zoom Monaco-based tanker owner Scorpio Tankers revealed it has entered into definitive agreements to merge with Marshall Islands-incorporated petroleum products shipping company Navig8 Product Tankers and acquire Navig8’s 27 operating vessels.Under the agreements, Scorpio will acquire four LR1 tankers prior to the closing of the merger. The remaining 23 ships will be acquired upon the closing of the merger in exchange for the issuance of 55 million shares of Scorpio common stock to the Navig8 shareholders.The fleet of 27 eco-design product tankers is comprised of 15 LR2s and 12 LR1s with a weighted average age of 0.9 years and a total carrying capacity of approximately 2.6 million dwt.In connection with the LR1 vessel acquisitions, Scorpio said it will pay cash consideration of USD 42.2 million, which is net of assumed debt. This cash is expected to remain with Navig8 through closing and will form part of the balance sheet of the combined company, subject to the terms and conditions of the merger agreement.What is more, Scorpio has launched an underwritten public offering of up to USD 200 million of its shares of common stock. Scorpio also intends to grant the underwriters a 30-day option to purchase up to USD 30 million additional shares of its common stock. Scorpio Services Holding Limited, a related party of Scorpio, is interested in purchasing at least USD 20 million of Scorpio’s common stock in the offering, according to the company.As disclosed, the net proceeds of the offering are expected to be used to provide cash to further strengthen Scorpio’s balance sheet and enhance liquidity, for the payment of costs related to the merger, to fund the purchase price of the LR1 vessel acquisitions, and the remainder, if any, for general corporate purposes.Based on Scorpio’s closing price on May 22, 2017, the consideration reflects a total equity value for Navig8 of approximately USD 228.8 million and a total enterprise value of approximately USD 1.1 billion, including the assumption of debt.The merger has been unanimously approved by the board of directors of Scorpio as well as by the board of directors of Navig8.The completion of the merger, which is expected to close in the second or third quarter of this year, is subject to the completion of the offering and relevant conditions, Scorpio said.Following the completion of the merger which would provide Scorpio with “substantial economies of scale”, the company’s operating fleet will consist of 105 owned or finance leased tankers with a weighted average age of approximately 1.9 years, and 19 time or bareboat chartered-in tankers.In addition, Scorpio has six newbuilding MR product tankers under construction which are slated for delivery throughout the remainder of 2017 and first quarter of 2018. Scorpio has also entered into an agreement to sell two MR product tankers, which is expected to close in June 2017.
zoom Athens-based owner of drybulk carriers DryShips informed that the company and its chief executive officer George Economou have been named as defendants in a lawsuit alleging breaches of fiduciary duty, unjust enrichment, and conflict of interest.Through the lawsuit, filed in High Court of the Republic of the Marshall Islands, the plaintiff seeks, among other things, a temporary restraining order and preliminary injunction to suspend any further issuances of new common shares by the company at a price per share below the price specified by the plaintiff in the complaint.Additionally, the plaintiff seeks certain other compensatory and punitive damages specified in the complaint.DryShips however said that the derivate lawsuit and motion for temporary restraining order and preliminary injunction to suspend further issuances of common shares below a certain price “are without merit.”Following a review of the complaint and the motion, the company said that it “will contest them vigorously.”
zoom Athens-based dry bulk owner Diana Shipping has managed to slightly improve its financials by shrinking its net loss in the second quarter of 2017.Although the net loss decreased, the company still ended the quarter with a net loss of USD 23.8 million, compared to a net loss of USD 31.3 million seen in the same three-month period of 2016.Diana Shipping’s operating loss stood at USD 15.5 million, compared to an operating loss of USD 24.2 million reported a year earlier, while the company’s time charter revenues reached USD 37.8 million, up from USD 28.3 million seen in the same quarter of 2016.The increase in time charter revenues was due to increased average time charter rates achieved for the company’s vessels during the quarter and increased revenues resulting from the enlargement of the fleet.Net loss for the six months ended June 30, 2017 amounted to USD 50.3 million, compared to a net loss of USD 62.7 million reported in the same period a year earlier.Time charter revenues for the first half of the year increased to USD 69 million from USD 59.1 million reported in the same six-month period of 2016.
