US consumer confidence ebbs in October
US consumer confidence declined in October following successive gains in the prior two months, according to Conference Board figures.
The Board´s consumer confidence index fell to 98.6, down from September´s downward-revised result of 103.5. Analysts had forecast the index to drop to 100.8.
“Consumers´ assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat,” Lynn Franco, the board´s head of economic indicators, said in a statement.
“However, consumers´ expectations regarding their income prospects in the coming months were relatively unchanged. Overall, sentiment is that the economy will continue to expand in the near-term but at a moderate pace.”
Those saying business conditions were “good” fell slightly from 27.7 percent to 26.2 percent but those saying circumstances were “bad” rose from 15.8 percent to 17.7 percent.
Views on the labour market also dimmed, with the share of those believing jobs were “plentiful” falling to 24.3 percent from 27.6 percent. The percentage of consumers who said they believed business conditions would improve over the next six months was 1 point lower at 16 percent, according to the survey.
Tata shake-up may distract group from restructuring efforts
The surprise removal of Tata Sons´ chairman Cyrus Mistry and his advisory team, and the temporary return of Ratan Tata, could distract the salt-to-software conglomerate from ongoing efforts to trim debt and reshape some of its businesses.
The boardroom coup sent shares in some Tata listed companies lower, though the reinstatement of the widely respected Ratan Tata as interim chairman likely helped ease investor concerns.
“When Mistry was there some actions were being taken at a group level which would have helped reduce the company´s cash drain activities,” said Daljeet Singh Kohli, research head at broker India-Nivesh.
“There was hope that rational, rather than more emotional decisions would prevail.” Some analysts expect uncertainty at Tata may stall some ongoing initiatives, such as the search for a partner for Tata Steel´s struggling UK assets.
“Under Mistry, Tata Group have taken significant steps towards deleveraging and better utilization of capital,” Citigroup said in a client note, adding his absence may impact the group´s future strategy and delay the “process of deleveraging.”
“Media reports following Mistry´s ouster suggested the influential Tata family, which owns a majority stake in Tata Sons through a series of trusts, was unhappy with some of his decisions as chairman.
Ratan Tata on Tuesday urged those in charge of Tata Group companies to focus on their businesses and shareholder returns, and not be distracted by the board changes. Those group companies own a range of wellknown brands, including Jaguar Land Rover, Tetley tea, Titan and the Taj Group of hotels.
“The companies must focus on their market position vis-à-vis competition, and not compare themselves to their own past,” Tata said, according to a company statement. Referring to ongoing initiatives, he said Tata would “evaluate and continue to undertake those that are required”.
Any changes would be discussed with business heads. “At a business level, life doesn´t change for us due to this management re-jig,” said a senior banker and frequent investor in Tata group´s bonds.
“What we need to see is what kind of strategy they will adopt now to revive their weak companies.” Mistry´s dismissal as chairman - he remains a board member - stunned even Tata insiders and senior executives, people in the company said.
“It came as a surprise to us; nobody seemed to know anything about it,” said one senior Tata Group official, adding they were informed through a memo and told the move was “unlikely to have much impact on individual companies.
“Tata has disbanded the group executive council - a core advisory team - set up by Mistry, who was trying to shake up the $100 billion company through changes to its management structure and the introduction of new faces at senior levels.
In a sign of the near-150-year-old conglomerate´s heft, Prime Minister Narendra Modi was told about the leadership change in a personal letter, according to government sources. Shares in Tata Steel fell 2.5 percent, Tata Power 1.5 percent, TCS 1.2 percent and Tata Motors 1.1 percent.