OPINION, P6 COMPANIES, P5 EDITORIAL PSU insurer right to walk out of ‘leaky’ Bhamashah scheme INTERNATIONAL, P14 ANWARUL HODA MESSAGE TRACEABILITY THIRD STRAIGHT TERM US wants India’s GSP benefits cut, but what about FTA gains for Korea & Mexico? Prasad-led IT ministry mulls third notice to WhatsApp Abe set to become Japan's longest-serving PM after victory NEW DELHI, FRIDAY, SEPTEMBER 21, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 174, 22 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E LOSS OF CABIN PRESSURE US SANCTIONS India opening rupee Jet passengers suffer nasal bleeding window for Iran oil Cockpit crew derostered; DGCA asked to immediately file report on the issue Gadkari says payment mechanism in 8-10 days; analysts say imports from Iran this year may be far less than projected FE BUREAU New Delhi, September 20 AS THE US sanctions on Iran are to resume on November 4, India may cut down on import of crude oil from the Persian Gulf country but would pay for whatever quantities it would still buy from it entirely in rupees.Apaymentmechanism, similar to the one which prevailedduringthelastincidence of the sanctions (till 2015), is being set up between the two IN THE NEWS Mega healthcare scheme: 27 states, UTs on board AS MANYAS 27 states and union territories are ready to join the ambitious healthcare scheme Pradhan Mantri Jan Arogya Yojana, Niti Aayog member VK Paul said, reports PTI. Over 15,000 hospitals, both public and private, across the country have expressed their willingness to be empanelled for the scheme which aims to provide 10.74-crore poor families health insurance. countries, official sources said, addingthatstate-runIndianOil Corp and Mangalore Refinery and Petrochemicals (MRPL) could make the payments through the Iran Federal Bank branch in Mumbai. Speaking at an event here, road transport and highways ministerNitinGadkarisaidthe mechanismwould be finalised between the two countries in 8-10 days. The sources said Iran, whichhasemergedasthethird $87.77 bn Top foreign suppliers to Indian OMCs (2017-18) India's oil imports in 2017-18 (million tonne) 29.66 Iraq 19.35 Saudi Arabia Kuwait 11.37 UAE Iran 81 78 75 9.95 9.80 78.73 Brent ($/bbl) 72 69 66 72.39 Aug 1, 2018 I want to assure you that in the public interest, we have taken tough decisions and this will continue. — NARENDRA MODI PRIME MINISTER Special Feature ‘We have been evolving into a relationship brand’ Manoj Adlakha of American Express on whether mobile payments could possibly impact the card business, its evolving customer base and more ■ BrandWagon, P9 QuickPicks FPIs sell close to $1-bn Indian bonds so far in Sept on weak ` APPREHENSIVE THE rupee could weaken further as crude oil prices soar, foreign portfolio investors (FPIs) have sold Indian bonds close to $1 billion in September so far, reports Tushar Goenka in Mumbai. The sales in the equity market, at close to $232.3 million between September 1 and September 18, have been far smaller. PAGE 2 Kerala seeks hike in borrowing limit, cess to fund reconstruction THE KERALA government on Thursday asked the Centre to allow it to borrow up to 4.5% of the state gross domestic product in FY19 against the norm of 3%, reports fe Bureau in New Delhi. The state also sought imposition of a cess on certain luxury items to garner additional resources for rebuilding the state ravaged by floods recently. PAGE 2 CEO: Thyssenkrupp to keep on implementing steel JV with Tata THYSSENKRUPP'S INTERIM CEO Guido Kerkhoff dismissed speculation that it would pull out of its steel joint venture with Tata Steel, reports Reuters. Last week, reports said the implementation of the landmark deal, signed in late June, was stalling over the sudden departure of Thyssenkrupp's CEO Heinrich Hiesinger, the main architect of the transaction. PAGE 4 Sept 20, 2018 largest supplier of crude to India in recent months,is open to accepting rupee payment for oil and may use the money to pay for equipment and food items it buys from India. Currently, India makes the payment to Iran in euros using European banking channels. While some reports suggestedthatthepaymentscould be routed through UCO Bank and IDBI Bank,official sources told FE a decision has not yet been taken in this regard.During the phase of last sanctions, Indian firms used to get payments forexports to Iran using the oil payments held in rupee balances at UCO Bank. India imports around 