zoom Work to extract 750 tonnes of heavy fuel oil from the grounded container ship m/v Kea Trader is now complete and efforts are underway to remove containers from the vessel.The process of removing containers could take several months to complete, subject to suitable conditions and operations on site, according to the ship’s owner Lomar Shipping.“A break in winter weather conditions last weekend allowed salvors to begin trials to remove containers using the ship’s own gear (cranes),” the company said.Six of the vessel’s 756 containers, of which 553 were being carried empty for onward shipments, were successfully transferred onto a barge that managed to come alongside.In an effort to re-floating the 25,293 dwt boxship, the salvors will continue removing containers on board, concentrating initially on those units that are most accessible and those containing any hazardous goods. This will be undertaken using the combination of a Sikorsky Skycrane heavy lift helicopter, a crane barge that is currently en route from Singapore and the vessel’s own gear.“Good progress has been made over the last week with all of the heavy fuel oil now having been extracted from the vessel. The focus has now turned to the removal of the containers on board, however the Kea Trader is in a remote part of the Pacific, which has made and will continue to make this procedure lengthy and complex in nature,” a Lomar spokesman said.Thirty days after its grounding on July 12, the Kea Trader remains in a stable position on the Durand Reefs in the Pacific Ocean.With a 2,194 TEU capacity, the container ship was launched in January 2017 at the Guangzhou Wenchong Shipyard in China. The ship had been sailing from Papeete, in French Polynesia, to Nourmea, the capital of New Caledonia, when it ran into trouble.
zoom China’s COSCO Shipping Lines has taken delivery of its second 20,000 TEU-class boxship, COSCO Shipping Taurus. The delivery and naming ceremony for the ultra large container vessel (ULCV) was held in Shanghai on January 27, 2018.Shanghai Waigaoqiao Shipbuilding (SWS) launched the Hong Kong-flagged ship on January 16.COSCO Shipping Taurus, which features a length of 400 meters and a width of 58.6 meters, has a market value of USD 121.35 million, VesselsValue’s data shows.Earlier this month, the company took delivery of COSCO Shipping Aries — described as China’s first 20,000 TEU containership — from Nantong COSCO KHI Ship Engineering (NACKS).Apart from the two recently delivered ULCVs, COSCO Shipping Lines has nine 20,000 TEU vessels on order at SWS, NACKS and Dalian Shipbuilding Industry yards.World Maritime News Staff
zoomIllustration. Source: Pxhere under CC0 Creative Commons license Bermuda-based shipowner Ship Finance International Limited (SFL) closed the first quarter of 2019 with a considerably higher net income.The company’s net income rose to USD 33.6 million in Q1 2019 from USD 3.5 million seen in Q4 2018.The net result was positively affected by charter hire of USD 160 million received from SFL vessels and rigs, including about USD 1 million of profit share from three VLCCs.As of March 31, 2019, the fixed rate charter backlog from the company’s fleet of 86 vessels and rigs was approximately USD 3.8 billion, with an average remaining charter term of over 5 years.In Q1 2019, some 62% of SFL’s charter hire was derived from vessels on time charters or in the spot market where SFL provides technical operations. “Our USD 3.8 billion fixed rate contracted charter backlog supports our continued ability to generate strong cash flows… We have already addressed most of the debt maturities until mid 2020 and secured new long term financings at very attractive terms,” Ole B. Hjertaker, CEO of SFL Management AS, commented.Q1 represented the first full quarter for SFL after USD 1.2 billion of new investments in 2018. These transactions added USD 1.3 billion in future contracted charter revenue.Although SFL’s most recent investments have been made in container vessels, the company intends to pursue growth opportunities across multiple sectors.“The last 12 months have been very active, and our strong liquidity position and balance sheet management supports continued growth in asset base and contracted charter backlog. We have been actively evaluating investment opportunities and expect to see new projects materialize later this year,” Hjertaker concluded.With regards to new maritime regulations that will enter into force in 2020, SFL said that 25 vessels are currently scheduled to be upgraded with scrubbers in 2019 and 2020. These include containerships, large crude oil tankers and dry bulk vessels.
