Nifty could remain range-bound in short term

Alibaba Group Holding Ltd. has bought a third of Ant Financial, the online financial services behemoth controlled by billionaire Jack Ma, augmenting a global array of investments now worth $83 billion.

The Chinese e-commerce leader has closed the acquisition of 33 per cent of newly issued equity in Ant, a long-gestating deal that cements ties between two of the country’s biggest technology corporations. Ant will now stop paying 37.5 per cent of its pre-tax profits to Alibaba as mandated under an earlier agreement, the online retailer said.

The deal formally links Ma’s two signature corporations just as protege and Chairman Daniel Zhang takes the helm of China’s largest online commerce company. Since starting as Alipay in 2004 as the main SYDNEY, Sept. 24: Australia’s financial intelligence agency on Tuesday ordered an audit of PayPal Holdings Inc’s compliance with local anti-money laundering and counter-terrorism financing laws, saying it was concerned reporting obligations had not been met.

AUSTRAC, which is tasked with ensuring compliance with the laws, ordered PayPal’s Australian unit to appoint an external auditor to look at the fund transfers at its own cost and report back within 120 days.

AUSTRAC said in a statement that International Funds Transfer Instructions reported by the financial sector provided intelligence that enabled the agency and its partners to combat serious crimes, such as child sex exploitation.

“Regulated businesses like PayPal Australia, who facilitate payments and transactions for millions of Australian customers every year, play a critical role in helping AUSTRAC and our law enforcement partners stop the movement of money to criminals and terrorists,” way for Alibaba’s shoppers to pay for goods, Ant Financial has grown into a $150 billion behemoth spanning micro-lending and insurance to credit-scoring and the country’s largest money-market fund. It’s acquiring assets overseas via deals in India and Thailand, en route to a potential initial public offering.

“Every year we generate new stuff and we acquire new stuff. We never stop,” Zhang told Alibaba’s annual investor conference in Hangzhou. “Payment and financial services are very important pillars in Alibaba’s system.”

Zhang on Tuesday set a goal for Alibaba to have 1 billion annual active users contribute 10 trillion yuan ($1.4 trillion) of transactions by 2023. Ant’s payment business—China’s most popular transactional tool—will prove instrumental by helping direct traffic AUSTRAC Chief Executive Nicole Rose said in a statement.

PayPal said its Australian unit reported itself to authorities after an internal review found an issue with the way it reported international fund transfers to AUSTRAC.

It said suggestions the reason for the audit was the discovery of child sex exploitation connections were not correct.

“We are working in full cooperation with AUSTRAC to remediate this reporting system issue and to undertake the audit as outlined by AUSTRAC in the time specified,” PayPal’s Senior Communications Director, Amanda Christine Miller, said in an email. The audit would have no impact on customers, Miller said.

US-based PayPal operates a worldwide online payment service which connects buyers and sellers through a secure online wallet linked to both parties’ bank accounts.

A preliminary report from to e-commerce and ondemand services such as food delivery. In return, Alibaba gives Ant insights into consumer credit and loan demand.

Ant however is contending with heightened competition from the likes of Tencent Holdings Ltd. in online finance and payments, while struggling to halt an exodus of capital from its main investment vehicle. Like Alibaba, it’s grappling with the fallout from US-Chinese trade tensions, which have depressed consumer spending a separate review ordered by AUSTRAC into buy-nowpay-later company Afterpay Touch Group in June, citing suspected non-compliance with anti-money laundering and counter-terrorism financing laws, was due to be handed to AUSTRAC on Tuesday. Buy-now-paylater (BNPL) players let shoppers purchase products without paying upfront, and without the regulatory hurdle of applying for a credit card or loan, raising concerns about shopper identity.

Australian regulators are under sustained pressure to act after the Royal Commission inquiry into financial sector misconduct widely condemned their performance in recent years.

The Royal Commission found that when misconduct by financial institutions was revealed, it either went unpunished or the regulatory consequences did not reflect the seriousness of what had been done. across the world’s No. 2 economy. Alibaba has a projection for revenue to grow about 33% in the year ending March 2020.

The deal announced Tuesday seals their alliance and places Ant at the heart of a global portfolio of investments that runs the gamut from artificial intelligence giant SenseTime Group Ltd. to augmented reality outfit Magic Leap. Those acquisitions are collectively worth $83 billion, Chief Financial Officer Maggie Wu said.

The Alibaba-Ant deal unwinds an earlier agreement brokered to resolve a 2011 dispute with shareholder Yahoo! Inc. They clashed after Alibaba transferred the fast-growing Alipay into an entity controlled by Ma, citing concerns that it wouldn’t be permitted to conduct business in China while it had foreign ownership. Sensex and Nifty-50 indices closed flat on Tuesday after phenomenal gains of over 8 per cent in the previous two sessions stimulus announced for the corporates. Profit taking emerged in stocks that had seen sharp gains, especially financial and auto stocks while IT stocks were big gainers.

The major Asian market equity indices ended up with minor gains after US Treasury Secretary Steven Mnuchin said US-China trade talks will resume next month.

The Sensex closed at 39,097.14 up just 7.11 points or 0.02 per cent while the Nifty-50 closed at 11,588.20 down 12 points or 0.1 per cent. The broader markets were mixed with the BSE Mid-cap Index down 0.51 per cent while the BSE Small-cap was up 0.17 per cent.

Among the sectoral indices BSE IT gained the most at 2.31 per cent while all other sectoral indices either closed flat or in the red. The BSE Bankex lost 1.25 per cent.

The rupee ended lower at 71.00 compared to Monday's close of 70.93 per US dollar.

After two sessions of net buying the foreign portfolio investors (FPIs) turned net sellers by Rs 828.49 crore while the domestic institutions were net buyers by Rs 472.81 crore.

After a sharp jump volatility indicator India VIX index closed flat on Tuesday at 16.73 down by 0.36 per cent.

Technical View

ICICI Securities said, “We do not foresee any major shift in the current directional positive bias. Therefore, any correction towards 11,200-11,300 should be used as an incremental opportunity to construct a portfolio of quality stocks.”

“It is time to pick stocks bound for short covering, as expected, FPIs long/short ratio has formed bottom again and has started moving up indicating closure of short positions by FPIs. The net short positions of more than 1 lakh contracts are reduced to 42,000 contracts till the last session. We believe FIIs will turn net positive in the coming sessions. Also 11,200 was the average short price of FPIs short positions. Move above this level would lead to short covering,” ICICI Securities said.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities said, “The short term trend of Nifty is range bound. There is a possibility of some more such choppy trading movement with minor weakness in the Nifty for the next 1 or 2 sessions, before showing further upmove. Immed-iate supports to be watched at 11530 levels.”

Market View

Vinod Nair, Head of Research, Geojit Financial Services, said,” After a massive rally investors took some money out, which led the indices to trade range bound. Sentiment factor is largely positive after the stimulus measures.”