WeWork sells control of China unit; says unit got $200 million in funding
US office-sharing firm WeWork on Thursday said it will sell control of its China division to one of its investors – private equity firm Trustbridge Partners – as it steps back from a competitive market where it has suffered low-occupancy rates. The deal effectively offloads the China unit away from the parent, which has faced fundraising issues since a failed attempt to go public in 2019. WeWork said it will maintain a minority stake and ”participating interest.” Concurrent with the deal, the division has received USD 200 million (157.3 million pounds) in funding from existing investors. Michael Jiang of Trustbridge Partners will serve as WeWork China’s acting chief executive officer. More here
Fed policymakers vow to keep interest rates near zero, call for more fiscal help
Federal Reserve officials on Wednesday doubled down on efforts to convince investors they will keep monetary policy easy for years to allow unemployment to fall, emphasizing that interest rates will stay near zero until inflation gets to 2 percent and stays there. The Fed’s governing board made that vow last week at its regularly scheduled policy meeting, promising to leave rates at their current near-zero levels until the economy reaches full employment, inflation has risen to 2 percent, and is on track to moderately exceed that level. Both Fed Vice Chair Richard Clarida and Chicago Fed President Charles Evans were adamant on Wednesday: Rates will not increase until labor markets recover fully from the economic downturn caused by the coronavirus, and prices hit the Fed’s target.
Market Watch: Gurmeet Chadha, Co-Founder & CEO of Complete Circle Consultants
On Bharti Airtel
“I have been constructive on Bharti and obviously more than 20 percent correction has taken everybody slightly off-guard. The initial triggers were the MSCI weightage and possibility of now Vodafone surviving for a little longer, but I still maintain that eventually it will be a duopoly after some time. So, my sense is it offers good price opportunity, a gradual accumulation should help.”
On Page Industries
“One has to have a slightly staggered approach. So, there are a few pockets where you can buy, where you are getting good value for the money. For example, in low ticket discretionary, something like a Bata or Page Industries which have corrected, look good. Page Industries, if you see in men innerwear, it is a USD 5 billion market; Page’s share is still in single digit — the women innerwear is about USD 3.5 billion and men innerwear is about USD 1.5 billion. This deep discounting, post COVID the ability of US Polo and other to burn cash has got dented. The MBO discounts almost touch 50 percent which I think would not be the case. They have also got into now lifestyle things with tie up with Speedo, the sports swimwear category, terry towels. So, there are new categories they are expanding into and they have taken good care of the intermediaries in this crisis. So, these are some of the ideas you can look at.”
Opening Bell: Sensex down nearly 500 points, Nifty breaches 11,000; all sectors in the red
Indian indices opened 1 percent lower on Thursday following steep losses in Asian peers amid weak global cues. Asian shares fell following a slump on Wall Street overnight, as a series of warnings from US Federal Reserve officials underscored investor worries over the resilience of the economic recovery. At 9:18 am, the Sensex was trading 491 points lower at 37,177 while the Nifty fell 135 points at 10,996. All sectors witnesses major selling weighing on the benchmarks led by the metal index, down 1.8 percent. Nifty Bank, Nifty Auto, and Nifty Fin Servcies also fell over 1 pecrent each. No stock on the Nifty50 index was positive at opening while Zee, Tata Motors, IndusInd Bank, Hindalco, and Bharti Airtel led the losses. Broaser markets also traded with cuts with the Nifty Midcap index down 1.3 percent and Nifty Smallcap index down 2 percent.
This asset class has made the most gains this year and it’s not gold!
Cryptocurrency is considered the best asset class for revenue generation as opposed to traditional investments. The Bloomberg Galaxy Crypto Index of digital coins is up 66 percent in 2020, beating gold’s rally of 20 percent. In fact, gold and bitcoin rose about 25 percent and 45 percent, respectively in 2020 versus the unchanged S&P 500 Index. Moreover, Ethereum contributed the most gains this year as it accounts for more than a third of crypto gauge’s weight, indicated Bloomberg data. In the past few months, gold made a new all-time high of $2,072, up 42.6 percent in the last decade, but bitcoin gained about 8.9 million percent during the same time, said Buffalo Chase, a crypto-asset trading firm. It explained the reason behind the bitcoin’s surge and said, “Security and scarcity are the topmost reasons why traders have trust in safe-haven assets like gold and bitcoin. Bitcoin would outperform gold in a foreseeable future because it’s easily accessible for anyone with internet and of course a more profitable asset than gold.” More here
Market Update | Some global cues from overnight & this morning
CAMS IPO issue subscribed 47 times on day 3:
The Rs 2,244-crore IPO of Computer Age Management Services (CAMS) has been subscribed 46.98 times on the last day of bidding process. It received bids for 60.27 crore equity shares as against the reduced IPO size of over 1.28 crore equity shares, the data available on exchanges showed.
Asian shares tumble as global recovery hopes falter
Asian shares fell on Thursday following a slump on Wall Street overnight, as a series of warnings from US Federal Reserve officials underscored investor worries over the resilience of the economic recovery. US Federal Reserve Vice Chair Richard Clarida said on Wednesday that the US economy remains in a ”deep hole” of joblessness and weak demand, and called for more fiscal stimulus, noting that policymakers ”are not even going to begin thinking” about raising interest rates until inflation hits 2 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan tumbled 1.35 percent in the morning session on broad losses across the region. Chinese blue-chips dropped 1.09 percent, Hong Kong’s Hang Seng fell 1.72 percent, Seoul’s KOSPI sank 1.73 percent and Australian shares were 1.18 percent lower. Japan’s Nikkei fell 0.74 percent. Read more.
Nifty Rejig: The Nifty will see a reshuffle come September 25 with Bharti Infratel and Zee Entertainment exiting the Nifty and Divis Laboratories and SBI Life entering the index.
SBI Life will be the second life insurance company to enter Nifty after HDFC Life. The inclusion of Divis Laboratories will increase Nifty’s pharma weightage to 4.1 percent. There will be no media stocks in the index post Zee’s exit. Read more here
Welcome to market live blog!
This is the market;s desk and we will be giving you all the updates on the stock market front. To begin with, the markets ended ended Wednesday’s volatile session lower, their fifth consecutive day of losses, dragged by selling in banks, pharma and media stocks amid mixed global cues. The Sensex ended 65.66 points or 0.17 percent lower at 37,668.42 while the Nifty lost 21.80 points or 0.20 percent to settle at 11,131.85. Broader indices ended mixed with Nifty Smallcap100 closing flat while Nifty Midcap100 falling 0.33 percent. Among sectors, Nifty Media fell the most over 2 percent followed by Nifty Pharma and Nifty PSU Bank declining over 1 percent each. Nifty Private Bank, Nifty Realty and Nifty Financial Services ended in the green. Nifty Bank gained more than 350 points to close in the green.