All Nova Scotians, including young people and seniors, have somewhere to turn if they are concerned about the care and attention they receive from provincial or municipal governments, thanks to changes to the Nova Scotia Ombudsman Act. School boards, child welfare agencies, licensed child-care facilities, nursing homes, residential care facilities for seniors, hospitals and community colleges now all clearly fall under the jurisdiction of the Nova Scotia Office of the Ombudsman. The office can investigate concerns from youth and seniors about decisions and actions of provincial and municipal agencies involved in providing child and senior services. The act was amended in May 2004 and the new regulations approved by cabinet in December 2004. In April 2005, the office added services and hired new staff to ensure effective and accessible support is available to youth and seniors in Nova Scotia. Youth services (previously known as the Children’s Section) offers children and youth in child custody and child protection agencies the assurance of an independent process to resolve complaints. Senior services is a new outreach program, which will offer advice and assistance to seniors who feel they have a complaint against a government agency. Staff will visit facilities, explain the role of the Ombudsman’s office and be available to discuss concerns. Anyone who believes they may have a complaint against a provincial or municipal government agency can make inquires to the Office of the Ombudsman. All inquires are confidential and not subject to freedom of information requests. The Office of the Ombudsman is an independent agency with a mission to promote the principles of fairness, integrity and good governance. Their services are provided free of charge. The Nova Scotia Office of the Ombudsman is hosting the annual meeting of the Canadian Council of Parliamentary Ombudsman May 29-31, in Halifax. The meeting is an opportunity for ombudsman from across the country to discuss ways to improve public accountability and how to improve the delivery of government services. Topics will include trust and ethics, disclosure of wrongdoing and the need for a federal ombudsman. For more information on the role and responsibilities of the Office of the Ombudsman, see the website at www.gov.ns.ca/ombu .
Walter Borden, an internationally renowned theatre artist from New Glasgow, is the 2005 recipient of Nova Scotia’s Portia White Prize. Premier Rodney MacDonald presented Mr. Borden with the prize, which recognizes artistic excellence and achievement by a Nova Scotia artist, at a ceremony at Province House today, March 1. “Mr. Borden is a fine example of a Nova Scotian artist who has excelled in the arts,” said Premier MacDonald. “He truly exemplifies the spirit and prestige of the Portia White Prize, and is an extraordinary cultural ambassador for our province.” The prize is named after the classical singer from Nova Scotia who overcame adversity to achieve international acclaim on the great stages of Europe and North America. Her artistic achievements and dedication to teaching young artists are a model for all Nova Scotians and continue to foster pride in African Nova Scotian communities and Nova Scotian artists. “Portia White was known for her artistic accomplishments but especially for her dedication to help young people realize their artistic dreams,” said Mr. Borden. “Knowing her legacy, it is indeed a truly great honour to receive an award which by definition implies that I have mirrored these attributes.” Throughout his 40-year career, Mr. Borden has been an activist and advocate for Black artists, as a public speaker, teacher and mentor to young theatre artists. In 1972, he became the first Black professional actor in Nova Scotia and he has performed in numerous productions at Neptune Theatre and throughout the province. His one-man show Tightrope Time, is a frank discussion of male homosexuality. This play which he wrote and performed in the mid 1980s, was a groundbreaking achievement in African-Canadian theatre. Revived by Black Theatre Workshop, the play was published for the first time in 2005. Mr. Borden is currently preparing for his fourth season as a company member at the Stratford Festival in Ontario, where he holds major credits in both classical and contemporary repertoire. This summer, he will be performing in the Governor General Award winning, Harlem Duet, marking the first theatre production ever written and performed by Black Canadian artists at the festival. The $25,000 Portia White Prize will be awarded in two components. The first part — $18,000 — will be awarded to the primary recipient, Walter Borden, and a secondary prize of $7,000 will be awarded to a protege named by Mr. Borden. This year’s protege is Jonathan Munro, a young soprano singer from Truro. Nominations for the 2006 Portia White Prize will be accepted until Sept. 15.
