one-third of this variety.
  • Basmati rice exports to Iran are likely to resume
  • Iran has lifted its ban on imports from India and indicated that it will make payments of over ₹1,700 crore to Indian exporters which have been due since last year
  • India and Iran have been trading through a rupee account in UCO and IDBI Bank, but since May 2019, there was no inflow of funds in the accounts as there was no import of crude oil by India.
  • Exporters said they are in talks with buyers in Iran and were expecting exports to pick up.
  • Prices of export quality basmati rice are already 15% less than the previous year at ₹46 a kg, which may rise once exports to Iran begins.

Agri Cushion Not Enough

  • The positive story of the rural sector has softened the pandemic-induced blow to the economy so far.
  • But the ongoing fiscal year is unlikely to move the needle any further.
  • While improvements in rural demand will increase the sector’s share in quarterly figures of gross domestic product, those are insufficient to further cushion the impact of the pandemic and take the economy to ‘near zero’ growth this fiscal year.

Saudi PIF – Rel Retail Deal

  • Saudi Arabia’s sovereign Public Investment Fund (PIF) is investing ₹9,555 crore ($1.3 billion) to pick up 2.04% stake in Reliance Retail Ventures (RRVL)
  • Reliance Industries (RIL) announced – latest highprofile global fund to purchase stake in India’s largest retailer.
  • Saudi fund is making the largest investment by any fund so far in RRVL, eclipsing Silver Lake’s September investment of ₹7,500 crore when the US fund set the tone by acquiring a 1.75% stake in Reliance Retail.
  • RIL is planning to raise about ₹60,000-63,000 crore by selling a 15% stake in Reliance Retail.
  • Jio Platforms the RIL-owned telecom services provider attracted $20 billion FDI by selling 33% stake in the company to ten global funds and four US tech giants of Google, Facebook, Intel and Qualcomm.
  • Now the same set of funds are also buying into RIL’s retail arm that operates 12,000 brick-and-mortar stores and has grand plans for its “new commerce” omni-channel play involving its physical outlets, newly-launched JioMart ecommerce platform and its plans to enlist millions of mom-and-pop stores.
  • On top of that, RIL is adding to its retail heft as it has agreed to acquire the country’s second largest retailer Future Group that will bring in ₹26,000 crore in additional sales to create a ₹1.89 lakh crore ($26 billion) retail empire spanning about 14,000 brick-and-mortar stores and the combine entity will be 7 times bigger in terms of revenues than its nearest Mumbai-based rival Avenue Supermarts, that runs D’Mart store chain.

 

 

 

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