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https://www.moneycontrol.com/news/business/economy/covid-19-pandemic-us-consumer-spending-tumble-in-april-5334861.html | US consumer spending dropped by a record in April as the COVID-19 pandemic undercut demand, buttressing expectations that the economy could contract in the second quarter at its steepest pace since the Great Depression.
The Commerce Department said on Friday consumer spending, which accounts for more than two-thirds of U.S. economic activity, plunged 13.6 percent last month. That was the biggest drop since the government started tracking series in 1959, and followed a 6.9 percent tumble in March.
Economists polled by Reuters had forecast consumer spending plummeting 12.6 percent in April.
Follow our full coverage of the coronavirus pandemic here. | consumer spending plunges 13.6 percent in April. that was the biggest drop since the government started tracking series in 1959. consumer spending accounts for more than two-thirds of economic activity. economists polled by Reuters had forecast consumer spending plummeting 12.6 percent. a spokesman for the u.s. government said the data was not available. | Negative |
https://www.businesstoday.in/top-story/state-run-banks-need-urgent-capital-of-rs-1-trillion-due-to-weak-market-valuations-crisil/story/288921.html | State-run lenders require an urgent Rs 1.2 trillion in the capital in the next five months and government will have to take a bulk of the tab due to the weak market valuations of these NPA-saddled banks, says report.
This is a little more than double the budgeted Rs 53,000-crore of capital infusion for the current fiscal year, Crisil senior director Krishnan Sitaraman said in a report Tuesday.
If the government decides to meet this need, this will put further pressure on the fiscal maths, thus its ability to meet the 3.3 per cent fiscal deficit target for the current fiscal year. Already the government has used up over 95 per cent of the deficit target or the market borrowings as of October end.
The report comes even as the government is asking the Reserve Bank to lower the minimum capital requirements by getting it at par with global practices-something the central bank is uncomfortable to meet.
It has also reported having turned down the finance ministry demand to transfer Rs 3.6 trillion of it's over Rs 9.5 trillion reserves, which government wants to use to recapitalise the bleeding banks.
Till now, only Rs 1.12 trillion have been infused into these lenders since October 2017, it said, adding just Rs 12,000 crore has come from the markets, it said.
Most of the required capital has to be infused into the 11 lenders who are under the prompt corrective action (PCA) framework of the RBI, wherein depletion in the capital and return on assets, combined with a surge in non-performing assets, has resulted in the severe restrictions on normal operations, it said.
"Given their weak performance and low valuations, state-run banks have little ability to tap the market, which means the government will have to provide most of the requirement," it said.
Sitaraman said the Rs 1.5 trillion infused by the government in the last three financial years has only helped them cover the losses of Rs 1.3 trillion incurred during the same period.
Profitability of state-run banks has been under pressure because of higher credit costs after the RBI tightened norms for recognition of stressed assets and their resolution, the report explained.
Most of the 21 state-owned banks have reported huge losses in recent years, and a good number of them will be in the red this fiscal as well which will put a strain on the capital, notes the report.
As per the norms, the banks ought to have their tier-I capital at 9.5 per cent, including the capital of conservation buffer (CCB) of 2.5 per cent, it said, adding if the CCB were to be excluded, the capital requirement will fall to Rs 40,000 crore from Rs 1.2 trillion.
Meeting the CCB requirement, introduced following the 2008 global financial crisis, is becoming difficult for many state-run banks and those under PCA have had to recall their additional tier-1 bonds in recent times impacting their capital adequacy, it said.
Thirteen of the 21 state-owned banks had their tier-I ratio below the regulatory norm as of the June quarter, the report noted.
Moves like the consolidation of weaker banks with stronger ones like the tri-merger between Bank of Baroda, Dena Bank and Andhra Bank will help reduce the additional capital required, its associate director Vydianathan Ramaswamy said.
Listing other imperatives, he said the quantum of capital infusion has to increase, risk-weighted assets need to be brought down, and better-performing banks have to be nudged towards the market for capital. | government will have to take a bulk of the tab due to weak market valuations, report says. this is more than double the budgeted Rs 53,000-crore of capital infusion for current fiscal year. government has already used up over 95 per cent of the deficit target or the market borrowings. report comes as the government is asking the Reserve Bank to lower the minimum capital requirements. | Negative |
https://www.financialexpress.com/economy/covid-19-apparel-exporters-body-pitches-for-amnesty-scheme-for-non-fulfilment-of-export-obligations/1902593/ | Apparel exporters on Wednesday urged the government to bring an amnesty scheme in case there is non-fulfilment of export obligations as traders are facing issues in terms of raw material supply on account of the coronavirus outbreak.
Under some export promotion schemes like Advance Authorisation and Export Promotion Capital Goods schemes, import of machines and raw materials used to make exportable products is allowed at zero duty but with an export obligation.
Exporters are of the view that in such a scenario, meeting these obligations would be a bit difficult for them.
In a letter to Commerce and Industry Minister Piyush Goyal, Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said apparel trade is deeply integrated with the global value chain and it has been impacted by the disruption in both imports and exports.
Uncertainties are developing over timely deliveries of imports of raw materials like fabric, and accessories supplies, and exporters are facing tough situation with regard to export orders as global buyers are asking for deferment of consignments.
He said the need of the hour is to “bring out an amnesty scheme for non-fulfilment/short-fulfilment of exports under various export obligation schemes, especially in a force-majeure (unforeseeable circumstances that prevent someone from fulfilling a contract) situation such as the present one”.
Sakthivel added that the current situation warrants urgent remedies and support from the commerce ministry.
“Since the last one week, many of the major brands and buyers from the US and EU have asked for postponement of orders or shipments which have completely upset our business and schedule,” Sakthivel said.
He added that such uncertainties, coupled with a weak demand position in major markets have started impacting the order position, production schedules, inventory pile up, working capital and export realizations. | exporters are facing issues in terms of raw material supply on account of the coronavirus outbreak. some export promotion schemes allow import of machines and raw materials used to make exportable products at zero duty but with an export obligation. a letter to commerce and industry minister Piyush goyal said apparel trade is deeply integrated with the global value chain. a weak demand position in major markets have started impacting the order position, production schedules, inventory pile up, working capital and export realizations. | Negative |
https://www.moneycontrol.com/news/business/markets/asias-mood-tested-by-trumps-tariff-threats-3221631.html | Asian shares battled to extend a global rebound on Tuesday after US President Donald Trump seemed to quash hopes of a trade truce with China, dampening risk appetite across the region.
Japan's Nikkei managed to edge up 0.4 percent, but MSCI's broadest index of Asia-Pacific shares outside Japan was all but flat.
E-Mini futures for the S&P 500 eased back 0.35 percent, after rising sharply overnight.
In an interview with The Wall Street Journal, Trump said he expects to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from 10 percent currently.
Trump said it was "highly unlikely" he would accept China's request to hold off on the increase, planned for Jan. 1.
The comments ran counter to recent speculation about a possible deal when Trump meets with Chinese President Xi Jinping at the G20 summit in Buenos Aires later this week.
"Trump's pessimistic view on the chances of a game-changing China trade deal may puncture global equity markets' optimistic start to the week," said Sean Callow, a senior FX analyst at Westpac in Sydney.
"Combined with last week's harsh report from the U.S. trade representative, investors have only the flimsiest hope that the Trump-Xi meeting in Argentina will amount to more than a hill of soybeans."
That put trade-sensitive currencies, including the Australian dollar, on the defensive, while the dollar lost some ground on the safe haven yen to 113.47.
The euro edged up a shade to $1.1333 and the dollar dipped to 97.038 against a basket of currencies.
OIL SHIFTS RISKS ON INFLATION, FED
Shares in Apple Inc fell after-hours in reaction to Trump's comments that tariffs could also be placed on laptops and iPhones imported from China.
Trump's remarks came just as the mood among investors had shown signs of brightening and Wall Street took heart from an upbeat holiday shopping period.
Even oil managed to regain a little ground after the gut-wrenching slide of recent weeks.
The Dow ended Monday up 1.46 percent, while the S&P 500 gained 1.55 percent and the Nasdaq 2.06 percent.
The rally came after the S&P 500 on Friday recorded its lowest close in six months, down more than 10 percent from September's peaks and back in "correction" territory.
In commodity markets, oil prices had climbed nearly 3 percent on Monday in what was seen as largely a technical correction after weeks of losses.
Early Tuesday, US crude was off 4 cents at $51.59 a barrel. Brent crude futures had closed up $1.68 at $60.48 a barrel.
Analysts at National Australia Bank noted the steep retreat in oil would drag on US inflation in coming months, perhaps offering further reason for the Federal Reserve to go slower on tightening.
"This is a starkly different picture to just a few months ago," said NAB's market strategist Tapas Strickland.
"A stable to lower inflation outlook means there is no urgency for the Fed to hike rates," he added. "An early 2019 pause is thus becoming more probable."
The futures market has already shifted to imply two more hikes at most next year, while the Fed itself is predicting three and more in 2020.
Ears will thus be pricked for a speech by Fed Vice Chairman Richard Clarida later on Tuesday, ahead of an appearance by Chair Jerome Powell the day after. | the dollar loses some ground on the safe haven yen, while the dollar drops a shade. the dollar loses some ground on the safe haven yen, while the euro edges up a shade. the rally comes after the u.s. president said he expects to raise tariffs on $200 billion in china. the u.s. dollar loses some ground on the safe haven yen, while the dollar drops a shade. | Negative |
https://www.financialexpress.com/industry/six-psus-now-fallen-angels-after-indias-sovereign-rating-downgrade-covid-19-took-toll-says-moodys/1985892/ | After India’s sovereign credit rating fell to lowest investment grade ‘Baa3’ early in June, six Indian public-sector undertakings (PSUs) have also taken a hit with them now becoming potential “fallen angels”. These six companies in the non-financial sector viz — Indian Oil Corporation, Hindustan Petroleum Corporation, Oil India, Petronet LNG, Bharat Petroleum Corporation and Oil and Natural Gas Corporation — are now just one step away from being considered junk, global ratings agency Moody’s Investors Service said on Tuesday. “Fallen Angels” are those companies which were earlier in the investment grade category and have slipped to sub-investment grade.
As the coronavirus pandemic has afflicted markets and economy around the world, the Asian list of potential “fallen angels” has reached an all time high of 21 in early June owing to the addition of six Indian PSUs, the agency said. The quantum of names in the list has doubled due to the COVID-19 pandemic. The 21 Asian companies, which now risk becoming fallen angels, have over $12.3 billion of outstanding bonds maturing in 2021. Of this $12.3 billion, about one-fourth at $3.3 billion are rated. The six Indian companies which have been added to the potential “fallen angels” category are state-run enterprises in the oil and gas sector. They have $1 billion of rated bonds coming up for repayment till 2021, the agency said.
India leaves China behind, but, that is no good news
Since 2008, Chinese companies have dominated the “fallen angels” list which has lately become a domain of Indian and South Korean companies.
Moody’s downgraded its rating on India by a notch recently after worries over growth and the fiscal strain abound. India’s current rating is the last level in the category classified as “investment grade”. “The country’s policymaking institutions will be challenged in enacting and implementing policies which effectively mitigate the risks of a sustained period of relatively low growth, significant further deterioration in the general government fiscal position and stress in the financial sector,” Moody’s said in a statement after downgrading India rating. However, the effect of the cut is likely to be short term on investment flows. | six Indian public-sector undertakings have taken a hit with them now becoming potential "fallen angels" the Asian list of potential "fallen angels" has reached an all time high of 21 in early June. the 21 Asian companies, which now risk becoming fallen angels, have over $12.3 billion of outstanding bonds maturing in 2021. of this $12.3 billion, about one-fourth at $3.3 billion are rated. | Negative |
https://www.moneycontrol.com/news/business/markets/wall-street-falls-on-powells-grim-outlook-5263621.html | Wall Street's main indexes fell on Wednesday after Federal Reserve Chairman Jerome Powell warned of an extended period of weak growth and stagnant incomes due to the coronavirus pandemic.
It will take some time for the U.S. economy to get back to where it was, Powell said in a webcast, and called for more fiscal stimulus.
"Powell's doing the right thing by warning people that this is not just going to be a V-shaped recovery," said Sam Hendel, president and co-portfolio manager of New York-based Levin Easterly Partners.
"I think the market may be overstating the ease of returning back to normal."
However, Powell made it clear that the Fed won't push interest rates below zero, as traders had been increasingly betting.
The three main U.S. stock indexes have climbed about 30 percent from their March lows as investors bet on a pickup in business activity after various states eased virus-induced lockdowns that have caused mass layoffs and disrupted supply chains.
However, the rally paused this week on fears of a second wave of COVID-19 infections following a spike in new cases in Germany, South Korea and China and a warning from a top U.S. health expert.
At 11:31 a.m. ET, the Dow Jones Industrial Average was down 307.23 points, or 1.29 percent, at 23,457.55, the S&P 500 was down 26.48 points, or 0.92 percent, at 2,843.64. The Nasdaq Composite was down 48.44 points, or 0.54 percent, at 8,954.12.
Energy dropped 2.5 percent, the steepest percentage losses among the 11 major S&P sectors. Interest rate-sensitive banks stocks shed 4 percent, tracking a slight drop in U.S. Treasury yields.
Wall Street's fear gauge rose for the second day to hit a one-week high.
"Volatility is likely to persist because there's a lot of uncertainty on how this virus plays out," said Brian Levitt, Global Market Strategist for Invesco.
Royal Caribbean Cruises launched a $3.3 billion bond offering, pledging 28 of its ships as collateral and forecast heavy losses for the first quarter. Its shares fell 6.8 percent.
Declining issues outnumbered advancers for a 4.22-to-1 ratio on the NYSE and for a 3.32-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and 10 new lows, while the Nasdaq recorded 28 new highs and 71 new lows. | main indexes fall after jerome p. o'connell warns of slowing growth. o'connell: "this is not just going to be a V-shaped recovery" obama: "we're going to have to wait until the end of the year" a top health expert warns of a second wave of COVID-19 infections. | Negative |
https://www.financialexpress.com/money/real-estate-revival-holds-key-to-building-a-stronger-economy/1935475/ | It was largely expected. With a view to curb the spread of Covid-19, the 21-day lockdown which was imposed earlier across the country has been extended by another 19 days albeit with partial relief given after 20th April in some parts or regions of the country. The biggest pandemic faced by mankind in over a century, which originated in China and soon engulfed the entire world including most of the developed as well as developing nations, has impacted one and all. With restriction on the movement of people as well as goods & services, barring some of the essential services, the economic activities are currently at a standstill. Needless to say, the lockdown would have a jeopardising impact on the economy.
The Early Growth Indicators
There is a near consensus amongst most of the economists that World economy would slip into recession, with many of them even predicting that the current slowdown would be far worse than that of 2008 financial crisis and next only to ‘Great Depression’. The IMF’s Economic Counsellor has named it the ‘Great Lockdown’ and has estimating the cumulative loss to global GDP over 2020 and 2021 at around $9 trillion, which is greater than the economies of Japan and Germany put together.
Thankfully, India is among the handful of countries that is projected to record positive growth and at 1.9%, India’s growth rate is projected to be the highest among the G-20 nations.
Measures unveiled by Government & Authorities
To curb the impact of pandemic, Governments and authorities across the globe have announced several relief measures. The United States has passed a record $2 trillion Corona relief package. Other countries have also announced similar measures.
Domestically, the Indian government too has announced a relief package to the tune of Rs 1.7 lakh crore, which is mostly aimed at economically weaker section of the society. Compared to relief package announced by some of the major economies, the relief package announced by India is much smaller as it is merely 2% of the GDP as compared to relief packages of the US, Japan, UK & others wherein it is to the tune to 10-12% of GDP. Thus, there is greater expectation that the government would soon unveil another relief package for industries.
The Reserve Bank of India too has done its bit. It has already announced several measures in two tranches. Complementing the Government’s efforts, the apex bank towards the end of March lowered repo rate by 75 basis points to 4.4% and infused liquidity in banking system to the tune of Rs 3.74 lakh crore. It also lowered the reverse repo by 90 bps to 4%. It also announced moratorium of 3-month on repayment of all term loans, including retail loans and on advances to MSMEs.
With the economic growth scenario remaining under cloud, the apex once again intervened on April 17 and announced further reduction in reverse repo to 3.75% besides providing additional liquidity of Rs 1 lakh crore to NBFCs and All India Financial Institutions like NABARD, SIDBI & NHB. It has also announced certain relaxation on loan classification and provisioning as well.
Real estate may offer panacea for economy
One of the reasons that the Indian economy is struggling to attain 7.5-8% kind of growth is the state of real estate. The last few years have been challenging for the sector as it underwent tremendous transformation due to Demonetisation, RERA and GST implementation. The Covid 19 is further likely hit the sector hard, with some of the reports suggesting extreme pessimism regarding the sector.
But as Mahatma once famously said: “In the midst of death life persists, in the midst of untruth truth persists, in the midst of darkness light persists.” – the sector still remains the second largest employer and is an essential cog in India Inc, with close to 300 industries relying on it for growth purposes. Thus, it is utmost important that some measures are announced to revive the sector, which in turn may immensely benefit the economy.
a) One Time Loan Restructuring
One of such measures could be developers’ long-pending demand of restructuring of existing loans for a period of 12 months. Amid the challenging times, the sales of housing units have remained subdued for the last couple of years. This in turn has adversely impacted the loan repayment capacity of a substantial chunk of developers. The unrest caused by Covid 19 is further likely to aggravate the situation. Thus, it would be apt that the Government or the Reserve Bank of India announces one-time loan restructuring for 1 year. This would ensure that developers would have sufficient liquidity at their disposal, which would enable them to turn the tide. Also, with no defaulter tag, developers would be able to raise additional finance from various institutions. Needless to say, it would help in faster completion of project and would create substantial employment opportunity.
b) Waiver of Stamp duty
The other major initiative, which may help the sector revive, is waiver of stamp duty for a limited time period. With stamp duty being one of the biggest sources of revenue, various state governments have substantially hiked circle rate over the years. In many of cases, the hike is not in sync with market realities. As such, stamp duty based on unrealistic circle rate is a major deterrent in buying of properties. Thus, it would be apt that states waive off stamp duty for a limited period. The move would help in the revival of the sector.
c) Special Window for HFCs/ NBFCs
Banks have been reluctant to finance realty projects over the last few years. In absence of it, the sector has heavily relied upon NBFCs and HFCs for its financial requirements. But post the IL&FS as well as DHFL fiasco, even that source of funding has dried up to a large extent. Even some of the HFCs and NBFCs are facing liquidity squeeze. In the wake of the same, providing a special window of finance for HFCs/ NBFCs would not only help them at this critical juncture, but in turn would help in the revival of the realty sector as well.
And there is little doubt, if real estate is able to get its mojo back, the Indian economy would also return to its 8-plus per cent growth rate soon.
(By Harvinder Singh Sikka, MD, Sikka Group) | the 21-day lockdown which was imposed earlier across the country has been extended by another 19 days. partial relief given after 20th April in some parts or regions of the country. the biggest pandemic faced by mankind in over a century has impacted one and all. with restriction on the movement of people as well as goods & services, the economic activities are currently at a standstill. | Negative |
https://www.moneycontrol.com/news/india/listen-to-ex-pm-manmohan-singhs-advice-on-economy-shiv-sena-tells-centre-4406091.html | BJP's ally Shiv Sena has backed former Prime Minister Manmohan Singh, who recently said that the Indian economy is in a bad shape due to "mismanagement" by the Narendra Modi-government, and said that listening to him is in the "national interest."
Sena's support for Manmohan Singh, a noted economist, came after the Centre dismissed his criticism of handling of the economy by the Modi-government. The Sena, through an editorial in party mouthpiece Saamana, asked the government to pay heed to the former PM's warning and not indulge in politics over the issue.
Last week, Manmohan Singh had termed the state of the economy as "deeply worrying" and said that the June quarter growth rate of 5% shows that India is in the midst of a prolonged economic slowdown. "India has the potential to grow at a much faster rate, but all-round mismanagement by the Modi government has resulted in this slowdown," Singh said in a statement.
Also read | Govt's 'all-round mismanagement' has resulted in slowdown: Manmohan Singh
However, the government rebuffed Singh's criticism on Tuesday, saying it does not subscribe to his analysis as India has now become the world's fifth-largest economy from 11th during his time.
"The economy is in doldrums. Kashmir and economic slowdown are two different issues. A learned person like Manmohan Singh there should be no politics around the economic slowdown and experts should be roped in to repair the economy. National interest lies in listening to Manmohan Singh's advice," the editorial in Saamana said.
Also read | Check economy figures during UPA rule, Anurag Thakur tells Manmohan Singh, Chidambaram
The Sena said that Singh has the "right" to speak about the economy as he has been associated with Indian finance and economy for over 35 years.
The editorial cited PM Modi's 2017 raincoat remark on Singh and said, "Prime Minister Modi had said 'Manmohan Singh bathes wearing a raincoat', but we don't have qualms in admitting that he knows about economy and finance. He has worked hard to revive the economy when it was in a bad shape."
The Sena once again cited demonetisation and the Goods and Services Tax (GST) as the main reasons for the slump in the economy. "The noteban failed and the GST has become a noose around the necks of businessmen and industrialists; there is a state of panic in the industry," it said. | BJP's ally Shiv Sena backs former pm manmohan Singh. the former pm recently said the economy is in a bad shape due to "mismanagement" the government rebuffed Singh's criticism on Tuesday, saying it does not subscribe to his analysis. the BJP has a close ally with a former prime minister. | Negative |
https://www.moneycontrol.com/news/business/markets/fiis-turn-net-sellers-in-indian-markets-but-it-is-not-because-of-budget-4885251.html | Foreign institutional investors (FIIs) have turned net sellers, pulling out more than Rs 2,000 crore in from Indian markets in the past four days. The move was not on account of the Budget but on global growth concerns, say experts,
Finance Minister Nirmala Sitharaman will table the Budget on February 1. The Nifty has slipped more than 1 percent, so far, in January, and about 3 percent from the record high of 12,430 recorded on January 20.
A snapshot of the 10-day activity of foreign investors suggests that the consensus seems to be short in index futures largely because of global growth concerns fuelled by coronavirus outbreak.
The World Health Organization on January 30 declared the coronavirus epidemic in China a public health emergency of international concern, said a Reuters report. Most economists have already lowered the growth forecast for China by 100-200 bps.
“FIIs are selling aggressively in the Indian equity market for the last few days but it has no correlation with the upcoming Union Budget because they are pulling out their money from emerging markets amid fear of short-term economic slowdown due to worries over coronavirus,” Amit Gupta, Co-Founder, TradingBells, told Moneycontrol.
“It is a global issue which is worrying FIIs because as per past behaviour, emerging markets tend to underperform amid such kinds of issues. FIIs are not only selling in the cash market, they are also betting on the short side via the F&O market,” he said.
Gupta added that FIIs have 60% net short positions in the index futures and these shorts may help in the short-covering rally if something major positive comes up in the Budget.
Even the rollover activity for the February series suggests a cautious stance by traders ahead of the big event.
The Nifty rolls stood near 66.30 percent, compared to the three-month average of 72.13 percent. Market-wide rolls stood at 86.45 percent against the 3-month average of 90.19 percent.
“As the D-Day of Budget 2020 draws nearer, FIIs have pulled back 2,371 crores of funds from the market in order to reduce their exposure and analyse the market. The last few days have been full of quarterly results thereby causing required price changes,” said Gaurav Garg, Head of Research at CapitalVia Global Research Limited- Investment Advisor.
“The Federal Reserve fixed the rate between 1.50-% 1.75%, FIIs seem to be planning to wait for perfect opportunities and invest in handpicked value stocks on the Budget Day and afterward.”
What will cheer FIIs in Budget?
Investors are pinning hopes on some relaxation in personal tax and tweaks in the Long-Term Capital Gains (LTCG) and the Dividend Distribution Tax (DDT). A low fiscal slippage will also make FIIs happy, say experts.
“The abolishment of LTCG and the rationalisation of DDT may change FIIs' sentiments for the Indian equity market. If the government comes out with any major reforms to boost consumption in the economy, then FIIs will once again head towards the Indian equity market,” says Gupta of Gupta TradingBells.
“There are some worries about the fiscal deficit but if the government will be able to give proper road map that it will manage to bring back the fiscal deficit in a comfortable range in the future then FIIs will be happy,” said Gupta.
He added that there is a high demand from the FIIs community from the government to come out with significant steps to strengthen the Indian financial sector which is the key worry of foreign investors for the last one year.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. | foreign institutional investors (FIIs) have turned net sellers, pulling out more than Rs 2,000 crore in from Indian markets in the past four days. the move was not on account of the Budget but on global growth concerns, say experts. the Nifty has slipped more than 1 percent, so far, in January, and about 3 percent from the record high of 12,430 recorded on January 20. | Negative |
https://economictimes.indiatimes.com/news/economy/policy/can-cci-be-more-agile-like-its-eu-and-us-counterparts-in-disposing-of-cases/articleshow/72201833.cms | Three meetings, two hotels, one city. These were crucial to an eight-month-long investigation by the Competition Commission of India CCI ) in 2010 and 2011 to expose a cartel in India’s cement industry, which resulted in a penalty of Rs 6,317 crore, the regulator’s highest in a single case to date.The CCI has since carried out many probes into alleged anti-competitive agreements and companies’ abuse of their dominant position, but it is still best known for the cement cartel case mainly because of the eye-popping fine. It is nearly half of the Rs 13,523 crore the CCI levied in 135 cases till March 2018, according to the latest data available with the regulator. Of its total fines, the CCI has collected a mere Rs 55 crore, or 0.4%.Compare this to the US Department of Justice (DoJ), which collected $172 million in criminal penalties in fiscal year 2018 (October-September), with the highest ever being $3.6 billion in fiscal year 2015. It has also sent several executives to prison.While the CCI cannot boast figures like DoJ, the very fact that it has the authority to severely penalise violators could be working to its advantage. Meanwhile, some of the recommendations made by the Competition Law Review Committee (CLRC), which submitted its report recently, could make CCI more nimble in the resolution of cases and take it a little closer to its counterparts in the EU, the UK and the US.It was in 2010, almost a decade ago, that the CCI, which had only become operational in May 2009, decided to probe its most high-profile case — to find out if 10 cement companies colluded through the Cement Manufacturers Association (CMA) to limit supplies and raise prices. The CCI said that after two of three CMA meetings at Mumbai’s Grand Hyatt and Hotel Orchid in early 2011, the companies hiked cement prices, which, the CCI said, “establishes that they co-ordinated their decisions and fixed prices after due consultations”. There were also questions over whether Ambuja Cement and ACC, which are part of the Swiss company LafargeHolcim, had attended two of these meetings despite no longer being members of the CMA.The companies and the CMA disputed the CCI’s findings and appealed the penalty. The case has made its way through the Competition Appellate Tribunal, the National Company Law Appellate Tribunal ( NCLAT ), which replaced the former in 2017, and is now pending before the Supreme Court, which asked the parties to deposit 10% of the penalty last year. Aparna Dutt Sharma, secretary general, CMA, did not respond to a request from ET Magazine for comment. Questions sent to Lafarge-Holcim, UltraTech Cement and Jaiprakash Associates, which were handed the highest penalties, also went unanswered.The delay in the conclusion of this case — and others where fines were levied — has meant that companies have not coughed up what the CCI asked them to. Should that be a cause for concern? Kaushal Kumar Sharma, the first director-general of the CCI, says it would be wrong to equate deterrence to realisation of penalties. Vaibhav Choukse, partner, competition law, J Sagar Associates, concurs. “Companies do not want to be on the wrong side of the competition law as there is a huge reputational loss from a penalty.” A listed company will have to make disclosures to the stock exchanges in case it is fined by the CCI, which could drive its shares down.“It’s not that the CCI wants to make money. The CCI’s idea in the early days was to make a splash and say, ‘We have arrived,’” says a competition lawyer, requesting anonymity. Nisha Kaur Uberoi , national head of competition law at Trilegal, a law firm, says the CCI has created deterrents through a combination of factors: “its ability to levy India’s highest economic penalties on companies, imposition of individual liability as well as advocacy to foster a culture of competition compliance”. By individual liability, she is referring to the CCI’s powers to penalise the directors of an errant company.Ashok Kumar Gupta, chairman, CCI, recently told ET that penalties are not an end in themselves in any enforcement process. “In numerous cases, parties rectify their anti-competitive behaviour during the enquiry process itself so the market correction as such has taken place.”As of March 2018, the CCI had noted 940 competition cases, ordered probes into 400 and completed investigations in 288. Even before the cement cartel case, a CCI order in 2011 gave India Inc an inkling of the regulator’s powers. It investigated the realtor DLF’s conduct in relation to one of its apartment buildings in Gurgaon and found that the company had set terms unfavourable to buyers in their agreement, like their inability to raise objections to changes in the structure by the builder. The CCI report added: “Despite knowing that necessary approvals were pending at the time of collection of deposits, DLF Ltd inserted clauses that made exit next to impossible for the buyers.”The CCI fined DLF Rs 630 crore, which the realtor appealed; the matter is now in the apex court. Also before the Supreme Court is an appeal related to a Rs 591 crore penalty on Coal India for discriminatory terms in fuel-supply agreements. DLF and Coal India did not respond to questions sent by ET Magazine. Besides looking at anti-competitive agreements like cartels and abuse of dominance, the CCI also has to greenlight mergers and acquisitions beyond a certain size. The CCI, set up under the Competition Act, 2002 (amended in 2007), replaced the Monopolies and Restrictive Trade Practices Commission.The CLRC, which the government set up last year, has recommended a series of changes to the CCI. These include a dedicated NCLAT bench for competition cases, given that NCLAT is overburdened with cases under the Insolvency and Bankruptcy Code (IBC), 2016. Though there is no NCLAT-specific data, as of September 30, there were nearly 1,500 IBC cases pending before the NCLAT or the Supreme Court, according to the Insolvency and Bankruptcy Board of India.Some of the report’s suggestions could make the CCI dispose of cases quickly. The introduction of settlement and commitment procedures, for instance, could help avoid pendency of cases. In the EU, which has had settlements since 2008, half the cartel cases are resolved using settlements, in which the parties admit to their guilt in exchange for a 10% reduction in penalties. Since 2004 the EU has also had commitments, in which the parties agree to change their behaviour. The US DoJ has consent decrees, which need to be court-approved.Another recommendation made by the CLRC is that the CCI should be transparent in how it arrives at penalties, like in the EU and the UK. “It’s as if the CCI is pulling figures out of a hat,” says Aditya Bhattacharjea, professor at the Delhi School of Economics and a member of the CLRC.The CCI, according to CLRC recommendations, can levy a penalty of up to 10% of the average turnover of the preceding three years in matters related to abuse of dominance. In case of cartels, it can impose a fine of up to 10% of their turnover or up to three times their profit in each year of the period during which the cartel existed, whichever is higher. “Having penalty guidelines will be good for the CCI when it has to defend its orders in courts,” says the competition lawyer quoted earlier.Regardless of when these recommendations are incorporated into the law, experts say companies could make use of an existing provision to minimise a crippling penalty. A company engaged in an anti-competitive agreement with its competitors can alert the CCI to the existence of the cartel and cooperate in the investigation in the hopes of being waived a part, or the whole, of its fine.Panasonic Energy utilised the lesser penalty option and went to the CCI in 2016 and admitted that it was part of a cartel with Eveready Industries and Indo National (which sells under the Nippo brand), aided by their industry association, to control the distribution and prices of zinc-carbon dry cell batteries, since 2008. Eveready and Indo National also availed of the lesser penalty provision. As a result, the CCI waived 100% of Panasonic’s Rs 75 crore penalty, and reduced Eveready’s and Indo National’s fines by 30% and 20%, respectively, to Rs 172 crore and Rs 42 crore.Cracking down on cartels without one of the participating companies coming forward is not easy, especially since in some cases the CCI may not have more than circumstantial evidence to base its conclusions on. An even bigger challenge is dealing with violations in the fast-evolving world of technology.Acting on information filed by Jaipur-based Consumer Unity & Trust Society and Matrimony.com, the CCI in 2018 fined Google Rs 136 crore for promoting its own specialised search — say, for flights — to the detriment of other websites. The order was stayed by NCLAT. Google is also being probed by the CCI for tying some of its apps to Android and limiting handset makers’ ability to sell devices with alternate versions. “Android has enabled millions of Indians to connect to the internet by making mobile devices more affordable. We look forward to working with the CCI to demonstrate how Android has led to more competition and innovation, not less,” says a Google India spokesperson.Google’s dominance has been under scrutiny in the EU and the US as well. Since 2017, it has been fined a total of $9.3 billion by the EU in three different cases related to its abuse of dominance by favouring its advertising and shopping services over its competitors’ and for bundling some of its applications with Android. (Google has appealed all three orders.) It is also being investigated in the US and so are Facebook and, reportedly, Amazon. “Other than in the EU, competition regulators are exercising caution (with tech companies) because consumers are benefiting from these companies,” says Bhattacharjea.While India may have got a competition authority later than several other countries, new technologies are coming to India soon after they are launched elsewhere. This is why Sharma, former CCI director general, believes that handling tech matters may not be too hard for the CCI. One of the emerging areas of concern for competition regulators worldwide is artificial intelligence-powered pricing algorithms of competitors colluding to fix prices. Who is to be held responsible here in the absence of executives of rival companies acting in tandem?In addition to instances of cartelisation and abuse of dominance in the old-economy sectors, the CCI will have to increasingly deal with competition cases in businesses like ecommerce, ridehailing, food delivery and online travel aggregation (the CCI is currently investigating MakeMyTrip and Goibibo, which merged in 2017, and Oyo Rooms over allegations of predatory pricing, among others). The CCI has also made clear its intent to pursue cases on its own without a formal complaint. But what is unlikely to change, till the CLRC recommendations are implemented, is the time it takes for a case to reach its conclusion. | competition commission of india investigated a cement cartel in 2010 and 2011. regulator's highest in a single case to date was Rs 6,317 crore. of its total fines, the CCI has collected a mere Rs 55 crore, or 0.4%. of its total fines, the CCI has collected a mere Rs 13,523 crore. | Negative |
https://economictimes.indiatimes.com/industry/telecom/telecom-news/jio-to-become-indias-no-1-telecom-operator-by-2021-bernstein-report/articleshow/67027316.cms | Agencies
Kolkata: Reliance Jio Infocomm is poised to race ahead of Vodafone Idea and Bharti Airtel to emerge as India’s No. 1 telco by revenue share and customers by 2021 and 2022, respectively, brokerage Sanford C Bernstein said.The Mukesh Ambani-led telco, it said, would relentlessly continue to subsidise its popular 4G VoLTE feature phone, called JioPhone, till these twin goals are realised.“Shareholders of Reliance Industries (Jio’s parent) are not complaining, preferring to see Jio continuing to gain share, and we believe neither Airtel nor Vodafone Idea have the stomach to engage in a pointless subsidy war,” Bernstein said in a note to clients.The global brokerage, in fact, expects the two older carriers to look forward to a time when Jio would start monetising its (customer) base through higher pricing after wresting market leadership.Jio’s pricing aggression since its entry in September 2016 forced incumbents to match rates to retain customers, galvanising consumption of voice and data services. Big incumbent carriers were hurt, while fringe players that couldn’t withstand the brutal price war exited and the sector consolidated down to three large private players — Vodafone Idea and Bharti Airtel, among the older ones, and Jio.More recently, strong performances in crucial states and rural mobile markets, have seen Jio boost revenue market share (RMS) by as much as 375 basis points (bps) sequentially to over 26% at the end of September. By contrast, Airtel’s RMS dipped 75 bps to 30.9% amid revenue losses in seven key markets, while VIL’s plunged 190 bps on-quarter to 32.8%, amid revenue slides nearly across India.Jio’s recent Monsoon Hungama offer of exchanging any old feature phone for a JioPhone for about `1,000 (including six months recharge) also proved a runaway hit with users of plain vanilla phones who upgraded to 4G and contributed to the sharp upsurge in the Mukesh Ambani-owned telco’s subscriber base in the September quarter.Airtel’s refusal to fight Jio in the VoLTE feature phone space has come at a heavy price. The telco lost as many as 6.6 million subscribers in the September quarter, while Jio reported a 37 million customer additions during the same taking its total base to over 252 million. Current market leader, Vodafone Idea, which has also refused to counter Jio in the 4G feature phone segment, similarly also lost 13 million customers in the fiscal second quarter, stung by a mix of brutal price wars and rising costs.Small wonder, Bernstein estimates Jio to reach 28% RMS and 26% subscriber share by March next year, especially if Airtel and VIL don’t counter Jio’s call to subsidise its 4G feature phone.“Both Bharti and Vodafone managements have indicated they don’t believe in handset subsidies for prepaid users; so if left unchallenged, Jio could reach the leading revenue market share position by 2021 and by subscribers by 2022,” the global brokerage said.Analysts also expect Airtel and VIL’s decision to unveil minimum recharge plans amid ongoing customer losses to Jio, will see both telcos collectively losing 56 million customers by the fourth quarter of FY19. | mukesh ambani-led telco will continue to subsidise its popular 4G VoLTE feature phone, called JioPhone, till these twin goals are realised. the two older carriers will look forward to a time when Jio would start monetising its (customer) base through higher pricing. big incumbent carriers were hurt, while fringe players that couldn’t withstand the brutal price war exited. | Negative |
https://www.businesstoday.in/sectors/energy/decline-in-global-gas-prices-credit-positive-for-indian-consumers-icra/story/408523.html | The plunge in global gas prices is credit positive for the domestic consumers in the medium-term because it will compel industrial and commercial consumers to convert from alternate fuels, ICRA said in its latest report.
Asian spot prices of liquefied natural gas (LNG) have declined to about $2 per million British thermal units (MMBtu) due to increase in supplies coupled with slow demand in wake of the COVID-19 pandemic. Nearly 29 million tons of liquefaction capacity was added in calendar year (CY) 2019 over 37 million tons added in CY2018.
"Even though LNG trade grew by the highest ever at 40 million tons in CY2019, the demand was outpaced by supply, depressing spot prices. Going forward, another 163 million tonnes of LNG capacity is expected to be added over 2020 to 2025 leading to supply outstripping demand which would continue to weigh on prices," ICRA said.
The report added that the COVID-19 pandemic is expected to drag the world GDP into 3 per cent contraction. "The timing of the recovery in the global economy is uncertain and expected to be prolonged, due to which the demand growth of natural gas is expected to remain muted over the medium term, owing to which prices are expected to remain under pressure," it said.
Besides, crude oil prices have also declined precipitously due to slump in demand on account of coronavirus outbreak which would also pressurise LNG prices, it added.
Also Read: No change in fuel prices on Tuesday; petrol at Rs 80.43, diesel Rs 80.53 in Delhi
"Owing to the unprecedented supply additions, high inventories and demand destruction due to the COVID-19 pandemic, LNG prices have declined to all time low levels. Mirroring the trend in LNG prices, gas prices at various international hubs have also declined to multi-year lows. Henry Hub prices currently at around $1.5/mmbtu, reflect the excess supply despite the recent production cuts amid unprecedented demand destruction due to Covid pandemic and high inventories," said K. Ravichandran, Senior Vice-President and Group Head, Corporate Ratings, ICRA.
"While record low prices are unlikely to sustain beyond the shock of the coronavirus, the surplus of LNG supply means prices will remain subdued. From an LNG aggregators perspective low spot prices could compress marketing margins on contracted long-term LNG as consumers would pressurise for reducing delivered prices," he added.