10% of its crude oil requirement from Iran. For 2018-19, India hadplannedtoimportabout25 million tonne of crude oil from Iran,upfrom22.6milliontonne imported in 2017-18. But the actualvolumescouldturnoutto be far less as companies like RelianceIndustrieshavetotally stopped buying oil from Iran and others too are scaling it down in hopes of winning a sanctionwaiverfrom the US. However, reduced purchases from Iranwould indeed haveanimpactonIndia’scrude import bill and trade deficit. Continued on Page 2 India may look to lock in oil futures to stem rupee slide, Page 8 SEPT 29 AGM IL&FS to seek reappointment of joint MD & CEO ROUHAN SHARMA Mumbai, September 20 THE BOARD OF directors of IL&FS will seek the reappointment of Arun Saha, joint MD and CEO of the group,fora further five years, till March 26, 2023, at the company’s forthcoming annual general meeting (AGM). According to the notice issued to shareholders ahead of the AGM on September 29, the board will seek shareholders’ approval for Saha’s reappointment on his existing terms and conditions. The board also says Saha is in the process of grooming the nextlineofleadershipatIL&FS as part of a succession planning programme to ensure a smooth transition. Saha is also memberofvariouscommitteeswithinIL&FS, including the Risk Management Committee which failed to conduct a single meeting lastyear,accordingtothecompany’s annual report. Further, the IL&FS board believes that in view of the “expanse of IL&FS Group...the quantum of systematic monitoring and implementation of variouspoliciesandprocedures” ON AGENDA ■ To seek nod to increase authorised share capital, raise borrowing limits ■ Board needs to present turnaround plan as well as its plans to monetise assets to raise funds ■ IL&FS defaulted on commercial paper on September 18 has become critical and will needcontinuityofleadershipto achieve the desired results. IL&FS, on September 6, said the Reserve Bank of India (RBI) had barred the company from accessing the commercial papermarket till February 28,2019. Continued on Page 2 PRESS TRUST OF INDIA Mumbai/New Delhi, September 20 AT LEAST 30 passengers on a Jet Airways flight from Mumbai to Jaipur suffered nose and earbleeding onThursdayafter the crew “forgot” to turn on a switch that controls cabin air pressure,officials said. The cockpit crew of the flight,whichhad171peopleon board, have been derostered andtheAircraftAccidentInvestigation Bureau (AAIB) has beendirectedtoprobetheincident.An AAIB official told PTI thattheincidentcouldbeacase ofnegligenceonthepartofthe pilots since controlling cabin pressurecontrolispartofcheck before operating a flight. One of the pilots of the flight, which returned to the Mumbai airport after being airborne for around 23 minutes, is a captain with more than five years of experience, sources said. Continued on Page 2 Safety audit of all airlines, airports CIVIL AVIATION MINISTER Suresh Prabhu on Thursday ordered a safety audit of all scheduledairlinesandairports, amid recent incidents related to safetyof passengers,reports PTI. Prabhu has directed officials concerned to prepare a Passengers on board the Mumbai-Jaipur Jet Airways flight wear oxygen masks after cabin pressure droppped on Thursday CHALLENGING TIMES comprehensive safety audit plan, which involves assessmentofsafetyparametersofall scheduled airlines, aerodromes,flyingtrainingschools and MROs immediately. Continued on Page 2 ● FUNDRAISING JLR woes: Fitch revises outlook on Tata Motors SBI raises $650 m via green bonds KRITIKAARORA Mumbai, September 20 FE BUREAU Mumbai, September 20 GLOBAL RATINGS AGENCY Fitch Ratings onThursdaysaid it has revised the outlook on Tata Motors to‘negative’from ‘stable’ on expectations that higher capital spending at JaguarLand Roverwill result in negative free cash flow in the current and the next financial year. The revision has come basically because the ratings agency expects that JLR’s continuing large investments will keep Tata Motors’ free cash flow negative over FY19 and FY20,compared with earlierexpectations of them turning positive by FY20. It said that free cash flow fell significantly in FY18 to negative 4.2% andwill further decrease to around negative Ebitda margin for JLR declined sharply q-o-q on account of multiple challenges in the quarter 20 15.9 15 10 (in %) Continued on Page 2 Continued on Page 2 13.9 JLR - reported ebitda margin 5 0 5.2 Jun-15 Jun-18 Source: Jefferies