Over the weekend I posted on China edges closer to IMF’s SDR inclusion, what does it mean for the yuan?
More now according to “three people briefed on the IMF discussions, who asked not to be named because of the sensitivity of the issue”:
IMF staff are set to give the all-clear for China’s yuan to be included in the SDR basket
Approval lays the groundwork for a favourable decision by policy makers
The IMF’s executive board is scheduled to decide in mid- to late-November
“Everything is on course technically and there is no obvious political obstacle. The report leans clearly towards including the RMB in the (basket) but leaves the decision for the board” one of the officials said
“There is no real discussion, no obstacles, all seems on course,” a second official said
Reuters have more–
This will not only have implications for the yuan (see the link in the first line, above), but also for China’s bond market (more attractive).
The former chief executive of Microsoft and prominent Silicon Valley personality Steve Ballmer has bet on Twitter, building a 4pc stake in the social media company.
A tweet posted on Friday claimed that Mr Ballmer had purchased 4pc of Twitter shares in recent months, praising Twitter for its “good job” appointing Mr Dorsey as CEO and creating a “leaner, more focused” company.
The man who ran Microsoft from 2004 to 2014 later confirmed in an email to Bloomberg that he had indeed created a sizable position in Twitter, and that his messages on the social network had not been the result of foul play.
Aurobindo has corporate governance issues such as inferior financial reporting, less than ideal disclosures and taxation issues relating to promoters. Moreover, the company also faces structural issues around absence of ‘moated’ revenue/profit streams and long-term growth drivers. Also, it faces potential revenue/margin erosion as incumbents return and regain market share post FY18 through competitive pricing in complex injectables, controlled substances and cephalosporin.
Low cash flow generation and high loans and advances as a percentage of net worth Corporate governance Opaque tie-ups with relatively unknown companies Capital allocation Vertical integration and improvement in product mix is a positive; gross block turnover in line with peers.
Lack of investment in innovation and no moats around its business; revenues exposed to return of competition Source: Company, Ambit Capital research. Note: = rating of 4/4; = rating of 3/ 4 and so on. Accounting quality – Poor cash flow generation Aurobindo has poor cash flow generation (CFO/EBITDA of 56% vs peer average of 85%) led by an extended working capital cycle (93 days vs peer average of 65 days).
Its accounting practices have raised issues before, leading to undisclosed income of `300mn during raids by income tax authorities in 2012 (click here). Capital allocation – Improvement in product mix and vertical integration Aurobindo moved up the value chain from an API manufacturer to a formulation manufacturer. Its acquisition track record is yet to be established; though the Actavis acquisition looks promising, we would wait before giving too much credit as pharma companies have struggled with profitability in Western Europe. Corporate governance – Distribution agreement impairs upsides Mr. Nithyanand Reddy (Chairman, ex-MD) appears to be a connected person.
China on Wednesday said it was banning major shareholders, executives and directors of listed companies from selling any of their stakes for six months – the latest in long line of measures the country has introduced in recent days to stop a brutal market sell-off that has wiped more than $3 trillion off its main exchanges.
In a statement, the China Securities Regulatory Commission said investors who own stakes exceeding 5 per cent must maintain their positions.
The ban is aimed at safeguarding the market from what the regulator had earlier described as panic and irrational selling.
It comes after another bout of sharp selling in Chinese shares on Wednesday, with the Shanghai Composite closing down 5.9 per cent, the Shenzhen index losing 2.5 per cent and Hong Kong’s Hang Seng index tumbling 5.8 per cent to erase all its gains over the previous 12 months.
In a further effort to halt the rout, Beijing has already suspended initial public offerings, used state funds to buy shares directly, cut trading fees in a bid to improve market liquidity and instructed government-owned companies not to sell shares.
Here is a rough translation of the statement (via Google Translate):
Maruti Suzuki India on Saturday decided to seek the approval of minority shareholders for its Gujarat plant, which it has decided would be built and owned by its parent firm Suzuki Motor (SMC). As reported earlier by FE, the company does not need any such approval, as the relevant provisions of the Companies Act, 2013, have not yet been notified, but Maruti said it would do so “as a measure of good corporate governance”.
However, it remains to be seen whether the amended proposal finds favour with the fund houses, who were the first to raise objections. “We will convince all the domestic institutional investors to vote against the proposal so that it gets defeated, ” a fund manager from a public sector fund told FE.
A senior fund manager of a large fund conceded the changes made to the proposal were welcome. However, the fund manager said opposition to the plant being housed in Suzuki Motor Corporation’s wholly-owned subsidiary rather than in Read More
The Reserve Bank of India today notified that Foreign Institutional Investors (FIIs), through primary market and stock exchanges, can now purchase up to 52.50 per cent of the paid up capital of M/s IDFC Limited under the Portfolio Investment Scheme (PIS). M/s IDFC Limited has passed resolutions at the board of directors’ level and a special resolution by the shareholders, agreeing for decreasing the limit from 54 per cent to 52.50 per cent for the purchase of its equity shares and convertible debentures by Foreign Institutional Investors (FIIs). The Reserve Bank has notified this under FEMA 1999, regarding raising of aggregate ceiling for investments by FIIs in Indian companies under Portfolio Investment Scheme (PIS).
Further the Reserve Bank advise that the foreign share holding by FIIs in M/s IDFC Limited has crossed the overall limit of its paid-up capital. Therefore, please note that no further purchases of shares of this company would be allowed through stock exchanges in India on behalf of FIIs.
At the moment Google is preparing an especially uncertain and distant shot. It is planning to launch Calico, a new company that will focus on health and aging in particular. The independent firm will be run by Arthur Levinson, former CEO of biotech pioneer Genentech, who will also be an investor. Levinson, who began his career as a scientist and has a Ph.D. in biochemistry, plans to remain in his current roles as the chairman of the board of directors for both Genentech and Apple, a position he took over after its co-founder Steve Jobs died in 2011. In other words, the company behind YouTube and Google+ is gearing up to seriously attempt to extend human lifespan.
Microsoft’s CEO Steve Ballmer announced his retirement today, saying he would step down within 12 months, once a successor is found.
“There is never a perfect time for this type of transition, but now is the right time,” Ballmer said in a company-issued statement.
“We have embarked on a new strategy with a new organization and we have an amazing Senior Leadership Team. My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company. We need a CEO who will be here longer term for this new direction.”
Microsoft shares rose 9.02% pre-open in the minutes after the announcement.
Microsoft’s board of directors has built a committee to choose Ballmer’s successor, made up of several high-ranking Microsoft executives, including Bill Gates. Read More