According to ICRA, low spot LNG prices are positive from a consumer perspective, however, due to the current low demand across different sectors, most production facilities are operating at moderate capacity utilisations and accordingly consumers which have long-term LNG procurement contracts are unable to exhaust the current contracted quantities of gas and take advantage of spot gas.
With ease in lockdown restrictions and recovery in demand, consumers would be in a position to benefit from low spot prices, it said.
Also Read: India-China tension: India to inspect power equipment for malware, Trojan horses
In case of ultra low spot prices, a key beneficiary would be domestic city gas distribution (CGD) companies who are expected to roll out networks in a large number of geographical areas (GAs) and low spot gas prices could provide compelling economics to convert industrial and commercial consumers from alternate fuels, ICRA said.
Moreover, standalone LNG dispensing stations, on which greater regulatory clarity was received recently, could also benefit from demand fillip, it added.
Additionally, in an effort towards enabling gas market and fostering gas trading in the country, the Indian government launched a natural gas trading platform - Indian Gas Exchange (IGX) on June 15, 2020. To begin with, trading has started at the physical hubs at Hazira and Dahej in Gujarat and Kakinada in Andhra Pradesh. The exchange provides six market products such as daily, weekly, fortnightly etc. The contracts traded at IGX are for compulsory physical delivery and are non-transferable.
"While a gas trading exchange would provide efficient and competitive discovery of gas prices, there are several impediments to overcome such as low domestic production vis-a-vis demand, bulk of domestic gas governed by the modified Rangarajan formula, lack of pan India trunk pipeline infrastructure, distance bases transportation tariff regime, different taxation rates across states etc," it said.
By Chitranjan Kumar | ICRA says the fall in global gas prices is credit positive for domestic consumers. spot prices of liquefied natural gas (LNG) have declined to about $2 per million British thermal units. the report added that the COVID-19 pandemic is expected to drag the world GDP into 3% contraction. the report also said that crude oil prices have also declined precipitously due to slump in demand. | Negative |
https://www.moneycontrol.com/news/world/us-expected-to-report-slowest-job-growth-in-six-months-6188611.html | U.S. employers likely hired the fewest workers in six months in November, hindered by a resurgence in new COVID-19 cases that, together with a lack of more government relief money, threatens to reverse the recovery from the pandemic recession.
The Labor Department's closely watched employment report on Friday will only cover the first two weeks of November, when the current wave of coronavirus infections started. Infections, hospitalizations and death rates have sky-rocketed, leading some economists to anticipate a drop in employment in December or January as more jurisdictions impose restrictions on businesses and consumers shun crowded places like restaurants.
"The November employment report may be the last 'strong' employment report for a while until a vaccine is widely available," said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. "The labor market is showing increased signs of stress, which could manifest itself into smaller monthly hiring gains over the winter months."
Nonfarm payrolls likely increased by 469,000 jobs last month after rising by 638,000 in October, according to a Reuters survey of economists. That would be the smallest gain since the jobs recovery started in May and a fifth straight monthly deceleration in job gains, leaving employment 9.621 million jobs below its February peak.
It would be in line with reports on consumer spending, manufacturing and services industries that have suggested a slowdown in the recovery from the worst recession since the Great Depression. Hiring peaked 4.781 million in June.
The United States is in the midst of a fresh wave of COVID-19 infections. Nearly 200,000 new cases were reported on Wednesday and hospitalizations approached a record 100,000 patients, according to a Reuters tally of official data.
Republicans in Congress struck a more upbeat tone on Thursday during coronavirus aid talks as they pushed for a slim $500 billion measure that previously was rejected by Democrats who say more money is needed.
More than $3 trillion in government COVID-19 relief helped millions of unemployed Americans cover daily expenses and companies keep workers on payrolls, leading to record economic growth in the third quarter. The uncontrolled pandemic and lack of additional fiscal stimulus could result in the economy contracting in the first quarter of 2021.
"We are going to see another dip in employment sometime this winter and followed by a decline in GDP in the first quarter," said Sung Won Sohn, a finance and economics professor at Loyola Marymount University in Los Angeles. "Unlike the first wave, there is no massive government stimulus on the horizon to cushion the economy. Interest rates are already zero."
DOWNSIDE BIAS
Job growth last month was likely held back by further departures of temporary workers hired for the 2020 Census. States and local governments are also expected to have shed more workers, leaving overall government payrolls to decline for a second straight month.
Retailers typically embark on seasonal hiring in November, a practice that has been upended by the pandemic. Economists expect this disruption could throw off the model that the government uses to strip seasonal fluctuations from the data.
Payrolls could surprise on the downside. The Institute for Supply Management reported this week its measure of factory employment contracted in November. The Federal Reserve's "Beige Book" report showed employment rising in all districts on or before Nov. 20, but the U.S. central bank noted "for most, the pace was slow, at best."
The unemployment rate is forecast dipping to 6.8% from 6.9% in October. It, however, has been biased down by people misclassifying themselves as being "employed but absent from work." That will keep the focus on long-term unemployment and people working part-time for economic reasons.
Economists will also keep an eye on the share of women in the labor force. Industries that tend to employ women have been hard hit by the recession. Many women have also quit jobs to look after children as schools have moved to online learning.
The number of people out of work for more than six months surged by 1.2 million in October. There were 6.7 million part-time workers. The share of those permanently unemployed increased to 40.9% in October from 35.6% in the prior month.
"Long-term unemployment always rises in a downturn, but the increase in the share of long-term unemployed has been extraordinarily rapid in the pandemic recession," said Dean Baker, senior economist at the Center for Economic and Policy Research in Washington. "This matters because people who have been unemployed for more than six months generally have a harder time being reemployed."
Labor market slack is expected to have left wages barely rising in November. Average hourly earnings are forecast nudging up 0.1%, matching October's gain. The average workweek is seen steady at 34.8 hours. Slower job and wage growth would lead to weakness in a proxy for take-home pay.
"The slowing in income along with the lack of another fiscal stimulus package will constrain household income and spending going forward," said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics in New York. | nonfarm payrolls likely increased by 469,000 jobs last month. that would be the smallest gain since the jobs recovery started in may. the united states is in the midst of a fresh wave of COVID-19 infections. a lack of more government relief money could result in the economy contracting. a spokesman for the labor department says the report is "very optimistic" | Negative |
https://www.moneycontrol.com/news/business/markets/how-to-make-the-most-of-muhurat-trading-4577391.html | Rahul Jain
The Indian economy, despite all its inherent potential, is going through one of its leanest patches recently. Renowned global agencies like the International Monetary Fund (IMF) and the Asian Development Bank (ADB) have slashed the country’s growth forecast in their publications. Today, the signs of an economic slowdown are all the more evident.
With the economic slowdown taking the center-stage, resulting in most investments turning red, investors are looking at ways to reverse fortunes and be optimistic.
Interestingly, our rituals, too, are all about keeping negativities at bay, being positive and Muhurat trading is just the beginning.
Positive sentiment on the horizon:
Muhurat trading is an auspicious slot on the day ‘Lakshmi Pujan’ on Diwali when markets open for an hour in the evening. Trading done during that particular period is believed to bring good luck, wealth and prosperity.
For individual and institutional investors, Muhurat trading presents an opportunity to carry out some trading as a token of auspicious buying. More than a means for booking profit, transactions are carried out with the hope of a profitable year ahead.
This year, BSE and NSE will conduct Muhurat trading on October 27 from 18:15 hrs to 19:15 hrs.
How to make the most of Muhurat trading?
As Muhurat trading is the mark of a new beginning, it’s the right time to take stock of your asset allocation and find out if it’s performing as per your liking, most importantly according to your financial goals. Note that with trading restricted to only an hour, Muhurat trading limits liquidity.
With little space to book profit, it is advisable to avoid day trading strategy during this special trading session. New investors looking to get started can make token investments to mark the auspicious occasion.
While doing so, don’t get swayed by the festive sentiments. Invest a small amount, ideally in large-cap scrips. If you are in a dilemma, you can take help from a certified financial planner.
To sum up:
Amid the domestic slowdown, international developments like political tension in the Middle East and the raging trade war between global powers are further expected to put pressure on the Indian economy.
As a response to the ongoing crisis, the concerned authorities have come up with several initiatives like concession in corporate tax, cut in the repo rate and linking of lending rate to external benchmarks for the efficient transfer of benefits of such cuts to the borrowers.
A boost in domestic investment holds the key to the revival of the spirits in the Indian financial markets. Also, paying homage to the goddess of wealth, Lakshmi, there can’t be a better occasion than Muhurat Trading to get started.
India, with its highly developed regulatory infrastructure and policy machinery, has gone a long way to set up a competitive business environment. Tiding over the current economic slowdown calls for financial consolidation, of which Muhurat trading can be the perfect beginning.
In a fluid market scenario, a long- term investment strategy can help you leverage the power of compounding and benefit from the inflation-beating returns of equities.
Happy trading!
(The author is Head, Personal Wealth Advisory, Edelweiss)
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. | the economic slowdown is taking the center-stage, resulting in most investments turning red. Muhurat trading is an auspicious slot on the day ‘Lakshmi Pujan’ on Diwali when markets open for an hour in the evening. trading done during that particular period is believed to bring good luck, wealth and prosperity. this year, BSE and NSE will conduct Muhurat trading on October 27 from 18:15 hrs to 19:15 hrs. | Negative |
https://www.financialexpress.com/brandwagon/coronavirus-impact-how-broadcasters-are-dealing-with-content-shortfall/1918376/ | The television broadcast industry is taking a few creative liberties to deal with the lack of fresh content in the wake of the coronavirus outbreak. While some broadcasters are developing theme-based edits of existing content, and bringing back iconic shows, others are resorting to reruns of popular shows, and testing the viability of using video conferencing tools to create content.
The Indian film and television industry had decided to halt shoots as a preventive measure until March 31. But the 21-day national lockdown has imposed a longer moratorium on the industry. With a content repository that could last only four weeks, most broadcasters had run out of fresh content by March end.
Riding on nostalgia
Bringing back old shows seems to be broadcasters’ best bet. Public broadcaster Doordarshan led the trend by bringing back iconic shows such as Ramayan, Circus, Byomkesh Bakshi and Shaktiman, among others. Viacom18 is airing reruns of its marquee non-fiction show Bigg Boss (Season 13) at 10 pm every day on Colors.
Zee TV is replacing its prime time shows Kumkum Bhagya and Kundali Bhagya with a few finite web series namely, Karrle Tu Bhi Mohabbat, Baarish, Kehne Ko Humsafar Hain, which were first streamed on ALTBalaji.
Prathyusha Agarwal, chief consumer officer, Zee Entertainment Enterprises, says, “We will also be creating fresh edits of existing shows. For instance, for &TV, we are developing edit-based, long episodes of shows such as Ek Mahanayak – Dr BR Ambedkar and Happu Ki Ultan Paltan.” The broadcaster is expected to tap into the originals library of its OTT platform, Zee5.
Additionally, broadcasters have turned some of their channels into free-to-air for a period of two months on all DTH and cable networks. Sony Pal, Star Utsav, Zee Anmol and Colors Rishtey are among the channels that are now available for free.
‘Home’ productions
The lockdown has led to a significant increase in television viewership, but most of the viewing is concentrated on news, movies and kids channels. The average time spent on GECs dropped by 5% in the week of March 14-21, as per the Broadcast Audience Research Council India, while news and kids channels have seen an increase of 17% and 11%, respectively, in average time spent.
In the US, where talk shows are immensely popular, broadcasters have begun creating broadcast-level content from the homes of the show hosts.
“While we are exploring all kinds of best practices from our counterparts in other markets, replicating the broadcast-from-home model will be tough in a scripted content heavy market like India,” says Deepak Dhar, founder and CEO, Banijay Asia.
Indian programming is dominated by scripted serials and non-fiction reality TV shows — both of which need a large set-up, crew and equipment.
Content creators in India are getting creative though. Cricketer Kevin Pietersen has been hosting interviews via Instagram Live with celebrities such as Indian batsman Rohit Sharma and member of Parliament Shashi Tharoor, while film reviewer Anupama Chopra is using Zoom video conferencing to interview Bollywood celebrities for YouTube channel Film Companion.
These formats are inspiring Indian television producers. Industry watchers say that sports channels are exploring options to replicate interviews via video conferencing and remote content creation formats.
Dhar says that while production has come to a grinding halt, teams are working on developing shows during this time. “This situation has shown us that we need to start evolving in the way we produce our content,” he says.
Ashish Pherwani, partner, media and entertainment leader, EY India, expects movies made on small budgets or movie producers struggling with cash flows to turn to early premieres on television. These too could help broadcasters who are content hungry right now.
Read Also: Ramayan returns with a bang; garners 170 million viewers over a weekend: BARC
Follow us on Twitter, Instagram, LinkedIn, Facebook | television broadcasters are taking creative liberties to deal with the lack of fresh content in the wake of the coronavirus outbreak. some are developing theme-based edits of existing content, while others are resorting to reruns of popular shows. the 21-day national lockdown has imposed a longer moratorium on the industry. most broadcasters had run out of fresh content by march end. | Negative |
https://www.moneycontrol.com/news/trends/coronavirus-pandemic-need-smart-upgrade-one-size-fits-all-lockdown-has-brought-untold-misery-rahul-gandhi-5143641.html | Hours before Prime Minister Narendra Modi announced the extension of the nationwide lockdown till May 3 to curb the spread of the novel coronavirus, Congress leader Rahul Gandhi had taken to Twitter to dub it as the “one-size-fits-all” lockdown.
For live updates on coronavirus, click here
Seeking a “smart upgrade” to the current situation in the country, he had urged the Centre to craft a solution that would help resuscitate the dying businesses at least in areas that are less affected by the novel coronavirus.
The one-size-fit-all lockdown has brought untold misery & suffering to millions of farmers, migrant labourers, daily wagers & business owners. It needs a “smart” upgrade, using mass testing to isolate virus hotspots & allowing businesses in other areas to gradually reopen. — Rahul Gandhi (@RahulGandhi) April 13, 2020
COVID-19 Vaccine Frequently Asked Questions View more How does a vaccine work? A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine. How many types of vaccines are there? There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine. What does it take to develop a vaccine of this kind? Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time. View more Show
However, in his national address at 10 am on April 14 – the day the first lockdown was supposed to end – the Prime Minister only announced the extension of the lockdown, without much discussion on ways to restart economic activity, at least partially, in phases.
Coronavirus impact | Lockdown to hit state govt's finances worse than Centre
He, however, has been stressing on “jaan bhi, jahaan bhi” -- focusing on both life and livelihood -- as the mantra of the second lockdown against the “jaan hai toh jahan hai” – focusing only on saving lives -- mantra of the previous one.
The Prime Minister has promised to review the situation of the country five days from now on April 20 and basic economic activity may be allowed in certain pockets that prove to be safe from coronavirus infection, albeit with restrictions in place to ensure safety.
Coronavirus pandemic | Top-10 places most responsible for spreading COVID-19 in India
The lockdown has financially crippled the unorganized sector of the Indian economy, including migrant workers and daily wage earners. While stimulus packages have been announced by the Centre to help the poor sustain themselves during the lockdown, their lives can only limp back to normalcy once work resumes in these sectors.
To follow our full coverage on coronavirus, click here | the one-size-fits-all lockdown has brought untold misery & suffering to millions of farmers. a vaccine works by mimicking a natural infection. a vaccine also helps quickly build herd immunity to put an end to the pandemic. a vaccine works by mimicking a natural infection. a vaccine works by mimicking a natural infection. | Negative |
http://www.financialexpress.com/market/shares-of-pnb-icici-bank-axis-bank-ultratech-cement-rpg-life-sciences-rcom-indian-hotels-in-focus-today-7-march-2018-bse-nse/1089852/ | Indian stock markets are likely to open lower on Wednesday, 7 March 2018 following the declines in the US stock futures in the late session as the top economic advisor to President Donald Trump, Gary Cohen resigned from the post. The early indicator of NSE Nifty, SGX Nifty Futures was trading little changed, down 0.12% at 10,220 on Singapore Exchange on Wednesday. Shares of the fraud-hit Punjab National Bank, ICICI Bank and Axis Bank will be in a close watch today as the top officials have been issued the summons in regard to Rs 12,700 crore scandal at India’s second-largest PSU bank PNB.
These stocks will be in focus today
PNB: The anti-fraud agency, SFIO has summoned PNB managing director and CEO Sunil Mehta to record his statement in connection with the Rs 12,700-crore fraud at the bank, and he is expected to appear today, PTI reported citing unidentified officials.
ICICI Bank & Axis Bank: Senior officials from private sector lenders ICICI Bank and Axis Bank had appeared before the SFIO (Serious Fraud Investigation Office) after the anti-fraud agency summoned ICICI Bank’s MD & CEO Chanda Kochhar and Axis Bank’s MD & CEO Shikha Sharma with regard to investigations into the Rs 12,700 crore PNB scam. Further, Axis Bank has revealed that it has Rs 200-crore exposure to companies promoted by Nirav Modi and Mehul Choksi.
UltraTech Cement: The RBI has increased the limit of foreign portfolio investment (FPI) in UltraTech Cement to 40%.
RPG Life Sciences: Pharmaceutical firm RPG Life Sciences promoter Summit Securities sold nearly 11% stake in the company for Rs 79.18 crore, in an open market transaction.
Indian Hotels Company: Indian Hotels Company Ltd (IHCL) said Tata Sons will be acquiring up to 6.64% shares of the company from three promoter entities as part of restructuring the investment portfolio.
Reliance Communications: An arbitration tribunal in an interim order has restrained debt-ridden Reliance Communications from sale, transfer or mortgaging of assets.
The Indian rupee on Tuesday: The rupee jumped to a fresh one-week high gaining 16 paise to end at 64.96 against the US dollars.
Indian stock markets on Tuesday
Indian stock markets ended in negative territory for the fifth straight session on Tuesday with Sensex plunging 429 points and Nifty slipping below 10,250-mark as shares of heavyweight stocks such as ICICI Bank, Reliance Industries, HDFC Bank, ITC, TCS, SBI tumbled while PSU banks shares crashed heavily today. The S&P BSE Sensex lost 429.58 points or 1.27% to conclude at 33,317.2 whereas NSE Nifty settled below 10,300, at 10,221.2, down by 137.65 points or 1.33%. Shares of the blue-chip private sector lender ICICI Bank dragged the key equity indices heavily after the anti-fraud agency, SFIO summoned MD & CEO of ICICI Bank in the PNB fraud case.
US stock markets on Tuesday
US stock futures fell more than 1% late Tuesday after the resignation of US President Donald Trump’s top economic adviser, Gary Cohn, fueled fears that the administration would follow through with plans to impose steel and aluminium tariffs, possibly triggering a trade war, Reuters said in a report. White House officials said the dispute over tariffs contributed to Cohn’s decision to resign but was not the only reason, Reuters reported. The Dow Jones Industrial Average rose 9.36 points, or 0.04% to close at 24,884.12, the S&P 500 gained 7.18 points or 0.26% to 2,728.12 and the Nasdaq Composite added 41.30 points or 0.56% to 7,372.01. | early indicator of NSE Nifty, SGX Nifty Futures was trading little changed, down 0.12% at 10,220 on Singapore Exchange on Wednesday. ICICI Bank and Axis Bank have been summoned in regard to the Rs 12,700 crore fraud at the bank. meanwhile, axis bank has revealed that it has Rs 200-crore exposure to companies promoted by Nirav Modi and mehul Choksi. | Negative |
https://www.financialexpress.com/economy/q4-gdp-growth-estimate-no-consensus-among-economists-forecasters-govt-to-release-data-tomorrow/1973556/ | Eyes are glued on the Q4 economic growth data, as it includes the figures for one week of lockdown, which has the potential to drag the overall growth figure down.The government is set to release GDP growth figures for the fiscal fourth quarter Jan-Mar tomorrow; however, economists’ and rating agencies’ forecasts show no consensus and vary over a very wide range. Eyes are glued on the Q4 economic growth data, as it includes the figures for one week of lockdown, which has the potential to drag the overall growth figure down. While ICRA estimates the Q4 GDP growth at 1.9 per cent, CRISIL estimates it at 0.5 per cent. SBI research has pegged the Q4 FY2019-20 GDP growth rate at 1.2 per cent. In today’s report, Care Ratings has put the most optimistic Q4 GDP growth at 3.6 per cent. A Reuters poll of economists has forecast India’s fourth quarter GDP growth at 2.1 per cent.
One of the major reasons for diverse predictions could be the absence of reliable headline numbers, making the predictions less precise. The difference in the predictions is so large that six out the 52 economists in the Reuters poll have also predicted a contraction in GDP in Q4. However, the GDP growth in full-year FY20 is unanimously believed to be in the range of 4 – 4.3 per cent. The impact of the Covid-19 outbreak on travel, tourism and hospitality, government expenditure compression amidst revenue shortfalls in March 2020, and subdued credit growth are expected to have adversely impacted service sector performance in Q4 FY2020, said Aditi Nayar, Principal Economist, ICRA.
Also Read: Cash still king, demonetisation effect gone; digital payments rising but face 2 key roadblocks
Generally, business and economic activity shoots up in the last quarter as companies put more effort to meet their annual targets. However, the nationwide lockdown called by Prime Minister Narendra Modi in the last week of March had put a major roadblock before the economy. The coronavirus pandemic is not the only trouble behind the country’s growth, instead, it is superimposed on the previous trouble of a longer-than-anticipated slowdown in the country. These two reasons clubbed together are responsible for the pessimistic growth predictions in the last quarter.
Meanwhile, the growth figures for the fourth quarter will also help in giving some clarity in establishing a base for the predictions of the first quarter when economic activity had almost come to a standstill in April and showed very limited momentum in May. Recently, RBI Governor Shaktikanta Das said that the Indian economy will contract in the current fiscal. | the government is set to release GDP growth figures for the fiscal fourth quarter Jan-Mar tomorrow. while ICRA estimates the Q4 GDP growth at 1.9 per cent, CRISIL estimates it at 0.5 per cent. a Reuters poll of economists has forecast India’s fourth quarter GDP growth at 2.1 per cent. the impact of the coronavirus pandemic is not the only trouble behind the country’s growth. | Negative |
https://www.moneycontrol.com/news/india/covid-19-to-test-several-established-legal-precedents-in-the-months-ahead-5225311.html | By Jayant Bhatt
For the past few months, we have been staring into the face of a grave danger, to the economy, society, as well as to the human race. What repercussions will ensue, none can fathom. None of us has witnessed a situation like the present one, where flights are grounded, ships remain docked at ports, cars silently parked at the houses, factories are mandatorily closed, and people, who have the good luck and luxury to afford it, remain locked in their own homes without protest.
Business as we know it, is not being conducted. While many employees in the services sector have the luxury of working from home, businesses based on manufacturing or requiring hands-on labour are suffering huge losses. While the efforts of our elected government in protecting the country from the deadly effects of the pandemic are laudatory, the resultant effects on our economy cannot be ignored.
The daily barrage of notifications coming everyday being issued by the government, either as a diktat or as an advisory, is making life tougher for these already struggling businesses.
While this unprecedented situation is beyond one's wildest imagination, the requirement by the state for all citizens to remain philanthropic i.e. neither lay off employees nor cut their salaries for an indefinite period of time appears to be impractical and misguided. Simply put, when one is prevented from operating their business indefinitely and earning profits, how can the state expect them to be philanthropic?
COVID-19 Vaccine Frequently Asked Questions View more How does a vaccine work? A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine. How many types of vaccines are there? There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine. What does it take to develop a vaccine of this kind? Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time. View more Show
According to the latest press release dated May 1, 2020, the lockdown in our country has been extended for a further period of two weeks. The press release, once again, in predictable fashion, creates more ambiguity than clarity on facing the present situation.
It is noteworthy that while there is certain relaxation for e-commerce companies, activities in the demarcated Red Zone are permitted only to the extent of essential goods. One can imagine the problems arising from this declaration, when in many places, as in Delhi, the entire state has been declared a Red Zone. Further, the press release states that private offices can operate with upto 33 percent strength as per requirement, with remaining persons working from home.
I may be alone in this opinion, but the actual implementation of such clauses can only be imagined, not effectuated. Our well-intentioned though haphazard implementation of the lockdown begets the important legal question for businesses forced to sack its workers. What legal consequences will they face? The short answer is that our courts, which are overburdened, will face an explosion of resultant litigation by disgruntled employees and labor unions. Apart from unpaid employees, another major challenge facing businesses is their performance of contracts. Most contracts entered into nowadays contain standardised Force Majeure clauses, which may be rendered ineffectual in view of the present unimaginable situation. However, our judiciary is attempting to remain ahead of the problem.
As recently as last week, the High Court of Delhi in Halliburton Offshore Services Inc. v. Vedanta Ltd. & Anr., granted relief to the petitioner by allowing their claim of restriction on movement due to the present pandemic of COVID-19 to be in the nature of a Force Majeure event, and consequently, the respondent was restrained from invoking a bank guarantee against the petitioner.However, earlier this month, the Bombay High Court, on a strict reading of a Force Majeure clause contained in an agreement, disallowed a party from invoking the said clause in order to terminate a contract pertaining to the distribution of an essential commodity viz. steel, on grounds that the Force Majeure clause was applicable only to the Respondent, and further, that steel being an essential commodity, was not subject to the restriction imposed due to the nation-wide lockdown resulting from the pandemic.
Needless to state that although the aforementioned cases differ vastly in essence, the indefinite lockdown, that is undoubtedly required to stem the spread of COVID- 19, is dramatically increasing the liability of businesses.
Attributing the present situation of the novel coronavirus as an Act of God or a Force Majeure situation shall be dependent on the exact terms of a contract, and courts in general have been known to make strict interpretations of the same.
However, it is noteworthy that as of now, the Supreme Court has not been seized of such issues. If either of the aforementioned judgments were to be challenged before the apex court, it would undoubtedly provide a novel way of reading the same.In view of the numerous challenges faced by our citizenry, a question on the legality of such a lockdown too is constantly being raised. However, it is the judiciary which will finally decide if the actions of either the Legislature or the Executive were toeing the line or veering towards sheer arbitrariness.
(The author is a New Delhi-based independent litigator who practices in the Supreme Court. He holds dual Masters of Law (LL.M.) from New York University, USA and National University of Singapore and has over a decade of experience in commercial law)
Follow our full coverage of the coronavirus outbreak here | a pandemic like this is a grave danger to the economy, society and human race. a vaccine works by mimicking a natural infection. a vaccine works by mimicking a natural infection. a vaccine works by mimicking a natural infection. a vaccine works by building herd immunity to put an end to the pandemic. | Negative |
https://www.moneycontrol.com/news/business/markets/market-live-nifty-hovers-around-10250-midcaps-outshine-tata-motors-extends-gains-2541989.html | Moneycontrol News
3:30 pm Market Closing: Benchmark indices closed sharply lower after gains seen in previous two consecutive sessions, weighed by US-China trade war concerns.
The 30-share BSE Sensex was down 351.56 points or 1.05 percent at 33,019.07 and the 50-share NSE Nifty fell 116.60 points or 1.14 percent to 10,128.40.
About 1,427 shares declined against 1,183 advancing shares on the BSE.
Nifty Midcap was down 225 points.
Gammon Infra, PC Jeweller, Jaiprakash Associates, HCC, Sunil Hitech, SAIL, HDIL, DLF, Union Bank, South Indian Bank and Ashok Leyland fell up to 5 percent.
Kwality was up 10 percent while Nalco and Indiabulls Real gained 2-3 percent.
3:26 pm ICICI Securities Performance:
3:18 pm Godawari Power & Ispat inform exchanges that it has received approval of competent authority for private railway siding served by Mandhar Station of Raipur Division for inward traffic of coal, iron ore & manganese and outward traffic of pellet, which has become operational w.e.f. 31st March, 2018.
Earlier, the company used to transport its raw materials through the railway siding facility of Raipur Infrastructure Company (RICL), a joint venture company, at Mandhar, Raipur.
The lease period of the said railway siding of RICL has expired on March 31, 2018 and the same has not been renewed.
There will not be any interruption in the movement of the raw materials due to above developments, the company said.
3:10 pm Leading contributors to Nifty's fall: HDFC Bank, L&T, HDFC, IOC, Titan Company, Vedanta, Infosys, Bajaj Finserv, Kotak Mahindra Bank, Grasim, UPL, Yes Bank and SBI were down up to 4 percent.
2:58 pm HUDCO in focus: HUDCO has achieved the level of loan sanctions (provisional) of Rs 38,600 crore and loan releases (provisional) of Rs 16,500 crore as on March 31, 2018, for the financial year 2017-18.
2:45 pm Market Update: The market is trading near day's low, with the Sensex falling nearly 400 points after China has announced new tariffs on 106 US products, which include soybeans, cars and whisky.
The Nifty Bank index lost more than 400 points while the Nifty50 slipped more than 100 points as all sectoral indices are in the red barring Auto.
Nifty Midcap index is also down over a percent.
Dow Jones futures are down 2 pecent, indicating negative opening on Wall Street later today.
2:30 pm Licensing agreement: Glenmark Pharmaceuticals and Helsinn Group, a Swiss pharmaceutical group focused on building quality cancer care products, entered into an exclusive licensing agreement to introduce AKYNZEO in India and Nepal.
AKYNZEO, an oral fixed combination of netupitant 300mg and palonosetron 0.5mg in capsule form, is used for prevention of chemotherapy-induced nausea and vomiting (CINV).
Glenmark will have exclusive marketing rights for AKYNZEO in India and Nepal.
2:20 pm Order Win: CC has received four new orders totalling to Rs 1,085 crore in March 2018.
Out of this, one order of Rs 344 crore pertains to Water and Environment division and three oders totalling Rs 741 crore pertain to electrical division.
2:10 pm Corporate Affairs Secy on ICICI Bank-Videocon matter: It is well within the SIFO's ambit to make a reference about a case but there is no such reference currently with the corporate affairs ministry on the issue involving ICICI Bank and Videocon Group, a senior official said.
Against the backdrop of controversy over the alleged conflict of interest and quid pro quo involving ICICI Bank CEO Chanda Kochhar and her family members in extending a loan to Videocon Group, reports said the Serious Fraud Investigation Office (SFIO) has sought permission to look into the matter.
The probe agency comes under the Corporate Affairs Ministry.
On whether the matter is being looked at by the SFIO, Corporate Affairs Secretary Injeti Srinivas said there is no such reference in the ministry and added that the RBI is the regulator that is looking into it.
"If the SFIO considers it necessary to make a reference to the ministry, it is well within its ambit," he told reporters.
Here are the top headlines at 2 pm from Moneycontrol News' Anchal Pathak
2:00 pm Market Update: Benchmark indices extended losses, with the Sensex falling 333.36 points or 1 percent to 33,037.27 after China unveiled new retaliation plan for US tariffs.
The Nifty fell 111.80 points or 1.09 percent to 10,133.20.
The market breadth turned negative as about 1,394 shares declined against 1,078 advancing shares on the BSE.
1:51 pm Buzzing: Sharika Enterprises share price rallied 20 percent as it has received letter of intent for designing, supplying, installation and commissioning of solar street lighting systems worth Rs. 40.33 crore (approximately) from one of the State Government's renewable energy agency.
1:36 pm Europe Update: European markets were slightly lower, as elevated concerns of a tit-for-tat trade war between the world's biggest economies overshadowed a bounce on Wall Street.
The pan-European Stoxx 600 was down around 0.2 percent, with most sectors and major bourses in negative territory.
1:31 pm Market Update: Benchmark indices fell sharply in afternoon after China unveiled new retaliation plan for US tariffs.
The 30-share BSE Sensex was down 272.14 points at 33,098.49 and the 50-share NSE Nifty fell 86.30 points to 10,158.70.
1:20 pm China unveils retaliation plan for US tariffs: China has announced new tariffs on 106 US products, which include soybeans, cars and whisky.
The world's second largest economy has set net tariff rate of additional 25 percent on US products, which include soyabean, corn, auto, chemical products.
China will announce effective date for new US tariffs at a later time.
New tariffs on US products include corn, other agri products, some types of aircraft, some plastic products, cotton, orange juice, wheat, sorghum products, tobacco etc.
1:05 pm Fundraising: Indian companies raised Rs 4,975 crore by issuing non-convertible debentures (NCDs) to retail investors in 2017-18 to meet their business requirements, a plunge of 83 percent from the preceding year.
In 2016-17, firms had mobilised Rs 29,558 crore through this route, according to latest data with the Securities and Exchange Board of India (Sebi).
Overall, in terms of volume, there were seven NCD issues in the recently-concluded fiscal as against 16 in 2016-17.
The companies raised money for funding expansion plans, retiring debt, supporting working capital requirements and other general corporate purposes.
NCDs are loan-linked bonds that cannot be converted into stocks and usually offer higher interest rates than convertible debentures.
Here are the top headlines at 1 pm from Moneycontrol News' Sakshi Sharma
12:55 pm Buyback of shares: Akzo Nobel India scrip price rallied 10 percent intraday ahead of board meeting to consider share buyback.
"A meeting of the board of directors of the company scheduled to be held on April 06, 2018, to consider proposal to buyback its own shares," the paint company said in its filing.
Meanwhile, the company completed its divestment of specialty chemicals business to Akzo Nobel Chemicals India Private Limited on March 31, 2018.
12:45 pm Market Update: The market continued to be rangebound, with the Nifty hovering around 10,250 levels.
Investors are awaiting cues from the two-day monetary policy committee meeting which ends on Thursday and March quarter earnings.
Tata Motors retained top position in the buying list of Nifty50 stocks, rising nearly 6 percent after good JLR show in the US in March.
12:35 pm RBI Policy Expectations: The first bi-monthly monetary policy review for FY19 is to be announced by the RBI on April 5.
According to CARE Ratings, the RBI is likely to maintain an unchanged stance on policy rates.
"The important issue will be the tone of the policy- will it be hawkish or neutral. We would tend to think that there would be more than neutral indications with a tint of hawkishness. Also we expect all members of the MPC to vote for at least no change with a possibility of a vote for a rate hike also on cards. However, there would not be a vote for a rate cut most probably," it said.
The policy review is in the backdrop of higher economic growth, moderation in inflation, increase in bank credit growth, lower bank deposits growth, tight liquidity conditions and increasing GSec yields in FY18.
12:20 pm Appointment: Reliance Capital announced the appointment of Nitin Rao as its new Chief Executive Officer.
"Rao will report to Anmol Ambani, Executive Director at Reliance Capital, and will be responsible for driving a more broad-based strategy for growing the wealth management offering to high net worth individuals," the company said.
12:15 pm ICICI-Videocon Case: The Serious Fraud Investigation Office (SFIO) is awaiting a nod from the Ministry of Corporate Affairs (MCA) to probe the ICICI-Videocon case, wherein a loan of Rs 3,250 crore was extended by the bank to the Videocon Group in 2012. The agency wants to take up the investigation as “the quantum involved is several thousand crores” and it concerns “public money”.
The SFIO had sent a request to the ministry last week regarding the same.
The Mumbai office of the SFIO had received a letter from a whistleblower last month. The letter, sources said, talked of alleged “corporate malpractice, surreptitious transactions and round tripping of money”.
The SFIO made a preliminary report on the case and submitted it to the MCA. A source close to the development told Moneycontrol, "The ministry may take a call on the investigation within this week."
Another source told Moneycontrol, "In the preliminary report, there are many transactions which need to be investigated."
12:05 pm Technical Outlook: Ashish Chaturmohta of Sanctum Wealth Management said above 10,250 levels, the Nifty can rally towards 10,420-10,500 levels where next cluster of resistances are seen. On the downside index has immediate resistance at 10,095 levels, breaking below this next support is at 9,950-9,920 levels.
Here are the top headlines at 12 pm from Moneycontrol News' Anchal Pathak
11:56 am Market Update: The market is currently off the day's high in volatile trade. Investors are awaiting cues from the two-day monetary policy committee meeting which ends on Thursday and March quarter earnings.
The 30-share BSE Sensex was up 42.70 points at 33,413.33 and the 50-share NSE Nifty rose 3.40 points to 10,248.40.
About 1,626 shares advanced against 715 declining shares on the BSE.
11:40 am Infosys Earnings next week: Infosys will announce the results for its fourth quarter and year ended March 2018 on Friday, April 13 around 4.00 pm Indian Standard Time.
11:25 am Crude Update: Oil prices slipped on expectations for a build-up in US crude inventories, but Russian government comments on prospects for stepping up cooperation with OPEC to coordinate output cuts braked steeper declines.
US WTI crude futures were at USD 63.32 a barrel, down 0.30 percent, from their previous settlement.
Brent crude futures dipped to USD 67.90 per barrel, down 0.32 percent, after it rose 0.7 percent on Tuesday.
11:15 am Jet Airways in Focus: Shares of Jet Airways rose as much as 3 percent on the bourses after the company said it had entered a pact for buying 75 B737 planes.
In a regulatory filing yesterday Jet Airways said it had entered an agreement with Boeing for buying 75 B-737 Max aircraft, as it looks to strengthen presence in the fast growing domestic aviation market.
Following the announcement, shares of the company opened on a bullish note at Rs 623, then gained further ground to touch an intraday high of Rs 632.25, up 2.99 per cent over its previous closing price.
11:03 am Buzzing: Zensar Technologies share price gained more than 5 percent after receiving a four-year, multi-million dollar contract from the City of San Diego for network services.
The contract has option of extension of two additional two-year terms with the total not to exceed contract value being approximately USD 79 million.
10:50 am Order Win: NBCC has received sanction from Ministry of Home Affairs (MHA), Government of India, for the construction of 14,460 bunkers in villages along the Indo-Pak Border in Jammu and Kashmir amounting Rs 415.73 crore.
NBCC is already executing border fencing work on Indo-Pak & Indo-Bangla borders for the MHA.
10:40 am Market Update: The market gained strength amid volatility, with the Nifty inching towards 10,300 levels and the Sensex gaining more than 100 points.
The broader markets extended gains, with the Nifty Midcap index rising 0.8 percent and BSE Smallcap gaining 1.2 percent.
The 30-share BSE Sensex was up 119.84 points at 33,490.47 and the 50-share NSE Nifty rose 30.30 points to 10,275.30.
About four shares advanced for every share falling on the BSE.
Tata Motors was the top gainer among Nifty50 stocks, up more than 5 percent after strong JLR show in the US in March
10:33 am RBI Approval: IndusInd Bank informed exchanges that the Reserve Bank of India has granted approval for the proposed company's acquisition of 100 percent stake in ISSL.
In March, the bank entered into an agreement with Infrastructure Leasing and Financial Services, the promoter shareholder of IL&FS Securities Services (ISSL) to acquire 100 percent of ISSL.
10:20 am Order Win: Building construction company Capacit'e Infraprojects has received contracts worth Rs 365.50 crore from Oberoi Realty Group entities. The stock gained 2 percent.
10:10 am Appointment: Den Networks said Himanshu Jindal has been appointed as chief financial officer of the company with immediate effect.
Rajesh Kaushall has resigned as chief financial officer and will continue to act as an advisor to the company, it added.
10:02 am Listing: Mishra Dhatu Nigam share price opened lower at Rs 87 on the National Stock Exchange, down 3.3 percent compared to the issue price of Rs 90.
The stock price fell as much as 4.4 percent in morning to hit a day's low of Rs 86.05 while it touched an intraday high of Rs 90.90.