Voici un message des fêtes de la part du premier ministre Rodney MacDonald : « Le temps des fêtes est une période pendant laquelle nous célébrons les réalisations de l’année et nous apprécions les bonnes choses dans notre vie. L’esprit de notre peuple est ce qui constitue le dynamisme de nos communautés. C’est pourquoi la Nouvelle-Écosse est la meilleure province où vivre dans ce pays. Je crois sans aucun doute que l’avenir de la Nouvelle-Écosse est rempli de possibilités. L’année 2008 a été une année active, remplie de grands accomplissements et, bien sûr, de certains défis. Je vous transmets mes meilleurs vœux et je souhaite à vous et à votre famille une période des fêtes joyeuse et sécuritaire, ainsi qu’une nouvelle année remplie de paix et de bonheur. » -30-
Atlantic Canadians will benefit from improved literacy strategies thanks to the development of an Atlantic Canadian Literacy Action Plan launched in St. John’s, Newfoundland and Labrador, today, Sept. 25. The Atlantic ministers of education and training demonstrated their commitment to improving literacy in Atlantic Canada by supporting the objectives in the plan that work to address and promote literacy at all levels, from early childhood to adult education. “Delivering a consistent plan is important for the economic future of Nova Scotia, and Atlantic Canada,” said Education and Labour and Workforce Development Minister Marilyn More. “This action plan will complement the progress we are making in Nova Scotia through the initiatives in public schools, post-secondary, adult, and early childhood education.” The plan focuses on the benefits of early childhood education and the need to identify specific actions that will promote early literacy learning. The plan further addresses the promotion of teacher literacy training across curriculum and at universities, increased professional development opportunities and increased awareness around the benefits of improved literacy rates for adults in Atlantic Canada. “Literacy levels have a profound impact on a person’s quality of life and on the economic prosperity of Atlantic Canada,” said Ms. More. “This plan will work to help Atlantic Canadians live a better life by achieving the literacy skills they need to increase labour productivity, and improve economic and social prosperity in Atlantic Canada.” Over the next three years, the literacy priorities of public education will focus on increasing professional knowledge and skills in teaching literacy. Priority will also be placed on assessing, tracking and improving literacy learning outcomes for all students in the context of diverse backgrounds and abilities. Enhancing curriculum leadership and making improvements to literacy capabilities for learning in all areas of the curriculum. Priorities for adult and workplace literacy will focus on increasing awareness of the benefits of improved adult literacy, encouraging employer engagement, eliminating barriers to learning opportunities and assuring relevance and value to the learner. Other objectives include increasing professional standards, knowledge and skills in teaching/facilitating adult literacy and essential skills and improving the quality and effectiveness of adult literacy and essential skills delivery. The ministers of education and training have also taken steps today to further promote literacy with the completion of curriculum and assessment resources for use in schools across the region. These resources support improved outcomes in literacy and numeracy and provide new, engaging and custom-designed resources for specific and unique needs of Atlantic Canadian students Literacy: Key to Learning and Path to Prosperity — An Action Plan for Atlantic Canada 2009-2012 was prepared by the Council of Atlantic Ministers of Education and Training, and the full document will be available at www.camet-camef.ca on Monday, Sept. 28.
Premier Darrell Dexter is encouraging Nova Scotians to take advantage of the world-class curling action starting today, March 6, at the 2010 Tim Hortons Brier in Halifax. “This year marks the sixth time that Nova Scotia has hosted the Canadian men’s curling championship,” said Premier Dexter. “In the past, this event has drawn tens of thousands of spectators and I know that the brier’s rich history and high energy continues to excite curling fans across this province, and the country. “I encourage everyone to come check out the action and cheer on our Nova Scotia athletes, and all the teams from across Canada.” The brier runs until Sunday, March 14 at the Halifax Metro Centre. Premier Dexter spoke at the opening ceremonies at 11:30 a.m. today. The curling begins at 3 p.m. with four matches, including Nova Scotia facing off against New Brunswick.The complete schedule and information on tickets are available at www.seasonofchampions.ca/2010brier/ .
Those wondering about the outlook for this fall’s lobster market, should have a clearer picture after a discussion by one of the leading experts in the field. John Sackton, a world-respected seafood analyst, will discuss what the lobster industry can expect for the fall season in a presentation in Yarmouth on Wednesday, Oct. 13. He will talk about the challenges the market is facing with the economic conditions in Europe and the United States, and how that will impact to coming season. “With the province’s biggest lobster season just around the corner, Mr. Sackton should provide industry members valuable information they can use,” said Sterling Belliveau, Minister of Fisheries and Agriculture. “He will discuss how our product competes around the globe and identify long-term opportunities and potential new markets. “The lobster industry is a significant economic driver in many rural Nova Scotia communities that creates good jobs and grows the economy.” Mr. Sackton, the president of Seafood.com and publisher of Seafood.com News, will hold the Oct. 13 discussion from 9 a.m. to 11 a.m., at Yarmouth Wesleyan Church, 70 Haley Rd. The free presentation will also explore increasing demand for processed lobster products and how lobster stacks with other high-value proteins. Mr. Sackton has providing market information and analysis of the lobster, snow crab and northern shrimp markets in Atlantic Canada for the past 12 years. He serves clients from Canada, U.S., Europe, South America, Russia and China, and the Seafood.com website is the most visited seafood industry website in North America. The presentation is sponsored by the Department of Fisheries and Aquaculture and the Atlantic Lobster Council of Canada. A Nova Scotia Lobster promotion presentation will follow. For more information, phone 902-424-8611 or go to www.gov.ns.ca/fish/mbd/ .
