Israel, UAE reach US-brokered deal to establish full diplomatic ties

Agencies
August 13, 2020

Dubai, Aug 13: The UAE and Israel have reached a historic deal that will lead to a full normalization of diplomatic relations between the two nations.

The agreement, brokered by US President Donald Trump, means Israel has suspended plans to annex parts of the occupied West Bank. 

A joint statement from the UAE, Israel and the US said: "This historic diplomatic breakthrough will advance peace in the Middle East region and is a testament to the bold diplomacy and vision of the three leaders and the courage of the United Arab Emirates and Israel to chart a new path that will unlock the great potential in the region."

The agreement was reached after talks between Trump, Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed, Israeli Prime Minister Benjamin Netanyahu.

"HUGE breakthrough today! Historic Peace Agreement between our two GREAT friends, Israel and the United Arab Emirates," Trump wrote on Twitter.

Sheikh Mohammed said the agreement would stop further Israeli annexation of Palestinian territory.

"During a call with President Trump and Prime Minister Netanyahu, an agreement was reached to stop further Israeli annexation of Palestinian territories," he said. "The UAE and Israel also agreed to cooperation and setting a roadmap towards establishing a bilateral relationship.”

The deal means the UAE would become the third Arab country to have full diplomatic relations with Israel.

The statement said Israel would suspend declaring sovereignty over areas outlined in Trump’s peace plan for the region and focus on expanding ties with other Arab and Muslim countries. 

It said efforts would continue to achieve an “enduring resolution to the Israeli-Palestinian conflict.”

“The United States, Israel and the United Arab Emirates are confident that additional diplomatic breakthroughs with other nations are possible, and will work together to achieve this goal,” the statement said.

Delegations from Israel and the UAE would meet in the coming weeks to sign agreements regarding investment, tourism, direct flights, security and telecommunications among others.

They would also discuss establishing embassies.

“Opening direct ties between two of the Middle East's most dynamic societies and advanced economies will transform the region by spurring economic growth, enhancing technological innovation, and forging closer people-to-people relations,” the statement said.

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Agencies
September 15,2020

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Mumbai, Sept 15: The small cap index posted its biggest single day gain in over six years on Monday after the SEBI circular on multi cap mutual funds triggered buying.

The estimates by analysts and brokerage houses indicate that the net inflow from large caps would be around Rs 27,000 crore into the small caps and around Rs 13,000 crore into the mid caps following the SEBI circular to invest 25 per cent each of assets of multi cap funds into large, mid and small cap stocks.

The huge rally in small cap stocks has come even after fund managers asked investors not to rush to buy small cap stocks in haste and there were clarifications that mutual funds have several options apart from rebalancing their schemes including a merger of schemes to comply with the circular.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said mid-cap and small cap stocks gained sharply.

He said investors were attracted towards Mid/small caps due to the SEBI mandate to Multicap mutual funds to invest a minimum of 25 per cent each in large, mid and small cap stocks. Small Cap Index posted its biggest 1-day gain in over six years.

Deepak Jasani, Head of Retail Research, HDFC Securities said that the recent SEBI circular on allocation by Multicap schemes spurred buying in a lot of small and midcaps in anticipation of fund buying that could emerge later to adhere to the new regulation. The Nifty midcap index ended 2.6 per cent higher while the smallcap index gained 5.6 per cent - the most since May 2014.

Nifty has ended the first day of the week in the negative while the broader market has reacted positively to the latest SEBI circular, he added.

In a note to investors, Sage One has said that SEBI had done a big re-categorization of mutual funds (MFs) in early 2018 which triggered initial rotation from small/midcaps to large caps, and the falling prices created their own snowball effect resulting in the small cap universe correcting by 40-60 per cent. During this period the large cap indices delivered positive returns. In the latest re-categorization of multi-cap MFs, a small part of the 2018 action has been reversed.

As per the note, institutional shareholding (SH) in large cap space is currently 20 per cent above the December 2017 levels whereas it's 41 per cent lower for the small cap space.

The total institutional holding has increased by 10 per cent during this period. Small cap companies make up 10% of the total market capitalization, but the institutional holding is only at 5.3 per cent of their total holding. In December 2017 small cap companies made 16 per cent of the total market capitalization. The biggest contribution in the market drop was the forced selling by the domestic institutions. As prices dropped, it forces other investors to move out and seek performing asset classes such as the large caps, the note said.

The note said that whether MFs actually do the entire re-allocation or whether they merge their multi cap schemes into the large cap schemes is an unknown.

"Irrespective of the amount that actually gets re-allocated, just the anticipation could bring in fresh capital in small/mid cap schemes under MFs, PMS' and AIFs. It doesn't take much inflow to move stocks in this universe," the note said.

The research notes that the impact cost of actual exits was as high as 15 times in the small cap space. This means that if one was to invest fresh capital of Rs 1,000 crore in the small cap companies, on an average their market cap would go up by Rs 15,000 crore. There will not be enough sellers available when the expectation is that this space would do well in presence of forced buyers.