The Rs 438-crore initial public offer of speciality alloy maker Mishra Dhatu Nigam (MIDHANI) was subscribed 1.21 times during March 21-23, 2018.
Here are the top headlines at 10 am from Moneycontrol News' Anchal Pathak
10:00 am Listing: ICICI Securities started off the first day on a negative note due to tepid response to the issue and analysts' doubts over consistency in financial performance going ahead.
The stock price debuted at Rs 453.80 on the National Stock Exchange, down 12.73 percent compared to issue price of Rs 520.
9:50 am Pre-Opening for ICICI Securities, Mishra Dhatu Nigam: ICICI Securities share price settled at Rs 435 in pre-opening trade on the NSE, down 16 percent from issue price of Rs 520.
State-owned steel company Mishra Dhatu Nigam share price settled at Rs 87 in pre-opening, down 3.3 percent from issue price of Rs 90.
9:45 am Monthly Sales Performance: JSW Steel has posted highest every monthly, quarterly and annual crude steel production.
"The monthly production of 1.52 million tonnes for March signifies a capacity utilisation of 101 percent. With this the company achieved 99 percent of production guidance of 16.5 million tonnes, given at the beginning of FY18," the company said.
9:35 am Market Update: Benchmark indices remained rangebound after opening mildly higher, with the Nifty hovering around 10,250 levels.
The 30-share BSE Sensex was up 17.29 points at 33,387.92 and the 50-share NSE Nifty fell 0.70 points to 10,244.30.
The broader markets outperformed frontliners, with the Nifty Midcap rising 0.4 percent and BSE Smallcap index up 0.75 percent on positive breadth.
About three shares advanced for every share falling on the BSE.
9:31 am Monsoon Forecast: Skymet Weather forecasts normal monsoon for India in 2018.
Skymet Weather said monsoon in India is likely to remain normal this year at 100 percent of its long period average of 887 mm. It sees a 20 percent chance of a below normal monsoon and zero probability of a drought.
9:21 am Buzzing: Tata Motors share price rallied more than 3 percent after Jaguar Land Rover's March US sales increased 10.2 percent to 14,232 units compared to 12,918 units sold in year-ago.
The growth was largely driven by Land Rover US sales that jumped 37.8 percent to 10,972 units, but Jaguar US sales fell 34.2 percent to 3,260 units YoY.
9:17 am Midcap Performer: Nifty Midcap gained 13 points.
Zensar Technologies, Akzo Nobel, IDBI Bank, Jet Airways, InterGlobe Aviation, Infibeam, Voltas, Pidilite Industries and VST Tillers gained up to 5 percent.
9:15 am Market Update: Benchmark indices opened mildly higher on Wednesday, with the Sensex rising 92.32 points to 33,462.95 and the Nifty gaining 11.80 points at 10,256.80.
9:08 am Technical Recommendations: We spoke to Guiness Securities and here’s what they have to recommend:
InterGlobe Aviation Ltd: Buy | Close: Rs 1367.85 | Target: Rs 1500 | Stop loss: Rs 1282 | Return: 9.65%
Jamna Auto Industries Ltd: Buy | Close: Rs 85.85 | Target: Rs 98 | Stop loss: Rs 78.50 | Return: 14.15%
Exide Industries Ltd: BUY | Close: Rs 232.95 | Target: Rs 260 | Stop loss: Rs 215 | Return: 11.59%
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
9:06 am Rupee Update: The Indian rupee has opened higher by 3 paise at 64.98 against the US dollar on Wednesday.
It closed at 65.0125 to the dollar in previous session.
9:05 am Stocks in news: Bharat Forge and Ramkrishna Forgings in focus - North America Mach Class 8 truck sales up 102 percent at 46,900 units versus 23,215 units YoY: Agencies
Also Watch - Markets@Moneycontrol: Nifty to start on a flat note; 3 stocks which can give up to 14% return
Tata Motors: March auto sales
-JLR US sales up 10.2 percent at 14,232 units versus 12,918 units (YoY)
-Jaguar US sales down 34.2 percent at 3,260 units versus 4,953 units (YoY)
-Land Rover US sales up 37.8 percent at 10,972 units versus 7,965 units (YoY)
ICICI Securities: ICICI Securities make their debut on the bourses on Wednesday, it will be the first time in almost three years that a company whose public issue remained largely undersubscribed will list on the stock exchanges.
Mishra Dhatu: Shares of Mishra Dhatu Nigam (MIDHANI) will list on BSE and NSE on Wednesday. The initial public offer (IPO), which was oversubscribed by 1.21 times, was opened for subscription from March 21 to March 23. The company had fixed the price band of Rs 87-90 for the public offer.
Zensar Technologies: Technology firm Zensar said it has bagged a four-year deal from the City of San Diego for network services for a deal value of up to USD 79 million.
9:02 am Market Check: Benchmark indices were higher in pre-opening trade on Wednesday, continuing upside for third consecutive session.
The 30-share BSE Sensex was up 66.19 points at 33,436.82 and the 50-share NSE Nifty gained 46.80 points at 10,291.80.
Kwality rallied 10 percent. Voltas was up 2 percent and Zensar Technologies gained 3 percent. Infibeam was up 2.5 percent.
Videocon was down 5 percent.
The three major US stock indexes ended higher after a choppy session on Tuesday as investors looked forward to earnings season while the S&P 500 pushed above a key support level, Reuters reported.
The Dow Jones Industrial Average rose 389.17 points, or 1.65 percent, to 24,033.36, the S&P 500 gained 32.57 points, or 1.26 percent, to 2,614.45 and the Nasdaq Composite added 71.16 points, or 1.04 percent, to 6,941.28.
Asian markets were mixed in early Wednesday trade as Japanese stocks tracked gains seen on Wall Street overnight on a bounce in large cap technology names.
Japan's Nikkei 225 edged up by 0.42 percent and Topix crept higher by 0.16 percent. South Korea's benchmark Kospi index slipped 0.09 percent, weighed down by declines in the technology sector, CNBC reported. | 30-share BSE Sensex was down 351.56 points or 1.05 percent at 33,019.07. the 50-share NSE Nifty fell 116.60 points or 1.14 percent to 10,128.40. about 1,427 shares declined against 1,183 advancing shares on the BSE. ICICI has received approval for private railway siding served by Mandhar Station. | Negative |
https://www.moneycontrol.com/news/world/shelved-aramco-ipo-hits-at-heart-of-saudi-princes-reforms-2877821.html | Saudi Arabia's decision to shelve what was billed as the biggest share sale ever is a major blow to the credibility of Crown Prince Mohammed bin Salman but there are other ways to finance reforms to strengthen the economy, bankers and investors say.
The initial public offering (IPO) of 5 percent of state-owned oil giant Saudi Aramco was a centrepiece of the crown prince's plan to diversify the kingdom's economy beyond oil by raising $100 billion for investment in other sectors.
The 32 year old ruler, widely known as MbS, also promised that listing Saudi Aramco on international stock markets would help create a culture of openness in the secretive kingdom and make it more appealing to foreign investors.
The decision to shelve the IPO raises doubts about the management of the process as well as the broader reform agenda, sapping the momentum generated by Prince Mohammed's dramatic 2030 Vision announcement in 2016 that helped propel him to power in the world's top oil exporter.
"The problem is: the more it gets delayed and the more there's not clarity on why it's getting delayed and what the issues are, the more it undermines confidence," said James Dorsey, a senior fellow at Singapore's S. Rajaratnam School of International Studies (RSIS https://www.rsis.edu.sg).
"He's been very good at creating expectations but not as good at managing expectations," said Dorsey.
Industry sources told Reuters this week that both the international and domestic legs of the IPO had been postponed indefinitely. Energy Minister Khalid al-Falih said the government remained committed to conducting the IPO at an unspecified date in the future.
"The reform process has to be judged on its entirety and over a period of years but this will negatively affect perceptions of its credibility overall, considering that the IPO was promised in such high-profile terms," said Richard Segal, senior analyst at Manulife Asset Management in London.
VISION 2030
Prince Mohammed launched his Vision 2030 programme with promises to fundamentally transform Saudi Arabia's economy and open up its people's cloistered lifestyles. He has implemented a series of high-profile reforms, including ending a ban on women driving and opening cinemas in the conservative kingdom.
But those moves have been accompanied by a harsh crackdown on dissent, a purge of top royals and businessmen on corruption charges, and a costly war in Yemen now in its fourth year.
The crown prince's increasingly aggressive stance towards arch-rival Iran and in relations with supposed friends such as Canada and Germany has unnerved allies and investors alike.
"The Aramco IPO was supposed to be an example of a new global level of transparency. Perhaps because there's so much going on and so little explained, it looks like they've gotten worse at transparency," said a former senior Western diplomat.
But some bankers said the reform programme was far bigger than the Aramco IPO and, despite the possible political fallout, many changes could still go ahead, or even accelerate, now that senior officials are no longer preoccupied by listing Aramco.
"The reality is there is a lot of other stuff that the authorities could do before doing this huge move of the Aramco IPO," said a senior banker whose institution pitched to help arrange the sale.
FDI DRIVE
Riyadh's circumstances have improved greatly since plans for the IPO were first announced in 2016.
Oil was about $35 a barrel at the time and the government was desperate for cash. Oil prices have more than doubled since and the state budget deficit has narrowed sharply, so Riyadh has more room to find other ways to finance projects.
MSCI https://www.msci.com and FTSE Russell http://www.ftserussell.com decided this year to add Saudi Arabia to their emerging market equity indexes, so even without the IPO the kingdom can expect an inflow of $20 billion or more of foreign funds next year.
Meanwhile, the authorities are proceeding, slowly, with other reforms to attract foreign direct investment (FDI).
In July, Riyadh published draft rules for partnerships between the state and private firms to build infrastructure. Last week, the kingdom's water utility said it was talking to international companies about involving them in water distribution and treatment.
In addition to Aramco, authorities have said they aim to sell another $200 billion worth of state assets in the coming years. While many analysts say this looks ambitious, freezing the Aramco IPO may clear the way for smaller sales to go ahead.
"The IPO always had important symbolic value but would not have affected the rest of the Saudi economy very much," said Steffen Hertog, associate professor at the London School Economics and Political Science http://www.lse.ac.uk and a leading scholar on Saudi Arabia.
"Challenges like private job creation for Saudis and improving the legal and regulatory environment for local and foreign investors are more important for kingdom's long-term economic health," he said.
SABIC SALE
While Prince Mohammed put the value of a 5 percent stake in Saudi Aramco at about $100 billion, analysts reckon the IPO would have only raised some $50 billion to $75 billion as the prince's valuation was over-optimistic.
The money would have gone to the government's Public Investment Fund (PIF), largely to fund projects creating jobs. With unemployment among Saudi citizens officially at a record 12.9 percent, finding ways to boost employment is seen as vital.
But even without the IPO, those projects could still go ahead because Aramco said in July it may buy a strategic stake in petrochemicals maker Saudi Basic Industries (SABIC) from PIF - potentially giving the fund as much money as the IPO.
At market prices, the sale of the PIF's entire 70 percent stake in SABIC to Saudi Aramco would raise about $70 billion.
If the PIF can create jobs, suspending the Aramco sale may even prove politically positive for Prince Mohammed because some Saudis were uncomfortable with the IPO.
"The average citizen saw it as a misguided sell-off of the national patrimony. Many Saudi royals worried it would expose their source of wealth and privilege," said Jim Krane, fellow for energy studies at Rice University's Baker Institute.
"So there is probably some level of relief in Saudi Arabia that the state is backing away from the plan." | the initial public offering (IPO) of 5 percent of state-owned oil giant Saudi Aramco was billed as the biggest share sale ever. the decision to shelve the IPO raises doubts about the management of the process and the broader reform agenda. both the international and domestic legs of the IPO have been postponed indefinitely. | Negative |
https://www.businesstoday.in/markets/stocks/sensex-nifty-open-lower-auto-consumer-durables-lead-losses/story/314618.html | The Sensex and Nifty opened lower in trade today led by losses in auto and consumer durables stocks. While the Sensex fell 100 points to 35,555 with 16 components in the red, Nifty was down 20 points to 10,640. Sun Pharma (1.17%), Bajaj Finance (0.74%) and ICICI Bank (1.08%) were the top Sensex gainers.
Top Sensex losers were HUL (0.90%), PowerGrid (0.85%) and HDFC Bank (0.82%).
On Monday, the Sensex fell 368 pts to 35,656 and Nifty lost 119 points to 10,661.
Meanwhile, the mid cap and small cap indices were trading 18 points and 2 points higher in early trade. Market breadth was negative with 642 stocks trading higher compared to 691 falling on the BSE.
Consumer durables stocks and auto stocks led the losses with their indices falling 73 points and 75 points, respectively.
Global markets
Asian markets were lower on Tuesday after the U.S. Justice Department unsealed criminal charges against China's Huawei, its subsidiaries and a top executive ahead of trade talks.
Japan's Nikkei 225 index tumbled 1 percent to 20,448.47 and the Kospi in South Korea shed 0.4 percent to 2,169.42. Hong Kong's Hang Seng index was 0.8 percent lower at 27,370.58. The Shanghai Composite index fell 1 percent to 2,572.39. Australia's S&P ASX 200, reopening after a holiday, eased 0.6 percent to 5,870.80. Stocks fell in Taiwan and Singapore but rose in Indonesia.
Edited by Aseem Thapliyal | Sensex and Nifty opened lower in trade today led by losses in auto and consumer durables stocks. top Sensex gainers were sunpharma (1.17%), Bajaj Finance (0.74%) and ICICI Bank (1.08%) top Sensex losers were HUL (0.90%), PowerGrid (0.85%) and HDFC Bank (0.82%). | Negative |
https://www.financialexpress.com/opinion/economics-vs-covid-19-the-question-of-how-to-get-cash-to-the-intended-recipients-is-not-as-straightforward/1916638/ | With the coronavirus devastating one economy after another, the economics profession—and thus the analytical underpinnings for sound policymaking and crisis management—is having to play catch-up. Of particular concern now are the economics of viral contagion, of fear, and of “circuit breakers”. The more that economic thinking advances to meet changing realities, the better will be the analysis that informs the policy response.
That response is set to be both novel and inevitably costly. Governments and central banks are pursuing unprecedented measures to mitigate the global downturn, lest a now-certain global recession gives way to a depression (already an uncomfortably high risk). As they do, we will likely see a further erosion of the distinction between mainstream economics in advanced economies and in developing economies.
Such a change is sorely needed. With overwhelming evidence of massive declines in consumption and production across countries, analysts in advanced economies must reckon, first and foremost, with a phenomenon that was hitherto familiar only to fragile/failed states and communities devastated by natural disasters: an economic sudden stop, together with the cascade of devastation that can follow from it. They will then face other challenges that are more familiar to developing countries.
Consider the nature of the pandemic economy. Regardless of their desire to spend, consumers are unable to do so, because they have been urged or ordered to stay home. And regardless of their willingness to sell, stores cannot reach their customers, and many are cut off from their suppliers.
The immediate priority, of course, is the public-health response, which calls for social distancing, self-isolation, and other measures that are fundamentally inconsistent with how modern economies are wired. As a result, there has been a rapid contraction of economic activity (and therefore economic wellbeing).
As for the severity and duration of the coming recession, all will depend on the success of the health-policy response, particularly on efforts to identify and contain the spread of the virus, treat the ill, and enhance immunity. While waiting for progress on these three fronts, fear and uncertainty will deepen, with adverse implications for financial stability and prospects for economic recovery.
When thrust out of our comfort zones in such a sudden and violent fashion, most of us will succumb to some degree of paralysis, overreaction, or both. Our tendency to panic lends itself to still deeper economic disruptions. As liquidity constraints kick in, market participants rush to cash out, selling not just what is desirable to sell, but whatever can feasibly be sold.
When this happens, the predictable result is high risk of wholesale financial liquidation, which, in the absence of smart emergency policy interventions, will threaten the functioning of markets. In the case of the current crisis, the risk that the financial system will reverse-infect the real economy and cause a depression is too big to ignore.
That brings us to the third analytical priority: the economics of circuit breakers. Here, the question is not just what emergency policy interventions can achieve, but also what lies beyond their reach, and when.
To be sure, given that simultaneous economic and financial deleveraging would have disastrous implications for societal wellbeing, the current moment clearly demands a “whatever-it-takes”, “all-in”, and “whole-of-government” policy approach. The immediate priority is to establish circuit breakers that can limit the scope of dangerous economic and financial feedback loops. This effort is being led by central banks, but also involves fiscal authorities and others.
But there will be tricky tradeoffs to navigate. For example, there is significant momentum behind proposals for cash transfers and interest-free lending to protect vulnerable segments of the population, keep companies afloat, and safeguard strategic economic sectors. Rightly so. The idea is to minimize the risk that liquidity problems will become solvency problems. And yet, a cash- and loan-infusion program will face immediate implementation challenges. Aside from the unintended consequences and collateral damage that come with all blanket measures, flooding the entire system in today’s crisis would require the creation of new distribution channels. The question of how to get cash to the intended recipients is not as straightforward as it seems.
There are even more difficulties when it comes to implementing direct bailout programs, which have become increasingly likely. Far from being outliers, airlines, cruise lines, and other severely affected sectors are leading indicators of what is yet to come. From multinational industrial companies to family restaurants and other small businesses, the line for government bailouts will be very long.
Without clearly stated principles as to why, how, when, and under what terms government assistance will be offered, there is a high chance that the bailouts will be politicized, ill-designed, and co-opted by special interests. That would undermine the exit strategies for putting firms back on their own feet, and risk repeating the post-2008 experience, when the crisis was brought to heel but without laying the groundwork for strong, sustainable, and inclusive growth thereafter.
Given how extensive government interventions are likely to be this time around, it is critical that policymakers also recognize the limits of their interventions. No tax rebate, low-interest loan, or cheap mortgage refinancing will convince people to resume normal economic activity if they still fear for their own health. Besides, as long as the public-health emphasis is on social distancing as a means of quashing community transmission, governments won’t want people venturing out anyway.
All the issues raised above are ripe for more economic research. In pursuing these avenues of inquiry, many researchers in advanced economies will find themselves inevitably rubbing up against development economics—from crisis management and market failures to overcoming adjustment fatigue and putting in place better foundations for structurally sound, sustainable, and inclusive growth. Insofar as they adopt insights from both domains, economics will be better for it. Until recently, the profession has been far too resistant to eliminating artificial distinctions, let alone embracing a more multidisciplinary approach.
These self-imposed limits have persisted despite abundant evidence that, particularly since the early 2000s, advanced economies are saddled with structural and institutional impediments that have stifled growth in a manner quite familiar to developing economies. In the years since the GFC (2008), these problems have deepened political and societal divisions, undermined financial stability, and made it more difficult to confront the unprecedented crisis that is now knocking down our door.
The author is Chief economic adviser, Allianz. Project Syndicate | aaron carroll: economics is playing catch-up with coronavirus, which is ravaging economy. he says government and central banks are pursuing measures to mitigate global downturn. he says we need to be prepared for a sudden stop in consumption and devastation. carroll: we need to be prepared for a pandemic economy, a crisis that will be costly and disruptive. | Negative |
https://www.financialexpress.com/industry/warren-buffett-2020-agm-berkshire-hathaway-q1-2020-results-sold-stake-in-four-airlines-shut-retail-businesses-railroad-insurance/1946619/ | The March-quarter operating earnings for Warren Buffett’s Berkshire Hathaway, which reported a 6 per cent increase to $5.87 billion, “have little meaning for forecasting the next year,” Buffet said at the company’s annual shareholders meeting on Saturday. Hathaway reported $49.7 billion loss in the first quarter of 2020 amid Covid-19 outbreak. “I don’t know the consequences of shutting down the U.S. economy…For some period, certainly during the balance of the year but maybe much longer…our operating earnings will be considerably less than if the virus hadn’t come along,” said Buffet.
While the Berkshire Hathaway’s three biggest ventures including the BNFS railroad, insurance, and the energy business have been in a “reasonably decent” situation but its other businesses (such as the home furnishing store chain Nebraska Furniture Mart and chocolate and candy maker See’s Candies) have been “effectively shut down,” he said, to contain the virus spread.
Also read: Warren Buffett reveals why he hasn’t made any big investment despite sitting on $137 billion cash pile
As the company accelerated efforts against Covid in the second half of March and April, “most of our businesses were negatively affected, with the effects to date ranging from relatively minor to severe,” Hathaway said in its Q1 2020 earnings report. Its railroad, utilities and energy, insurance and certain of its manufacturing, distribution and service businesses “have slowed considerably in April.” Buffett told his shareholders that the company has sold around $6.5 billion of stock in April when it pared around 10 per cent stakes in the country’s four largest airlines – America, United, Delta and Southwest Airlines. The billion investor said he made an “understandable mistake” in valuing their stock noting that the airline sector has been “really hurt by a forced shutdown” due to the virus.
Berkshire Hathaway, which reported $137 billion cash in hand, hasn’t made any big investment deal since 2016 when it bought the industrial goods and metal fabrication company Precision Castparts for $37 billion. Buffett said that’s because he hasn’t come across a company “attractive” enough for the deal. “We have not done anything, because we don’t see anything that attractive to do.” However, the company is “willing to do something very big,” he said. | the company reported a 6% increase to $5.87 billion in the first quarter of 2020 amid the outbreak. "our operating earnings will be considerably less than if the virus hadn't come along," said Buffett. the company's three biggest ventures including the BNFS railroad, insurance, and the energy business have been in a "reasonably decent" situation. | Negative |
https://www.financialexpress.com/industry/free-messages-beyond-100-sms-a-day-jio-airtel-voda-idea-allowed-to-not-charge-money-even-after-limit/1985602/ | Indian telecom regulator TRAI has relieved companies of charging users with minimum 50 paisa for text messages after they cross the limit of 100 SMS a day owing to the situation arising out of the coronavirus pandemic. Under a certain clause, telecom companies were required to charge a minimum of 50 paisa per SMS above the limit of 100 SMS per SIM per day to avoid commercial bulk texts. “The deletion of Schedule XIII thus implies another step of TRAI in doing away with the tariff regulation and strengthening the regime of tariff regime forbearance,” TRAI said in its latest notification. However, after the removal of this clause, companies now have a free hand in deciding the charges for such bulk messages, PTI reported an official as saying.
“It was felt that tariff regulation which has the potential of adversely affecting the interests of genuine non-commercial bulk users of SMS is no longer required and therefore can be removed,” TRAI said. The Schedule XIII of the Telecommunications Tariff Order was introduced in 2012.
Meanwhile, Indian telecom operators are in for a pleasant surprise by FY25 as their revenues are likely to be doubled by the time period. India has entered into a “tariff discipline phase”, which means that companies such as Vodafone-Idea, Reliance Jio, and Bharti Airtel will enjoy higher ARPU (average revenue per user). “A comparative analysis of over 25 markets indicates that mobile revenues/ARPUs in India could double over FY20-25 to USD 38 billion,” a Jefferies report said on Monday. Currently, India’s mobile revenues-to-GDP ratio is among the lowest at 0.7% among the countries which share similar scale, according to a comparison of mobile ARPUs (average revenue per users) of over 25 countries.
With this, Sunil Bharti’s telecom company Bharti Airtel is likely to emerge as the key beneficiary of expanding tariffs and consolidation of the telecom space. The news may bring relief to Indian telecom operators which were having turbulent years since Mukesh Ambani’s entry into the telecom sector with Reliance Jio and the AGR dues. | telecom companies were required to charge a minimum of 50 paisa per SMS above the limit of 100 SMS per SIM per day. this was to avoid commercial bulk texts arising out of the coronavirus pandemic. after the removal of this clause, companies now have a free hand in deciding the charges for such bulk messages. the news may bring relief to Indian telecom operators which were having turbulent years since Mukesh Ambani’s entry into the telecom sector. | Negative |
https://www.moneycontrol.com/news/business/markets/indian-rupee-sinks-30-paise-on-us-rate-hike-worries-crude-spike-2874621.html | Representative Image
The rupee today sank 30 paise to close below the 70-mark against the US currency due to renewed worries about a hike in US interest rates amid global trade war jitters.
The domestic currency ended at 70.11 per dollar, a loss of 30 paise or 0.43 per cent over the previous close. In day trade, the rupee had crumbled to a session low of 70.17 per dollar.
The rupee suffered its the biggest single-day drop in past one week, snapping a two-straight session recovery trend.
Forex sentiment wobbled with a resurgent dollar as currency traders increased their expectations for a fourth interest rate hike this year after the Federal Reserve released its meeting minutes overnight.
The US Federal Reserve in meeting minutes indicated that it may hike rates again if the economy stays on track even as it flagged "ongoing trade disagreements and proposed trade measures as an important source of uncertainty and risks".
The US dollar launched a spirited recovery from its previous five days of losses and gained against its major trading peers. The US dollar index was up 0.37 per cent at 95.35 against a basket of six currencies.
Speculative traders and investors also raised short positions on the Indian rupee.
A fresh wave of global risk-aversion trade, triggered by the implementation of new tariffs by the world's two largest economies revived fears of a full-blown trade war, further added to the downbeat mood.
The US and China escalated their ongoing trade war by implementing 25 per cent tariffs on USD 16 billion worth of imports on both sides.
A sharp spike in international crude oil prices due to a combination of factors also weighed on the trading front.
The benchmark Brent was trading at USD74.55 a barrel today. The domestic currency resumed with a sharp fall at 70.02 against Tuesday's close of 69.81 at the inter-bank foreign exchange (forex) market.
Sliding down a steep wave, the rupee crumbled to hit a session low of 70.17 in mid-afternoon deals before ending at 70.11, revealing a sharp loss of 30 paise, or 0.43 per cent.
It had appreciated by 34 paise after crashing to fresh lifelows last week.
The Financial Benchmarks India private limited (FBIL), meanwhile, fixed the reference rate for the dollar at 70.0656 and for the euro at 81.0486.
The 10-year benchmark bond yield also rallied by 5 bps to 7.88 per cent.
In the cross currency trade, the rupee remained under pressure against the euro to finish at 81.21 compared to 80.44 and also drifted against British pound to settle at 90.41 per pound from 89.61 earlier.
The local unit, however recovered against the Japanese yen to close at 63.29 per 100 yens from 63.33 per 100 yens.
In forward market today, premium for dollar showed a mixed trend owing to lack of market moving factors. | rupee closes below 70.11 per dollar, a loss of 30 paise or 0.43 per cent over the previous close. rupee suffered its biggest single-day drop in past one week. a fresh wave of global risk-aversion trade revived fears of a full-blown trade war. the rupee is expected to be the most volatile currency in the world. | Negative |
https://www.financialexpress.com/market/sensex-nifty-look-to-open-with-losses-on-monday-key-factors-to-set-tone-for-equity-markets-today/2029138/ | Domestic equity market benchmarks BSE Sensex and Nifty 50 are expected to open weak following their Asian peers. On Friday Sensex soared 548 points or 1.50 points to end at 37,020, while the broader Nifty 50 index settled just above 10,900, gaining 162 points or 1.51 per cent. Headline indices, Sensex and Nifty ended the week with a gain of 1.16 per cent and 1.24 per cent, respectively. “With no major event, the on-going earnings season and global cues will continue to dictate the market trend. Besides, the progress of monsoon will also be closely watched. Markets are braving all the storms and gradually inching higher however the participation is largely limited to a handful of index majors. Traders should maintain extra caution in the selection of stocks and prefer hedged trades,” said Ajit Mishra, VP Research, Religare Broking.
SGX Nifty points to weak start: The trends on SGX Nifty were signalling a gap-down opening from BSE Sensex and Nifty 50 on Monday. Nifty futures were trading 37 points or 0.34 per cent lower at 10,894 on Singaporean Exchange.
HDFC Bank profit surges 20% in Q1: HDFC Bank reported a 19.6 per cent growth in net profit to Rs 6,658.62 crore from Rs 5,568.16 crore in Q1 FY20. Its net interest income increased 17.8 per cent for the first quarter of the financial year to Rs 15,665.4 crore from Rs 13,294.3 crore for the same period last financial year.
Earnings today: A total of 40 companies are scheduled to report their results today. The list includes names such as ACC, Den Networks, and SBI Cards and Payment Services, Bombay Dyeing, CSL Finance, Indo Amines, Maharashtra Scooters, NRB Bearings, State Trading Corporation of India Swaraj Engines. etc.
Asian markets: Stocks in Asian markets edged lower in early morning trade on Monday. Japan’s Nikkei 225 pared earlier gains and dipped 0.42%. The Topix declined 0.43% and the Hang Seng index tumbled 1%.
US market: The Dow Jones Industrial Average fell 0.23 per cent to end at 26,672.36 points, while the S&P 500 gained 0.29 per cent to 3,224.75. The Nasdaq Composite climbed 0.28 per cent to 10,503.19.
FII and DII data: On Friday, foreign institutional investors (FIIs) bought shares worth Rs 697.08 crore, while domestic institutional investors (DIIs) sold shares worth Rs 209.42 crore on a net basis, according to the provisional data available on the NSE.
Technical view by Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The near term uptrend of Nifty seems to have sustained after a small dip and one may expect further upside in the coming sessions. The next upside levels to be watched around 11250, which is an opening downside gap of 5th March. Immediate support is placed at 10850. However, having stretched its uptrend above the resistance, one needs to be cautious of longs at the highs. As there is a possibility of reversal from the highs. | Sensex and Nifty 50 are expected to open weak following their Asian peers. broader Nifty 50 index settled just above 10,900, gaining 162 points or 1.51 per cent. Sensex and Nifty ended the week with a gain of 1.16 per cent and 1.24 per cent, respectively. a total of 40 companies are scheduled to report their results today. | Negative |
http://www.moneycontrol.com/news/business/markets/more-than-ltcg-dividend-tax-on-mf-pe-compression-hit-market-mood-nifty-seen-at-10450-2498289.html | Budget 2018 dampened market sentiment with bears tightening their grip on Dalal Street. Frontline indices fell more than 1.5 percent Friday and the broader markets crashed over 4 percent while on the sectoral front, Nifty Bank lost more than 500 points.
Major worry in market is the correction in midcaps that started even before the Budget and continued today with volumes on the buy side shrinking. Margin calls triggered in the morning led to sell-off in frontline stocks as well.
More than long term capital gains (LTCG) tax of 10 percent reintroduced in the Budget, introduction of a tax on distributed income by equity oriented mutual fund at the rate of 10 percent bothered investors, experts suggest.
A likely compression of price earnings, and hike in interest rates that may hit margin and finance cost for companies with debt on books also hit sentiment.
"One can ascribe this fall to LTCG, revenue deficit shortfall, political uncertainty as people get worried post Rajasthan bypolls where BJP lost the game," Ajay Srivastava of Dimensions Corporate Financial Services told CNBC-TV18.
"All in all the government is facing biggest headwinds and people are saying that true cost of demonetisation is coming to the fore. The government has no revenues to meet its political goals, which all I think bothering most to investors who are saying will this continue like this."
In this market, he said apart from economic uncertainties, political issues will also come to the fore and will become more relevant. Srivastava was thinking of happening somewhere in June-July, but it is happening now.
"MF inflows which were guaranteed with 10 percent distribution tax and were giving dividend every month, it was tax free, but now suddenly everyone is sitting with tax authorities. Now what is bothering investors is will this investment flow keep coming to MFs as now there are large segments go under tax hammer compared to earlier set up. It is not about paying tax but dealing with the tax. So all in all LTCG is not hurting sentiment but 10 percent tax on mutual funds is bothering most to investors now," he explained the major reason of worry.
Dipan Mehta, Member BSE & NSE said in an interview to CNBC-TV18 that more than LTCG, the fear in the market is about likely rise in interest rates and the process of compression of price earnings multiples but there is not threat to earnings and earnings remain intact.
Prior to Budget, market was factoring stable interest and justifying higher PE multiples, that equation may be turnaround completely, we are seeing that may be equity may not be the best asset class and we may get decent returns in fixed income as well.
On the whole, the companies which have huge debt on books wil have pressure on interest rates and margins, Mehta said.
Hemang Jani, Head Equity Sales & Advisory, Sharekhan feels the broad market is reacting negatively to the excessive focus on rural and social schemes and the return of LTCG tax.
There is stock specific pressure due to unwinding of positions in high beta stocks and the market will take few days to absorb these proposals, he said.
Srivastava feels the midcap crisis should get stabilised soon. People can hold on to stocks, don't sell out at this point of time, he advised.
Technical analysts expect this correction to continue and advised not to take long positions.
"This is a big correction and chances are that this correction will continue, getting worse. Bank Nifty already fell around 500 points, so this is going to get worse as more and more stoplosses coming, who is selling? - shortsellers as well as people are cutting down their long positions," Ashwani Gujral of ashwanigujral.com said.
He expects the big fall for 2-3 weeks. I won't be surprised if the Nifty breaks 10,400 level on the downside, he said.
Let the market gets settled and then think of taking positions in the market, he advised.
Mitessh Thakkar of miteshthacker.com said don't be hurry to buy stocks now. The Nifty may revisit its support levels of 10,550-10,590, he feels. | frontline indices fall more than 1.5 percent on friday. broader markets crash over 4 percent on the frontline. LTCG tax reintroduced in the budget. a hike in interest rates and compression of price earnings also hit sentiment. a soaring interest rate on mutual funds also hurt sentiment. a soaring interest rate on shares also hurt sentiment. | Negative |
https://economictimes.indiatimes.com/markets/forex/rupee-plunges-70-paise-as-covid-19-concerns-weigh/articleshow/74898572.cms | Mumbai: The Indian rupee tumbled by 70 paise to close at 75.59 against the US dollar on Monday as concerns around coronavirus impact on the economy continued to hurt sentiment globally. Forex traders said heavy selling in domestic equities dragged the local unit amid mounting fears of a coronavirus-led economic slowdown.Moreover, strengthening of the American currency in the international market also weighed on the domestic currency.At the interbank foreign exchange market, the rupee opened at 75.17. During the day, it lost further ground and finally settled at 75.59, down 70 paise over its previous close.The rupee had settled at 74.89 against the greenback on Friday."On the domestic front, rupee has been under pressure on back of selling by FIIs in equity and debt segment."Market participants will be keeping an eye on employment numbers that will be released from the US and weaker-than-expected economic data could keep under dollar weighed down," Motilal Oswal Financial Services Forex & Bullion Analyst Gaurang Somaiyaa said.The number of COVID-19 cases climbed to 1,071 in India on Monday, while the death toll rose to 29, according to the Union Health Ministry.The number of deaths around the world linked to the new coronavirus has touched nearly 35,000.The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.58 per cent to 98.93.The 10-year government bond yield was at 6.21 per cent.Global crude oil benchmark Brent fell 8.34 per cent to USD 22.85 per barrel amid concerns over global growth.On the domestic equity market front, the 30-share BSE barometer ended 1,375.27 points or 4.61 per cent lower at 28,440.32. Similarly, the NSE Nifty fell 379.15 points, or 4.38 per cent, to close at 8,281.10.Foreign institutional investors (FIIs) sold equities worth Rs 4,363.61 crore in the Indian market on Monday, as per provisional data.The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 74.8434 and for rupee/euro at 82.6411. The reference rate for rupee/British pound was fixed at 91.5604 and for rupee/100 Japanese yen at 68.89. | rupee closes at 75.59 against the dollar, down 70 paise from its previous close. rupee has been under pressure on back of selling by FIIs in equity and debt segment. number of COVID-19 cases climbed to 1,071 in india on monday. death toll from the new coronavirus has touched nearly 35,000. | Negative |
http://www.financialexpress.com/industry/banking-finance/sbi-sees-bad-loan-provisions-as-biggest-challenge/1027307/ | State Bank of India, the nation’s largest lender, sees provisioning for soured debt as the biggest challenge for the South Asian nation’s banking system even as credit growth is reviving from a three-decade low.
“Whatever process we resort to for the resolution of non-performing assets there will be a gap in the provisioning,” Chairman Rajnish Kumar said in an interview with Bloomberg Television’s Haslinda Amin on the sidelines of the World Economic Forum in Davos on Tuesday. “That is precisely where the support from the government is required. For the banking system to come out of the problem we have to provide for those loan losses that have been incurred.”
Kumar is at the forefront of helping clean up the worst soured-debt ratio among the world’s biggest economies. Overdue loans have dragged economic growth to the lowest since 2014, piling pressure on the government to revive activity before elections next year.
Prime Minister Narendra Modi’s administration has pledged to inject $33 billion of fresh capital into struggling state-run banks — including SBI — and the Reserve Bank of India has asked commercial lenders to resolve bad loans at 40 of the biggest defaulters within a year. Policy makers are betting these moves will boost loan growth from a 30-year low.
Rate Outlook
“Banks need to recapitalize, write down bad debts and be in a stronger position first,” Kumar said, referring to the government’s plan to merge some state-run banks. “We need to create a few more large banks in the country as the gap between SBI and others is very wide.”
State Bank, which accounts for more than a fifth of India’s banking assets, broke into the ranks of the world’s top 50 lenders in April after it merged with five smaller units and Bharatiya Mahila Bank Ltd. The lender is set to report earnings for the December quarter next month.
Under Kumar, the lender aims to focus on expanding loans to consumers as well as small and medium-sized enterprises. His task will probably become tougher as monetary conditions tighten. India’s inflation has breached the central bank’s target, increasing the odds the RBI will raise borrowing costs sooner than expected. It’s due to review policy Feb. 7.