Premier Darrell Dexter is urging Nova Scotians to vote for Yarmouth in the Kraft Hockeyville 2012 contest. Yarmouth’s Mariners Centre has been selected as the finalist from Atlantic Canada and is one of the top five communities in the running for the title. “Nova Scotians continue to proudly nominate their hometowns and vie for the Kraft Hockeyville title,” said Premier Darrell Dexter. “I encourage all Nova Scotians to throw their support behind Yarmouth and get out the vote.” Kraft Hockeyville sees communities across Canada compete to show their community spirit and commitment to the sport of hockey. The successful community will host an NHL pre-season game, have a Hockey Night in Canada broadcast in their community, and be awarded $100,000 for arena upgrades. “Hockey is a sport with deep roots in Nova Scotia — our province is widely thought to be the birthplace of hockey,” said Premier Dexter. “Unlike an election, Nova Scotians can cast their vote more than once. We need everyone to vote early, and vote often.” Nova Scotians can vote for Yarmouth online or on mobile devices at www.krafthockeyville.ca or by calling 1-866-533-8066 toll-free. Voting closes on Tuesday, March 20, at 11:59 p.m. Eastern Standard Time (12:59 a.m. AST).
À compter d’aujourd’hui, 17 décembre, la plupart des immigrants potentiels en Nouvelle-Écosse peuvent faire une demande d’immigration au moyen d’un nouveau système en ligne. « Le traitement électronique est plus pratique pour les candidats puisqu’il leur fournit une rétroaction immédiate concernant un dossier incomplet, souligne la ministre de l’Immigration, Lena Metlege Diab. Le nouveau système accélérera la préparation de leur demande et réduira le fardeau des dossiers papier. » L’Office de l’immigration de la Nouvelle-Écosse continuera d’accepter des demandes en format papier au titre de ses volets d’immigration jusqu’à la fin de juin 2016. La Province apporte aussi d’autres changements pour administrer plus efficacement le système d’immigration. À compter de maintenant, et ce pour passer à travers tous les dossiers résultant d’une forte demande, la Province arrêtera temporairement d’accepter de nouvelles demandes au titre de son volet Demande de la Nouvelle-Écosse : Entrée express. Les demandes portant la date d’aujourd’hui, le cachet de la poste faisant foi, seront acceptées. Le volet rouvrira plus tard en 2016. L’Office de l’immigration fermera aussi le volet Travailleurs en entreprise familiale à la fin de 2015. Les candidats qui auraient voulu faire une demande au titre de ce volet pourront faire une demande au titre du volet Travailleur qualifié qui a les mêmes critères. La Nouvelle-Écosse a été la première province à lancer les volets Entrée express en janvier 2015. Le quota pour l’Entrée express est presque atteint pour cette année. Le quota du gouvernement fédéral était à l’origine de 350 et il a plus tard été augmenté de 300 pour être porté à 650. En tout, la Nouvelle-Écosse avancera la candidature de 1 350 immigrants au titre du Programme des candidats des provinces en 2015, soit près du double du quota de 700 en 2014.
