The big question in the global technology market is whether Bytedance, the owner of the Tik Tok brand will allow Microsoft to take over its US business. Satya Nadella has hinted at a payment in excess of $40 billion for the US business of Tik Tok. That would be top dollar since Bytedance has an overall market cap of $140 billion and Tik Tok is only one of the products of Bytedance. Tik Tok has 100 million customers in the US but the US contributes less than 2% of the total revenues of Bytedance. However, China has protested that it cannot be forced to sell out its business to a US company under duress.
You can now not only buy products but also mutual funds on the Amazon platform. Many mutual funds are tying up with Amazon to offer savings products to customers. Of course, these will be UPI transactions and hence transactions have been limited to Rs.90,000 for accepting UPI payments on Amazon. The only area of dispute is that Amazon will be offering gift cards with each investment and the question has been raised whether such a practice of client enticement can be permitted. With Paytm also foraying into MF distribution, the Amazon platform could offer a new dimension to mutual fund selling.
With Reliance stock in a relentless bull market, its heft in the market has been growing. RIL now accounts for 14% weight in the Nifty and it constitutes 9% of the stock exchange market cap as a whole. After the Jio stake monetization and the zero-debt plans, RIL has seen its market cap inch closer to $200 billion. The stock has remained strong despite a spate of downgrades by the likes of Edelweiss and CLSA. The RIL stock hardly moved between 2009 and 2016 but showed tremendous traction after the launch of Jio. Today it is Jio Platforms and Reliance Retail that is driving growth in the group.
India’s July gold imports dipped by 24% on a YOY basis as gold buyers became extremely wary of buying gold at such elevated price levels. Indian gold market has traditionally been a price sensitive market and the demand has suddenly contracted in these conditions. The recent report released by the World Gold Council has also pointed out that gold jewellery demand has been at a 20 year low in the first half of 2020. The gold import demand in Jul-20 was just 30 tonnes compared to 39.66 tonnes in Jul-19. Lower gold imports are positive for the RBI as it conserves precious foreign exchange from unproductive gold.
The government has averred that for the fiscal year 2021, agriculture was most likely to cushion the impact of a slowdown in the industrial and the services sector. Sowing for Kharif has already been 14% above last year in this season and it promises a bumper year for agricultural output. The government has also assured attractive MSP for all agricultural products and that is likely to also contribute to the farm incomes and rural demand for goods and services. Most farm activity was kept out of the COVID lockdown and as a result the impact on rural India was limited compared to urban India. Even the monsoons are expected to be 104% of the long period average (LPA), which will classify as a year of normal monsoon. This is in sync with the PM’s goal of doubling farm incomes by 2022.
India’s third largest private bank, Axis Bank, launched its Rs.10,000 crore QIP placement on 04 August. The floor price of the issue has been set at Rs.442.19 per share and Bain Capital was likely to get preferential allotment in the issue. This is nearly 4% higher than the closing price of Axis Bank on Tuesday, which was probably factoring in the dilution due to the QIP placement. Axis Bank net profits had fallen 19% on a YOY basis due to the lag effect of the pandemic and the forced lockdowns and social distancing norms imposed. This will boost the bank’s Tier-1 capital ahead of moratorium withdrawal.