“Our sense is that going forward the inflation numbers will stabilize and at least for the next six months there will not be an up-move in terms of the central bank’s policy rates and government bond yields,” Kumar said. | the nation's largest lender sees provisioning for soured debt as the biggest challenge for the south Asian nation's banking system. chairman Rajnish Kumar is at the forefront of helping clean up the worst soured-debt ratio among the world's biggest economies. overdue loans have dragged economic growth to the lowest since 2014, piling pressure on the government to revive activity before elections next year. | Negative |
https://economictimes.indiatimes.com/wealth/personal-finance-news/how-sensex-us-dollar-10-year-g-sec-performed-during-week-ending-may-21-2020/articleshow/75912877.cms | This weekly tracker keeps you updated on the benchmark stock index, bond yields , forex movements and CPI-Combined.It also tracks the changes in the past one year to give investors an idea how their investments performed over a longer period.Markets remained volatile due to Covid-19 fears and heavy selling in banking and NBFC stocks. Investors were also concerned about the chances of demand revival in the near term as the recent stimulus measures are considered inadequate.The 10-year bond yield changed little due to the adequate liquidity surplus in the system.The rupee weakened due to the strengthening US dollar , rising crude oil prices, and extension of national lockdown.The CPI-Combined for the month of March 2020 is revised to 5.84%, which fell below the RBI's upper target limit of 6%. | weekly tracker keeps you updated on the benchmark stock index, bond yields, forex movements and CPI-Combined. markets remained volatile due to Covid-19 fears and heavy selling in banking and NBFC stocks. rupee weakened due to the strengthening US dollar, rising crude oil prices, and extension of national lockdown. the rupee weakened due to the strengthening US dollar. | Negative |
https://economictimes.indiatimes.com/markets/commodities/news/gold-prices-today-slip-on-profit-booking/articleshow/76334011.cms | Gold Rates - Spot & Futures (.995 purity) (MCX) Date Gold Spot Price
Rs/ 10 grms (AHMEDABAD) Gold Future Price
Rs/ 10 grms Expiry: 05-Dec-2023 24-11-2023 61229 61295 15-11-2023 60029 60120 14-11-2023 60029 60066 13-11-2023 60029 59835 12-11-2023 60029 59775 01-11-2023 0 60742 31-10-2023 61018 61237 30-10-2023 61027 61268 27-10-2023 60629 61238 26-10-2023 60764 60968 25-10-2023 60311 60794 24-10-2023 60418 60544 GoldGold Technical Charts
NEW DELHI: Gold and silver saw profit booking on Friday as traders exited bullion counters at high level amid sharp rise in the Covid-19 cases and gloomy economic projections.Total number of Covid patients in India reached close to 3 lakh while fatalities climbed to near 8,500 levels. The numbers could also increase faster as India has eased restrictions in the most parts.Gold futures were down 0.72 per cent or Rs 342 at Rs 47,072 per 10 grams. Silver futures dropped 1.55 per cent or Rs 752 to Rs 47,887 per kg."Spot gold prices for 24 carat in Delhi traded up by Rs 477 on rupee depreciation," HDFC Securities Senior Analyst (Commodities) Tapan Patel said. Meanwhile, silver prices rose by Rs 26 to Rs 49,868 per kg.Globally, gold prices held steady on Friday as downward pressure from a stronger dollar countered rising safe-haven demand supported by gloomy economic projections and renewed fears over a second wave in COVID-19 infections.Spot gold was flat at $1,727.24 per ounce, as of 1256 GMT. U.S. gold futures fell 0.4 per cent to $1,733.30.On Wednesday, Fed officials announced the need to keep the key interest rate near zero through at least 2022, and that it would be a "long road" to recovery. Large stimulus measures and low interest rates tend to support gold, which is often considered a hedge against inflation and currency debasement.Gold has rallied about 19 per cent since touching an over three-month low of $1,450.98 on March 16. SPDR Gold Trust , the world's largest gold-backed exchange-traded fund , said its holdings rose 0.5 per cent to 1,135.05 tonnes on Thursday.Palladium was unchanged at $1,921.22 per ounce, while silver was down 0.4 per cent to $17.64, and platinum rose 0.2 per cent to $812.37. | gold futures were down 0.72 per cent or Rs 342 at Rs 47,072 per 10 grams. silver futures dropped 1.55 per cent or Rs 752 to Rs 47,887 per kg. globally, gold prices held steady on Friday as downward pressure from a stronger dollar countered rising safe-haven demand. gloomy economic projections and renewed fears over a second wave in COVID-19 infections. | Negative |
https://economictimes.indiatimes.com/industry/services/property-/-cstruction/covid-19-pandemic-drags-demand-for-office-space-down-by-30-per-cent-in-q1-2020/articleshow/75063674.cms | BENGALURU: Net absorption of office spaces in India in Q1 2020 witnessed a decline of 30% from the peak observed in Q1 2019 due to the on going health crisis globally. The last such drop was seen in Q1 2017, post demonetisation.Office absorption in Q1 2020 was backed by strong pre-commitment levels in new completions during the quarter. The quarter witnessed a net absorption of 8.6 mn sq ft of Grade A office space , out of which pre-commitments accounted for 4.9 mn sq ft, said JLL The impact of the COVID-19 pandemic became more apparent in March as most businesses defer their real estate decisions. IT- ITeS (56%) as well as co-working (13%) occupiers drove leasing activity during the quarter.“The evolving COVID-19 crisis is prompting corporates to re-evaluate their commercial real estate strategies, with a focus on enhancing resilience measures. There will be a greater emphasis on cost management, employee wellbeing and sustainability, and the adoption of flexible working practices as resilience practices ramp up,” said Ramesh Nair, CEO & Country Head, JLL.Furthermore, construction activity and the process of obtaining requisite approvals from the government also slowed down in the beginning of March, in line with growing concerns of the impact of COVID-19. “New completions were recorded at 8.6 mn sq ft in Q1 2020, a fall of 40% Y-o-Y from levels observed in Q1 2019 and representing the second largest dip witnessed in new completions in the last five years. Post demonetisation, new completions dropped to less than 20% of that seen in Q1 2016,” adds the report.The three larger markets of Bengaluru, Mumbai and Delhi NCR accounted for nearly 75% of the net absorption in Q1 2020, despite the overall decline in the overall market. Net absorption in Mumbai and Chennai more than doubled in Q1 2020 as compared to Q1 2019, led by strong leasing activity in the first two months by IT/ITeS occupiers.”The strong leasing momentum of 2019 continued in the first two months of 2020 before the pandemic impacted the Indian market in March. Several leasing deals in the final stages of negotiation were deferred as the office market witnessed a net absorption decline of 30% y-o-y. New completions also saw a fall of 40% y-o-y during Q1 2020. Several office assets in the final stages of completion were stuck owing to delays in obtaining requisite approvals from the government authorities,” said Samantak Das, Executive Director and Head of Research, REIS, JLL.The consultancy firm said that over the next few months, leasing is expected to be mainly driven by renewals and consolidation activity. With fresh take up of spaces likely to be limited, landlords might have to sit on locked in capital (completed buildings) for a relatively longer time period. Business continuity plans and remote working strategies have been successful. Hence, future demand from occupiers is likely to take into account the need for flexible workspace. | net absorption of office spaces in india in Q1 2020 witnessed a decline of 30% from the peak observed in Q1 2019. the last such drop was seen in Q1 2017, post demonetisation. the impact of the COVID-19 pandemic became more apparent in march as most businesses defer their real estate decisions. the three larger markets of Bengaluru, Mumbai and Delhi NCR accounted for nearly 75% of the net absorption in the quarter. | Negative |
https://www.moneycontrol.com/news/business/markets/franklin-templeton-fund-closure-an-eye-opener-for-rbi-umesh-mehta-5185841.html | Franklin Templeton’s fund closure is an eye-opener for the RBI that its liquidity efforts are either insufficient or are not effective in de-freezing the liquidity crisis, Umesh Mehta, Head of Research, Samco Securities, says in an interview to Moneycontrol’s Kshitij Anand.
Edited excerpts:
Q) Franklin Templeton has shut down six credit risk strategy debt funds. This is the second casualty of the coronavirus outbreak after IndiaNivesh. Do you think investors will again lose faith like they did after the 2008 financial crisis?
A) Investors currently are in a state of fear and shock but during such a crisis causalities do happen and the credit risk of debt funds is a natural extension of a liquidity crisis.
Therefore, this is not a systematic crisis but is considered a part and parcel of such downtrends. However, it is an eye-opener for the RBI that despite its liquidity efforts, these measures are either insufficient or are not effective in de-freezing the liquidity crisis.
Hopefully, now that the credit risk debt fund crisis has occurred, it is expected that things will be taken care of at the regulatory end.
Q) What can the government do to mitigate the credit crisis that led to the winding down of Franklin Templeton schemes?
A) There is a lot that the government needs to do to bring back confidence and trust in the economy but all wishes cannot be granted.
The minimum -- the government should take on the risk of credit defaults of SMEs and MSMEs such that they are able to access fresh line of credit to revive their depleting businesses.
This is similar to the government having credited a sum of Rs 2,000 and Rs 500 a month for three months for farmers and women in their Jan Dhan accounts directly.
Q) A volatile week for Indian markets but the Nifty managed to hold on to 9,000, supported by some positive global cues and expectations of a stimulus package. But it looks like 9,300 is a crucial resistance level for the Nifty50. What are your views on the market?
A) 9,300 is indeed a crucial level for the Nifty and acts as strong resistance as it is nothing but 38 percent retracement of the market’s recent fall as per Fibonacci’s retracement levels.
Such levels assume importance because even international markets are hovering around similar retracement levels. Unless we see substantial improvement in the situation on both – the COVID-19 front and the business resumption front-- we believe 9,300 will be a strong resistance level.
Q) What are the important data points and levels to watch out for in the coming week?
A) 9300-9400 levels will be a cluster of strong resistance for the market and any increase in VIX may resume the downtrend in the bourses.
Nonetheless, astute government stimulus and important policy decisions to kick start the economic engine, which is currently at standstill, are expected to be key pointers for the markets going ahead.
Q) Small and midcaps underperformed and we are seeing some stress in the broader market space. Has falling GDP growth rate made things worse for some stocks? What should investors do if they have small & midcap-focused portfolios?
A) Amid continued deterioration in the economy, small and midcaps have really been hit hard. But, this is a matter of reality, those who are strong and large will lead as and when things start to look brighter.
It is also feared that some small and midcap companies might go into oblivion in dark times like these. Some of them may even destroy complete values.
Therefore, as a prudent approach, one may consider switching from such funds to largecap frontline funds. This would certainly be a difficult decision but would pay off in the long run.
Q) There is so much volatility. Are there any all-weather stocks that one can look at?
A) Assuming that someone really wants to remain invested in equities at all times, then FMCG as a sector should act as a defensive play, although that sector, too, might see some profit booking if the market goes deeper into a recessionary spiral.
Ideally, it is said that in bull markets equity is the king and in uncertain times cash is the king. One has to remain invested selectively but at the same time keep liquidity in order to take advantage of further falls.
Investors will have a long time to pick and select stocks for investment. Beaten down sectors and stocks ideally should outperform markets once the bull market resumes and defensives would then underperform.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. | Franklin Templeton has shut down six credit risk strategy debt funds. a volatile week for india but the Nifty managed to hold on to 9,000. a government-backed treasury fund is expected to be able to close in a few days. a government-backed treasury fund is expected to close in a few days. | Negative |
https://economictimes.indiatimes.com/news/company/corporate-trends/covid-effect-tatas-plan-layoffs-to-cut-fixed-costs/articleshow/76618717.cms | (This story originally appeared in on Jun 25, 2020)
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Chennai/Mumbai: The Tata Group may eliminate jobs at some of its businesses to save fixed costs as it grapples with falling profits due to the coronavirus pandemic, and global economic projections pointing to a challenging time ahead.The pandemic had led to a suspension of the conglomerate’s several businesses — including aerospace, automotive and aviation — depressing its earnings in key markets across the world. The conglomerate has already made moves to cut contract workers engaged in manufacturing and other functions at its various facilities, including at Tata Motors and its UK arm Jaguar Land Rover.Tata Motors, after sinking Rs 9,864 crore into the red in the fourth quarter of fiscal 2020, said “there are widespread opportunities to cut costs across the organisation and all actions will be taken with prudence”, without getting into specifics. The flagship of the Tata Group has initiated a cash improvement programme of Rs 6,000 crore and 5 billion pounds at its India and UK units. Sources said the company plans to axe jobs at various levels in the domestic business. The labour union at Tata Steel’s Netherlands unit said the management planned to slash 1,000 of the 9,000 jobs at the site to improve the profitability of the metal producer.The senior leadership at the group’s several businesses, including Indian Hotels Company (which runs the Taj chain), has already taken a cut in remuneration as part of a broader restructuring plan. The $113-billion conglomerate — comprising 30 companies across 10 business verticals — employs over 7.2 lakh people in India and outside the country. Tata Group has joined Reliance Industries, Raymond, Apollo Tyres and TVS Motor, where top managements have taken a pay reduction as the pandemic ravages operations. The group’s real estate unit, said sources, may also retrench employees even as it battles mismanagement allegations. “With the advent of Covid-19, we are closely monitoring the situation and assessing its impact on the real estate industry and on the company,” said a Tata Realty and Infrastructure spokesperson.Other group entities — TCS and Tata Technologies — have reduced dependency on subcontractors and cut bench strength respectively to optimise costs. | the conglomerate has already made moves to cut contract workers engaged in manufacturing and other functions at its various facilities. the $113-billion conglomerate employs over 7.2 lakh people in india and outside the country. the group's real estate unit may also retrench employees even as it battles mismanagement allegations. the group has joined Reliance Industries, Raymond, Apollo Tyres and TVS Motor, where top managements have taken a pay reduction. | Negative |
https://economictimes.indiatimes.com/markets/forex/rupee-goes-below-66-for-first-time-since-march-2017/articleshow/63840379.cms | NEW DELHI: The rupee was a bundle of nerves at the open on Friday as it sank 24 paise to a 13-month low of 66.06 against the dollar, hit by rising crude prices and fiscal deficit worries.It breached the 66 level for the first time since March 14, 2017.The domestic currency on Thursday ended at 65.82. It has emerged as the worst performer among major Asian and emerging market currencies.The rupee has fallen a staggering 60 paise in its recent bearish spell.The rapid surge in global crude oil prices has already had an adverse impact on India's import bill and can further hit the country's fiscal arithmetic, a forex dealer said.The domestic currency has been weighed down by a variety of other factors, including concerns that faster tightening of US monetary policy and President Donald Trump's protectionism will hurt the Indian economy the most and spark capital outflows, said a PTI report."The rupee continued its weakness... against the greenback on the back of firm oil prices ahead of OPEC meeting, higher US bond yields and foreign outflows. US dollar's firmness takes cues from the Fed's Beige Book, which outlined the economy to be positive despite recently imposed tariffs," Anand James, Chief Market Strategist at Geojit Financial Services, said.On the global front, Oil prices held firm on Friday near three-year highs as ongoing Opec-led supply cuts drained out excess supplies. Brent crude oil futures were at $73.87 per barrel and US WTI crude futures $68.40.Meanwhile, both Sensex and Nifty opened the day on a negative note on Friday, given weakness in banking stocks post RBI's hawkish policy stance and simmering oil prices. | rupee falls 24 paise to 13-month low of 66.06 against the dollar. rupee has emerged as the worst performer among major Asian and emerging market currencies. rupee has fallen a staggering 60 paise in its recent bearish spell. rupee has been weighed down by concerns that tightening of monetary policy will hurt the economy. | Negative |
https://www.businesstoday.in/current/world/coronavirus-in-us-covid-19-confirmed-cases-reach-half-a-million-22000-dead/story/400826.html | Americans spent a glum Easter Sunday largely confined to their homes by the still-raging coronavirus pandemic as the U.S. death toll neared 22,000, with more than half a million confirmed cases nationwide.
With 42 states imposing strict stay-at-home orders most churches were shuttered, although many erected crosses outside or even offered drive-through services conducted by priests, pastors or ministers wearing latex gloves and surgical masks.
Other Americans turned to online church services to mark the holiest day in the Christian calendar. In Louisiana, the evangelical Life Tabernacle megachurch near Baton Rouge defied local government orders to shut down, holding its Easter Sunday service as planned, said Reverend Tony Spell.
"Our rights come from our creator, not from a governing body," Spell told Reuters, adding people traveled from across the region to attend.
In some states, attempts by authorities to clamp down on Easter services have sparked legal battles over the rights of government to prevent Americans from attending church, even under pandemic conditions.
On Saturday, the Kansas Supreme Court upheld an executive order barring more than 10 people from gathering for religious and funeral services. The decision, a victory for Democratic Governor Laura Kelly, followed an attempt by a Republican-led legislative body to overturn the order.
The United States, with the world's third-largest population, has recorded more fatalities from COVID-19 than any other country, nearly 22,000 as of Sunday evening according to a Reuters tally.
Roughly 2,000 deaths a day were reported for the last four days in a row, the largest number in and around New York City. Even that is viewed as understated, as New York is still figuring out how best to include a surge in deaths at home in its official statistics. As the death toll has mounted, President Donald Trump mulled when the country might begin to see a return to normality.
Trump Eyes May 1
The sweeping restrictions on non-essential movement now applied to most Americans have damaged the economy, taken a painful toll on commerce and raised questions over how long business closures and travel curbs can be sustained. The number of Americans seeking unemployment benefits in the last three weeks surpassed 16 million.
The Trump administration sees May 1 as a potential date for easing the restrictions, the commissioner of the Food and Drug Administration, Stephen Hahn, said on Sunday. But he cautioned that it was still too early to say whether that goal would be met.
"We see light at the end of the tunnel," Hahn told ABC's "This Week," adding, "Public safety and the welfare of the American people has to come first. That has to ultimately drive these decisions."
In the latest sign of the disruption wrought by the disease, one of the nation's largest pork processing plants was shuttered after workers fell ill, and its owner warned the country was moving "perilously close to the edge" in supplies for grocers.
"It is impossible to keep our grocery stores stocked if our plants are not running," Ken Sullivan, chief executive of Smithfield Foods, said in a statement on Sunday.
Dozens of workers at a beef production plant in Greeley, Colorado, have tested positive for COVID-19, according to its owner, meatpacking company JBS USA. The union representing workers at the plant said two employees have died.
In recent days, public health experts and some governors have pointed to some hopeful signs that the worst of the pandemic might be past.
Dr. Anthony Fauci, the country's top U.S. infectious disease expert, said he was cautiously optimistic and pointed to the New York metropolitan area, which had its highest daily death toll last week but also saw a decrease in hospitalizations, intensive care admissions and the need to intubate critically ill patients.
"Once you turn that corner, hopefully you'll see a very sharp decline and then you can start thinking about how we can keep it that way," Fauci told CNN's "State of the Union." "If all of a sudden we decide 'OK, it's May whatever,' and we just turn the switch on, that could be a real problem."
Fauci and other public health experts say widespread testing will be key to efforts to reopen the economy, including antibody tests to find out who has already had the disease and could be safe to return to work.
New government data shows a summer surge in infections if stay-at-home orders are lifted after only 30 days, according to projections first reported by the New York Times and confirmed by a Department of Homeland Security official.
INDIA CORONAVIRUS TRACKER: BusinessToday.In brings you a daily tracker as coronavirus cases continue to spread. Here is the state-wise data on total cases, fatalities and recoveries in one comprehensive graphic
Also read: India asks US to extend Indians H-1B visa amid coronavirus pandemic
Also read: Coronavirus India live updates: 308 people dead in the country as active COVID-19 cases near 8,000-mark | more than half a million confirmed cases of coronavirus in the u.s. have been confirmed. the death toll from the pandemic is 22,000. the death toll has risen to 22,000. the president mulled when the country might see a return to normality. a u.s. official says the death toll is "significant" | Negative |
https://www.financialexpress.com/economy/coronavirus-pandemic-impact-exports-collapse-by-35-in-march-more-pains-in-sight/1929678/ | Merchandise exports crashed by almost 35% year-on-year in March to $21.4 billion, the sharpest monthly decline in at least three decades since liberalisation, and imports plunged by 28.7%, as the COVID-19 outbreak and a consequent lockdown since March 24 wrought havoc on external trade. Trade deficit narrowed to a 13-month low of $9.75 billion in March.
With close to a half of their orders cancelled now and the nation-wide lockdown extended up to May 3, exporters warn of a much steeper decline in both outbound and inbound shipments in April. In any case, key markets — the US and the EU — have been badly hit by the pandemic.
Merchandise exports, which had already contracted by 1.5% y-o-y up to February, ended the last fiscal with a 4.8% fall to $314.3 billion. Imports dropped 9.1% in FY20 to $467.2 billion.
Barring iron ore, exports of all the 30 major groups witnessed a contraction last month. The sharpest slide was witnessed in oil meals (70%), followed by meat, dairy and poultry (45.5%), engineering goods (42.3%), gems and jewellery (41%), leather and leather products (36.8%), plastics and linoleum (35.7%), garments (-34.9%) and carpets (34.7%). Petroleum product exports dropped 31.1%, partly due to a crash in prices, while rice exports declined by 28.3% and electronics goods by 21.5%.
Core (non-oil and non-gold) exports dropped by 34.2% in March, while such imports fell by 29.1%.
Overseas buyers are using the crisis to renegotiate contract terms and seek a cut in product prices. Domestic manufacturing units are shut and logistics chains in tatters, even though ports are functioning. However, with the government allowing some units to start operations, the situation is expected to ease in May, say exporters. But external headwinds and subdued domestic manufacturing continue to hurt exports. Even a depreciation of the rupee against the dollar is hardly any consolation, as the currencies of some of the competitors like Indonesia and Malaysia have weakened at a faster pace.
Most of the top 25 destinations for engineering goods exports are facing a lockdown. These 25 markets together accounted for $53 billion of the $71 billion worth outbound shipments of these products in the April-February period, said Ravi Sehgal, chairman of EEPC India.
The Federation of Indian Export Organisations president Sharad Kumar Saraf cited the cancellation of over 50% of orders, gloomy forecast, major job losses and rising NPAs amongst exporting units to urge the government to immediately announce a relief package for exports. “COVID-19 interest-free working capital term loan to exporters to cover the cost of wages, rental and utilities, EPF and ESIC waiver for 3 months from March to May 2020 and extension of pre- and post-shipment credit by 90-180 days on their maturity are the much needed steps to help the exporting community during such difficult and testing times,” he said. | exports fell by almost 35% year-on-year in march to $21.4 billion. imports plunged by 28.7% as COVID-19 outbreak wrought havoc on trade. trade deficit narrowed to a 13-month low of $9.75 billion in march. exporters warn of steeper decline in both outbound and inbound shipments. | Negative |
https://www.moneycontrol.com/news/business/with-an-eye-on-faltering-rupee-rbi-expected-to-raise-rates-next-week-2987481.html | The Reserve Bank of India is likely to raise interest rates in early October, despite relatively tame inflation, to prop up a retreating rupee, according to a Reuters poll of economists who also trimmed their near-term growth forecasts.
In an abrupt change from the last survey conducted two months ago, which predicted rates would stay on hold until this quarter next year, two-thirds of 61 economists polled September 19-25 said the RBI would lift the repo rate at least once by year-end.
Slightly over half said RBI Governor Urjit Patel and the Monetary Policy Committee would deliver a 25-basis-point rise to 6.75 percent at the October 5 policy meeting, with one economist calling for a 50-basis-point rise.
The predicted rate hike would be the RBI's third this year, having lifted borrowing costs in June and August. The US Federal Reserve is forecast to raise rates this week - its third this year - according a separate Reuters poll.
For many analysts, the retreating Indian rupee, which has tumbled nearly 15 percent since the start of the year and is the worst-performing major Asian currency, is likely of concern to policymakers.
On Tuesday the rupee, hit recently by growing credit concerns engulfing non-banking financial companies, was trading at 72.68 to the dollar.
The finance ministry also wants RBI to boost liquidity.
"For the RBI, I think it becomes necessary to provide a policy response. The question was only of timing," said Radhika Rao, economist at DBS in Singapore.
"Some would say it (rate hike) could have come sooner ... it probably would have been a bit more beneficial. But better now than never."
If the RBI does raise rates, it would be the latest in a series of emerging market central banks that have been pressured into tightening policy in response to a tumbling currency.
Fortunately for the RBI, the economy is doing well. The Indian economy is forecast to expand by an annual rate of more than 7 percent every quarter for the next two years, although slower than the surprise 8.2 percent rate clocked last quarter.
This means that India will remain the world's fastest growing major economy, but economists have chopped forecasts somewhat for coming quarters.
"Although the high growth rate in Q2 might be partly attributed to favourable base effects ... the underlying dynamics of the Indian economy shows that virtually all high-frequency data is flashing green," said Hugo Erken, senior economist at Rabobank.
Prices of crude oil - the country's biggest import have surged by over 20 percent this year. That in turn has swollen the current account gap to 1.9 percent of GDP, swinging to deficit from a small surplus of 0.7 percent a year ago.
That gap is forecast to widen further to 2.8 percent of GDP by the fiscal year ending in March 2019, before easing slightly to 2.5 percent in 2019-20.
Just over half of 49 respondents who answered an additional question said the biggest economic risk over the coming year was higher fuel prices.
The escalating US-China trade war has not had a major impact on India so far but has spurred on a broad selloff in emerging market assets since the beginning of this year.
The sharp fall in the rupee has not stirred much worry about inflation, however, which was just under 3.7 percent in August, slightly below the 4 percent where the RBI prefers it to be.
It is expected to average 4.1 percent this quarter and next, but rise to 5 percent by the middle of 2019 - significantly lower than the predictions in the last poll two months ago.
Economists were almost evenly split on whether a weaker rupee posed the biggest upside risk to inflation, with 26 of 51 respondents saying it was.
But even if the RBI raises rates on October 4, it will still struggle to keep up with the Fed, which is expected to keep tighten policy well into next year.
"The RBI will have to do more, though that looks unlikely on the grounds of on-target inflation and stress in the financial sector," Prakash Sakpal, Asia economist at ING, wrote in a research note. | two-thirds of economists polled say RBI will raise rates in early October. rupee has tumbled nearly 15 percent since start of year. rupee is worst-performing major Asian currency. RBI is forecast to expand by an annual rate of more than 7 percent every quarter. but economists have cut forecasts somewhat for coming quarters. RBI is expected to raise rates in early october. | Negative |
https://www.moneycontrol.com/news/business/coronavirus-the-pandemic-will-permanently-change-the-auto-industry-5273231.html | Some automakers may emerge stronger, others too weak to survive on their own. Factories will shut down. The pressure to go electric could become more intense.
People may travel less now that they have discovered how much they can get done from home. Or they may commute more by car to avoid jostling with others on crowded buses and trains.
The auto industry was bracing for a brutal year even before the coronavirus idled factories, closed dealerships and sent sales into a free fall. Now, things are about to get really Darwinian: The industry is expected to realign in ways that could have a profound effect on the eight million people worldwide who work for vehicle manufacturers.
It took almost a decade for car sales in the European Union to recover from the recession that began in 2008. The US market took about five years to bounce back, but sales have been flat since 2015. Explosive growth in China initially helped compensate, but the market has been in decline since 2018. As Volkswagen, Daimler, Fiat Chrysler and other companies slowly restart their assembly lines, people who work in the car business are beginning to ponder what the repercussions of this crisis will be.
COVID-19 Vaccine Frequently Asked Questions View more How does a vaccine work? A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine. How many types of vaccines are there? There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine. What does it take to develop a vaccine of this kind? Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time. View more Show
“We shouldn’t be too optimistic and expect that in 2021 everything is going to go back to normal as if nothing happened,” Ola Källenius, the Chief Executive of Daimler, told reporters during a recent conference call. The pandemic, he said, “will probably have a huge effect on the economy and we have to prepare.”
Here’s a look at what to expect.
Factory closures and labour strifeAutomakers worldwide had at least 20 percent more factory capacity than they needed before the coronavirus hit, analysts say. That idle manufacturing space cost them money without producing any profit. As sales plummet further, shutting down underused plants may be a matter of survival.
“Some of those big plants in Europe are going to really struggle,” said Peter Wells, Director of the Centre for Automotive Industry Research at Cardiff Business School in Wales. The going will be especially tough for the companies that make smaller cars, which tend to be less profitable, like Fiat, Renault or Volkswagen’s SEAT brand.
In Europe, it’s impossible to close a factory without labour strife and political resistance because so many jobs are at stake. Severance payments to workers and other costs can make it as expensive to shutter a plant as it is to build one.
“It’s about the politics more than the economics,” Wells said.
In an example of the kind of fights that may lie ahead, workers shut down a Nissan plant in Barcelona only two days after it opened in early May, demanding that the Japanese company commit to maintaining its presence in Spain.
Electric cars could come sooner (maybe)Sales of electric cars have been surprisingly resilient even as lockdowns gutted sales of gasoline and diesel powered vehicles.
In March, as much of Europe went into lockdown, car sales on the continent fell by more than half. But registrations of battery-powered cars surged 23 percent, according to Matthias Schmidt, an analyst in Berlin who tracks the industry.
In April, lockdowns caught up with electric cars, too, and their sales fell 31 percent, according to Schmidt’s estimate. But that was nothing compared with the total European car market, which plummeted 80 percent.
It is not clear whether the surge in electric car sales is a trend or a quirk. Many of the electric vehicles registered early this year had been ordered earlier, Schmidt said. Carmakers may have taken their time delivering cars that were bought in 2019 so the vehicles would help meet stricter European Union limits on carbon dioxide emissions that took effect in 2020.
Carmakers may not be as motivated to sell electric cars in coming months. They will be tempted to instead push SUVs, which generate far greater profits and are easier to sell now that fuel prices have plunged.
Much will depend on government incentives and regulations. Europe and China are doing more to promote electric cars than the United States under the Trump administration. Battery-powered cars are still much more expensive than gasoline vehicles. In a recession, fewer people may be able to afford them without subsidies.
An opening for startupsTurmoil in the market could be good for electric car startups like Byton and Lucid, which have proliferated after Tesla showed it was possible to challenge the traditional carmakers. The startups have a chance to attack the market while the established companies are struggling.
“The spaces in the market might open up a bit,” Wells said. “Once the fractures start to emerge, things start to happen.”
For other challengers, the pandemic has been a huge setback. Ride-hailing services like Uber and Lyft, which threatened to make car ownership obsolete for urban residents, have suffered because everyone is staying home. The Silicon Valley companies that promised self-driving cars by 2020 are still years away, and the pandemic is interfering with the human road testing they need to perfect their technology.
Get ’em while they’re cheapFew sectors get less love from investors than the old-line carmakers. Shares in Renault, for example, have fallen 70 percent in the last year, and the stock market values the company at just 5.7 billion euro, or $6.2 billion. (Billionaires like Jeff Bezos, Michael Bloomberg and Elon Musk are worth far more as individuals than Renault with its 180,000 workers and sales of 3.8 million cars last year.)
There may be one group of investors willing to overlook the high risk and meagre profits of car making. Chinese investors could see rock-bottom valuations as an opportunity to get a foothold on the continent.
Geely Holding, a carmaker based in Hangzhou, set a precedent when it bought Volvo Cars from Ford in 2010. Geely also own 8 percent of Volvo AB, a Swedish truck maker that is separate from the car company. Geely’s Chairman, Li Shufu, owns almost 10 percent of Daimler. The Chinese automaker BAIC Group owns another 5 percent of Daimler.
Further incursions by Chinese investors are certain to meet political resistance. Germany is expected to pass legislation making it easier to block foreign acquisitions. France has passed similar legislation, and has significant sway over Renault because it owns 15 percent of the shares.
But foreign investment might be welcome if it helps preserve jobs. Geely has revived Volvo Cars and the region around its home base in Goteborg, Sweden.
Pair up or perishCarmakers will face even more pressure to spread around the cost of developing electric cars and other new technologies. Existing partnerships, such as the one between Volkswagen and Ford Motor to develop autonomous driving software, could be expanded.
“It’s pretty likely that we will see former enemies or former competitors start to team up with each other,” said Axel Schmidt, a Senior Managing Director at the consulting firm Accenture who focuses on the auto industry.
These alliances, though crucial, are tough to manage. Renault has struggled to overcome tensions with its longtime partner, Nissan.
Rethinking globalisationThe pandemic exposed just how interconnected the world is and how a factory closure in one part of the world can shut down an assembly line in a different hemisphere.
“What we are all learning, and I talk to a lot of managers and CEOs in Germany, is that we all have to rethink our logistics and supply chains,” said Olaf Berlien, Chief Executive of Osram, a German maker of lighting products for autos and other uses.
“Because of the price pressure that we are all under, we took the cheapest provider wherever in the world it might have been,” Berlien said. “We undervalued the provider who was just around the corner.”
Others are not so sure that carmakers will be more willing to buy local. Källenius of Daimler said supply chains were already built to withstand disruption and had stood up well during the crisis. Not a single Mercedes went unbuilt because of a supply chain problem, he said.
“I wouldn’t come too quickly to the conclusion that we have to regionalise supply chains,” Källenius said. “The globalisation that we have achieved in the last 20 years has led to enormous productivity gains. I would see it as a mistake to back away from that.”
c.2020 The New York Times Company | automakers may emerge stronger, others too weak to survive on their own. the pressure to go electric could become more intense, says dr. ed husain. husain: industry expected to realign in ways that could have profound effect on workers. he says it took almost a decade for car sales in the eu to recover from the recession. | Negative |
https://www.livemint.com/news/india/how-china-fear-hits-indian-traders-11607264530187.html | After dealing in the import of fancy goods and hair accessories from Ningbo—an industrial hub south of Shanghai in China—for several years, Mumbai-based trader Amit Shah has decided to call it quits.
“Suddenly, there are too many restrictions on imports. There’s no clarity. To make things worse, the domestic market is yet to pick up after the pandemic and the (subsequent) economic slowdown. Meanwhile, container freight rates have gone through the roof. There is no option for me but to down the shutters," says Shah. He adds that a large part of the Chinese import trade that he has seen others indulge in while doing business over the years is unethical and illegal, with unimaginable levels of under-invoicing and bribing at the customs and ports.
Yet, the new norms have put barriers on even seemingly legitimate business. Shah is hardly alone in expressing distress. Rebin Sunny of Omega Trading, who used to import half a dozen 40-ft containers of car tyres from China and Taiwan every month, is at a loss too. “Abrupt changes in import policies have jeopardized my business," he says.
The pandemic and the government’s efforts to reduce Chinese imports following the India-China border skirmishes in June have unsettled the trading community all across the country. In parliament, the commerce minister Piyush Goyal had claimed that imports from China have declined by more than a quarter (around 28%) to $22 billion during April-August 2020.
After New Delhi clamped restrictions on imports, thousands of importers, traders, and wholesalers are now forced to wait and watch while struggling to make ends meet.
Several months into the onset of diplomatic tensions which left a shadow on trade, India’s approach still seems to be largely blunt force instead of being targeted. And unintended consequences are steadily piling up. For instance, when Customs authorities began compulsory physical checks on all shipments originating from China, starting June, it further messed up economic revival in certain key sectors that rely on imported goods.
The import basket is quite diverse; Indians lap up a whole range of goods manufactured by its neighbour. They include electronic goods, smartphones, consumer durables, solar cells, pharmaceutical ingredients, industrial goods, vehicles, tyres, toys, fancy goods, sports goods and music instruments, among many others.
Most importers agree that bilateral trade has been growing alarmingly in the past decade and that India may need to take steps to reduce its dependence on China. But a barrage of tariff and non-tariff barriers came in at a time when India is already facing an economic crisis, without giving importers adequate time to prepare for the rainy day. The question now is: How quickly can India adopt a more nuanced strategy that would cause the least amount of impact on local actors?
Anti-China sentiments
There are a few quick takeaways. Despite all the political din, China continues to enjoy the Most Favoured Nation (MFN) status. Goyal said in a statement that there is no proposal currently under consideration to withdraw the MFN status. While the government’s efforts are on to encourage local manufacturing and exports, India cannot afford to shut imports from China officially. Over the last few years, the government has forced many companies, especially in the telecom and auto sectors, to set up assembly lines and local production. Some companies have already started domestic sourcing and their products go under the ‘Make in India’ label.
Some importers in India have in fact sidestepped China and turned to Asean countries for sourcing their requirements due to fears of abrupt policy changes. On the other hand, some traders have started rerouting their imports through other countries. So, the expectation in some quarters is Chinese goods may end up in India via Taiwan or Vietnam, though costs shoot up for traders in case of rerouting.
A cross-section of importers has told Mint about how they’ve already been forced to shut down their businesses or go slow over the last few months. “The anti-China sentiments went through the roof. Many who had already built an inventory were struggling to empty their warehouses. Where is the question of placing new orders?" asks Sumit Rawat, a Mumbai-based importer of high-end audio/video equipment.
Praveen Khandelwal, secretary general of the Confederation of All India Traders (CAIT), which claims to represent 70 million traders in the country, said that there are several complaints that have been received in the last few weeks about ships being stranded and shipments being put on hold. “If there are curbs and ship movements are restricted, it’s also impacting exports. We have requested traders to send in their grievances so that we can take them to the government."
The organisation intends to meet Piyush Goyal with two requests. “We need to get all shipments cleared without any delay. Second, the government should come up with short-term policy guidelines till the next Budget. The lack of clarity is not good for the economy," said Khandelwal.
FM’s long battle
On 1 February, finance minister Nirmala Sitaraman unleashed a furious attack on Chinese imports. The customs duty on tableware and kitchenware made of porcelain or China ceramic, clay iron, steel and copper were doubled to 20%. The duty on several electrical appliances such as water heaters, hair dryers, ovens, cookers, toasters, coffee makers, heaters, fans and grinders, among an array of such products, were also doubled to 20%. Duty on toys, dolls, tricycles and scooters saw a steep hike from 20% to 60%. The government was killing two birds with one stone: Slowly shutting down Chinese dominance wherever possible, and pushing local manufacturing.
For Kochi-based Kottaram Trading Company, which owns the popular Nolta brand of crockery ware and kitchen appliances, the Budget proposals were the first blow, quickly followed by the lockdown and the anti-China sentiments and the concomitant non-tariff barriers. Siby K Thomas, director (finance), said the economic slowdown induced by the pandemic and the recent tensions at the border have been the proverbial final nail on their Chinese imports.
“We have steadily brought down dependence on imports and moved to Indian production for half of our product line-up. But Indian production lacks the cosmetic finish that Chinese products provide. There is also at least a 10% increase in the cost of production. Going forward, we plan to spread out imports to other countries instead of concentrating on China. We have already begun importing glassware from UAE and Thailand. We will look to import goods from Asean countries and avail the duty benefits. Since there is a ban on foreign travel, we are going slow," says Thomas.
The pandemic has shrunk the domestic market, especially in south India, which is a big market for Thomas. “During the first three months of the lockdown, we saw a 40% drop in the purchase of consumer durables such as non-stick vessels, cutlery, glassware, crockery ware and such. The recovery is pretty slow," he says.
While overall business has shrunk, the spike in container freight cost in a highly volatile market has cut their profit margins too.
The ripple effects
For long, the Indian government wasn’t comfortable with China’s growing clout in the bilateral trade. In 2019-20, the trade between China and India stood at $82 billion, with a deficit of $49 billion in China’s favour. There is a dip in the deficit, but India’s exports continue to remain a fraction, one-sixth of the value of goods imported by India. China, which was India’s largest trading partner between 2013-14 and 2017-18, has already slipped below the US in 2018-19, and is likely to slide down the ranking further.
But the fact is that a flurry of recent moves to counter imports came at a cost. Many raw materials and key ingredients have been in short supply as imported goods keep getting detained at various ports and airports. In June, there were huge delays in the clearance of containers from ports. But before the situation could get out of hand, the government did swing into action and exempted import of some key raw materials for pharmaceutical products as well as goods brought in by top importers from compulsory checks. However, smaller companies and traders continue to face the music.
Delay in imports has had a devastating effect on Indian manufacturing. For instance, India’s pharma sector depends heavily on the Active Pharmaceutical Ingredients (APIs), or the raw materials, produced in China. Two-third of India’s imports of APIs come from China. Bloomberg has estimated the Chinese import bill at $2.4 billion, out of the total spending of $3.56 billion for API imports.
In June, the government also banned tyre imports and shut down a big parallel market in the country.
“We were regularly importing car tyres from Maxxis (Taiwan) and Linglong (China), two of the world’s top 10 tyre manufacturers. Even after paying over 43-45% duty (28% GST and 15% import duty), the tyres used to be sold at nearly 50% discount to the Indian products," says Rebin Sunny of Omega Trading. He was retailing them through a wide network of dealers in south India.
While most of the imported tyres went to the replacement market, there is also a sudden shortage of ultra-high performance (UHP) tyres in India, he says. “The luxury car makers in India were sourcing their special tyres from plants abroad run by Pireili, Continental, Michelin and the like. These companies do not have manufacturing facilities in India. Also, it’s difficult to build specialty tyres here because of low volume."
After some automakers raised a hue and cry, the Director General of Foreign Trade (DGFT) has now started issuing licences on demand to them selectively for importing superior quality tyres that are not manufactured in India. “Apparently, these licences come with a caveat. You can import tyres only if they are meant for export-oriented vehicles," Sunny says. This leaves the luxury cars sold in the domestic market in a dilemma.