Homeowners should also limit places that could make attractive dens for wildlife by blocking access points under doorsteps, sheds and attics. People concerned about wildlife damaging property or threatening their safety or see an injured or diseased animal should contact their local office of the Department of Lands and Forestry. Contact information for offices can be found at http://www.novascotia.ca/natr/staffdir/offices.asp . To learn more about living with wildlife and other topics, visit http://novascotia.ca/natr/wildlife/living-with-wildlife/ . People can reduce the risks of wildlife encounters in their neighbourhoods by following advice from experts at the Department of Lands and Forestry. “Seeing animals in the wild can be a wonderful experience but it is also common to see wildlife in our communities and that can become a nuisance and possibly a risk to people and pets,” said director of wildlife Bob Petrie. “To avoid backyard encounters with bears, foxes, deer, coyotes and other wild animals, people should reduce food sources.” Pet food left outside can attract animals and bird feeders can support mice or raccoons which attract foxes and other predators. “Nova Scotia’s black bears, for example, are magnificent animals, but they are a healthy population of omnivores and it’s in their nature to eat a wide variety of food and repeatedly return to a property when they smell a food supply,” said Mr. Petrie. “It’s important to reduce food odours from compost bins, garbage containers, and barbeques, to avoid unnecessary conflict and protect the animals and people.” To avoid attracting bears and other wildlife to residential properties: store green compost bins and garbage containers in a shed until the morning of pickup turn garden compost piles often and add lime to reduce odour freeze odorous food waste, such as lobster shells and fish, and put them in the compost bin on collection day avoid using bird feeders from April to October burn off barbecue grills at high temperatures after every use and clean them often keep pet food bowls indoors pick fruit from trees as soon as it ripens
Cardiff (UK): New Zealand made a flying start to their World Cup campaign as paceman Matt Henry struck three times in a 10-wicket trashing of woeful Sri Lanka on Saturday. Henry returned figures of 3-29 and combined with fellow paceman Lockie Ferguson, who also took three wickets, to bowl out Sri Lanka for just 136 in 29.2 overs in Cardiff. Martin Guptill and Colin Munro then hit unbeaten half-centuries to make short work of their modest target. Also Read – We don’t ask for kind of tracks we get: Bowling coach ArunThe Kiwis cruised home in 16.1 overs to register their third win in a World Cup game by 10 wickets. The right-left batting combination of Guptill, who hit 73, and Munro, who scored 58, had little trouble in smashing the Sri Lankan bowlers to all parts of the ground. Guptill hammered eight fours and two sixes including one hit that sailed out of the ground. But it was Henry’s spell of seven straight overs that opened the gates for New Zealand’s domination against the 1996 champions. Also Read – Bastian Schweinsteiger announces retirement, could join Germany set-up”It’s a great start for us. You want a balanced attack going into any surface. It is important that you have that to have aggressive options for different occasions,” New Zealand captain Kane Williamson said. “The two at the top played beautifully. It was nice for those guys to play a few shots. It was a good all-round performance.” Sri Lanka skipper Dimuth Karunaratne added: “It was a good toss to win. In the morning it was seaming and swinging. They had that advantage and they have good bowlers to do that, so they took their chance. “The batters aren’t low on confidence. We batted well in some practice games and we work really hard. We need to think about the game.” Henry stood out in the absence of senior paceman Tim Southee, who missed the game due to a calf injury, with his incisive pace and swing. He struck with the second delivery of the game to send Lahiru Thirimanne trudging back to the pavilion after the left-handed opener had hit a boundary from the first ball. Thirimanne was initially ruled not out by the on-field umpire, but the Kiwis successfully reviewed the lbw call in their favour after replays suggested the ball pitched on line and would have hit the batsman’s leg stump. The left-handed Karunaratne, who has returned to the one-day side after a gap of four years, then put on 42 runs for the second wicket with Kusal Perera. But Williamson kept Henry on for the bowler’s fifth over and the decision paid off as he got Perera for 29 and Kusal Mendis without scoring on successive deliveries. Dhananjaya de Silva played the hat-trick ball with a glorious off drive, but soon fell to the pace of Lockie Ferguson after being trapped lbw. Karunaratne fought on to register his third ODI fifty in 81 balls before he ran out of partners after Lasith Malinga was bowled by Ferguson for one. Karunaratne’s unbeaten 52 made him only the second opener in World Cup history to carry his bat through a completed innings. The feat had previously been achieved by the West Indies’ Ridley Jacobs, who made an unbeaten 49 against Australia in 1999.