"Even if we assume that only half (Rs 13,500 crore) the capital would be re-allocated by the MFs and assume that there will be no fresh inflows in the small cap companies by other investors and in addition even if we assume that the buying impact would be half (7.5x), the increase in the market cap of the small cap universe would be more than Rs 1 lakh which is around 36% increase in total market cap (currently Rs 2.80 lakh crore) of the small cap companies," the research said.

This step would benefit more than 1000 companies compared to just 100 companies that benefited by the 2018 circular. In an environment when debt raising is multiple times difficult for the smaller companies, this SEBI triggered change would help equity raising capability of these companies.

HDFC Securities said in a note that given the size of multicap funds and higher allocation especially to smallcap stocks; some concerns have been raised about achieving the prescribed investment limits without creating a bubble in small and midcap stocks.

The AUM of smallcap stocks across equity categories (excluding sectoral) as on July 2020 is Rs 68,109 crore – compare this with Rs 28,000 crore worth fresh buying required.

"These stocks have less free float availability, relatively lower volumes, corporate governance issues and higher impact cost (both at the time of getting in and getting out). Also, liquidity issues in smallcap stocks could get compounded in bear markets when these funds face redemption pressure and are required to sell small cap stocks where impact costs could be large," it said.

Schemes requiring the least reshuffling include multicap funds from Invesco, IDFC and Nippon, while schemes requiring the most reshuffling include Kotak Standard, HDFC Equity, Motilal Multicap 35, Axis and Canara Robeco Eq diversified fund, HFDC Securities said.

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News Network
September 17,2020

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New Delhi, Sept 17: Four Indian cities -- New Delhi, Mumbai, Hyderabad, and Bengaluru -- witnessed a significant drop in their rankings in the global listing of smart cities that was topped by Singapore.

The Institute for Management Development (IMD), in collaboration with Singapore University for Technology and Design (SUTD), has released the 2020 Smart City Index, with key findings on how technology is playing a role in the Covid-19 era.

In the 2020 Smart City Index, Hyderabad was placed at the 85th position (down from 67 in 2019), New Delhi at 86th rank (down from 68 in 2019), Mumbai was at 93rd place (in 2019 it was at 78) and Bengaluru at 95th (79 in 2019).

"Cities in India (New Delhi, Mumbai, Hyderabad, Bengaluru) suffer significant drops this year. This can be attributed to the detrimental effect that the pandemic has had where the technological advancement was not up to date," the report said.

It further added that "Indian cities have suffered more from the pandemic because they were not prepared".

From 15 indicators that the respondents perceive as the priority areas for their city, all four cities highlighted air pollution as one of the key areas that they felt their city needed to prioritise on.

For cities like Bangalore and Mumbai, this was closely followed by road congestion while for Delhi and Hyderabad it was basic amenities, the report said.

The 2020 Smart City Index (SCI) was topped by Singapore, followed by Helsinki and Zurich in the second and the third place respectively. Others in the top 10 list include Auckland (4th), Oslo (5th), Copenhagen (6th), Geneva (7th), Taipei City (8th), Amsterdam (9th) and New York at the 10th place.

In SCI's context, 'smart city' describes an urban setting that apply technology to enhance the benefits and diminish the shortcomings of urbanization.

The second edition of the SCI ranked 109 cities worldwide by capturing perceptions of randomly chosen 120 residents in each city.

Hundreds of citizens from 109 cities were surveyed in April and May 2020 and asked questions on the technological provisions of their city across five key areas: health and safety, mobility, activities, opportunities and governance.

Reflected in this year's rankings is that cities have ever differing approaches to technology as managing the pandemic has become increasingly important in local politics, the report said.

"We cannot ignore the impact of Covid-19," said IMD's Professor Arturo Bris, who led the work of the ranking as the Director of the World Competitiveness Center at the Swiss management institute which is behind it. Those with better technology manage the pandemic better. Smart cities are not the solution, but technology helps,” he explained.

"Smart cities closer to the top of the rankings seem to deal with unexpected challenges of the devastating pandemic with a better outcome," remarked Professor Heng Chee Chan, Chairperson of the Lee Kuan Yew Centre for Innovative Cities at SUTD.

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Agencies
September 15,2020

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Pilibhit, Sept 15: The Superintendent of Police (SP) Pilibhit, Jai Prakash Yadav, has recommended suspension of the arms licence of BJP district vice-president, Amit Balmiki, following a report filed by Pilibhit police stattion SHO Shrikant Dwivedi.

The SP has written to the District Magistrate Pulkit Khare to suspend the arms licence issued to Balmiki.

The controversy began when Balmiki reportedly attempted to take unauthorised possession of a residential plot.

The SHO said that in the 12-year-old dispute with one Dimple Gaur, over a 200 square metre plot in Dalchand locality, a Pilibhit civil court had ruled in favour of Gaur on February 19 this year.

On August 31, when she began construction on the plot, located next to her residence, Balmiki arrived with 26 henchmen and obstructed work.

After police booked both sides under sections 107/116(3) of CrPC, the Gaurs obtained bail against personal bonds, but Balmiki and his henchmen neither appeared before court nor sought bail, said the SHO.

SP Yadav said based on Dwivedi's report, he recommended the suspension of Balmiki's pistol licence.

Balmiki could not be contacted for his comment.

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