The government move to classify tyre imports into the restricted category was primarily to prevent dumping of low-quality tyres from China, which were retailed in India at 25-30% of the price of locally manufactured tyres. Of course, the move has helped domestic players to enhance production. A senior official from CEAT said most of the tyre factories in India, including those run by his company, are running at nearly 100% capacity, something not seen in many years.
Two other segments that are facing acute difficulty are electronic music instruments and sports goods. A whole range of keyboards and electric guitars from the likes of Korg, Yamaha and Fender was coming from China while most badminton/table tennis rackets, shuttles and accessories were being imported from China too. The stringent and time-consuming checks at ports are delaying the imports, creating a severe shortage in the domestic market.
In June, the government also restricted imports of television sets and agarbattis. In October, it banned the import of air conditioners with refrigerants. All these decisions were taken to boost domestic production.
As the government keeps an eye on dumping by China and other countries into India, traders are at the receiving end of sudden shifts, which have become frequent this year. “Surely, India should not be a dumping yard for anyone. Dumping is unethical and creates a lot of problems," says Khandelwal. But there is a caveat.
Only when a country or a firm exports an item at a price lower than the price of that product in its domestic market can it be called dumping, as per international trade rules. Of course, it impacts the price of that product in the importing country, leaving local manufacturers in the lurch. In such situations, international trade rules allow countries to impose tariffs on such products to provide a level-playing field to domestic players.
But for Indian manufactured goods to fill the emerging void, they will have to get price competitive. And fast. Or else, China’s loss may just be another Asian country’s gain.
“Most traders who earlier depended on Chinese imports are now shifting their procurement to other countries like Vietnam, Taiwan and South Korea," says Khandelwal. “It may take a year or so to stabilize." There is enough empirical evidence to suggest that India is on an unfinished agenda.
Anto T. Joseph is a senior journalist based out of Mumbai | trader Amit Shah has decided to call it quits after dealing in the import of fancy goods from Ningbo. he says there are too many restrictions on imports and there is no clarity. a large part of the Chinese import trade is unethical and illegal. the pandemic and the government’s efforts to reduce Chinese imports following the India-China border skirmishes in June have unsettled the trading community. | Negative |
https://www.moneycontrol.com/news/business/markets/commodity-prices-likely-to-head-lower-crude-to-remain-choppy-5265271.html | Ravindra Rao
Comex gold was trading moderately higher near $1,725/oz after a 0.6% gain on May 13. Gold traded higher, supported by choppiness in the equity market and the US dollar index.
Risk sentiment remains weak amid disappointing economic data, downbeat growth outlook, US-China tensions, increasing virus cases, fear of a second wave of infection in previous hotspots like China and warnings against rushed reopening of economies.
US PPI fell 1.3% in April, the biggest drop since the index began in December 2009, reflecting pressure on the economy. Adding to it, Fed Chairman Jerome Powell warned that the economy would take many months to recover from the pandemic.
ETF inflows also show continuing investor interest.
Gold holdings with SPDR ETF rose by 8.48 tonnes to 1,092.14 tonnes on May 13, the highest since April 2013.
Gold may witness choppy trade, reflecting a mixed trade in the US dollar. However, the general bias may be on the upside amid global growth concerns and hopes of additional monetary easing measures.
After a 1.9% decline on May 13, NYMEX crude was trading above $25 a barrel.
After sharp gains in the last few days, crude has turned directionless due to mixed factors.
Supporting crude price is the improving supply picture as OPEC and the US continue to reduce output. However, demand outlook continues to be bleak as major economies reel under virus-related restrictions.
US crude production fell for the sixth consecutive week to 11.6 million barrels per day, the lowest since July 2019 and 11.5% less than the record high level seen in February.
US Energy Information Administration, earlier this week, lowered its estimate for crude production for 2020 from 11.76 million barrels per day to 11.69 million bpd.
Along with the US, OPEC and allies are also aggressively cutting output. OPEC and allies 9.7 million barrels per day production-cut deal kicked in from May 1 and members are working on adhering to the terms.
Saudi Arabia has indicated it will cut output by an additional 1 million bpd to 7.5 million bpd starting June.
Demand concerns are high as weak economic data point to a negative impact of the virus-related restrictions.
US PPI slumped 1.3% in April as against the forecast of a 0.5% decline. Also weighing on prices is the weaker outlook, as the International Monetary Fund (IMF) warned that it may further lower global growth forecast.
Adding to demand concerns, after US EIA, OPEC also lowered its global forecast. In its monthly report, OPEC reduced its forecast for 2020 crude demand by 2.23 million bpd and expects it to fall by 9.07 million bpd.
Mixed factors may keep crude price choppy, however, general bias may be on the upside amid improving supply picture.
On May 14, the focus will be on IEA’s monthly outlook, US economic data and development relating to the virus outbreak and US-China tensions.
The author is VP- Head Commodity Research at Kotak Securities
Disclaimer: The views and investment tips expressed by experts on moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. | gold traded higher after a 0.6% gain on may 13. risk sentiment remains weak amid disappointing economic data. US dollar index fell 1.3% in April, biggest drop since index began in 2009. OPEC and allies are aggressively cutting output. a spokesman for the u.s. government said it is reviewing its response. a spokesman for the u.s. government said it is reviewing its response. | Negative |
https://www.businesstoday.in/news/share-market-today-live-updates-sensex-nifty-airtel-adani-power-idfc-vodafone-coffee-day-union-bank-mtnl-ongc-14-11-2019/story-liveblog/117.html | 8:53 AM (3 years ago)
Trump threatens for more tariffs on China before Christmas
Posted by :- Rupa Roy
U.S. President Donald Trump has again threatened to jack up U.S. tariffs on Chinese goods if the world’s two largest economies fail to reach a trade deal. Additionally, the previously announced 15% tariffs on about $156 billion worth of Chinese-made consumer goods will be scheduled to take effect on December 15Stocks fell on Wednesday in Asia and Europe and initially in the United States as investors turned cautious as Trump on Tuesday said a trade deal with China was “close,” but offered no details and warned that he would raise tariffs “substantially” on Chinese goods without a deal. | 15% tariffs on $156 billion worth of Chinese-made consumer goods will take effect on December 15. previously announced 15% tariffs on about $156 billion worth of Chinese-made consumer goods will take effect on. 'i'm not going to raise tariffs on china,' he said. 'i'm going to raise tariffs'substantially' without a deal. | Negative |
https://www.financialexpress.com/india-news/cia-factbook-labels-bajrang-dal-vishva-hindu-parishad-as-militant-orgnisations/1207222/ | United States’ intelligence organisation Central Investigative Agency (CIA) has categorised India’s right-wing organisations Vishwa Hindu Parishad and Bajrang Dal as “religious militant groups”. The mentions have been made in CIA’s ‘world factbook’ which is a document released by the organisation to provide information on various issues like government, economy and history of countries. The CIA document listed Rashtriya Swayamsewak Sangh as a nationalist organisation. While Kashmir’s Hurriyat Conference was mentioned as a separatist group.
The World Factbook provides CIA a view on the history, people, government, economy, energy, geography, communications, transportation, military, and transnational issues for 267 world entities.
However, the VHP has raised strong objection over the declaration and threatened a worldwide agitation against the CIA if they don’t retract.
“The declaration of the Vishwa Hindu Parishad and Bajrang Dal as a militant religious organization by the American intelligence agency CIA is objectionable, outrageous and beyond facts,” the VHP said in a statement. VHP joint general secretary Surendra Jain said that the VHP works for more than 60,000 single schools and is dedicated to overall development of the country. These organization never compromise with national interest and Hindu interests, it added.
Political pressure groups and leaders (As described by CIA)
All Parties Hurriyat Conference in the Kashmir Valley (separatist group)
Bajrang Dal (militant religious organization)
Jamiat Ulema-e Hind [Mahmood MADANI] (religious organization)
Rashtriya Swayamsevak Sangh or RSS [Mohan BHAGWAT] (nationalist organization)
Vishwa Hindu Parishad [Pravin TOGADIA] (militant religious organization)
other: hundreds of social reform, anti-corruption, and environmental groups at state and local level; numerous religious or militant/chauvinistic organizations; various separatist groups seeking greater communal and/or regional autonomy
While Vishwa Hindu Parishad is the parent organisation, Bajrang Dal is its youth wing. The controversial right-wing organisation has been in news for all the wrong reasons. A number of video and pictures have shown its cadre getting arms training in the past. Last month, a picture of Bajrang Dal cadre getting armed training in Madhya Pradesh, had gone viral. When asked, an official from the group claimed that it was 10-day camp in all 51 districts which is organised every year. | CIA has categorised India's right-wing organisations as'religious militant groups' the CIA document listed Rashtriya Swayamsewak Sangh as a nationalist organisation. while Kashmir’s Hurriyat Conference was mentioned as a separatist group. the VHP has raised strong objection over the declaration. it has threatened a worldwide agitation against the CIA if they don’t retract. | Negative |
https://www.moneycontrol.com/news/business/cryptocurrency/bitcoin-gains-14-after-the-us-fed-says-it-has-infinite-cash-5068191.html | Bitcoin rallied over 14 percent on March 24 after the US Federal Reserve announced a 'bazooka' to tackle coronovirus-related economic stress.
The digital currency was quoting $6,724.66, up 14.49 percent at the time of writing this copy.
In an effort to protect the US economy from spiralling into a depression, the US Fed on March 23 said it will pump in $125 billion each day, or a massive $2.5 trillion per month, to support sectors roiled by the COVID-19 outbreak. | digital currency was quoting $6,724.66, up 14.49 percent at the time of writing. in an effort to protect the US economy from spiralling into a depression, the US Fed on march 23 said it will pump in $125 billion each day. in an effort to protect the US economy from spiralling into a depression, the US Fed on march 23 said it will pump in $125 billion each day. | Negative |
https://economictimes.indiatimes.com/mf/mf-news/brokers-body-seeks-sebi-finmin-intervention-as-franklin-closes-6-mf-schemes/articleshow/75352740.cms | Terming the shut down of six debt schemes by Franklin Templeton Mutual Fund (FTMF) as an extreme step that has created panic, an umbrella body of brokers on Friday sought markets regulator Sebi and the Ministry of Finance's intervention to protect investor interest.FTMF stunned all by deciding to shutter operations of six schemes with assets under management of more than Rs 25,000 crore late Thursday evening, citing redemption pressures and market volatilities in wake of the COVID-19 pandemic. The fund house has said that capital markets regulator Sebi was informed in advance about the decision, which has been taken to protect investor wealth."Such an extreme step by FTMF has created panic among their investors as well as mutual fund investors in other debt schemes across asset management companies," the Association of National Exchange Members of India (ANMI) said.The ANMI wrote to capital markets watchdog Sebi and the Ministry of Finance, seeking their intervention to "protect the hard earned savings" of lakhs of investors.The body pitched for the formation of an expert committee of mutual fund executives to "determine the precise problem in FTMF schemes".It said the confidence of people in debt mutual funds is at a risk and an event like this should not lead to an erosion of trust in a Rs 24 lakh crore industry. | FTMF shutters six debt schemes with assets under management of more than Rs 25,000 crore. fund house says regulator Sebi was informed in advance about the decision. ANMI seeks government intervention to protect investor interest. FTMF says investors' confidence is at risk. a committee of mutual fund executives will be formed to investigate the problem. a spokesman for the fund house says the decision is a "very serious matter" | Negative |
https://www.moneycontrol.com/news/business/markets/fitch-says-iocs-net-debt-levels-to-rise-due-to-large-capex-2717901.html | Indian Oil | The board has approced implementation of Petrochemical and Lube Integration Project at lndianOil's Gujarat Refinery at an estimated cost of Rs 17,825 crore. (Image: PTI)
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Fitch Ratings today it expects state-owned Indian Oil Corp's (IOC) net debt levels to increase due to its large capital expenditure and investment plans in the medium term and affirmed a rating equivalent to India's sovereign rating.
The 'BBB-' rating with stable outlook "equalises the India-based company's rating with that of its largest shareholder, the State of India (BBB-/Stable), based on Fitch's Government-Related Entities (GRE) Rating Criteria," the rating agency said in a statement.
"Fitch expects IOC's capex to remain high to upgrade refineries to meet new emission standards (BS-VI) and to expand refining and petrochemical capacity, including the expansions currently underway.
Fitch forecasts average capex of Rs 25,000-30,000 crore per annum over the next five to six years," it said.
IOC's financial profile, it said, is likely to remain moderate over the medium term due to its high capex and investment plans.
Its financial profile has improved over the last couple of years with net leverage (net adjusted debt/operating EBITDAR) falling to 2.0x in the year ended March 2018 (FY18) from 2.7x in FY16 (FY17: 2.1x), mainly on account of higher gross refining margins (GRMs).
"We expect IOC's net debt levels to increase due to its large capex plans in the medium term. However, we believe IOC's credit metrics will remain comfortable with net leverage of around 2.5x over the next two to three years, provided its dividend outflow normalises from the high levels of the last two years," it said.
Fitch said it has assessed IOC's standalone profile at 'BB+' to reflect its dominant market position as the largest oil refining and marketing company (OMC) in India, the average-but-improving complexity of its refining assets and a moderate financial profile.
"High capex requirements are likely to keep free cash flows negative over the next few years," it said adding ut assesses IOC's status, ownership and control by the sovereign as 'strong'.
"Fitch assesses the socio-political implications of a default by IOC as 'very strong'. A default would significantly affect the country's energy security given IOC's position as the largest OMC.
"IOC, along with two other state-owned OMCs, imports a large share of crude oil - a default would jeopardise their ability to do so, resulting in disruptions to the economy, the statement said.
Fitch sees the financial implications of an IOC default as 'strong' as it is one of the key state-owned borrowers in India and a financial default may have a strong impact on the availability and cost of financing options for the state and other GREs, it said.
IOC has 80.7 million tonnes per annum of refining capacity (33 percent of the total in India). It operates 11 of the 23 refineries in the country.
IOC also has a 49 percent share of the country's crude and product pipeline (by length) and 44 percent share in petroleum products with over 48,170 customer touch points.
Fitch said IOC is exposed to the international crude-refining cycle as reflected in the volatility of its historical GRMs. However, the ongoing refinery upgrades are likely to lower the volatility impact over the medium term.
"We also expect IOC to benefit from strong demand for petroleum products in India over the medium term in light of its dominant market position," it said.
Petroleum-product consumption in India has increased strongly at a CAGR of 5.6 percent from FY12 to FY17 and we expect growth to remain strong (around 5 percent) over the medium term amid the prospect of robust GDP growth, it added.
Also, IOC's refining asset quality is expected to improve from the planned upgrade and expansion, resulting in higher profitability and cash flows.
IOC's strong liquidity, Fitch said, is reflected in its large cash and equivalents of around Rs 11,600 crore (including Oil Marketing Companies GoI Special Bonds) as at end-FY18 against long-term debt maturities of around Rs 3,500 crore.
In addition, the company had large unutilised working capital limits of around Rs 8,000 crore as of end-FY18. IOC also enjoys ready access to domestic and international capital and banking markets. | the board has approved implementation of Petrochemical and Lube Integration Project at lndianOil's Gujarat Refinery. the project is expected to cost an estimated cost of Rs 17,825 crore. Fitch affirmed a rating equivalent to India's sovereign rating. it expects IOC's net debt levels to increase due to large capital expenditure. | Negative |
https://economictimes.indiatimes.com/news/international/world-news/cpec-to-be-completed-at-all-costs-imran-khan/articleshow/76783727.cms | I-T Lens on Google, Amazon & Apple for likely ₹5kcr Demand The Income Tax (I-T) Department is investigating the Indian units of Apple, Google and Amazon over possible non-payment of tax. In connection with a probe that began in 2021, the authorities have sought detailed explanations from the tech behemoths on their transfer pricing (TP) practices, according to people aware of the matter.
Indians End British Raj to Top Dubai Realty Buyers’ Mkt Indians have become the largest real estate investors in the Dubai property market, playing a pivotal role in shaping the city’s real estate market. | the income tax (I-T) department is investigating the Indian units of Apple, Amazon and Amazon over possible non-payment of tax. the authorities have sought detailed explanations from the tech behemoths on their transfer pricing (TP) practices. in connection with a probe that began in 2021, the authorities have sought detailed explanations from the tech behemoths on their transfer pricing practices. | Negative |
https://economictimes.indiatimes.com/markets/stocks/news/investors-could-look-at-top-rated-company-fds-as-options-shrink/articleshow/76082199.cms | Mumbai: Falling bank deposit rates should not make you lose heart. Fixed deposits of top-rated companies could be an attractive investment option, especially for those desiring safety and reasonable returns. With the Reserve Bank of India announcing the closure of government bonds that paid 7.75 per cent interest and the country’s largest lender State Bank of India slashing deposit rates, financial planners are advising investors to consider fixed deposits of companies such as HDFC, Bajaj Finance, ICICI Home Finance and Mahindra Finance.Investors in a corporate deposit can earn as much as 200-240 basis points higher than deposit with a nationalised bank like SBI. While an SBI deposit pays a maximum of 5.4 per cent, a deposit in Mahindra Finance pays 7.8 per cent for 40 months. Bajaj Finance offers 7.6 per cent for a five-year deposit. Investors can opt to receive interest payment on a monthly, quarterly or annual basis, and many retirees often use such products to meet their monthly expenses.“Uncertainty in stock markets, negative environment around debt mutual funds and no fresh issuance of NCDs is turning investors towards corporate fixed deposits,” said Anup Bhaiya, CEO, Money Honey Financial, a Mumbai-based distributor.Investors prefer these companies because of their stable track record, strong parentage and top-notch ratings. While there is a preference for safety over higher returns, investors deem the current rates offered by banks to be unviable. The government bonds offered post-tax returns of 4.4 per cent annually for a person in the highest tax bracket. Though returns were not considered high, individuals preferred them for their safety. The highest interest rate offered by SBI is 5.4 per cent after the 40-basis point cut.“Investors are looking to lock money at higher rates in these corporate deposits as they believe rates will go down further,” said Rupesh Bhansali, head (distribution), GEPL Capital.Many senior citizens prefer corporate deposits over debt mutual funds as these are simple to understand, with defined rate of interest. The scrapping of six schemes by Franklin Templeton that has led to redemptions being stopped indefinitely has contributed to the aversion to debt funds. Returns after tax deductions in these fixed deposits work well for those whose income are not subject to tax or for people in the marginal tax bracket.Financial planners point out that investments in company FDs should be done after planning for emergency funds. “Build your contingency fund first through bank deposits and after that is done, opt for such deposits. Since they are illiquid, investment must be made with a view of holding till maturity,” says Vinayak Kulkarni, a Mumbai-based financial adviser. | falling bank deposit rates are turning investors towards fixed deposits. investors prefer companies because of their stable track record, strong parentage and top-notch ratings. government bonds offered returns of 4.4 per cent annually for a person in the highest tax bracket. the highest interest rate offered by SBI is 5.4 per cent after the 40-basis point cut. a deposit in ICICI Home Finance pays 7.8 per cent for 40 months. | Negative |
https://economictimes.indiatimes.com/markets/commodities/news/gold-rate-today-gold-declines-on-rising-equities-fall-in-spot-demand/articleshow/70548027.cms | Gold Rates - Spot & Futures (.995 purity) (MCX) Date Gold Spot Price
Rs/ 10 grms (AHMEDABAD) Gold Future Price
Rs/ 10 grms Expiry: 05-Dec-2023 01-11-2023 0 60742 01-11-2023 61018 60742 31-10-2023 61018 61237 30-10-2023 61027 61268 27-10-2023 60629 61238 26-10-2023 60764 60968 25-10-2023 60311 60794 24-10-2023 60418 60544 23-10-2023 60418 60591 20-10-2023 60451 60725 19-10-2023 59687 60360 18-10-2023 59570 60065 17-10-2023 59046 59190 16-10-2023 58877 59148 13-10-2023 58092 59430 GoldGold Technical Charts
NEW DELHI: Gold prices witnessed a fall in futures trade on Tuesday as a rise in equities weighed on the demand for gold as a safe-haven metal.A fall in demand by jewellers at spot markets and an uptick in rupee against the US dollar was also a negative for gold prices.Global cues, however, were positive.Gold prices continued to rise as the protracted trade war between the United States and China intensified after Washington designated Beijing a currency manipulator, prompting a flight towards safe-haven assets, Reuters reported. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.53 per cent to 835.16 tonnes on Monday from 830.76 tonnes on Friday.Around 10:35 am, MCX Gold traded at Rs 37,108 per 10 grams, down by Rs 237. Silver also declined after a slump in demand by industrial units and coin makers at the spot markets.MCX Silver traded Rs 42,295 a kilo, down by Rs 188 around that time.As per brokerage SMC Global Securities , bullion counter may witness some profit booking at higher levels."Gold (October) can test Rs 37,000, facing resistance near Rs 37,400 and silver (September) can slip towards Rs 42,100, facing resistance near Rs 42,500," said the brokerage. | gold futures trade falls as equities weigh on demand for safe-haven metal. fall in demand by jewellers at spot markets and rupee uptick also negative. silver also declines after slump in demand by industrial units and coin makers. asian markets are booming as equities and rupee trades are a major concern. | Negative |
https://economictimes.indiatimes.com/news/economy/indicators/government-revises-downwards-gdp-growth-data-during-upa-regime/articleshow/66850228.cms | Modi govt releases GDP back-series data, UPA era growth rates lowered
NEW DELHI: The government issued revised GDP data for the 2005-12 fiscal years that lowered growth under the previous Congress-led United Progressive Alliance, in contrast with recalculated numbers that had been released in August and sparking a controversy ahead of general elections in a few months. The back series adjusts GDP numbers for the period using new methodology with the base year as FY12.The four years of the current government show higher average growth than that achieved during the UPA under the recalibrated national accounts. Under the back series, growth in the UPA years was slower with the peak of 10.3% in FY11 scaled back to 8.5%.The August revision had shown four years of 9%-plus growth during FY06-FY08 while the latest numbers don’t cross 9%. The average growth for the UPA years after the back-series revision for FY06 to FY12 declines to 6.82% from 7.75% earlier, well below 7.35% during the four years of the present government. The UPA ruled from 2004 to 2014, when it gave way to the current BJP-led National Democratic Alliance.Former finance minister P Chidambaram said the Niti Aayog, which was involved in the exercise, should be scrapped. “Niti Aayog’s revised GDP numbers are a joke. They are a bad joke. Actually they are worse than a bad joke. The numbers are the result of a hatchet job. Now that Niti Aayog has done the hatchet job, it is time to wind up the utterly worthless body,” he said in a series of tweets.Questioning the revised numbers, Congress member Ahmed Patel said 140 million had been lifted from poverty and per capita income rose 300% during the UPA’s tenure. “No trickery can change this. They couldn’t beat UPA’s economic growth so they changed the formula to please themselves,” he said.“In its desperate attempt to rewrite GDP data, the government resembles the student who cannot pass an exam without cheating,” Congress leader Ahmed Patel said.Responding to Chidambaram’s comments, Niti Aayog vice chairman Rajiv Kumar tweeted: “@PChidambaram_IN it would be far more in keeping with your acumen to give us details of why the new back-series data is wrong than merely to assert that they are wrong. I challenge you to prove them to be technically deficient.”The August numbers had been calculated by the Sudipto Mundle committee set up by the National Statistical Commission (NSC), which had bumped up growth during the UPA years based on the socalled production-shift method. That showed growth to be faster in FY04-FY12 and lower before that in 1994-95, triggering a war of words between the BJP and Congress, with the latter claiming India did better under the UPA.“The UPA government delivered the best-ever decadal growth… The back-series calculation of GDP has proved that the best years of economic growth were the UPA years 2004-2014,” Chidambaram had said at the time.The government had dismissed the numbers saying the GDP back series issued by the NSC committee amounted to “experimental results” meant to facilitate a decision on the approach to be followed and were not official estimates. It also questioned the quality of growth under the UPA, saying it had been fuelled by debt and a high government fiscal deficit.Ministry of statistics and programme implementation secretary Pravin Srivastava said on Wednesday that the latest back-series calculation was made by the Central Statistics Office (CSO).All countries have to align GDP data with UN standards for comparison. “The government wanted the back-series data,” Srivastava said.The latest data show growth falling from a high of 7.9% in FY06 to 5.2% in FY12 as against 9.3% and 6.6% respectively under the old series with FY05 as base year. Kumar said this difference was not a coincidence.“The back-series GDP data is the result of hard work of CSO officials who had recalibrated the economy. These numbers have been thoroughly vetted by leading economists before being made official,” he said.Independent experts said the new numbers didn’t alter the overall trajectory.“Directionally, the new series is similar to the old series, which suggests that the latter was not misleading the policymakers on whether the pace of growth was accelerating or slowing down,” said Aditi Nayar, principal economist, ICRA.Devendra Kumar Pant, chief economist, India Ratings, said the data showed minor change. “Even this data shows deceleration in investment rate from 39.8% in FY11to 30.6% in FY18 and decline in gross savings rate to 29.6% in FY17 from 36.2% in FY11. These are major economic challenges which Indian economy is currently facing,” he said.The Advisory Committee on National Accounts Statistics (ACNAS) recommended the methodology used for calculating the GDP back series. While the methodology for preparing back-series estimate for 2004-05 to 2010-11 is largely the same as methodology followed in the new base (2011-12), in certain cases owing to limitations of the availability of data, either splicing method or ratios observed in the estimates in base year 2011-12 have been applied. | the government released revised GDP numbers for the 2005-12 fiscal years. growth under the previous Congress-led United Progressive Alliance was slower. the revised numbers were released in august but were not recalculated. the government has been criticized for releasing the revised figures. the figures spark a controversy ahead of the general elections in a few months. former finance minister P Chidambaram said the revised numbers were a joke. | Negative |
https://www.moneycontrol.com/news/business/markets/market-cap-to-gdp-ratio-lowest-in-10-years-time-to-buy-or-turn-cautious-5444751.html | The ratio, which is also known as Warren Buffett indicator, compares the value of all stocks at an aggregate level to the value of the country's total output. A value above 100% indicates that the market is overvalued while a number close to 50% indicates that it is undervalued.
The market-cap-to-GDP ratio has declined swiftly – from 79 percent as of FY19 to 56 percent (FY20 GDP) – much below the long-term average of 75 percent and closer to levels last seen during FY09, according to a report by Motilal Oswal.
The market-cap-to-GDP ratio is currently at its lowest level since the global financial crisis of 2008-2009. The ratio, which is used to determine whether the overall market is undervalued or overvalued, suggests that it might be the right time to put in money, but experts beg to differ.
The lowest in the last two decades was 42 percent in FY04. However, the number of listed and traded companies back then were much lower vis-à-vis today. The ratio hit a peak of 149 percent in December 2007 during the 2003-08 bull run, the report added.
The numbers might give an impression that the stock market might be trading at cheap levels, but experts suggest that the ratio does not reflect the true picture of the economy as well as markets. The true market-cap-to-GDP ratio is slightly skewed.
The success and the applicability of the market-cap-to-GDP ratio is higher when the market-cap reflects a much larger share of the economic activity in the country, said the Motilal Oswal report.
India Inc. in the year 2019 saw robust investment momentum from private equity with total investment of $37 billion as compared to $36.16 billion in the year 2018 (as per a report by private company data tracker Venture Intelligence).
“The true market cap to GDP ratio is slightly skewed as the PE investments which came in large numbers have not been captured while considering market cap. In addition to this, if one assesses the impact of COVID -19 which would largely materialise going ahead, the growth is projected to contract by 3.20% in FY2020-21 (World Bank),” Umesh Mehta, Head of Research, Samco Securities told Moneycontrol.
“Therefore, though this ratio looks attractive but optically it is still on a higher side taking into account the PE investment and true GDP picture,” he said.
“Historically, and specifically in recent years we always had low Mcap to GDP ratio. During the COVID-19 market crashed to abysmal levels and Mcap to GDP went below 50 which reflected the stark undervaluation in the broader market,” Paras Bothra, President of Equity Research, Ashika Stock Broking told Moneycontrol.
“Though this is not the only indicator to gauge the market valuation. Also, this indicator itself got changed sharply with decelerating GDP growth and anemic earnings,” he said.
Is it a wealth-creating opportunity?
The Indian market after slipping into a bear market has bounced back by more than 30 percent from the lows. Given that the ratio is slightly skewed, market cap-to-GDP ratio may be near its long-term average or slightly below but it is currently absolutely not at low levels on a like to like comparison, suggest experts.
Whether the aggregate Mcap rise or fall, identifying individual sectors which have its own bull and bear phase with changing fundamentals needs to be closely studied, they say.
“Identifying companies and emerging leaders in it which are likely to benefit from the tailwind of a sector is a reliable way to make sustainable wealth,” says Bothra of Ashika Stock Broking.
“Whether the overall market is in a bear or a bull market, there will be sectors which are always having a bull or a bear phase of its own for reasons mentioned above. This is primarily going to be my focus area,” he said.
Taher Badshah, CIO – Equities, Invesco Mutual Fund in an interview with Moneycontrol said that in a post-COVID world, the new normal for India Inc. will likely involve dealing with a defensive consumer, cautious borrowing and lending practices, conservative capital investing by corporates, greater digital and online intervention and even higher dependence on state support for driving growth in the system.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. | market-cap-to-GDP ratio has declined swiftly from 79 percent as of FY19 to 56 percent (FY20 GDP) ratio is used to determine whether the overall market is undervalued or overvalued. lowest in the last two decades was 42 percent in FY04. experts suggest that the ratio does not reflect the true picture of the economy. | Negative |
https://www.financialexpress.com/industry/construction-equipment-demand-to-falter-further-icra/1955839/ | The construction equipment industry is expected to witness 20% degrowth in calendar year (CY) 2020. A recent survey revealed that dealers and original equipment manufacturers (OEMs) are saddled with significant inventory, which will negatively impact the carrying costs of the industry in H1 FY2021, said an Icra note on Monday. Demand revival is likely only in the third quarter of FY2021, the credit rating agency said.
The Indian construction industry is facing numerous headwinds as a result of the economic slowdown and other factors impacting construction activities. As a result, the construction equipment (CE) industry witnessed a significant volume degrowth of 16% in CY2019. Volumes degrew by 22% in FY2020. The situation has been further exacerbated by the Covid-19 outbreak and the nationwide lockdown. The industry is expected to degrow 20% during CY2020. These were the conclusions of Icra’s survey of CE dealers across 12 states in the country — Andhra Pradesh, Bihar, J&K, Punjab, Haryana, Himachal Pradesh, Uttarakhand, Telangana, Karnataka, Kerala, Madhya Pradesh and Rajasthan. The extensive survey was conducted throughout April.
According to Icra’s findings, in FY2020, 43% of the respondents witnessed volume degrowth > 25%. Dealers in few states like Karnataka and Bihar reported volume growth between 5 and 5%. Tough financing environment and liquidity strain in the market made it difficult for majority of the dealers to secure funding, thereby impacting sales to some extent during FY2020.
Majority of the respondents indicated that funds flow from the government was weak. While central government payment was flowing, payments from state governments were stuck, which, in turn, impacted CE demand. As for rental demand, 50% of the respondents said it was in line with previous years while 30% felt otherwise, which impacted fresh CE buying to a certain extent.
Sales during March was severely impacted by the Covid-19 outbreak and the ensuing lockdown as 83% of the respondents witnessed volume degrowth of more than 60% (in some cases as much as 80-90%). Typically, March of every fiscal is the best month during which the CE sales witnesses a surge in volumes. But this was not the case in FY2020, which lead to relatively higher inventory holding.
Currently, 85% of the respondents hold more than one month of inventory, thereby adding to higher interest costs for Q1FY2021. Despite tight conditions, dealers received timely funds from financiers for sales during February and March, even while the lockdown impacted sales in March.
Nearly 71% of the respondents expect demand to revive during Q3 FY2021, after Q2 FY2021, which is typically a lean period for the industry on account of monsoons. The extent of volume degrowth during FY2021 remains uncertain given current market conditions; 50% respondents expect volumes to decline by 15-25% while 29% expect volumes to remain flattish.
Emission norm change (on production of engines >50HP) to TREM IV standards for backhoe loaders and wheeled loaders is scheduled for October. More than 70% respondents expect the emission norm changes to be implemented as scheduled. More than 85% respondents expect cost of the equipment to increase by 5-10% given the upfront investments incurred by OEMs to implement emission norm changes in wheeled loaders and backhoe loaders.
Pavethra Ponniah, VP and sector head, Icra, said, “Apart from the impact of the lockdown during March to May, Covid-19 has crippled several industries and eroded livelihoods. Weakness in government revenues streams, more so at the states; redirected government support to healthcare, possibly at the cost of all other capital spends; the need for structural changes incorporating social distancing in several industries like construction; movement of labour and material; and the cost of restarting the economy — all these thwart the ability to make forecasts for sectors intrinsically linked to the underlying economy. Unforeseen headwinds will be many in the coming months.” | the construction equipment industry is expected to witness 20% degrowth in calendar year (CY) 2020. the situation has been further exacerbated by the Covid-19 outbreak and the nationwide lockdown. the credit rating agency said demand revival is likely only in the third quarter of FY2021. the survey was conducted across 12 states in the country. in FY2020, 43% of the respondents witnessed volume degrowth > 25%. | Negative |
https://economictimes.indiatimes.com/markets/commodities/news/crude-oil-prices-slip-as-us-inventories-and-virus-fears-grow/articleshow/77105250.cms |
LONDON: Oil prices fell on Wednesday as industry data showed a bigger than expected inventory build in the United States, where a surge in coronavirus cases could further dent fuel demand in the world's biggest oil consumer. Brent crude fell 39 cents, or 0.9 per cent, to $43.93 a barrel by 0837 GMT. US West Texas Intermediate ( WTI ) crude dropped 48 cents, or 1.1 per cent, to $41.44.The American Petroleum Institute (API) industry group reported US crude inventories rose last week by 7.5 million barrels, against expectations for a draw of 2.1 million barrels.The US Energy Information Administration (EIA) releases official oil data later on Wednesday."US glut fears have become a permanent fixture of the oil market," said Stephen Brennock of oil broker PVM. "This will remain the case so long as the US oil demand outlook is being undermined by the country’s failure to contain the COVID pandemic."Global coronavirus infections surged past 15 million on Wednesday, according to a Reuters tally, with the pandemic gathering pace even as countries remain divided in their response to the crisis.In his first pandemic press briefing in months, US President Donald Trump said the outbreak would probably worsen before it gets better. His comments were a shift in strategy from his previously robust emphasis on reopening the US economy.Republicans and Democrats are also struggling to come to terms over more fiscal support for the economy, contrasting with the European Union deal that lifted oil prices on Tuesday.Rising tension between the United States and China over the coronavirus and Hong Kong also pressured prices.China said that the United States had abruptly told it to close its consulate in Houston - a move that Beijing said it strongly condemns, threatening retaliation.Economic data from Japan, the world's fourth-largest oil consumer, also weighed on prices. Factory activity contracted for a 15th straight month in July, indicating lower economic activity as the pandemic extends into the third quarter.There are also signs that Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), is still not meeting its target under an OPEC-led supply pact.Russia, meanwhile, plans to cut its oil loadings from Baltic ports and Black Sea port Novorossiisk over Aug. 1-10 by nearly a quarter compared with the corresponding period in July, according to a preliminary loading schedule and Reuters calculations, which could support prices. | crude fell 39 cents, or 0.9 per cent, to $43.93 a barrel by 0837 GMT. US crude inventories rose last week by 7.5 million barrels. coronavirus infections surged past 15 million on. tuesday. rising tension between the united states and china over the coronavirus and Hong Kong also weighed on prices. | Negative |
https://www.livemint.com/news/world/covid-19-impact-us-fed-officials-see-rates-remaining-low-through-2022-11591813014786.html | Washington: The US Federal Reserve on Wednesday repeated its promise of continued extraordinary support for the economy as policymakers projected a 6.5% decline in gross domestic product this year and a 9.3% unemployment rate at year's end.
"The ongoing public health crisis will weigh heavily on economic activity, employment and inflation in the near term and poses considerable risks to the economic outlook over the medium term," the Fed said in its latest policy statement. The first policymaker economic projections since December see the overnight interest rate remaining near zero through at least 2022.
Though much of the statement repeated language from its April meeting, the central bank did promise to maintain bond purchases at "the current pace" of around $80 billion per month in Treasuries and $40 billion per month in agency and mortgage backed securities - a sign it is beginning to shape its long run strategy for the economic recovery.
That is expected to begin in earnest in 2021 with growth forecast at 5%.
The pledge to keep monetary policy loose until the U.S. economy is back on track repeats a promise made early in the central bank's response to the coronavirus pandemic. That response included cutting its key overnight interest rate to near zero in March and making trillions of dollars in credit available to banks, financial firms, and a wide array of companies.
But the projections are the first issued since December, and offer policymakers' views on how fast employment and economic growth might recover, and an initial steer on how long the federal funds rate will be pinned down.
Through most of last year U.S. central bankers felt they were in an enviable spot, with record low unemployment, tame inflation, and a strong expectation that both would continue.
But the pandemic has now thrown them into what may be a years-long fight to bring Americans back to work after some 20 million jobs were lost from March through May.
On Wall Street, which had been near unchanged ahead of the Fed statement, stock prices rose, with the benchmark S&P 500 Index gaining by 0.3%. Treasury security yields rose and the dollar fell against the euro and yen.
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This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed. | the central bank's latest policy statement is the first since December. it sees a 6.5% decline in gross domestic product this year and a 9.3% unemployment rate at year's end. the central bank also promises to keep bond purchases at "the current pace" the central bank also promises to make trillions of dollars in credit available to banks. the announcement follows a promise made in response to the coronavirus pandemic. | Negative |
https://www.financialexpress.com/world-news/little-impact-so-far-on-global-food-supply-chain-but-anxiety-driven-panic-could-change-that-wfp/1918673/ | The rapidly growing novel coronavirus pandemic is so far having little impact on the global food supply chain, but that could change for the worse and soon if anxiety-driven panic by major food importers takes hold, the World Food Programme (WFP) has said.
In a new report, “COVID-19: Potential impact on the world’s poorest people: A WFP analysis of the economic and food security implications of the pandemic”, the UN agency said global markets for basic cereals are well-supplied and prices generally low.
However, given the highly globalised nature of food production and supply, commodities need to move from the world’s ‘breadbaskets’ to where they are consumed and the novel coronavirus-related containment measures are starting to make this more challenging.
“Disruptions are so far minimal; food supply is adequate, and markets are relatively stable,” WFP Senior Spokesperson Elizabeth Byrs said, noting that global cereal stocks are at comfortable levels and the outlook for wheat and other staple crops is positive for the rest of the year. “But we may soon expect to see disruptions in food supply chains,” she said, explaining that if big importers lose confidence in the reliable flow of basic food commodities, panic buying could ensue, driving prices up.
A grain market analyst at the Food and Agriculture Organisation (FAO), quoted anonymously in the report, said the problem is not supply, but “a behavioural change over food security”. “What if bulk buyers think they can’t get wheat or rice shipments in May or June? That is what could lead to a global food supply crisis,” the analyst said.
For low-income countries, the consequences could be devastating, with long-term repercussions, with coping strategies coming at the expense of such essential services as health and education. It recalled that when a food price crisis struck in 2008, the world’s poorest households ? which typically spend the largest share of income on food ? suffered disproportionately.