Shanghai: Huawei will sell its majority share in a submarine cable unit, the stake’s buyer announced Monday, amid a US-led drive to isolate the Chinese telecom giant from global information networks over spying fears. US President Donald Trump has attacked Huawei in recent months, urging allies to boycott its products and blacklisting the Chinese firm from buying some US software. Undersea cables are vital to global internet traffic. The 51 per cent stake in Huawei Marine Networks will be bought by Hengtong Optic-Electric, an optical-cable manufacturer based in eastern China’s Jiangsu province, according to a filing with the Shanghai Stock Exchange. Huawei Marine Networks is a joint venture between Huawei and UK-based undersea cable firm Global Marine Systems. Huawei Marine claims on its website to be involved in around 90 projects, from the Pacific to the Atlantic, totalling more than 50,000 kilometres (30,000 miles) of undersea cables. Washington suspects that Huawei, which was founded by former People’s Liberation Army (PLA) engineer Ren Zhengfei, has ties to China’s military and thus poses a security threat.
As was expected, the Reserve Bank of India’s monetary policy committee (MPC) on June 6, 2019, lowered its interest rate by 0.25 percentage points to 5.75 per cent, the third such reduction since February. With the MPC already indicating in the last two policies that inflation would not be the only factor that would drive the decision on interest rate changes, it is not really a surprise that the RBI has gone in for a rate cut, especially after rather disappointing numbers have come out on gross domestic product (GDP) growth in the fourth quarter and unemployment rate. Also Read – A staunch allyThe GDP growth has plunged to a five-year low of 5.8 per cent during January-March, 2019, dragging down the annual growth to 6.8 per cent while the country’s unemployment rate has stood at a 45-year high of 6.1 per cent. Both figures are as per the data released by the government. RBI and its Governor can claim to have done its part of the job with the MPC, unlike in the past, approving the rate cut unanimously. How far the rate cut will be effective in either pushing up the country’s economic growth or in arresting the slowdown is debatable. Experts differ and are divided on the positive impact of the rate cut. As experience goes and also by the central bank’s own admission, only 21 of the cumulative 50 basis points rate cut effected by the RBI in the February and April policies has been passed on to borrowers by banks. The excuse from banks was that liquidity was tight and so deposit rates could not be cut. The excuse seems to be justifiable. Similarly, the RBI’s decision to do away with its charges on NEFT Real Time Gross Settlement System (RTGS)/National Electronic Funds Transfer (NEFT) transactions is welcome provided it can, again, ensure that banks pass on the benefit to customers. Also Read – Cuban pathosWhile announcing the monetary policy, the central bank also lowered India’s GDP growth estimate to seven per cent for the year 2019-20 from 7.2 per cent that it forecast in April this year. It said that in the April policy, GDP growth for 2019-20 was projected at 7.2 per cent — in the range of 6.8-7.1 per cent for the first half and 7.3-7.4 per cent for the second half — with risks evenly balanced. Data for the fourth quarter of 2018-19 indicates that domestic investment activity has weakened and overall demand has been weighed down partly by slowing exports. It further said that weak global demand due to the escalation in trade wars may further impact India’s exports and investment activity. Further, private consumption, especially in rural areas, has weakened in recent months. After remaining in double digits in the previous five quarters, gross fixed capital formation (GFCF) growth too declined sharply to 3.6 per cent. Private consumption growth also moderated. On the supply side, agriculture and allied activities contracted, albeit marginally, due to a decline in rabi production. According to the third advance estimates, foodgrains production at 283.4 million tonnes for 2018-19 was lower by 0.6 per cent compared with the previous year mainly due to lower production of rabi rice, pulses and coarse cereals. Further, private consumption, especially in rural areas, has weakened in recent months. From the monetary standpoint, a rate cut helps companies and individuals that borrow, as it lowers cost of loans provided banks pass it on. Banks would be in a position to lower lending rates in case they can lower the deposit rates. This may not always be feasible, given that growth in deposits has tended to lag that in credit, which had created a virtually permanent liquidity deficit. Also, as there is a significant part of the population that lives on interest income, there could be negative effects on such spending that hence comes back to hurt consumption. This is one reason as to why banks have not been lowering their deposit rates with alacrity. With the drivers of growth sputtering, private consumption, investment and export growth remain subdued, and with limited fiscal space, it will be very difficult to arrest the slowdown in the economy. With drought hitting severely more than half of the country, prospects of growth are turning unlikely, resulting in further deepening of the slowdown. (The views expressed are strictly personal)