estimates, company data 6% in FY19. Fitch affirmed the longterm issuer default rating of Tata Motors’ at ‘BB+’. The ratingsagencysaidinastatement that it believes that a disorderlyBrexit could significantly Govt raises small savings rates by up to 40 bps THE GOVERNMENT ON Thursday raised by up to 40 basis points (bps) interest rates on various small savings schemes for the three months through December, compared with the September quarter, mirroring rising interest rates in bank deposits. The interest rate on Public Provident Fund (PPF), Kisan Vikas Patra (KVP) Scheme and theSukanyaSamriddhiAccount Scheme have been raised by 40 basispointseachfortheDecember quarter, according to a disrupt JLR’s supply chain andaffectthecompany’searnings and cash generation. Lastweek,Fitchhadrevised its outlook on JLRfrom‘stable’ to‘negative’. STATE BANK OF India (SBI) on Wednesdayraised$650million through an issuance of green bonds.Thefundswillbeusedto back clean energy-based environment-friendly projects.The move is aimed at helping companiesthathaveheldbackoverseas debt financing because of the extreme volatility in global currencymarkets. The 5-year dollar money is priced at the US treasury plus 165 basis points (bps), while from for a British investor the coupon will be 3 Libor plus 151 bps.Chairman Rajnish Kumar said,“Thebankhasembarkedon its sustainability journey with theobjectivetocreateapositive impact on the environment.” 8.9 ● OCT-DEC QUARTER FE BUREAU New Delhi, September 20 Recurring ebitda margin TO BE NOTED ■ Hike in sync with rising deposit rates in the banks ■ Rise in interest rates will also raise Centre’s interest outgo finance ministry notification. Similarly, the interest rate on one-year, two-year, and threeyear time deposits have also been hiked by 30 bps to 6.9%, 7% and 7.2%,respectively. Continued on Page 2 EPFO-CMIE FE BUREAU Jobs created or lost? Close to 1 million 'formal jobs' were created on a net basis in July 2018, as per an EPFO data. While a record for any month, the CMIE, in sharp contrast, says close to 9 million jobs have been lost in the 11 months to July 2018. Formal jobs 9,51,423 10,00,000 EPFO data 8,00,000 6,00,000 EPFO CMIE 6.18 million 4,82,442 Formal jobs 8.9 million 4,00,000 All jobs 2,00,000 0 Sept 2017 -July 2018 Sept 2017 July 2018 ON A HIGH Pot stock Tilray is now bigger than American Air, Clorox and CBS BLOOMBERG New York, September 20 TILRAY, CROWNED ON Tuesday as the most valuable pot company, is now bigger than many leaders in other industries — including household names that are more than 100 years old. The British Columbia, Canada-based cannabis company opened higher by 50.7% onWednesday,bringingitstotal market value to $21.7 billion, according to data compiled by Bloomberg. This exceeds the values of American Airlines Groupat$18.7billion,Cloroxat $19.5 billion,and CBS at $20.9 billion as of Tuesday’s close, while closing in on Hershey at $21.7billion.Itsmarketvalueis now half that of Constellation Brands,the Corona parent that recently dipped its toe into the marijuanaindustrythroughan investment in Canopy Growth — the same company Tilray dethroned this week as the largest cannabis firm. The weed stock that took Heavy hitter Tilray value exceeded many blue chip names Market value (billion) 20.886 20 15 10 Clorox Canopy Growth 5 0 American Airlines Dell Technologies CBS Tilary Jul 20 Jul 31 Source: Bloomberg 12.022 19.480 Aug 8 Aug 15 Aug 23 Aug 31 Sept 7 Sept 14 investorsonperhapsthewildest dayyet forthe nascent industry has registered huge swings in premarkettradingonThursday, falling as much as 7% before trading higher by 11% as of 8 am in New York. More than 300,000 shares traded hands. On Wednesday, the maker of cannabis products nearly doubled before wiping out the entiregaininlessthananhour, onlyto finish 40% higherthan where it started. The fluctuations drew comparisons to the Bitcoin craze and even the height of the dot-com bubble. Sure,Tesla has delivered some whipsaw sessions and AMD has tripled this year, but the moves had a different feel. “It’s almost like everyone wanted to express their fear and greed through one entity,” Michael Antonelli, an institutional equity sales trader and managingdirectoratRobertW Baird & Co, said. “It’s fun to watch. It’s the wild west right now for cannabis. It isn’t the kind of thing that institutions would touch.”
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