Using the economic pillar of the Proteus food security index – and taking into account dependency on primary commodities such as fuel, ores and metals for export earnings – the report said that countries in Africa and the Middle East are most vulnerable.
Africa accounts for the majority of the almost 212 million people in the world who are chronically food insecure and the 95 million who live amidst acute food insecurity, the report said. Byrs said labour shortages could disrupt the production and processing of labour-intensive crops in particularly, especially in vulnerable countries in sub-Saharan Africa.
Other potential sources of disruption include blockages along transport routes ? a particular concern for fresh produce ? and quarantine measures that could impede farmers’ access to markets. Going forward, the WFP report said, it is essential to monitor food prices and markets, and to transparently disseminate information ? thus helping to strengthen government policies while also averting public panic, and social unrest.
It said that in places where food insecurity is caused by restricted access, rather than lack of availability, cash-based transfers — which can often be made through contactless solutions — should be considered as a standard response.
“Planning in-kind food assistance is essential,” the report said, noting that supply chain disruptions are likely to affect higher-value items first. Such items involve more tiers of suppliers, human interaction and dependency on few suppliers ? putting specialized nutritious food more at risk than staples, it said. | new report says global markets for basic cereals are well-supplied. but commodities need to move from 'breadbaskets' to where they are consumed. fears that panic buying could ensue if major importers lose confidence. if fears are not overcome, prices could rise, causing a global food supply crisis. 212 million people in the world are chronically food insecure. | Negative |
https://www.moneycontrol.com/news/business/markets/technical-view-nifty-forms-bearish-candle-manages-to-hold-10800-volatility-seen-high-on-fo-expiry-3590551.html | The Nifty50 continued to remain in bear trap on February 27, as hightened geopolitical tensions between India & Pakistan and weak global cues weighed on traders sentiment. The index has seen volatility as it traded in a wider range of around 190 points during the day and closed lower ahead of expiry of February futures & options contracts on Thursday.
The index formed bearish candle on the daily charts, though it managed to hold psychological 10,800 levels.
The volatility is likely to continue in coming sessions due to geopolitical tensions, experts said, adding once this event gets settled down, the Nifty50 is likely to move upwards.
The Nifty50 opened sharply higher at 10,881.20 to touch an intraday high of 10,939.70, but wiped out all gains in afternoon amid volatility and hit a day's low of 10,751.20. The index fell 28.60 points to close at 10,806.70.
"Bulls remained vulnerable to the cross border news flows as Nifty50 witnessed a wild swing of around 190 points in both the directions before signing off the session with a bearish candle which resulted in a modest cut when compared to its previous day’s close," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
He said as the trends are getting influenced by the external factors (news flows relating to geo political tensions), in the very short term market may remain volatile and unpredictable.
Once the dust gets settled around these issues market shall catch up with the prevailing short to medium term trend which slightly appears to be positively biased for time being, he added.
Mazhar said technically speaking, in the event of any positive development market may rally and initially head towards 11,000 kinds of levels whereas breach of 10,729 shall initially extend the downswing towards 10,645 kind of levels.
As markets are moving swiftly in both the directions, without giving proper directional clue, it looks prudent on the part of short term traders to remain on sidelines for time being, he advised.
Volatility was too high as India VIX moved up sharply by 10.45 percent at 18.90 levels.
Sudden spike in VIX has given a pause in the positive momentum and VIX has to cool down below 16-15 to get the smooth ride in the market, experts said.
On option front, maximum Put open interest (OI) is at 10,400 followed by 10,700 strike while maximum Call OI is at 11,000 followed by 10,900 strike.
Call writing is at 11,000 followed by 10,950 strike while Put unwinding is at immediate strike price.
Experts said option band signifies a trading range between 10,720 to 10,929 zones.
"Nifty index formed a bearish candle on daily scale as it has got stuck in a trading range and follow up action is missing on both the sides as dips are being bought while bounce is being sold in the market," Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Now it has to continue to hold above 10,750 zones to extend its move towards 10,888 then 10,929 zones while on the downside support exists at 10,720 then 10,650 levels, he added.
Bank Nifty remained highly volatile throughout the session as it traded in a wider range of 26,700 to 27,200 zones. It closed 153.65 points lower at 26,799.30 and formed a Bearish Engulfing Candle on daily scale as selling pressure is being witnessed at higher levels.
"The index got stuck in between 26,666 to 27,200 zones since last 11 trading sessions. Now it requires a decisive range breakout from the current trading band to commence the next leg of momentum," Chandan said.
On immediate basis it has to hold above 26,850 to witness an upmove towards 27,000 then 27,150 zones while on the downside major support exists at 26,666 zones, he added. | the index closed lower on friday ahead of expiry of February futures & options contracts. the volatility is likely to continue in coming sessions due to geopolitical tensions. the index opened higher at 10,881.20 to touch an intraday high of 10,939.70. but wiped out all gains in afternoon amid volatility and hit a day's low of 10,751.20. | Negative |
https://www.financialexpress.com/market/grand-plans-rs-53k-cr-rights-issue-to-help-ril-lighten-balance-sheet/1945355/ | In a capital raise that will help it further deleverage its balance sheet after the $5.7-billion deal with Facebook, Reliance Industries (RIL) on Thursday said it would mop up Rs 53,125 crore from shareholders via a rights issue. The conglomerate’s effective debt at the end of 2019-20 is estimated at around Rs 1.5 lakh crore and it hopes to become debt-free in CY2020. RIL ended 2019-20 with a consolidated operating profit of Rs 1,02,280 crore.
RIL said it was looking to complete a capital raise of Rs 1.04 lakh crore by June 2020 with help from the rights issue, Facebook’s Rs 43,600 crore investment and the previous investment by BP PLc.
The company said, on Thursday the deal to sell a 20% stake in its oil-to-chemicals (O2C) business to Saudi Aramco was on track.
A stronger balance sheet will allay concerns at a time when the Indian economy is expected to contract following the disruption due to the outbreak of Covid-19 and consumer demand is espected to remain muted. Post the Facebook deal announcement on April 21, Moody’s had observed: We expect the transaction to reduce RIL’s consolidated net debt/EBITDA by 0.4x to well below 3.0x, the tolerance level for its Baa2 rating.
RIL’s promoters have said they would subscribe to both their quota of shares as also all of the unsubscribed portion. Shareholders will be entitled to 1 share for every 15 shares held at Rs 1,257 apiece.
The capital will come in handy as analysts expect RIL’s operating profits — especially from the petrochemicals and refining businesses –to be under pressure this year. The digital and telecom businesses, however, are expected to do well. Moody’s noted it expected the company’s ebitda to decline over the next 12 months but said the credit metrics may remain appropriate for its ratings if it successfully executes its announced transactions.
On 12 August 2019, RIL said it has signed a non-binding letter of intent to sell a 20% stake in its Oil to Chemical (O2C) business to Saudi Aramco. The O2C business, which has an enterprise valuation of $75 billion, includes RIL’s refining and petrochemical divisions, and RIL’s 51% stake in its fuel marketing business. RIL also announced that it has entered into a deal with BP Plc to sell a 49% stake in its fuel marketing business in India for $1 billion. Moody’s said the proceeds from these transactions will result in a $16 billion reduction in RIL’s net debt. RIL’s first rights issue in three decades, will see partly- paid shares with a face value of Rs 10, being issued, allowing shareholders to pay up over a period of time. While 25% must be paid on application, the balance will need to be paid in one or more calls. | the conglomerate's effective debt at the end of 2019-20 is estimated at around Rs 1.5 lakh crore and it hopes to become debt-free in CY2020. the company said it was looking to complete a capital raise of Rs 1.04 lakh crore by June 2020. the deal to sell a 20% stake in its oil-to-chemicals (O2C) business to Saudi Aramco was on track. | Negative |
https://economictimes.indiatimes.com/nri/visa-and-immigration/trump-urged-to-pause-h1b-visa-programme-after-job-loss-amidst-layoffs/articleshow/74925783.cms | PUNE: A US-based anti-immigration technology workers group has asked for the H1-B visa programme to be suspended due to growing joblessness following the coronavirus outbreak. US Tech Workers , a non-profit which advocates more local hiring, has written to US President Donald Trump saying unemployment claims had gone up to 3 million in the previous week, with projections showing that this could rise further by 30%.“We urge you to pause the H-1B visa programme that would bring in 85,000 workers this year and suspend the recently approved addition of additional 35,000 workers for the H-2B visa,” it said. While the H-1B visa is primarily used to bring in highly skilled workers to the US, the H-2B visa is used mainly for farm workers, primarily from Latin America. When contacted, IT industry association Nasscom declined to comment on US Tech Workers’ stance on H1-B visas, although it pointed out that the H-1B visas “fulfil an acknowledged critical skills gap for all global companies in the US market....”Nasscom has also requested the US Citizenship and Immigration Services for a 90-day grace period for tech professionals to leave the US following expiry of their visas, it said. The current limit is 60 days. Other firms representing tech workers have asked for it to be extended to 180 days, citing the rising number of layoffs and economic uncertainty. | non-profit US Tech Workers has written to US president Donald Trump. unemployment claims have gone up to 3 million in the previous week. projections show this could rise further by 30%. 'we urge you to pause the H-1B visa programme that would bring in 85,000 workers this year,' it said. the H-2B visa is used mainly for farm workers, primarily from Latin America. | Negative |
https://www.financialexpress.com/lifestyle/science/japans-decision-to-release-fukushima-radioactive-water-into-sea-will-cause-disease-along-asian-coastal-belt-say-experts/2131019/ | Japan’s decision to release radioactive contaminated water from its wrecked nuclear plant in Fukushima into the sea by 2022 has led to alarm bells ringing in India with experts warning it would set a wrong precedent and impact aquatic and human life along coastal belts of several parts of the world.
The contaminants of the massive quantities of nuclear water will include radioactive isotopes such as cesium, tritium, cobalt and carbon-12 and may take from 12 to 30 years to decay. It will destroy everything it comes in contact with almost immediately and cripple the economy related to the fishing industry and lead to a spectrum of diseases, including cancer.
“This will be the first incident of high volumes of radioactive water being released in the sea and can set a wrong precedent for others to follow. Concerns related to the environment and health are crucial for the existence of the human race. Therefore, alternative arrangements may be debated globally,” A K Singh, director general of health science at the Defence Research Development Organisation (DRDO), told PTI.
On March 11, 2011, a 9.0 magnitude earthquake struck off the north-eastern coast of Japan, triggering a 15-metre tsunami that damaged the 5,306 MW Fukushima nuclear plant. It is the second biggest nuclear disaster in the history of nuclear power generation after Chernobyl in 1986.
After the accident, 1.2 million tonnes of radioactive contaminated water released from the reactors in over 1,000 tanks were kept in a cordoned off large area near the Fukushima plant.
However, authorities are running out of space as the plant is to be decommissioned and the Japanese government has decided to release the radioactive contaminated water in the sea starting 2022.
The decision to release the radioactive water was taken on October 16, 2020 after years of debate.
Singh, among the Indian government’s top nuclear health scientists, said the release of contaminated water into the ocean will directly impact human and aquatic life.
“The possibility of ingestion of tritium in humans will increase and since this isotope will distribute in all organs in humans and long. Radioactivity monitoring in fish and other aquatic life in near vicinity (coastal areas) and drinking water will be necessary. Deposition of the radioactive elements on the rocks has also to be seen,” he said.
While Japanese authorities have said the water would be diluted before being released and it would only contain only tritium, other health experts who have been monitoring the issue said the risk involved should never be undermined.
Yudhyavir Singh, assistant professor of anaesthesia and critical care at the All India Institute of Medical Sciences, said the risks will depend entirely on the amount of the contaminants present in the nuclear wastewater and their nature.
“Mostly contaminants are radioactive isotopes which include cesium, cobalt, carbon-14 and tritium. The half-life of cesium is 30 years, it will take 30 years of half of the material to decay. Also the half-life of tritium is 12 years,” he told PTI.
“All the radioactive isotopes are carcinogenic and can induce cancer on prolonged exposure. In Chernobyl, it has been seen in the rise of thyroid cancer post nuclear leakage after 20 years,” he said.
Once the water is released into the ocean, it would be advisable to move and stay away from the coastal area in the region while completely avoiding seafood, added Yudhavir Singh, who has several publications on critical care and is a renowned researcher too.
“In the past, it has been seen that radioactive material discarded in France travelled to the North Atlantic and Arctic Oceans and found in the bodies of seals and Tortoises,” he said, warning that South East Asian nations will be at higher risk.
Environmentalists and several organisations, including Safecast and Greenpeace, have urged the Tokyo Electric Power Company (TEPCO), the operator of the Fukushima plant, to build more storage tanks and keep the water stored.
Greenpeace claimed the water could change human DNA if consumed.
“Tritium is a beta emitter with low energy so causes damage to the DNA leading to genetic damage and affecting reproductions. It will depend upon the radioisotopes contaminants in the water. Cesium has a half-life of 30 years and will be the last to decompose,” Yudhyavir Singh said.
The quantity of cesium in the nuclear waste water may take 180-300 years to decompose, he said.
Citing studies from the World Health Organisation, M C Misra, former director of AIIMS, Delhi, said an increase for specific cancers for certain subsets of the population inside the Fukushima Prefecture is very likely.
“A 2013 report predicts that for populations living in the most affected areas there is a 70 per cent higher risk of developing thyroid cancer for girls exposed as infants, a 7 per cent higher of leukemia in males exposed as infants, a 6 per cent higher risk of breast cancer in women and 4 per cent higher risk, overall, of developing solid cancers for females,” Misra told PTI.
Misra, who has dealt with all types of medical cases, including that of radiation, said Japan could have easily prevented the entire accident.
“The Japanese focused on the prevention principle without paying due attention to the mitigation principle as if it was sure that an accident was impossible. The power unit of the Fukushima plant was built on the basis of a design developed in 1960 and, therefore, the station was not ready for a crisis situation of the 21st century,” Misra said, citing the complexity of such situations. | contaminants of massive quantities of nuclear water will include radioactive isotopes such as cesium, tritium, cobalt and carbon-12. it will destroy everything it comes in contact with almost immediately and cripple the economy related to the fishing industry. experts warn it will impact aquatic and human life along coastal belts of several parts of the world. 'this will be the first incident of high volumes of radioactive water being released in the sea and can set a wrong precedent for others to follow' | Negative |
https://www.businesstoday.in/markets/stocks/share-market-live-sensex-nifty-dalal-street-stock-outlook-bse-nse-news-may-14/story/403763.html | Sensex, Nifty Updates: Benchmark Sensex and Nifty erased yesterday's gains and closed sharply negative on Thursday, tracking heavy sell-off in overseas markets as fears of a second wave of infections overshadowed propects of re-opening economy.
Sensex closed 885 points lower at 31,122 and Nifty fell by 240 points lower at 9,142. Globally indices traded on bearish note as investors kept trades cautious amid growing second virus wave fears. Further World Health Organization's warning that the virus "may never go away" also kept investors sentiments at edge. Fed's comments about the current state of U.S. economy also kept market sentiments down. Yesterday, Sensex closed 637 points higher at 32,008 and Nifty ended the session at 9383, rising 187 points.
Here's a look at the updates of the market action on BSE and NSE today
3: 45PM: Closing bell
Benchmark Sensex and Nifty erased yesterday's gains and closed sharply negative on Thursday, tracking heavy sell-off in overseas markets as fears of a second wave of infections overshadowed propects of re-opening economy.
Sensex closed 885 points lower at 31,122 and Nifty fell by 240 points lower at 9,142.
3.31 PM: Escorts share price drops over 4% post result
Escorts share price fell 4.09% to the intraday low of Rs 779 on BSE today after the company reported its quarterly earnings.
The company reported 9.6% rise (YoY) in consolidated net profit to Rs 127 crore during the quarter ended March 31, 2020, as against Rs 116 crore, recorded in a year-ago period. Total income fell 16% (YoY) to Rs 1385 crore in the January-March quarter of the current fiscal as compared to Rs 1649 crore in the same period last financial year.
3.15 PM: UCO Bank drops 2%
UCO Bank share price dropped 2% intraday to Rs 11.65 on BSE today after the market regulator RBI slapped a fine of Rs 5 lakh for violating norms on government bond holding.
3.00 PM: Mphasis share price falls 1.5%
Mphasis share price fell 1.5% to the intraday low of Rs 790.90 after the company reported its quarterly earnings.
The company reported 32% rise (YoY) in consolidated net profit to Rs 353 crore during the quarter ended March 31, 2020, as against Rs 266 crore, recorded in a year-ago period. Total income rose 16.54% (YoY) to Rs 2398 crore in the January-March quarter of the current fiscal as compared to Rs 2058 crore in the same period last financial year.
2. 50 PM: Result date annoucnement
NESCO : May 19, 2020
JK Lakshmi Cement : May 20, 2020
UltraTech Cement : May 20, 2020
Indraprastha Medical Corporation : May 23, 2020
2.37 PM: IRCTC share price erases gains, trades lower
IRCTC share price erased early gains and fell in trade today after Indian Railways cancelled all tickets booked for travel on or before June 30. Share price of IRCTC fell up to 3.57% to Rs 1,385 against previous close of Rs 1,436 in early trade on BSE. The stock climbed 15% in last three sessions after Indian Railways announced last week it would start operations of 15 passenger trains (30 return journeys) from May 12.
IRCTC share price runs out of steam after three sessions; here's why
2. 20 PM: FM to detail out second phase of the economic stimulus package at 4 PM
Finance Ministry Nirmala Sitharaman will be hold another Press Conference today at 4PM. The second phase announcements of the mega Rs 20 lakh crore package will likely be for agriculture and allied activities
FM Nirmala Sitharaman Speech at 4 PM Live Updates: 2nd phase of announcement on economic package soon
2.10 PM: Tata Motors share price falls over 5%
Tata Motors share price opened with a loss of 3.27% today and fell later 5.27% to an intraday low of Rs 82.65 on BSE today. The company announced that it has restarted manufacturing operations for both Commercial and Passenger Vehicles from its plants located at Pantnagar (Uttarakhand) beginning last week and from Sanand (Gujarat)
As per the filing, company's plants in Lucknow (Uttar Pradesh), Dharwad (Karnataka), Jamshedpur (Jharkhand) and Pune (only for Ambulance Vehicle manufacturing) are in final stage of readiness and expect to begin production over the next few days.
1.49 PM: Vedanta share price gains 1%
Vedanta share price continued its upwrad rally today and rose over 1% higher in today's weak sesssion, after the announcement of promoter's delisting plan
1.35 PM: Global markets in red
Asian Markets fell in trade post WHO's warning that the "may never go away". US markets closed lower after comments from Fed's Powell who expects 'significant downside risk' and said that economy needs more booster shots.
European markets traded lower as fear of a second wave of the coronavirus overshadowed propects of re-opening economy.
Investor globally also awaited Australia's jobs data, which is due today.
1.16 PM: NMDC share price falls 2.9%
NMDC share price opened with a loss of 2.33% today and later fell 2.93% to an intraday low of Rs 72.8 on BSE.
The company has considered the current market scenario of steel and iron ore and taken informed decisions to rationalize the prices. Company has reduced the prices of iron ore by Rs 400 on 9 May 2020 and also reduced the price of DRCLO by Rs 470 per tonne.
1.03 PM: PNC Infratech share price up 5%
PNC Infratech share price gained 4.99% to the intraday high of Rs 115.65 on BSE after the company declared it was the L1 (lowest) bidder for a NHAI Project of 53.95 km long Four-laning for Uttar Pradesh state under Bharatmala Pariyojana on Hybrid Annuity Mode (HAM) for Rs 1412.0 crore.
12.44 PM: Gold gains today
Gold price gained after comments from Fed's Powell that more booster shots were required to support economy and warned about the current state of U.S. economy. Gold price gained 0.45% higher to $1,721 per ounce today, after rising to the highg of $1,724 as against its previous settlement of $1,713.90.
12.34 PM: Power stocks rally
In a otherwise weak market, power stocks were rallying today, after FM Sitharaman announced fresh injection of Rs 90,000 crs into DISCOMs, in a move to de-stress them and improve the liquidity for power generation companies.
Adani Power share price shot up 13% intraday to Rs 36, followed by Tata Power that jumped 9.57% intraday to Rs 33.20 and Reliance Infrastructure share price that gained 5% higher to Rs 18.15 on BSE. Shares of Jaiprakash Power Ventures, Reliance Power, K.P. Energy were also gaining in the range of 3-5% today.
Adani Power, Tata Power rise up to 13% on Rs 90K crore stimulus for discoms
12.11PM: Market falls further
Benchmark Sensex and Nifty erased yesterday's gains and traded sharply negative on Thursday, tracking heavy sell off in overseas markets as fears of a second wave of infections overshadowed propects of re-opening economy. Traders said investors were concerned about the fiscal deficit concerns of the Rs 20-lakh-crore economic stimulus package. Sensex traded 606 points lower at 31,406 and Nifty fell by 166 points to 9,217.
12.00 PM: RIL share price falls
Reliance Industries share price fell 1.93% to Rs 1,467 compared to the previous close of Rs 1,496 on BSE as the stock goes ex-rights today. Ex-rights means the shares will be available for purchase without the benefit of rights issue (shares at discount price) from today. The company has identified the shareholders who are eligible to receive its additional shares.
Reliance Industries goes ex-rights, share price falls 2%
1.45 AM: Q4 Earnings
-Biocon, Tata Consumer Products, Indian Energy Exchange, Escorts, Indiabulls Real Estate, Oracle Financial Services, Mahindra Lifespace Developers, Manappuram Finance, T.V. Today Network, Zensar Technologies, Accelya Solutions and AAVAS Financiers will be reporting Q4 results today.
-Godrej Consumer Products, Kotak Mahindra Bank, Maruti Suzuki India, Mphasis, Schaeffler India, Siemens reported their quarterly earnings yesterday.
-Cipla, Crompton Greaves Consumer Electrical, L&T Technology Services, Mahindra & Mahindra Financial Services and Nippon Life India Asset Management will be reporting their results tomorrow.
11.35 AM: Rupee trades lower
Rupee local unit opened at 75.57 in the currency front, then lost further ground and fell to 75.59 against dollar, down 13 paise over its previous close of 75.46 against the US dollar on Wednesday. Meanwhile, the dollar index was trading 0.06% higher at 100.30.
Rupee vs Dollar: Rupee falls 13 paise to 75.59 per dollar amid weak equity market, strong dollarC
11.15 AM: Oil traded flat today
International oil benchmark Brent crude futures were trading flat at USD 29.19 per barrel. Oil prices remained weak even after data showed U.S crude inventories fell. Negativity was also guided by remarks made by Fed official on US economy.
11.09 AM: World Health Organization's warns the virus "may never go away"
Globally, market took cues from WHO's recent comments. World Health Organization's warning that the virus "may never go away" also kept investors sentiments at edge, as per experts.
"We have a new virus entering the human population for the first time and therefore it is very hard to predict when we will prevail over it," said Michael Ryan, the WHO's emergencies director in a press conference in Geneva.
He added," This virus may become just another endemic virus in our communities and this virus may never go away".
10.50 AM: Top losers and gainers
NTPC, Infosys, PowerGrid, Tech Mahindra, M&M, IndusInd Bank and ONGC were among the top laggards in the Sensex pack.
On the other hand, Bajaj Finance, Nestle India, Kotak Bank, Sun Pharma and UltraTech Cement were among the top performers.
10.36 AM: IRCTC share price rises 3.2%
IRCTC share price that fell 3.57% in the early tarde recovered from losses and gained 3.32% intraday to Rs 1484 in a volatile trade on BSE. The Indian Railways has cancelled all train tickets till June 30, except Shramik and special trains that will continue to run.
Lockdown 4.0: Railways' IRCTC cancels tickets for all trains till June 30; Shramik Specials to run
10.23 AM: Lupin share price rises 1.7%
Lupin share price gained 1.7% intraday to the day's high of Rs 854 on BSE today after the company announced that its Vizag API facility has received establishment inspection report from USFDA. As per the filing, the unit was inspected between January 13-17, 2020.
10.19 AM: Companies that reported Q4 results
Stock specific action was also registered in companies that recently announced their earnings. Shares of Mphasis, Godrej Consumer rose 3.89% and 5% post earnings, Kotak Mahindra Bank gained 2.23%. ABB also fell 2.23% intraday post results.
Meanwhile, Siemens shares fell 5% intraday as it posted weak Q4 figures. Maruti also fell 3.52% after posting Q4 earnings.
10.15 AM: Companies to report Q4 earnings today
Where shares of Indiabulls Real Estate gained 3.71%, Manappuram Finance rose and Indian Energy Exchange climbed 2.8% intraday, ahead of their Q4 earnings.
10.04 AM: Market Update
Benchmark Sensex and Nifty traded on a negative note on Thursday, tracking heavy sell off in overseas markets as investors fretted over fears of a second wave of infections. Earlier domestic indices opened sharply negative, reversing from yesterday's bullish session as local investors had already factored in the optimistic news of allocation of funds and relaxations by the government, in a fight against the coronavirus led economic downfall.
Sensex traded 523 points lower at 31,484 and Nifty fell by 142 points to 9,240.
9.57 AM: Coronavirus toll
The total number COVID-19 cases in India has jumped to 78,003 on Thursday, including 49,219 active cases, 26,234 cured/discharged, 1 migrated, and 2,549 deaths. The country recorded 3,722 new cases, and 134 deaths in the last 24 hours.
Globally, there are 44.29 lakh confirmed cases and 2.98 lakh deaths from the coronavirus COVID-19 outbreak as of today.
Coronavirus Live Updates: India's total cases spike to 78,003; FM Nirmala Sitharaman's 2nd presser today
9.33 AM: News Alert
Finance Ministry Nirmala Sitharaman will be hold another Press Conference today at 4PM, in which she is likely to announce measures regarding agriculture and allied activities. FM may also touch upon the supply chain disruption and ways to resolve the issues
9.30 AM: Stocks to watch today on May 1
Maruti, Godrej Consumer, Siemens, Biocon, Tata Consumer, Escorts, ABB, Kotak Bank among others are the top stocks to watch out for in Thursday's trading session
Stocks in news: Maruti, Godrej Consumer, Siemens, Biocon, Tata Consumer, Escorts, ABB, Kotak Bank and more
9.26 AM: Opening bell
Benchmark Sensex and Nifty have opened sharply negative on Thursday, tracking heavy sell off in overseas markets as investors fretted over fears of a second wave of infections. Sensex fell 535 points lower at 31,450 and Nifty started the day at 9,243, down 140 points.
9. 15 AM: Nifty's outlook
As per market experts, Nifty will remain in pressure. On the lower side, the index will continue to find support at around 9,050 and then at 8,800 levels and 8,500 levels. Meanwhile, resistance is observed at 9,535, then at 9,600 and 9,750 level and then 9,900 mark.
9.05 AM: Pre open session today
Benchmark Sensex and Nifty have pre-opened sharply negative on Thursday, tracking heavy sell off in overseas markets as investors fretted over fears of a second wave of infections. Sensex fell 569 points lower at 31,412 and Nifty started the day at 9,230, down 150 points.
8.55 AM: Global cues
Globally stocks were falling today after Federal Reserve warned of a "significantly worse" US recession than any downturn since World War II. Fed Chair Jerome Powell comments turned sentiments pessimistic, at a time when many economies move towards reopening lockdowns and led to a sharp selloff in equities.
A per experts, overseas markets continued their bearish trend on back of fears of a second wave of infections.
The Dow Jones Industrial Average fell 2.17%, the S&P 500 lost 1.75%, and the Nasdaq Composite dropped 1.55%.
8.50 AM: Q4 earnings today
Companies set to announce their earnings are Biocon, Tata Consumer Products, Indian Energy Exchange, Escorts, Indiabulls Real Estate, Oracle Financial Services, Mahindra Lifespace Developers, Manappuram Finance.
8. 45 AM: SGX Nifty
SGX Nifty traded 50 points lower at 9,265 level, indicating a tepid start in domestic grounds today
8. 40 AM: FII/ DII action on Wednesday
On a net basis, FIIs sold Rs 283.43 crore while DIIs bought Rs 232.65 crore in equities on Wednesday
8. 30 AM: Highlights of FM's announcements
The Finance Minister yesterday announced additional stimulus measures of Rs 6 lakh crore today on top of Rs 10 lakh crore announced so far. FM also announced infusing liquidity worth Rs 45,000 crore through a Partial Credit Guarantee Scheme for NBFCs. In a move to address the liquidity issues for the micro, small and medium enterprises (MSMEs), FM announced collateral-free MSME loans worth Rs 3 lakh crores, 100% guaranteed by the government.
Sitharaman announces 6 measures for MSMEs as part of stimulus package
FM further announced fresh injection of Rs 90,000 crs into DISCOMs, in a move to de-stress them and improve the liquidity for power generation companies. She also announced other measures like reduction of TDS and TCS rates by 25% and extension of due dates of tax returns and tax assessments.
Stimulus package 2.0: Lower TDS, TCS to leave Rs 50,000 crore more with taxpayers
8. 20 AM: PM Care fund
PM CARES Fund has allocated Rs 3,100 crore in fight against COVID-19, of which Rs 1,000 crore will be used for the care of migrant labourers.
8.10 AM: Rupee Closing
Rupee, the local unit, closed stronger at 75.47 per dollar on Wednesday compared to its previous close of 75.50 per US dollar.
Sensex and Nifty traded majorly bullish on Wednesday and closed 2.3% higher each, as market investors cheered over the Rs 20 lakh crore stimulus pacakage, announced by Modi government. Sensex closed 637 points higher at 32,008 and Nifty ended the session at 9383, rising 187 points.
Share Market Update: Sensex ends 637 points higher, Nifty at 9,383; Bajaj Finance, ICICI Bank, L&T, top gainers | Sensex closed 885 points lower at 31,122 and Nifty fell by 240 points lower at 9,142. Sensex closed 637 points higher at 32,008 and Nifty ended the session at 9383, rising 187 points. who's warning that the virus "may never go away" also kept investors sentiments at edge. | Negative |
https://www.financialexpress.com/industry/cait-suggests-imposition-of-minimum-operating-price-for-products-on-e-commerce-sites/1767190/ | Traders body CAIT on Sunday suggested the government to impose a “minimum operating price” for products, alleging that traders are at the receiving end of a pricing onslaught posed by e-commerce firms and brands in collusion with banks. The Confederation of All India Traders (CAIT) has written a letter in this regard to Union Commerce and Industry Minister Piyush Goyal.
“Under the circumstances and visualising it as a price war, we suggest it is the high time when the government must step in and enforce the fundamental of Minimum Operating Price (MOP) which is the price consisting of landing price, operational cost and reasonable profit margin and below the MOP no product should be sold in the market,” CAIT said in the letter.
The traders’ body alleged that e-commerce companies and brands in collusion with banks, by charging much lower price than the actual market value are depriving the government of GST and other revenue. “It is the responsibility of the Brands to advise to their buyers to sell their products at MOP to maintain the market hygiene keeping in mind that retailer should earn at least minimum margin to cover his operational cost and earn very thin margin,” CAIT suggested in the letter to Goyal.
It said there should be a uniform policy of discounting by brands both for online and offline trade. “Cash back on credit cards given by the banks should also be made applicable to offline trade. There should not be any kind of exclusivity either for online or offline trade. Upgrade or buyback offer by brands should remain the same for both offline and online trade. All schemes of the brands should be made available to online and offline trade in a transparent manner,” CAIT said, arguing that this will create a level-playing field for every player in retail trade.
In this context, we suggest that the government should initiate a discussion with all stake-holders on MOP and frame rules for the same, the traders’ body observed. It also suggested that the government should constitute a Regulatory Authority to regulate and monitor all verticals of retail trade including small retail, big retail, e-commerce and direct selling besides MOP, and if anyone wants to offer any scheme, the same should be approved by the Regulatory Authority.
“The cash on delivery (COD) in e-commerce should not be allowed and all deliveries in online sale should accept digital payments only. We are sure that it will receive your kind attention and you will be pleased to take necessary action in order to curb unethical and unfair business practices of e commerce companies and restructuring of retail trade of India which is a key to vision of Prime Minister to make India a 5 trillion dollar economy by 2024,” CAIT said. | traders' body CAIT has written a letter to the government on monday. it alleges that e-commerce firms and brands are depriving the government of revenue. the traders' body also suggested the government should impose a "minimum operating price" for products. it said there should be a uniform policy of discounting by brands both for online and offline trade. | Negative |
https://www.moneycontrol.com/news/business/ongc-oil-earnings-to-decline-credit-metrics-weaken-due-to-lower-oil-prices-moodys-5236771.html | live bse live
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State-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd are likely to see earnings decline and credit metrics weaken due to fall in oil prices, Moody's Investors Service said on Thursday. ONGC and OIL get rates equivalent to those prevalent in the international markets. Oil prices in the international markets last month slumped to a two-decade low of $18 per barrel before rebounding by some measure.
In addition to the decline in oil prices, ONGC and OIL also face a reduction in government-regulated prices for the natural gas they produce.
"We expect ONGC's earnings to decline and its credit metrics to weaken because of lower oil prices over the next 12-18 months," Moody's said in a report on Asian national oil and gas companies.
Although ONGC is an integrated oil and gas company, its downstream segment contributed only about 30 percent of its consolidated EBITDA for the year ended March 31, 2019 (fiscal 2019).
Crude oil, which accounted for about half of its total production, contributed nearly 80 percent of its upstream revenue in FY19.
"In addition to the decline in oil prices, ONGC also faces a decline in natural gas selling price. The natural gas selling price in India is regulated by the government of India which has revised the price of natural gas with effect from April 1, 2020, to $2.39 per million British thermal units (btu) from $3.23 per million btu," Moody's said.
ONGC's credit metrics, it said, will weaken but still remain appropriate for its baa2 rating.
"However, if prices remain depressed for longer than we expect, its credit metrics will weaken beyond our downgrade threshold," it said.
Although it is likely that ONGC will be able to reduce its capital spending, the company is yet to announce any such reductions. As a government-owned company, it will be challenging for ONGC to meaningfully reduce its dividends, the rating agency said.
"In terms of liquidity, ONGC has insufficient cash to address its near-term debt maturities. However, given that the company is majority-owned by the government, we expect it to be able to refinance its upcoming debt maturities through its access to Indian banks," it said, adding it had already downgraded ONGC to the same level as the sovereign rating on India (Baa2 negative).
A sovereign rating downgrade will result in a downgrade of the company's rating.
"ONGC also remains exposed to a possible consolidation in the oil and gas sector in India and may be asked by the government to acquire other oil and gas companies," it added.
For OIL, crude oil accounted for about 60 percent of its total production and about 80 percent of its total revenue in FY19.
"Based on our price assumptions, we expect OIL's EBITDA for FY21 will be about 55 percent lower as compared with FY20 and its credit metrics will be weaker than the tolerance level," it said, adding OIL's credit metrics will recover to levels appropriate for its baa3 rating by fiscal 2022.
In terms of liquidity, OIL has no material near-term debt maturity and thus will have adequate liquidity, provided it generates enough cash flow to fund its capital spending and shareholder returns.
Moody's said government support will continue to underpin Asian national oil companies' credit quality through the market downturn.
Sharply lower oil prices will hurt the earnings and strain their credit metrics.
"Should their credit metrics weaken materially and result in a decline in their Baseline Credit Assessment (BCA), we expect that the degree of rating movement for NOCs will be low," it said.
The rating agency said companies are expected to embark on austerity measures to conserve cash.
"National oil companies (NOCs) will likely scale back capital spending and investments to preserve cash to tide over the low price environment. Some NOCs will be able to reduce dividends, while others will find it more challenging to do so given their government's dependence on oil and gas sector revenue, especially as governments announce further economic stimulus packages," it said.
ONGC had announced an interim dividend in March.
"Most Asian NOCs will have adequate internal cash sources to fund planned capital spending and dividend payments in the low oil price environment. We expect the NOCs will continue to have strong access to capital given their strategic importance to their respective governments," it added. | ONGC and oil india likely to see earnings decline and credit metrics weaken. ONGC and OIL get rates equivalent to those prevalent in the international markets. ONGC and OIL face reduction in government-regulated prices for natural gas. ONGC is an integrated oil and gas company. ONGC is a government-owned company. ONGC is yet to announce any such reductions. | Negative |
https://www.financialexpress.com/opinion/is-india-ready-for-economic-growth/1991504/ | Economic growth is about increasing the value of measurable economic activities, and is a convenient (if overemphasised) proxy for increases in welfare. One can measure aggregate economic activity by capturing its components, valuing them and adding them up, either from the perspective of expenditure, or income. India’s pandemic lockdown brought a forced halt to a large fraction of economic activity, so national income and expenditure would naturally take a big hit.
The problem in such circumstances, aside from the fundamental issue of basic survival for many people affected by the loss of income, is that such reductions have ripple or multiplier effects, deepening and prolonging the initial loss. This phenomenon led to the Great Depression of the 1930s, and that traumatic time helped to change the way in which appropriate economic policy responses were conceived. In particular, government was recognised as being uniquely able to spend in bad times (including transferring money to its citizens, who would do the actually spending in that case), to cushion first-order income losses and their even more substantial ripple effects.
Every government has been responding in this manner to pandemic-caused halts to economic activity. In previous columns, I reported what I thought was a broad consensus view, that the Indian government’s fiscal response has been inadequate, given the hit taken by the economy as a result of the lockdown. It has been a bit difficult to estimate the overall impact of government measures, in terms of net fiscal “stimulus”, but a dozen or so different analysts reported numbers mostly ranging around 1% of GDP (the standard measure of aggregate economic activity). Recently, however, Surjit Bhalla, who holds a very important position as India’s Executive Director at the International Monetary Fund (IMF), provided a headline number of a 5% fiscal package.
He argued that this is one of the largest responses among all economies in the world, and that India is now “Ready for Growth”. I hope he is correct, but given the importance of this issue for the Indian economy going forward, the basic issue of how much the government is supporting aggregate economic activity seems to be worth re-examining, before one gets into issues of the quality of structural reforms and long-run growth prospects.
Bhalla bases his estimate on the IMF Policy Tracker, which reports its own estimates of various components of the government’s economic package. He reports added expenditure of 3.5% for poor households, migrant workers and agriculture, plus another half percent transfer to state governments, together totalling 4% or so. The headline number is not derived explicitly, but is supported by some qualitative arguments, including methodological disagreements with all the analysts who preceded him. The methodological issues seem to be complex, and include issues of where spending gets counted, and whether certain kinds of guarantees indirectly support spending that would otherwise not have taken place.
Who is more accurate? Reviewing one analysis, as reported in The Wire on May 17, provides a detailed calculation of a direct fiscal stimulus of 1% of GDP, much less than the IMF numbers, the sources of which are not provided. More recently, Pronab Sen, former chief statistician of India and chairman of the National Statistical Commission, has also offered calculations that amount to around a 1% fiscal stimulus, possibly doubled by multiplier effects. Using a consistent approach, he estimates the corresponding response to the 2008-09 crisis, which was much less severe, at 3% of GDP. Yet, another detailed and thoughtful evaluation of the entire economic package, by Rajeswari Sengupta and Harsh Vardhan (like Sen’s analysis, available at http://www.ideasforindia.in) concludes that the incremental government spending in the overall package is less than 2% of GDP.
Several analysts of the temporary shock to economic activity estimate its magnitude at 10% or more of annual GDP for 2020-21. In that case, even a 5% stimulus would be inadequate, and the bulk of analyses indicate that even allowing for indirect effects, the total package the government has come up with is less than that. On the bright side, the monetary policy response has been more appropriate, but monetary policy measures are not as direct as putting money into people’s pockets, and the distributional impacts are also less favourable than when money is transferred to the poor.
I have not been able to find an official government analysis, or a rebuttal of academic and private sector analyses of the economic package, beyond the government’s own discourse and framing. The issue is not one of politics or of the quality and impact of economic reforms: it is a basic question of what the government is actually planning and accomplishing in its efforts to engineer an economic recovery from the lockdown. India will resume growth, but the questions are how much and how soon, and what will be the ultimate economic cost in terms of lost income and welfare. The answers depend on what the government does, and, at least to me, it is not clear that it is doing the best it can.
Professor of Economics, University of California, Santa Cruz. Views are personal | india's pandemic lockdown brought a forced halt to a large fraction of economic activity. government was recognised as uniquely able to spend in bad times. 5% fiscal package was announced by the international monetary fund. a 5% fiscal package is expected to be announced in the coming months. a 5% package is expected to be announced in the coming months. | Negative |
https://www.moneycontrol.com/news/world/eu-launches-antitrust-investigations-into-apples-app-store-apple-pay-5411851.html | The European Commission on June 16 launched formal antitrust investigations into tech giant Apple's rules pertaining to its App Store and Apple Pay platforms. The two parallel investigations will assess whether Apple's rules for app developers on the distribution of apps via the App Store and its conduct in connection with Apple Pay violate the European Union's (EU's) competition rules.
The probe into Apple's App Store will look into the mandatory use of Apple's own proprietary in-app purchase system and restrictions on the ability of developers to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps.
Meanwhile, the other investigation will look into the company's "terms, conditions and other measures for integrating Apple Pay in merchant apps and websites on iPhones and iPads, Apple's limitation of access to the Near Field Communication (NFC) functionality (“tap and go”) on iPhones for payments in stores, and alleged refusals of access to Apple Pay.
"...the Commission has concerns that Apple's terms, conditions, and other measures related to the integration of Apple Pay for the purchase of goods and services on merchant apps and websites on iOS/iPadOS devices may distort competition and reduce choice and innovation," it said in a statement.
Executive Vice-President Margrethe Vestager, in charge of the Commission's competition policy, said, "It appears that Apple obtained a “gatekeeper” role when it comes to the distribution of apps and content to users of Apple's popular devices. We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books."
She also noted, "Mobile payment solutions are rapidly gaining acceptance among users of mobile devices, facilitating payments both online and in physical stores. This growth is accelerated by the coronavirus crisis, with increasing online payments and contactless payments in stores. It appears that Apple sets the conditions on how Apple Pay should be used in merchants' apps and websites. It also reserves the “tap and go” functionality of iPhones to Apple Pay. It is important that Apple's measures do not deny consumers the benefits of new payment technologies, including better choice, quality, innovation and competitive prices." | the european commission launches antitrust investigations into apple's rules. the probe will look into the mandatory use of Apple's own proprietary in-app purchase system. the other investigation will look into the company's measures for integrating Apple Pay. the Commission says it has concerns that Apple's rules may distort competition. the company reserves the "tap and go" functionality of iPhones to Apple Pay. | Negative |
https://www.financialexpress.com/economy/demonetisation-effect-unemployment-rate-hit-45-year-high-in-2017-18-shows-leaked-govt-report/1460361/ | India’s unemployment rate rose to a 45-year high during 2017-2018, the Business Standard newspaper on Thursday quoted a government survey as showing, in the latest setback for Prime Minister Narendra Modi just months before a tightening election.
The assessment by the National Sample Survey Office conducted between July 2017-June 2018, showed the unemployment rate stood at 6.1 percent, the highest since 1972-73, Business Standard reported.
The survey has become a political issue after the acting chairman and another member of the body that reviewed the job data resigned saying there was delay in its release. The head of the government-funded National Statistical Commission P.C. Mohanan said on Wednesday that he and colleague J. Meenakshi were unhappy at the non-publication of jobs data that had been due for release in December and alleged interference by other state agencies over backdated GDP data.
Business Standard said the report showed that joblessness stood at 7.8 percent in urban areas compared with 5.3 parts in the countryside. The data is significant because this was the first comprehensive assessment of India’s employment situation conducted after Modi’s decision in November 2016 to withdraw most of the country’s banknotes from circulation overnight, the report said.
India’s economy has been expanding by 7 percent plus annually — the fastest pace among major economies — but the uneven growth has meant there are not enough jobs created for millions of young Indians entering the workforce each year. This has put pressure on Modi as he seeks to retain power in a general election due by May.
Earlier this month, the Centre for Monitoring Indian Economy, a leading independent think-tank, said the country lost as many as 11 million jobs last year. | the assessment by the National Sample Survey Office showed the unemployment rate stood at 6.1 percent, the highest since 1972-73. the survey has become a political issue after the acting chairman and another member of the body that reviewed the job data resigned saying there was delay in its release. the head of the government-funded national Statistical Commission said he and colleague. J. Meenakshi were unhappy at the non-publication of jobs data that had been due for release in December. | Negative |
https://economictimes.indiatimes.com/magazines/panache/chinese-delegates-wear-masks-at-auto-expo-amid-coronavirus-scare-green-vehicles-find-eminence/articleshow/73977685.cms | PTI A visitor wears a mask as he looks at cars on display at the Auto Expo 2020 in Greater Noida.
iStock Keeping up the EV drive, Mahindra & Mahindra launched the electric variant of its compact electric SUV eKUV 100 starting at a price point of Rs 8.25 lakh.
India's biennial flagship motor show Auto Expo kicked off on Wednesday under the shadow of coronavirus outbreak as officials of Chinese participants stayed away from pavilions, on a day when China's Great Wall Motor announced an investment of USD 1 billion to tap into the country's auto market.Keeping in tune with the changing landscape of the automotive industry globally which has also been reflected in India, major manufacturers such as Maruti Suzuki India, Hyundai, Tata Motors, Mahindra & Mahindra, Renault, Mercedes-Benz, Voklswagen and Skoda along with new entrants such as Kia and Hector showcased their range of electric vehicles , concepts and upcoming SUVs.Being held at the time of deadly coronavirus outbreak, many delegates and participants besides media men could be seen wearing face masks -- a rarely seen scene in the previous editions of the expo -- while hand sanitisers were ubiquitous at the guest lounges of the participating firms.In the first instance of impact of outbreak on Auto Expo, China's FAW Group firm automaker Haima Automobile on Wednesday cancelled its scheduled press conference as top leadership team of the company could not make it to India. One of the leading Chinese automakers, the company displayed its seven-seater MPV 7X and SUV 8S and electric vehicle E1 here at the expo."We had to cancel the scheduled press conference as leadership team from China could not make it to India," an Indian representative at the company's stall told PTI. The company's presser was originally scheduled to be held at 4 pm.Notwithstanding the health scare, China's largest SUV manufacturer Great Wall Motor (GWM) announced it will invest USD 1 billion in India to tap the market that is set to be among the top three auto markets globally. The investment will be made in a phased manner in areas including research and development, manufacturing, and sales and marketing."We firmly believe that India will become one of the top three auto markets in the world in the next three-five years... Our aim is to establish a comprehensive ecological chain covering research, production, sales and marketing...," said Hardeep Brar, Director, Marketing and Sales of the Indian subsidiary of GWM.He also admitted the coronavirus outbreak and subsequent advisories on Chinese travelling into India has had an impact on the participation of leadership team from headquarters.Similarly, MG Motor India announced that it is in the process of finalising a new manufacturing plant in the country in addition to its already existing production facility in Halol (Gujarat).Chinese firms led by the likes of Great Wall Motor, First Automotive Works (FAW) and electric bus and battery maker BYD have booked around 20 per cent of the total space of around 40,000 square metres at automobile show of the Auto Expo here at Greater Noida.When asked about the impact of coronavirus on the auto industry, Tata Motors Managing Director and CEO Guenter Butschek said it would be known only after next week when factories of Chinese component suppliers re-open next week after an extended lunar new year holiday.Owing to the coronavirus outbreak, India on Sunday announced temporary suspension of e-visa facility for Chinese travellers and foreigners residing in the neighbouring country and issued a fresh advisory saying anyone with travel history to China since January 15 can be quarantined.On Tuesday, automobile industry body Society of Indian Automobile Manufacturers (SIAM) had said all Chinese companies participating at the expo have confirmed that their exhibit area would be manned by their Indian employees.Country's largest car maker Maruti Suzuki India announced its target of selling the next one million "green vehicles" in the next couple of years as it accelerates its eco-friendly mobility drive. Maruti Suzuki India Managing Director and CEO Kenichi Ayukawa said the company has already sold a million green cars, comprising CNG and smart hybrids in the last decade.Showcasing its concept FUTURO-e, an electric SUV, he said the car is being shown for the first time globally in India reflecting the importance of Indian customers in Suzuki's business.Keeping up the EV drive, Mahindra & Mahindra launched the electric variant of its compact electric SUV eKUV 100 starting at a price point of Rs 8.25 lakh (ex showroom Delhi post Fame benefits). It offers peak power output of 40kW, torque of 120 Nm and a range of 147 kms, ideal for city commuters."It is our firm belief that shared mobility would drive large scale adoption of e-vehicles and hence our product offerings would continue to redfine shared mobility space. We intend to offer widest range of vehicles to meet the needs of shared mobility," Mahindra & Mahindra Managing Director Pawan Goenka said.Tata Motors, which showcased pre-production version of its Gravitas SUV that is scheduled to be launched in the first half of FY2021, also announced plans to roll out an electric low-floor bus and an electric truck."Tata Group has taken lead in driving the government's vision of electrifying India and building a comprehensive and sustainable ecosystem, by leveraging the Group's rich experience and diversified competencies. The recently launched Tata uniEVerse is a holistic approach addressing all aspects of e-mobility solutions, from infrastructure to charging network and phase wise manufacturing plan, to provide our consumers a future ready sustainable and efficient e-mobility environment,"Tata Sons Group Chairman N Chandrasekaran said.The company is actively looking to set up exclusive outlets for its electric vehicle portfolio but has not yet taken a final call over the issue, said Tata Motors electric vehicles business head Shailesh Chandra.German luxury carmaker Mercedes-Benz said it would launch its electric SUV EQC in India in April, while French auto major Renault also said it was working towards entering electric vehicle space in India and is likely to launch its first EV in the next two years.MG Motor India unveiled its futuristic concept car Marvel X, world's first mass-production model to achieve Level-3 Intelligent Driving. Kia Motors showcased its concept Sonet, a compact SUV which it would launch in India later this year.Czech auto major Skoda, which has been given the responsibility of turning around the fortunes of Volkswagen group in India, unveiled Vision IN, an India specific mid-sized SUV concept car based on the MQB A0 IN platform, while Volkswagen commenced pre-booking for two up coming SUVs -- Tiguan Allspace and T-Roc -- which it plans to launch in the first half of the year.Similarly, Hyundai unveiled new version of its Tucson SUV with an eye to capture bigger share in the premium SUV segment. | autoexpo 2020 kicks off in greater Noida on tuesday under shadow of coronavirus outbreak. many delegates and participants besides media men could be seen wearing face masks. china's great wall motor announces investment of USD 1 billion to tap into country's auto market. expo is the first time the top leadership of the company from china has been unable to make it to India. | Negative |
https://www.moneycontrol.com/news/business/commodities/oil-slides-as-producer-cuts-fail-to-banish-demand-fears-5146121.html | Oil prices plunged again on Tuesday as investors were unconvinced that record supply cuts could soon balance markets pummeled by the coronavirus pandemic.
Brent futures fell 62 cents, or 2 percent, to $31.12 a barrel by 1310 GMT after settling 0.8 percent up on Monday. U.S. West Texas Intermediate (WTI) crude was down 98 cents, or 4.4 percent, at $21.43 after dropping as much as 5 percent following a 1.5 percent decline in the previous session.
The Organization of the Petroleum Exporting Countries (OPEC), along with Russia and other producing countries - a grouping known as OPEC+ - agreed over Easter to cut output by 9.7 million barrels per day (bpd) in May and June, equating to about 10 percent of global supply before the coronavirus outbreak.
Additional output cuts by the United States, the world's biggest producer, and other nations outside the OPEC+ group will take the estimated total reduction to about 19.5 million bpd.
"With demand destruction forecasts ranging from 15 million to 22 million bpd in April 2020 and these measures not even coming into place until May, we are likely to see a substantial overhang in the short-term," said Nitesh Shah, director of research at New York-based WisdomTree Investments.
Oil prices remain more than 50 percent down this year.
Rystad Energy's head of oil markets, Bjornar Tonhaugen, said that implementation of the international deal would be a logistical challenge that would take weeks at least.
"Reducing upstream supply is not just turning off the tap or pushing a button. We would be surprised to see overall OPEC+ compliance at 50 percent through May," he said.
Also read: Gold prices likely to touch Rs 50,000-55,000 by end of 2020
Inventories, where available, are expected to fill up fast even as some countries among the G20 group of nations agreed to buy oil for their national reserves.
Still, U.S. production is falling in tandem with a drop in prices and there are signs that the coronavirus outbreak may have peaked in some areas of the world.
In China, where the virus started and is now largely under control, demand appears to be returning, with data showing that crude oil imports rose 12 percent in March from a year earlier.
Supporting prices, U.S. shale oil output is expected to register a record monthly drop in April, the U.S. Energy Information Administration (EIA) said on Monday.
Production has been sliding for several months, but the declines are expected to accelerate sharply in April with a loss of nearly 200,000 bpd of production, the EIA said. | oil prices plunge again as investors are unconvinced that record supply cuts could soon balance markets. the coronavirus pandemic has wiped out more than 50 percent of global oil supply. OPEC, Russia and other producing countries agreed over Easter to cut output by 9.7 million barrels per day. the u.s., the world's biggest producer, and other nations outside the OPEC+ group will take the estimated total reduction to about 19.5 million bpd. | Negative |
https://www.businesstoday.in/current/world/coronavirus-update-global-covid-19-cases-deaths-and-economic-effect/story/403460.html | More than 4.12 million people have been reported to be infected by the novel coronavirus globally and 281,591 have died, according to a Reuters tally, as of 0421 GMT on Monday.
EUROPE
British Prime Minister Boris Johnson said the lockdown will not end yet, urging people to "stay alert" to the risks as he outlined plans to begin slowly easing measures.
Total cases in Germany increased by 357 to 169,575, while the death toll rose by 22 to 7,417.
Spain registered its lowest daily number of deaths on Sunday since mid-March.
Portugal will "assess the risk" of re-starting football this month if there are many COVID-19 cases among players, after three players at top-flight Vitoria Guimaraes tested positive.
Russian authorities said they had recorded 11,012 new cases in the last 24 hours, bringing the nationwide tally to 209,688.
ASIA-PACIFIC
China reported 17 new cases for May 10, marking the highest daily increase since April 28. The total case toll now stands at 82,918 and the death toll remained unchanged at 4,633.
Japan could lift a state of emergency in many regions this week if new cases are under control and PM Shinzo Abe signalled readiness to compile a second supplementary budget during the current Diet session.
South Korean officials scrambled to contain a COVID-19 outbreak threatening to spread throughout Seoul. Officials reported 35 new infections across the country, the highest in more than a month, reinforcing fears of a second wave.
Yemen reported 17 new cases and one death, and declared Aden an infested city after total cases there jumped to 35, including four fatalities.
New Zealand reported three new cases, ahead of a decision on whether to ease restrictions further and allow more business and recreational activities to resume.
AMERICAS
More than 1.33 million people have been infected in the United States and 79,509 have died, according to a Reuters tally as of 0421 GMT on Monday.
U.S. Vice President Mike Pence is not in quarantine and plans to be at the White House on Monday, despite media reports that Pence was self-isolating after a staffer tested positive.
The White House has begun informal talks with Republicans and Democrats in Congress about what to include in another round of coronavirus relief legislation.
The chief of the U.S. National Guard, which is at the leading edge of the domestic military response to the new coronavirus, is in limbo after testing positive and negative in conflicting tests.
The death toll in Canada rose by 2.2% to 4,728.
Mexico confirmed 1,562 new cases and 112 additional deaths, bringing its national tally to 35,022, with 3,465 deaths.
Confirmed cases in Panama reached 8,448 on Sunday, a rise of 166 from the previous day, and deaths climbed by seven to 244.
Avianca Holdings, the world's second-oldest airline, filed for bankruptcy on Sunday, after failing to meet a bond payment deadline.
MIDDLE EAST AND AFRICA
A county in southwestern Iran has been placed under lockdown.
A worker at a fish-processing factory in Ghana's city of Tema infected 533 other workers at the facility.
Tunisia recorded zero new cases for the first time since early-March.
Morocco's central bank has asked banks to withhold dividends this year so they are better placed to deal with any fallout.
ECONOMIC FALLOUT
Asian shares followed Wall Street higher as investors looked ahead to more countries restarting their economies, even as some reported an unwelcome pick up in new coronavirus cases.
China's central bank said it will step up counter-cyclical adjustments to support the economy and make monetary policy more flexible to fend off financial risks.
Also read: Coronavirus in UK: PM Johnson says lockdown to stay, 'careful' easing begins
Also read: Coronavirus Live Updates: Railways issues SOP for passenger movement; only those with e-tickets to be allowed | more than 4.12 million people have been infected by the novel coronavirus. 281,591 have died, according to a tally, as of 0421 GMT on monday. a total of 169,575 cases in germany, meanwhile, the death toll rose by 22 to 7,417. a third of the u.s. population is infected with the novel coronavirus. | Negative |
https://economictimes.indiatimes.com/news/economy/indicators/fitch-solution-cuts-indias-fy21-gdp-growth-forecast-to-1-8/articleshow/75244834.cms | NEW DELHI: Fitch Solutions on Monday cut India's economic growth forecast for the financial year 2020-21 to 1.8 per cent saying private consumption is likely to contract due to large-scale loss of income in the face of worsening domestic outbreak of COVID-19."Over the past week, we have continued to adjust down our country-specific real GDP growth forecasts on the back of persistent low oil prices and the widening spread of COVID-19. Our forecasts remain fluid and, even despite the recent downward revisions, we believe that the risks remain skewed to the downside," the rating agency said.For India, it said the real GDP growth rate for 2020-21 (April 2020 to March 2021) has been revised down to 1.8 per cent from 4.6 per cent, previously."We now expect private consumption to contract, versus a weak expansion previously, due to large scale loss of income across the economy in the face of a worsening domestic outbreak of COVID-19," it said.Fitch Solutions also anticipated a deeper contraction in fixed investments as businesses choose to cut back on capital expenditure to conserve cash amid elevated economic uncertainty."The slow roll-out of fiscal stimulus by the central government will only exacerbate India's economic woes," it added.For China , it revised downwards its 2020 real GDP forecast to 1.1 per cent from 2.6 per cent previously, to reflect the impact of a worsening global economic outlook."Real GDP (of China) contracted by a sharp 6.8 per cent y-o-y in Q1 2020, and our current forecast reflects our view that private consumption and net exports will continue to drag heavily," it said. "Meanwhile, targeted fiscal stimulus should see fixed investment growth come in relatively flat, while strong government consumption will provide the bulk of support and prevent a full-year contraction in 2020." | india's real GDP growth rate for 2020-21 has been revised down to 1.8 per cent. the rating agency says private consumption is likely to contract due to a loss of income. the slow roll-out of fiscal stimulus by the central government will only exacerbate India's woes. for china, it revised downwards its 2020 real GDP forecast to 1.1 per cent from 2.6 per cent previously. | Negative |
https://www.financialexpress.com/economy/there-are-jobs-in-2017-jobs-gain-was-12-8-million-says-pmeac-member-surjit-bhalla/1244824/ | At the time when the Narendra Modi government is facing criticism for jobless growth, noted economist and PMEAC member says that in 2017, there was a job gain of 12.8 million. In a column written in the Financial Express on Saturday, Surjit Bhalla said, “If the QES data is extrapolated to the entire non-farm population, job growth in India was 10 million; EPFO based estimates place it at 7 million; our estimate for 2017 (CMIE data) is a job gain of 12.8 million.”
He said that there are three independent but piecemeal sources of data on employment growth—QES, CMIE and EPFO. Analysing different data, Surjit Bhalla said that the employment growth has been the highest in NDA periods. “In the UPA period coincident with NSSO data (2004/5 to 2011/12) GDP growth averaged the highest ever, with a CAGR of 7.8 % a year (as also inflation—CAGR of 7.4 %—but that story can be told on another day). However, employment, (principal status), increased by only 11 million; according to the weekly status, employment increased by a similar 11.4 million,” he wrote in the column.
“This was the employment creation inheritance of PM Modi. And, before the economy could really get started, it was hit by two successive droughts in 2014/15 and 2015/16,” he said, adding that droughts are not good for employment is an old true fact.
Making a strong case for health employment growth in India, he also said that the jobs data by Centre For Monitoring Indian Economy (CMIE) is the most pessimistic. “The raw CMIE data (unadjusted by Census population estimates for 22 age-sex groups; 15-19, 20-24… >=65 years for both men and women) shows a total job gain of 1.4 million. But, this is incorrect since the survey population in each age-sex cell is not a good estimate of the Census population in each age-sex cell,” he wrote.
The Narendra Modi government has been saying that there has been job creation and what is lacking is comprehensive jobs data. The government is expected to release a jobs data report later this year, which will map creation of jobs with a different and efficient methodology. | noted economist says in 2017, there was a job gain of 12.8 million. he says there are three independent sources of data on employment growth. the government is expected to release a jobs data report later this year. he says the data is not accurate since the survey population is not a good estimate. he says the data is not reliable and that the economy is not doing well. | Negative |
https://www.businesstoday.in/current/economy-politics/fpi-outflow-hits-4-month-high-of-rs-21000-cr-in-sept/story/283227.html | Overseas investors pulled out a massive Rs 21,000 crore ($3 billion) from the capital markets in September, making it the steepest outflow in four months, on widening current account deficit amid global trade tensions.
The latest withdrawal comes following a net infusion of close to Rs 5,200 crore in the capital markets (both equity and debt) last month and Rs 2,300 crore in July.
Prior to that, overseas investors had pulled out over Rs 61,000 crore during April-June.
According to the latest depository data, foreign portfolio investors (FPIs) withdrew a net sum of Rs 10,825 crore from equities in September and Rs 10,198 crore from the debt market, taking the total to Rs 21,023 crore ($3 billion).
This was the highest outflow since May, when FPIs had pulled out Rs 29,775 crore. FPIs never fully returned to the Indian equity markets after pulling out net assets worth Rs 61,000 crore during the quarter ended June 2018.
Although they net bought assets to the tune of Rs 7,500 crore cumulatively in July and August, the quantum of inflows was much lower than what was seen in the past when they invested with full conviction.
This indicates that there has been a fair bit of uncertainty and cautiousness among FPIs investing in the Indian equity markets in the recent times, experts said.
The outflow in September was due to global trade tensions, widening current account deficit on the back of surge in oil prices, depreciating rupee, concerns over the government's ability to meet fiscal deficit targets and lower than expected GST collection, said Himanshu Srivastava, Senior Research Analyst at Morningstar.
"All these factors deteriorated the country's macro environment. It has also cast a doubt on the sustainability of the economic growth which is closely watched by the FPIs. This coupled with expensive valuation triggered a sell-off from FPIs in September," he noted.
Additionally, given the global trade tensions, there has been risk-aversion among foreign investors which explains their cautious stance towards emerging markets like India, which are considered to be riskier than their developed counterparts, he added.
So far this year, FPIs have pulled out over Rs 13,000 crore from equities and more than Rs 48,000 crore from the debt markets. | foreign investors pulled out a massive Rs 21,000 crore ($3 billion) from the capital markets in September. this was the steepest outflow in four months, on widening current account deficit. this was due to global trade tensions, depreciating rupee and concerns over deficit. experts say there has been a fair bit of uncertainty and cautiousness among foreign investors. | Negative |
https://www.financialexpress.com/economy/fitch-ups-indias-economic-growth-forecast-to-7-4-for-fy19-but-cites-these-as-risks/1205108/ | Fitch Ratings today raised India’s economic growth forecast to 7.4 per cent for 2018-19 but cited higher finance costs and rising oil prices as risks. It also said that the rupee has been among the worst performers vis-a-vis Asian currencies this year. The global credit rating agency had earlier estimated the GDP growth at 7.3 per cent for the current financial year. For 2019-20, it projected the growth at 7.5 per cent. Fitch forecast global oil price to remain around USD 70 per barrel in 2018, up from USD 54.9 a barrel last year. It said it expects oil price to cool to USD 65 a barrel next year. “We have revised up our forecast for 2018-19 growth to 7.4 per cent from 7.3 per cent in March. However, higher financing costs (stemming from monetary tightening and higher market premiums) and rising oil prices should limit the upside to growth,” Fitch said in its Global Economic Outlook.
The Indian economy grew at 6.7 per cent in 2017-18. In the fourth quarter (January-March) the GDP grew at 7.7 per cent. Fitch said the Indian rupee has been one of the worst performing currencies in Asia this year, although the depreciation was more muted than during the 2013 taper-tantrum episode. “India has better macroeconomic fundamentals than in 2013 and very low foreign ownership rates in the domestic government bond market, but the current account deficit has been widening as a result of rising oil prices, reviving domestic demand and poor manufacturing export performance,” it said. Last month, US-based Moody’s cut India’s growth forecast for 2018-19 to 7.3 per cent from 7.5 per cent citing rising oil prices.
Fitch said inflation has picked up since mid-2017, despite food inflation being muted. “The rise in the oil price and the INR depreciation should add to price pressure in the coming months, although we expect inflation to be contained within the upper band of the RBI’s target range.” Fitch projected retail inflation to be 5 per cent by the end of 2018. The Reserve Bank earlier this week hiked its policy rate by 0.25 per cent, citing inflation risks. Fitch retained the global growth forecast at 3.3 per cent in 2018 and 3.2 per cent for 2019, reflecting the disappointment over distribution of growth, with shortfalls in a number of smaller economies. It said however that expansion will be on-track or slightly better in the world’s two largest economies – the US and China.
It also said the near-term global growth prospects remain robust despite rising trade tensions and political risks. Fitch Chief Economist Brian Coulton said: “Global trade tensions have risen significantly this year, but at this stage the scale of tariffs imposed remains too small to materially affect the global growth outlook. “A major escalation that entailed blanket across-the-board geographical tariffs on all trade flows between several major countries would be much more damaging.”
It said a major escalation that entailed blanket across the-board geographical tariffs on all trade flows between major countries would be much more damaging. “This still looks quite unlikely, but the US administration’s continuing focus on reducing bilateral trade deficits – which will be very hard to achieve in the near term – increases the risk of sustained tensions,” Fitch said. | rupee has been among the worst performers vis-a-vis Asian currencies this year. global oil price forecast to remain around USD 70 per barrel in 2018. rupee grew at 6.7 per cent in 2017-18, compared to 7.7 per cent in 2013. rupee is expected to be the most volatile currency in the world. a softer rupee could mean a stronger growth in the coming months. | Negative |
https://economictimes.indiatimes.com/markets/expert-view/midcap-it-could-be-one-of-the-leaders-of-next-bull-market-in-2019-porinju-veliyath/articleshow/66934210.cms | Unlock Leadership Excellence with a Range of CXO Courses Offering College Course Website IIM Lucknow IIML Chief Marketing Officer Programme Visit IIM Lucknow IIML Chief Executive Officer Programme Visit Indian School of Business ISB Chief Digital Officer Visit
I am structurally bullish and in long-term investing, there is nothing wrong in that: Porinju Veliyath I still believe one has to invest in midcaps and smallcaps to make much higher returns than the market, Porinju Veliyath, Founder & Portfolio Manager, Equity Intelligence India, tells ET Now.
You can skip through the corrections and still create wealth, that is my experience over the last 30 years,, Founder & Portfolio Manager,, tells ET Now . The IT stocks now, in spite of apprehensions, uncertainties and grey areas, are growing at 15-20% if you see last five years’ CAGR. The 10-year CAGR looks even better.Edited excerpts:It is very true that the macros are reversing and dramatically. Not many people expected the way oil prices reversed, the rupee and the markets got steady, The media have been exaggerating the negatives. When the market has a bad sentiment, investors are not in a buying mood, it adds to the agony. There was so much exaggeration regarding the trade war, the NBFC crisis and again the so-called macro headwinds. Now things are looking better and there are reasons for the investors to cheer.We had a very bad 2018. It was very painful for all kinds of investors. Those who were not affected earlier got affected in the later part of the year. That is definitely going to reverse in 2019. It is an election year. Many investors are waiting for the election before taking a buying or investing decision.But that is not the way one should look at equity or long-term investing. It is perhaps a very good opportunity when people are talking about the election outcome and whether Modi will come back or not. That is not very relevant at this point of time for long-term investors.In the past, after every election, irrespective of the fact whether or not the outcome was liked by investors or corporates, the markets have always gone up, The best example is 2004 when Congress and CPM jointly formed a government. Most people thought there is nothing worse than that but still the markets performed very well. That has gone up three times in subsequent years and this time the concerns are very different. Ultimately it melts down to the earnings of companies and valuation. It is a very comfortable time in the market for new investors to come and invest in equities. The existing investors hold on to their investments with a lot of confidence.The leadership changes after every fall in the market. Even this time, the future opportunities are going to be very different. People should not go by past performance and the past leadership. We are heading for new sectors and new opportunities and themes.In that context, we have recently been looking at IT, especially the midcap IT segment. Normally investors see it as a rupee trade. That is why it did not do very well. There has been consolidation over the last 18 years. In the previous two rallies, the IT stocks were almost ignored, even though the rally in 1999-2000 was led by IT stocks.The IT stocks now, in spite of all those apprehensions, uncertainties and grey areas, are growing at 15 to 20% if you see last five years’ CAGR. The 10-year CAGR looks better. Even earning wise, it is better than the revenue CAGR. The price earnings multiples are at historical lows.Just compare this with the consumer companies, the FMCG companies are growing at 8-10%. The best of them are growing at 12% and we are giving 30 and 40 PE multiples. The question here is whether it is a secular growth. Can we expect 15-20% CAGR for these companies for the next five years? I believe a lot of these midcap companies are making innovations and a lot of them are reinventing themselves, going for more digital revenues.Such companies are going to grow at 15-20% and I would not be surprised if a few of them grow 20-25%. This can be one of those leaders of the next bull market , especially in 2019.Yes. The housing finance companies (HFCs) and NBFCs were much fancied in the last many years and had too high valuations. Some of these companies tried to take advantage by manipulating and by hiding things. Now things are getting settled but at the same time, I do not think this is something which can bring down India or its economy or its financial system.It is not that big. Some people are comparing the NBFC crisis even with the Lehman crisis. That is nonsense. We are not up to that. So, things will get settled. I believe the worst is over for the sector.In the finance sector, as it is, the bankruptcy code, the NPA resolution process is very encouraging. Of course, we all wish it was much faster and much more but it has got its limitations. This is the dirt that has accumulated over the last many years and it will take some time to show progress.It is a slow process but is very impressive. People have been under-estimating the bankruptcy code and other reforms happening in this country. This will go a long way. It will be remembered after 10, 20 and 30 years. Our financial system is getting stronger than before.There was a time even I was very bullish on this sector. We expected a lot of upturn in the whole vertical but it was a bit disappointing and the stocks in the sector have performed very badly. Shankara and all is a very different thing. They have got company specific issues and that’s why I never invested into that.We have a company called Hindustan Sanitaryware, HSIL and that stock has come to a multiyear low. But many solid companies in that segment have corrected well and investors can look for some of those companies in the sector.Eventually, housing construction will bounce back. Perhaps the demonetisation halted the float of black money in the system. But this is a temporary phenomenon, Ultimately people will make homes and there will be deals. We are just coming back. There was a one-two years of gestation period after demonetisation and the crackdown on black money. That was very important and a much required thing.But investors can look for some select stocks in that sector. It remains a good sector.I have mostly been fully invested. Structurally I am very bullish. I believe life is so short. I do not want to go into negativism and waste my life. I am structurally a bullish person. I love my country. I have that positive way of looking at things and in long term investing and there is nothing wrong in that. You can skip through the corrections and still create wealth that is my experience over the last maybe 30 years.I have to admit that I am going through some kind of embarrassing time as a fund manager because lot of people who have invested do not really understand volatility, especially people who have invested with me knowing that I predominantly invest in the midcaps and smallcaps all the time. I still believe that is the way to go if you want to make much higher returns than the market. So, there will be some pockets where you will be hit hard and we are going through this in 2018.I believe the whole thing will be reversed in 2019 but at the same time there will be some companies which I have invested or you have invested, generally people have invested they may not come up in the next rally or in the coming years. So one has to be very careful and very choosy.The times are changing. The disruptive world out there and many small businesses may not survive well and profit margins can be affected. It is too dynamic a situation. As investors you have to look for new themes and opportunities in the market that is where the fun is. But we also have got stuck with some stocks which we cannot even sell and buy something good. I am very confident it is a fantastic opportunity.At the same time, markets in general, are not very cheap. I definitely have to agree to that. You have to go through the new themes and opportunities to make money going forward. Markets are not very cheap but at the same time the earnings were also depressed. So, look at the normalised earnings and the price earning multiples. The market is very comfortable now in general and stock picking is going to be exciting.Yes, we still hold the shares. That is one of our largest holding in portfolio management. I still have the conviction.I do not know. If I am not bullish, I would not be holding it. In case of Kaya there is a very trustable management with futuristic business model. It is a well-managed company and the valuations are very attractive at this point of time. We are holding the shares. We have got vested interest so please do not take it as a recommendation.By December 2019, Nifty and Sensex is definitely going to be at new highs. Markets have been in highs and at the same time, investors have lost money. Some of the stocks that have been beaten down are investment-worthy companies. I am seeing hundreds of stocks which will be more than 100% up by next December 2019. That is a tremendous opportunity despite the election outcome and at the same time I am very confident that the current government will continue and reforms will be followed up. We are in the right inflexion point. | Porinju Veliyath, Founder & Portfolio Manager, equity intelligence india, tells ET Now. he says investors can skip through corrections and still create wealth. the IT stocks now are growing at 15-20% if you see last five years’ CAGR. the media have been exaggerating the negatives. 'we had a very bad 2018': | Negative |
https://www.financialexpress.com/economy/us-to-allow-8-countries-to-continue-buying-iran-oil-after-sanctions-on-november-5-says-mike-pompeo/1370827/ | The US has agreed to temporarily allow eight countries to continue buying Iranian oil after it reimposes crippling sanctions on Tehran on November 5, Secretary of State Mike Pompeo said on Friday, citing “significant reductions” in imports of oil from the Persian Gulf nation. India is one of the countries expected to get the exemptions. But senior administration officials refused to spell out the names on Friday. The list of these exemptions would be announced on Monday, Pompeo told reporters during a conference call on Iranian sanctions, with US Treasury Secretary Steven Mnuchin. While the US had previously wanted countries including India to completely halt oil purchases from Iran by November 4 when its full sanctions against Tehran come into force, it seems to have relented considering the havoc the move to completely take out Iranian supplies from the market would have had on prices.
Pompeo said that countries like India, if it gets the exemption, would be asked to bring down their oil imports from Iran to zero in six months’ time. Negotiations are still ongoing, he said explaining the reasons for not revealing the names of the countries that are expected to get exemptions from the US from this latest and so far the toughest American sanctions on Iran.
“We expect to issue some temporary allotments to eight jurisdictions, but only because they have demonstrated significant reductions in their crude oil and cooperation on many other fronts and have made important moves towards getting to zero crude oil importation. These negotiations are still ongoing. Two of the jurisdictions will completely end imports as part of their agreements. The other six will import at greatly reduced levels,” Pompeo said. These economic sanctions are just a part of the US government’s total effort to change the behaviour of the Iranian regime, he said.
“On November 5th, the United States will reimpose sanctions that were lifted as part of the nuclear deal on Iran’s energy, shipbuilding, shipping and banking sectors. These sanctions hit at core areas of Iran’s economy. They are necessary to spur changes we seek on the part of the regime,” he said. “In order to maximise the effect of the president’s pressure campaign, we have worked closely with other countries to cut off Iranian oil exports as much as possible,” Pompeo said.
The expected list of exemptions to eight jurisdictions, that too temporary, is far less than the 20 countries, including India, which were exempted from Iranian sanctions during the previous Obama administration, he said. “We will have issued, if our negotiations are completed, eight and have made it clear that they are temporary,” he said. “Not only did we decide to grant many fewer exemptions, but we demanded much more serious concessions from these jurisdictions before agreeing to allow them to temporarily continue to import Iranian crude oil. These concessions are critical to ensure that we increase our maximum pressure campaign and accelerate towards zero,” Pompeo said.
As a result of the latest sanctions, he said the US expects to have reduced Iranian crude oil exports by more than 1 million barrels even before these sanctions go into effect. “This massive reduction since May of last year is three to five times more than what many analysts were projecting when President Trump announced our withdrawal from the deal back in May,” he said. “Starting today, Iran will have zero oil revenue to spend on any of these things. Let me say that again: Zero. 100 percent of the revenue that Iran receives from the sale of crude oil will be held in foreign accounts and can be used by Iran only for humanitarian trade or bilateral trade in non-sanctioned goods and services,” he said.
Pompeo said the latest US sanctions are targeted at the regime, not the people of Iran who have suffered grievously under this regime. “It’s why we have and will maintain many humanitarian exemptions to our sanctions, including food, agriculture commodities, medicine and medical devices,” he said. India, which is the second biggest purchaser of Iranian oil after China, is willing to restrict its monthly purchase to 1.25 million tonnes or 15 million tonnes in a year (300,000 barrels per day), down from 22.6 million tonnes (452,000 barrels per day) bought in 2017-18 financial year, sources in New Delhi said.
The US will also demand the Society for Worldwide Interbank Financial Telecommunication (SWIFT) global financial network stop supporting Iranian banks as part of enforcing sanctions over Tehran’s nuclear programme and alleged support for terrorism.
In May, President Donald Trump pulled the US out of the 2015 landmark Joint Comprehensive Plan of Action (JCPOA) terming it as disastrous”. Under the Obama-era deal, involving five permanent members of the UN Security Council and Germany, Iran agreed to stop its nuclear programme in exchange for relief from economic sanctions. After the US’ withdrawal from the deal, Trump signed fresh sanctions against Iran and warned countries against any cooperation with Tehran over its controversial nuclear weapons programme. Iran has dismissed these charges and maintains that its nuclear programme is for peaceful purposes. | the list of exemptions would be announced on Monday, secretary of state said. if India gets the exemption, it would be asked to bring down their oil imports from Iran to zero in six months’ time. the list of exemptions is far less than the 20 countries, including india, which were exempt from the sanctions. the sanctions were lifted as part of the nuclear deal on Iran’s energy, shipbuilding, shipping and banking sectors. | Negative |
https://www.livemint.com/Politics/DNQJqmtysO2AlnHONcbZ2M/Trillions-of-litres-of-water-in-dams-are-not-reaching-farme.html | New Delhi: Mihir Shah, erstwhile member of the Planning Commission and head of several committees on water reforms set up by the Modi government, is candid about the problems facing water management. Excerpts from an interview:
Why has it been so hard to make a national push on water, similar to sanitation or the more recent nascent attempt on health?
For some reason, policy makers in India have consistently failed to recognise the key importance of water for the sustainability of India’s growth process and its vital significance in the lives and livelihoods of millions. This has to urgently change.
There has been enough pushback from citizens who are enduring water stress. Are these making any qualitative difference and do they offer some way forward?
Citizens efforts are vitally important but at best they are exemplars for government of the direction national policy must take.
A committee chaired by you in 2016 had recommended a slew of water-related reforms, including the setting up of a National Water Commission. Has there been any progress?
Whenever I presented the proposals, whether to the Ministry of Water Resources, the Niti Aayog or the Prime Minister’s Office, the response I got was overwhelmingly positive, much more positive, for example, than when I was a member of the Planning Commission. Even so, the proposals have not moved forward due to the extraordinary resistance from vested interests within the Central Water Commission, who exercise an almost mystifying power over water policy in India. It gives me no joy to say this but I am afraid this has to do with the political economy of corruption in India.
This is also the reason why despite spending more than Rs400,000 crore on major and medium dam projects in India, we have a recurring and intensifying crisis of water. Trillions of litres of water stored in our dams is not reaching the farmers for whom it is meant. Unless we reform the management of our irrigation commands, this problem will remain. We need to move towards participatory irrigation management and hand over the management of these commands to Water User Associations of farmers. Wherever we have done this, much success has been achieved. These examples need to be scaled up.
Do you think India has had a serious reckoning with the condition of its groundwater resources?
Sustainable groundwater management is the single most important water reform we need to urgently undertake since groundwater is, by far, India’s most important source of water. India is the largest consumer of groundwater, way ahead of even China, which is in second place. During my tenure in the Planning Commission, we initiated the National Aquifer Management Program (NAQUIM), the largest such program ever undertaken in human history.
But over the years, even as groundwater has grown in importance, the central and state groundwater boards have been consistently shorn of human resource capacity. We need a large scale network of partnerships with academic institutions and civil society organisations in order to implement NAQUIM, which seeks to both measure and manage aquifers.
Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more. | despite spending more than Rs400,000 crore on major and medium dam projects, we have a recurring and intensifying crisis of water. unless we reform the management of our irrigation commands, this problem will remain. sustainable groundwater management is the single most important water reform we need to urgently undertake since groundwater was contaminated in the 1970s. a report by the nasa on water management in india published in the journal 'water and sanitation' | Negative |
https://www.moneycontrol.com/news/world/coronavirus-pandemic-world-faces-food-crisis-in-wake-of-covid-19-un-wto-5096921.html | Representative image
The heads of three global agencies warned Wednesday of the risk of a worldwide "food shortage" if authorities fail to manage the ongoing coronavirus crisis properly. Many governments around the world have put their populations on lockdown causing severe slow-downs in international trade and food supply chains.
Panic buying by people going into confinement has already demonstrated the fragility of supply chains as supermarket shelves emptied in many countries.
"Uncertainty about food availability can spark a wave of export restrictions, creating a shortage on the global market," said the joint text signed by Qu Dongyu, head of the UN's Food and Agriculture Organisation (FAO), Tedros Adhanom Ghebreyesus, director-general of the World Health Organization (WHO) and Roberto Azevedo, director of the World Trade Organisation (WTO).
"In the midst of the COVID-19 lockdowns, every effort must be made to ensure that trade flows as freely as possible, specially to avoid food shortage(s)" from developing, they said in their statement.
COVID-19 Vaccine Frequently Asked Questions View more How does a vaccine work? A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine. How many types of vaccines are there? There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine. What does it take to develop a vaccine of this kind? Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time. View more Show
"When acting to protect the health and well-being of their citizens, countries should ensure that any trade-related measures do not disrupt the food supply chain," they added.
Over the longer term confinement orders and travel restrictions risk causing disruptions in agricultural production due to the unavailability of agricultural labour and the inability to get food to markets.
"Such disruptions including hampering the movement of agricultural and food industry workers and extending border delays for food containers, result in the spoilage of perishables and increasing food waste," said the three leaders.
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They also stressed the need to protect employees engaged in food production, processing and distribution, both for their own health and that of others, as well as to maintain food supply chains.
"It is at times like these that more, not less, international cooperation is essential," they said.
"We must ensure that our response to COVID-19 does not unintentionally create unwarranted shortages of essential items and exacerbate hunger and malnutrition."
Follow our full coverage here | three global agencies warn of risk of "food shortage" if authorities fail to manage crisis. panic buying by people going into confinement has already demonstrated fragility of supply chains. a vaccine works by mimicking a natural infection. a vaccine works by mimicking a natural infection. a vaccine works by building herd immunity to put an end to the pandemic. | Negative |
https://www.businesstoday.in/current/economy-politics/imf-global-debt-record-usd-164-trillion-india-praised-right-policies/story/275209.html | The world is drowning in debt like never before. According to the IMF, global debt, public and private alike, hit a record $164 trillion in 2016 - almost 225 per cent of the world's economic output - up 8 per cent from 2015. Debt-to-GDP ratios in the advanced economies are at levels not seen since World War II, while the same for emerging market and middle-income countries have hit levels last seen during the 1980s debt crisis. To ram home the bad news, "the world is now 12 per cent of GDP deeper in debt than the previous peak in 2009", as the latest Fiscal Monitor report put it.
According to Vitor Gaspar, Director, IMF Fiscal Affairs Department, which prepared the report, most of the global debt is in advanced economies, at 105 per cent of GDP on average. But in the past decade, emerging market economies have been responsible for most of the increase. Debt-to-GDP ratios for the latter in 2017 reached almost 50 per cent and are expected to continue on an upward trend. "One-fifth of emerging market and middle-income economies had debt above 70 per cent of GDP in 2017, similar to levels in the early 2000s in the aftermath of the Asian financial crisis. Among low-income developing countries, 20 per cent now boast debt above 60 per cent of GDP, compared with almost none in 2012," said the report.
"Underpinning debt dynamics for all countries are large primary deficits, which reached record levels in the case of emerging market and developing economies," it added. Here's why high government debt and deficits are cause for concern:
It can make countries vulnerable to a sudden tightening of global financing conditions, which could disrupt market access and put economic activity in jeopardy.
Past experience shows that countries can be subject to large unexpected shocks to public debt-to-GDP levels, which would exacerbate rollover risk. Furthermore, IMF has previously established that fiscal risks can be highly correlated with each other, with a distinct bunching of contingent liability realizations during crisis periods.
It can hinder a government's ability to implement a strong fiscal policy response to support the economy in the event of a downturn. Historical experience shows that a weak fiscal position increases the depth and duration of recession-such as in the aftermath of a financial crisis.
Arguably, high debt can also result in lower growth because it can crowd out private investment and create uncertainty about higher future distortionary taxation.
Against this backdrop consider that as per IMF data, India's general government debt (as a percentage of GDP) has been pegged at 70.2 per cent for 2017, up 2 per cent since 2012. In fact, it boasted the second highest debt, after Brazil, in the Emerging Market and Middle-Income Economies category. But the figure is projected to steadily go down here on, from 68.9 per cent this year to 61.4 per cent by 2023. "The debt level is relatively high, but the authorities are planning to bring it down over the medium term with the right policies," said Abdel Senhadji, Deputy Director, IMF Fiscal Affairs Department, at a press conference, adding that India is planning to continue with the consolidation in the current fiscal year and over the medium term. According to the IMF, India's debt ratio projection for 2023, along with a fiscal deficit target of 3 per cent by 2019-20, "are appropriate".
China slammed
In contrast, China's government debt to GDP ratio stood much lower at 47.8 per cent in 2017. However, the IMF report holds the country responsible for a whopping 43 per cent of the global debt increase since 2007, calling it "a driving force". The main concern "has to do with the level and pace of accumulation of overall debt, private and public. So, the control over the debt level - in particular, the rhythm of debt accumulation - is a major challenge for the Chinese economy," said Gasper. According to IMF data, China's general government debt (as a percentage of GDP) is expected to balloon from 47.8 per cent in 2017 to 65.5 per cent by 2023.
Dismal outlook for the US
The projections for the US are similarly dismal. "In the US, the revised tax code and the two-year budget agreement provide additional fiscal stimulus to the economy. These measures will give rise to overall deficit above $1 trillion over the next three years, and that corresponds to more than 5 per cent of the US GDP," said Gasper, adding, "Debt is projected to increase from 108 per cent in 2017 to 117 per cent of GDP in 2023. If tax cuts with sunset provisions are not allowed to lapse, public debt would climb even higher."
Thankfully, the outlook for the world at large is a lot more positive - the IMF forecasts indicate that debt-to-GDP ratios would come down over the next three to five years in most countries. This, of course, hinges on them delivering fully on their policy commitments. So the report calls out for immediate decisive action on the part of nations to strengthen fiscal buffers and advance policies/reforms to reduce vulnerabilities, taking full advantage of the recent broad-based pickup in economic activity. "Countries are advised to avoid procyclical fiscal policies that exacerbate economic fluctuations and ratchet up public debt," said Gasper.
Incidentally, the report also gives a thumbs up to Aadhaar, the constitutional validity of which is currently being debated in the Supreme Court. "Digitalization can improve financial management and ultimately the efficiency of public spending... Biometric technology to identify and authenticate individuals can help reduce leakages and improve coverage of social programs. With more than 1.2 billion registered citizens in India's biometric identification system, Aadhaar, the country stands out as a leader in this area," it said. Significantly, the IMF also underscored that digitization is no panacea, and the report made clear that "governments must address multiple political, social, and institutional weakness and manage digital risks".
(With PTI inputs) | global debt hit a record $164 trillion in 2016 - almost 225 per cent of the world's economic output. advanced economies are at levels not seen since the world war II. emerging market and middle-income countries have hit levels last seen during the 1980s debt crisis. the world is 12 per cent of GDP deeper in debt than the previous peak in 2009. | Negative |
https://www.moneycontrol.com/news/business/markets/most-nifty-companies-hit-52-week-low-in-march-amid-covid-19-fall-should-you-buy-5090171.html | live bse live
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Nifty is down about 30 percent from its recent record high of 12,430 hit on January 20, and about 90 percent of the companies hit their 52-week low in March.
As many as 45 companies out of Nifty50 have hit their multi-year low amid the mayhem caused by the outbreak of COVID-19 virus across the globe. Foreign institutional investors (FIIs) have alone pulled out more than Rs 60,000 cr from the cash segment of the Indian equity market in March alone.
Stocks that have hit their fresh 52-week low in March include prominent names like Shree Cement, Eicher Motors, Bajaj Finserv, Maruti Suzuki, UltraTech Cements, Bajaj Finance, TCS, and Hero MotoCorp, according to data collated on March 27.
COVID-19 Vaccine Frequently Asked Questions View more How does a vaccine work? A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine. How many types of vaccines are there? There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine. What does it take to develop a vaccine of this kind? Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time. View more Show
Most of the companies which are part of the index are bluechip names and are leaders of their respective sectors. With the recent fall seen in the markets, many of the blue-chip names are trading at multi-year lows.
The question now is – are these stocks good long-term buys? Moneycontrol spoke to experts on this and they said, not all stocks which have hit their 52-week lows are long term buys, but only a select few.
Some of the stocks which are going through a turmoil are due to structural or industry-specific issues, hence, it does make sense to avoid while some of them are under pressure due to institutional selling.
It makes a valid case for investors who are looking at an investment horizon of 2-3 years. Because the volatility is likely to continue amid the Coronavirus outbreak at least till the time a medically approved vaccine comes to light.
“Investor, looking to build long term portfolio, can start investing in blue chips companies such as Reliance Industries, HDFC twins, Bajaj finance, Asian paints, Colgate, Britannia, Dabur, L&T, Axis Bank, Titan, Cipla, Infosys and TCS which are available at a reasonable valuation,” Ajit Mishra, VP Research, Religare Broking told Moneycontrol.
“Though we do not rule out further downside in the stock price due to on-going virus concern and its impact on the economy, we would advise buying these fundamentally sound stocks in a phased manner for healthy returns over the next 2-3 years,” he said.
Experts do advise caution on the part of investors before making a buy or a sell decision. Positions in quality stocks can be made in a staggered manner keeping in view the risk profile of investor(s) in order to avoid opportunity loss, suggest experts.
“Markets are in grip of risk aversion due to the spread of coronavirus pandemic. Though the stocks have corrected significantly from their highs, the uncertainty involved in the markets has not abated given the escalation of new cases and causalities due to the virus esp. in the US and Europe,” Pankaj Bobade, Fundamental Research head, Axis Securities Limited told Moneycontrol.
“If one has more than 3 years of investment horizon, one can look at investing in the corrected blue chips in staggered manner thereby averaging the cost of acquisition,” he said.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. | 45 companies out of Nifty50 have hit their multi-year low in march. a vaccine works by mimicking a natural infection. a vaccine helps quickly build herd immunity to put an end to the pandemic. a vaccine is a vaccine that is based on the whole virus. a vaccine is a vaccine that is based on a virus that is stable. | Negative |
https://www.financialexpress.com/opinion/basic-income-towards-a-path-of-resilience/1929720/ | India has been given time to prepare, or in the jargon of the moment, to get ahead of the curve before the death toll mounts, and the economic slump heaps further misery on people.
A hundred years ago, the Spanish flu swept the world, killing over 40 million. But, the world economy did not suffer from a depression. Paradoxically, while we hope that the Coronavirus will kill far fewer, the ensuing economic depression will, on current trends, be much worse. If so, there will be many more deaths.
The main reason is that the economic crisis has been waiting for some time to happen. The pandemic is like a trigger. The global economic system has evolved into global rentier capitalism, not anything close to free-market capitalism. With rentier capitalism, more and more of the income and wealth flow to the owners of assets-physical, financial and so-called intellectual property. The share of income going to people who work and labour has been falling across the world.
A new class has emerged, the precariat, consisting of millions who are not in the informal economy as traditionally understood or in what the left likes to call the proletariat, but who are deeply insecure, with low, fluctuating and uncertain incomes. They are living on the edge, mostly with chronic debt. One downturn will tip many into the abyss.
This relates to a key difference between 1920 and 2020. A hundred years ago, the US economy was able to bounce back because the private debt was less than 50% of national income, corporate debt was insignificant, and the size of the financial sector was not large relative to the real economy. Just before the pandemic struck this year, private debt was over 150% of the US national income, and corporate debt was 73% of GDP. In Britain, Japan and many other countries, private and corporate debt were also at record levels.
This means that the major economies entered the pandemic in an extremely fragile state. The negative multiplier effects of a small downturn will be huge, and this is not going to be small. Moreover, the global system is grossly over-financialised, with finance accounting for over 350% of American GDP, and over 300% of Britain’s. Expect the stock market crashes of recent weeks to be a harbinger of worse.
What we are confronting is the biggest global demand shock in history. It requires brave and transformative economic policy. While central banks and the international financial agencies will resort to fancy monetary instruments and will do their utmost to prop up corporations and financial markets, it is what happens to ordinary people that will matter most.
We should presume that the Indian government is not complacent or timid. But, a key principle must be kept in mind. Whatever the delaying effect of lock-downs, deaths due to the pandemic and to the ensuing economic downturn will be much higher if ordinary people are not given the resources to be resilient. Indeed, the slogan should be: Rescue, Resilience, and Revival.
Having worked on it for over 30 years, I am convinced that the optimum way to provide resilience is through a basic income system. We are fortunate in this respect. We piloted that system in villages of Madhya Pradesh and west Delhi, and we know that it works, and is feasible in India. Our pilots showed that even in what might be called ‘normal times’, a community-wide basic income system improves health, nutrition, schooling and production, and induces local multiplier effects of the sort most urgently needed in the crisis. It is not inflationary because the increased local demand induces increased local supply of basic goods and services.
With numerous rural-urban migrants flocking back to their villages, imagine the potential of providing every man and every woman with Rs 500 a month. We know this is not much but is still a little more. As we found, the emancipatory value is greater than the monetary value. Just as they should avoid paternalistic schemes such as universal grain distribution, a recipe for chaos, corruption, waste and inequities, the authorities should avoid targeting or selectivity through means-tests. They fail in the best of times, not reaching those in need. The basic income must be paid to every usual resident in every community across the land. It can be collected back, as a tax, from the rich in due course.
As other economists have argued, a short-term rise in public budget deficits in current conditions is fiscally good. The cost in lives and economic loss of not going in the direction recommended would be many times that cost. But, expenditure switching is also essential, since the existing subsidy state is bloated, chronically inefficient and shockingly inequitable. The government should take advantage of the crisis to combine payment of basic income with fiscal reform that would be much harder in more normal conditions.
Several interesting schemes are trying to mobilise private money as donations to such initiatives as the PMNRF and PM CARES. Those are likely to be politicised, and even if they were genuinely philanthropic, there would be widespread suspicion that they have ulterior motives. Better for the affluent to allocate money to help legitimise a basic income system by making a start in randomly chosen districts, setting an example that the state and central governments could follow with conviction.
Perhaps, what is needed is a variant of the Bombay Plan, in which political leaders and leading industrialists and other affluent persons could come together to institute a policy that could set an example for the whole world. There is the technology to be able to identify everybody and deliver basic incomes (it could even induce much more documentation). Above all, there are potentially millions of lives to be saved.
The author is Professorial Research Associate of SOAS, University of London. VIews are personal | the world economy did not suffer from a depression 100 years ago. but the ensuing economic depression will be much worse. the global system has evolved into global rentier capitalism. the global system is grossly over-financialised. a small downturn will tip many into the abyss. a'sea-change' is not going to be small. | Negative |
https://www.businesstoday.in/podcast/bulletin/india-likely-to-witness-second-wave-of-coronavirus-says-japanese-firm-nomura/406605.html | 11 Jun 2020, 12:19 PM
India likely to witness second wave of coronavirus; in high-risk group: Nomura
India's decision to unlock the world's longest coronavirus-induced lockdown in a phased-manner might turn detrimental in the upcoming days. According to Japanese financial research firm, Nomura, India has been listed among 15 countries where relaxing the lockdown could result in an increase in the cases of coronavirus infection more rapidly. And, in extreme cases, it could lead to the situation of re-locking.
India may lose Rs 10-lakh crore revenue due to coronavirus: Gadkari
Union Transport and Highway Minister Nitin Gadkari said that economic war against coronavirus pandemic has started in India and that the COVID-19 outbreak would cause a humongous loss to the country's revenue. Gadkari, who was addressing his Bharatiya Janata Party (BJP)'s Jan Samvad virtual rally from Nagpur on Wednesday, stated that India was expected to lose revenue of Rs 10 lakh crore due to coronavirus outbreak.
Cash withdrawal from ATMs falls nearly 50% in April
Cash withdrawals from automated teller machines (ATMs) nearly halved to about Rs 1.27 lakh crore during April, mainly on account of the impact of the coronavirus-induced lockdown. The withdrawals were Rs 2.51 lakh crore in March. According to data released by the RBI in monthly bulletin for June, the number of transactions or cash withdrawal volume from ATMs also declined 28.66 crore in April from 54.71 crore in the previous month.
Govt releases Rs 6,195 crore to 14 states to support fight against coronavirus
The central government on Wednesday disbursed Rs 6,195 crore to 14 states as monthly installment for boosting their financial resources meant for containing coronavirus outbreak and treating affected people. This was the third equated-monthly installment of the post devolution revenue deficit grant as recommended by the 15th Finance Commission.
S&P keeps India's rating unchanged at 'BBB-'; keeps outlook stable
S&P Global Ratings on Wednesday kept India's sovereign rating unchanged at 'BBB-' with a stable outlook on the country's long-term rating. The American credit rating agency said that the stable outlook "reflects it expectation that India's economy will recover" after containing the COVID-19 pandemic and the country will "maintain its sound net external position."
OECD warns Indian economy can contract 7.3% in FY21 if there's second wave of coronavirus
The Organisation for Economic Co-operation and Development (OECD) has said that India's economy may contract by as much as 7.3 per cent in FY21 in case of a second coronavirus outbreak by year end. Otherwise, the economy is expected to shrink at 3.7 per cent, the intergovernmental economic organisation said in its latest Economic Outlook. | nomura says relaxation of coronavirus lockdown could lead to increase in cases. 'in extreme cases, it could lead to situation of re-locking,' says nomura. india may lose Rs 10 lakh crore revenue due to coronavirus outbreak. cash withdrawals from ATMs nearly halved to about Rs 1.27 lakh crore in April. | Negative |
https://economictimes.indiatimes.com/markets/expert-view/this-is-not-a-vanilla-correction-nifty-can-fall-to-11100-level-gautam-shah/articleshow/74318674.cms | Unlock Leadership Excellence with a Range of CXO Courses Offering College Course Website IIM Lucknow IIML Chief Executive Officer Programme Visit IIM Lucknow IIML Chief Marketing Officer Programme Visit IIM Kozhikode IIMK Chief Product Officer Programme Visit
The market does not look good. It has been on a weak footing. The foundation of what is happening right now was laid six months back. Many of the technical charts that we follow have been negative for a while now. The technical indicators have not been in sync with the price action but because the Nifty had such a great run on account of a handful of stocks, we never questioned the technical indicators till Nifty hit 12,300-12,400 levels.In light of the developments of the past week, it does seem that this is not a plain vanilla correction. It is a short term downtrend wherein the markets will continue to make a series of lower tops and lower bottoms and this can continue for many weeks and maybe even many months.The market participants are used to seeing indices correct or turn around to go back to making new highs. This might not happen right now because when you look at the momentum on the way down, and the volumes, some of the larger stocks are clocking in bad days. And this is an indication that there is a big shift happening.The markets are also going through collateral damage given what is happening around the world. This is going to get a lot worse before it gets better. The first pointer to work with is the budget day low of around 11,620. You could see some stopover demand there but we believe that eventually this market is headed towards that zone of 11,300 to 11,350 and maybe even to 11,100 and this has been our working view for the last one month. All rallies will find a lot of resistance, so the upside is clearly capped to the 11,900 area. And because there are too many sectors participating on the way down, Bank Nifty which was an outperformer in the last couple of days is only now sitting up for the largest decline. We would not be surprised if Bank Nifty loses about 10 per cent from these levels.I would be more bearish on capital goods, the reason being in the good times when Nifty got close to levels of 12,400 level, the stocks from this sector did not participate. And now as the markets are going through a difficult phase, capital goods is clearly one of the biggest underperformers. Larsen & Toubro is a great example because it did absolutely nothing in the last three months. Many of the top capital good stocks are setting up for a much bigger breakdown that could lead to 10 per cent to 15 per cent downside for the index and for most of the stocks.Autos, well they had a lovely run. They moved up 30 per cent from the lows of last August, September but the manner in which some of them have just come off in the last 10 days that does not look heartening at all. In this environment, the weak is getting weaker, and the cheap is getting cheaper and this trend will continue on for the next many weeks. We will have to really review in the last week of March but at least for the next four to six weeks, capital goods, FMCG, auto, metals, banking are a complete avoid and the only two spaces that we like are IT and healthcare. We believe one can hide is chemicals and insurance too. So, these four pockets will outperform but everything else in the market looks quite bleak.In the banking space, for the last year, year and a half just one stock – HDFC Bank acted like Pied Piper. So, when this stock did well, the Bank Nifty did well and because the Bank Nifty did well it helped Nifty.Some of these top-performing stocks of the last 18 months may witness some downside and if that were to happen, then the Bank Nifty will take a hit. We are working with an immediate target of about 29,700 which was around the budget day low, and once that gets violated we would not be surprised if Bank Nifty goes down to 28,900 and eventually 28,000.A possible 2,000 point fall on the Bank Nifty is likely and some of the top names in the space, apart from ICICI Bank which has broken out of a 10-year consolidation, look weak.PSU banking is in terrible shape; most stocks are making 52-week lows and there are no signs of bottoming out. We have recommended our subscribers to stay away from this space because you really do not know where this is going to end in terms of its downtrend. | market does not look good. it has been on a weak footing, says nirmal. markets are going through collateral damage given what is happening around the world. nifty is now sitting up for the largest decline. nifty is a short term downtrend. nifty is a good example of how the market is going to react to the global crisis. | Negative |
https://www.moneycontrol.com/news/business/markets/gold-futures-loses-sheen-as-markets-ride-high-shed-0-24-3999671.html | Gold prices dipped 0.24 percent to Rs 31,460 per 10 gram in futures trade Tuesday as speculators reduced exposure at the spot market.
On the Multi Commodity Exchange, gold for delivery in June contracts fell by Rs 77, or 0.24 percent, to Rs 31,460 per 10 gram in a business turnover of 7,620 lots.
Traders said, the gold prices dipped after domestic equity markets saw strong gains and investors turning to riskier equities over the safe-haven metal.
Globally, the gold prices fell 0.16 percent to USD 1,275.20 an ounce in New York. | gold for delivery in June contracts fell by Rs 77, or 0.24 percent, to Rs 31,460 per 10 gram. domestic equity markets saw strong gains and investors turning to riskier equities. gold prices fell 0.16 percent to USD 1,275.20 an ounce in new york. globally, the gold prices fell 0.16 percent to USD 1,275.20 an ounce. | Negative |
https://www.financialexpress.com/market/analyst-corner-buy-on-pvr-fair-value-at-rs-1800/1902420/ | We upgrade PVR to ‘buy’ from ‘reduce’ with FV of Rs 1,800 (Rs 1,850) valuing it at 11X FY2022E EV/Ebitda (unchanged). While Covid-19 would significantly impact the business in the short term (say two months), we expect it to bounce back thereafter, led by pent-up demand and a packed line-up of movies. We cut FY2020-21E Ebitda estimates by 10-23% and retain FY2022E estimates.
Sharp 40% correction from peak presents an opportunity to buy this stock at an attractive valuation.
Almost all state governments have ordered complete shutdown of cinemas in order to contain Covid-19 outbreak. Subsequently, producers have pushed back movie releases and production studios have halted ongoing shoots. These restrictions could continue for a few weeks. We assess potential ST impact of Covid-19 on PVR’s financials assuming a complete shutdown for two months (base case). Exhibit 1 shows break-up of PVR’s cost structure. Film hire costs, F&B COGS, electricity are variable costs. Employee costs (permanent + contractual workforce) and other expenses (travel costs, repair & maintenance, advertising and other G&A expenses) are semi-variable in nature. Even as rental cost is largely fixed (fixed rent or MG + revenue share), several lease contracts have a provision
for partial/complete waiver in situations such as this.
As per our estimate, PVR would incur cost of Rs 750 mn/month in the event of a complete shutdown. Cash inflow would be nil during this period and revenues would be booked at Rs 150 mn/month (amortization of BookMyShow/Paytm convenience fee deal). We estimate Ebitda loss of Rs 600 mn/month (Rs 750 on cash basis) and cash loss (including interest expense) of Rs 850 mn/month. PVR has utilized available W-cap facility of about Rs 1.5 bn and increased cash-levels to about Rs 2-2.5 bn. Net debt as of date is about Rs 9.2 bn. We expect a strong bounce back in demand post Covid-19 led by pent-up demand, and packed line-up of movies (Q4FY20/Q1FY21 releases deferred would be scheduled during Q2-Q4FY21). Further, we believe that PVR’s performance is largely linked to content quality and weak macro has modest impact on the operating performance. Given this, we expect footfalls to largely recover post Covid-19 even in case of some incremental weakness in macro. That said, we note that advertising revenue growth could decelerate if economy slows down further. We like PVR for its thought leadership, premium location presence and branding, leadership in monetization and profitability, and execution track record. We value the stock at 11X FY2022E EV/Ebitda (excluding Ind-AS 116). We have cut our FY2020-21E Ebitda estimates by 10-23% as we model complete shutdown of about two months (base case). | we upgrade PVR to ‘buy’ from ‘reduce’ with FV of Rs 1,800 (Rs 1,850) valuing it at 11X FY2022E EV/Ebitda (unchanged) we cut FY2020-21E Ebitda estimates by 10-23% and retain FY2022E estimates. Almost all state governments have ordered complete shutdown of cinemas in order to contain Covid-19 outbreak. producers have pushed back movie releases and production studios have halted ongoing shoots | Negative |
https://economictimes.indiatimes.com/news/international/world-news/britain-unlikely-to-lift-coronavirus-lockdown-until-end-of-may-government-expert/articleshow/74981605.cms | LONDON: Britain is unlikely to lift its stringent lockdown rules until the end of May, a leading government adviser said on Saturday, warning that the spread of the coronavirus must first slow and intense testing be introduced.The government has put Britain into a widespread shutdown, closing pubs, restaurants and nearly all shops, while ordering people to stay home unless absolutely essential to venture out.The order is designed to curb the spread of COVID-19 in the country, which has almost 40,000 confirmed cases and 3,605 deaths, but some experts have started to question whether the shuttering of the economy will cost more lives in the long run."We want to move to a situation where at least by the end of May we're able to substitute some less intensive measures, more based on technology and testing, for the complete lockdown we have now," Neil Ferguson, a leading professor of mathematical biology at Imperial College London, told BBC Radio.Britain initially took a restrained approach to the outbreak but Prime Minister Boris Johnson changed tack and imposed stringent social-distancing measures after Ferguson's modelling showed a quarter of a million people in the country could die.The response has since been hampered by a lack of ventilators and an inability to carry out mass testing to determine whether the public, and particularly health workers, have built up an immunity.A second senior government adviser, the chief pandemic modeller Graham Medley, said he feared Britain had painted itself into a corner, with no clear exit from a strategy that would damage the economic and mental well-being of many people.Almost one million people have applied for welfare benefits in just two weeks in Britain, according to official data that shows the economy is set for a depression that could be worse than the slump in the 1930s."If we carry on with lockdown it buys us more time, we can get more thought put into it, but it doesn't resolve anything - it's a placeholder," Medley told the Times newspaper."We've kind of painted ourselves into a corner, because then the question will be, what do we do now? In broad terms are we going to continue to harm children to protect vulnerable people, or not?"Health minister Matt Hancock has set a goal of 100,000 tests per day by the end of this month, a tenfold increase that industry leaders have questioned due to shortages of specialist chemicals and testing kits. It is also considering immunity certificates.Medley said the antibody tests could help but were not working so far.Separately the government said it would free prisoners who were deemed to be low risk and were within weeks of release.Prime Minister Johnson, who has been in self-isolation after testing positive for the novel coronavirus, said he would invite opposition party leaders to a briefing next week with Britain's chief medical officer and scientific adviser."As party leaders we have a duty to work together at this moment of national emergency," he said. | government has ordered people to stay home unless absolutely essential to venture out. experts question whether the shuttering of the economy will cost more lives. a quarter of a million people could die from the coronavirus. a second senior government adviser fears the country has painted itself into a corner. a ten-year target of 100,000 tests per day is set for this month. | Negative |
https://www.moneycontrol.com/news/india/in-pics-new-lockdown-guidelines-what-is-allowed-and-what-is-not-5149071.html | 1/21
A day after Prime Minister Narendra Modi announced lockdown extension until May 3 to combat coronavirus outbreak, government issued revised guidelines to be followed during the lockdown. However these relaxations will not be applicable sin the containment zones as demarcated by States/UTs/ District Administrations. Here is the list of revised guidelines about what is allowed and what is not. (Image: Moneycontrol) | government issues revised guidelines to be followed during the lockdown. relaxations will not be applicable in the containment zones. the lockdown is to combat coronavirus outbreak. the government has extended the lockdown until may 3. a lockdown is in effect until may 3.. a lockdown is in effect until may 3.. if the lockdown is extended, the government will begin a new lockdown. | Negative |
https://www.financialexpress.com/market/india-sees-pe-vc-deals-worth-45-billion-in-2019-highest-inflow-in-10-years-report/1957707/ | India continued to be the second largest deal market in the Asia-Pacific region in 2019 with over 1,000 private equity and venture capital pacts valued at USD 45 billion – the highest in the last decade, a report by Bain & Company said on Wednesday.
Private equity (PE) and venture capital (VC) investment in the country rose to its 10-year peak primarily due to the increasing number of large deals greater than USD 100 million as well as an increase in their average deal size, the firm’s India Private Equity Report 2020 said.
The report, developed in partnership with the Indian Private Equity & Venture Capital Association (IVCA), also found that exit value in 2019 decreased, finishing at nearly USD 13 billion against USD 17 billion in 2018 (excluding Flipkart’s exit).
This was still the third-highest for the last decade. The dip over last year was led by a decrease in the number of exits from 265 to 200.
India-focused dry powder (marketable securities that are highly liquid and considered cash-like) will remain healthy, but a potential reduction in investments could occur in the first half of 2020, accompanied by a price correction across the board, the report noted.
India continued to be the second largest private equity deal market in Asia-Pacific (APAC) with the most growth in the region, it said adding that India’s share of the APAC deal market increased to nearly 25 per cent in 2019, and the investment value was about 70 per cent higher than in 2018 and nearly 110 per cent higher than the previous five-year average.
Meanwhile, China’s PE market witnessed a decline in both deal value and volume due to trade war concerns, social unrest and stringent Renminbi fundraising regulations, the report said.
Of the top 15 deals in India – which constituted more than 35 per cent of the total investment value in 2019 – five were in real estate; three in IT and ITES; and the rest across banking, financial services and insurance (BFSI), telecommunications, energy and consumer technology.
Notable large investments in 2019 included stakes in Reliance Jio Infratel, Pipeline Infrastructure, Axis Bank, GMR Airports, GVK Airport Holdings and Paytm. Real estate and infrastructure, telecom, IT and ITES, and BFSI contributed to more than 90 per cent of the growth in investment value.
BFSI investments were fuelled by deals in banks as well as non-banking financial companies with investments of USD 8.4 billion, while consumer technology attracted USD 7.7 billion of investments in 2019. Almost half of these investments were in vertical e-tailers/marketplaces and fintech companies.
“From an investment perspective, we will likely see a short-term dip in investment activity with COVID-19, as already evidenced globally. However, this imminent price correction across the board will present an investment opportunity.
”Investors need to triage their portfolio and take actions to adapt to the changes in the economy which includes taking immediate actions to ensure business continuity and plan for value creation to retool their businesses for the future,” Arpan Sheth, Partner at Bain & Company and one of the lead authors of the report, said.
He added that the market disruption caused by COVID-19 could lead to growth in select pockets such as e-commerce, enterprise technology, healthcare, and on-demand services.
Like previous years, the total share of buyouts rose with an increase in growth and late-stage investments. These featured a few large individual buyouts like Reliance Jio Infratel (USD 3.5 billion) and Pipeline Infrastructure (USD 1.8 billion), the report said.
With recent investments from global players, competitive intensity in the Indian investment market has progressively increased, with 662 active funds in 2017-19 compared with 553 funds in 2015-17, it added.
The report pointed out that the COVID-19 pandemic signals the possibility of a significant impact due to increased global interconnectedness and the virus’ high spread rate.
India is beginning to face the impact of COVID-19, with major import and export destinations impacted as well as the stock market which has taken a hit in recent months, it said.
The report said, based on global financial crisis experience, deals invested during or after a downturn tend to do well.
Overall APAC-focused fundraising slowed considerably, dropping to about USD 80 billion in 2019 from nearly USD 200 billion in 2017. This was largely driven by weakening Renminbi-based funds, reflecting the Chinese government’s tightened restrictions on PE investments.
A majority of investors expect the fundraising environment to be more challenging in the next 12 months, driven by record-setting previous years, cautiousness of a slow economy and limited partnerships being highly selective with increasing competition, the report said.
“A strong exit track record will be important for future investments. Having seen record investments last year, Software as a Service and cross-sector technologies will be the attractive opportunities for investors in the future,” Sriwatsan Krishnan, Partner at Bain & Company and a co-author of the report, said.
With an unpredictable public market, strategic sales became the preferred mode of exit, accounting for about 50 per cent of exit volume. | private equity investment in the country rose to its 10-year peak. exit value in 2019 decreased, finishing at nearly USD 13 billion against USD 17 billion in 2018 (excluding Flipkart’s exit) this was still the third-highest for the last decade. of the top 15 deals in India – which constituted more than 35 per cent of the total investment value in 2019 – five were in real estate; three in IT and ITES; and the rest across banking, financial services and insurance (BFSI), telecommunications | Negative |
https://www.financialexpress.com/industry/textile-processing-industry-will-not-be-able-to-recommence-operations/1941672/ | Even though the Gujarat government has granted permission to recommence operations, the Ahmedabad-based Rs 25,000 crore textile processing industry will not be able to function as there is no demand (domestic and international) of processed textile in wake of Covid-19 pandemic.
Till March 24, 2020, over 300 textile processing units situated in and around Ahmedabad used to process on an average nearly 1.5 crore metre cloths on daily basis. With announcement of nationwide lockdown, this highly labour intensive industry suddenly ceased.
“It is not easy to resume work. Markets across the globe are almost closed. Even if some demand generates in near future, it would take at least a fortnight to make a textile processing unit to function normally. Migrant labourers have left for their native places and most of the local labourers residing in red zones declared by authorities. Hence, they wouldn’t be able to leave their areas till further orders,” says Nitin Thakker, president of Ahmedabad Textile Processors Association (ATPS) adding that in such situation it would be impossible to run a unit with immediate effect.
Already owners of textile processing units are under severe pressure to pay their instalments of loans, salaries of their employees and contract labours and other fixed expenditures, said Thakker, who is also member of a committee formed by Union ministry of textile for the development of textile sector in the country. According to him, currently people’s priorities are food and medicine, textile and apparels would come later and hence there wouldn’t be any demand in near future.
The highly labour intensive textile processing sector of Ahmedabad provides direct employment to nearly 1 lakh people and indirect employment to more than three lakh people. He further said that it would be extremely difficult to follow social distancing guidelines of government in the case of textile processing units as textile processing requires large number of labourers.
Crores of rupees have been stuck as these textile processors have supplied processed textile all across the country on credit and due to sudden lockdown purchasers are not able to pay them. “We can’t blame on buyers as they haven’t been neither able to do value addition on processed textile or sell it to their buyers. Hence they don’t have money to pay us. Nobody knows when this vicious chain would end,” said an owner of a large textile processing units, whose Rs 75 crore have been stuck due to lockdown requesting anonymity. | the Gujarat government has granted permission to recommence operations. but the industry will not be able to function as there is no demand (domestic and international) of processed textile in wake of Covid-19 pandemic. with announcement of nationwide lockdown, this highly labour intensive industry suddenly ceased. owners of textile processing units are already under severe pressure to pay instalments of loans, salaries of their employees and contract labours. | Negative |
https://www.financialexpress.com/money/fixed-income-banking-and-psu-funds-may-be-a-safer-bet-in-times-of-covid/1976909/ | By Jiju Vidyadharan
The Covid-19 pandemic has wreaked havoc across financial markets. Even the hitherto steady fixed income market is shaken. Investors are concerned about credit quality and liquidity of the underlying instruments. In such unbridled times, we review the banking and PSU (public sector undertaking) category, which invest 80% of their assets in debt instruments of banks, PSUs, public financial institutions (PFIs) and municipal bodies.
Better credit & liquidity profile
These funds primarily invest in top-rated instruments of the debt market—bonds and debentures issued by banks, PSUs and PFIs—thus providing a better credit profile for investment compared to most other mutual fund categories.
Credit quality comparison among debt funds ranked in the CRISIL Mutual Fund Ranking of March 2020 shows that banking and PSU funds have predominately invested in top-rated papers versus most other categories with portfolio average maturity above one year. Average exposure of these funds to AAA rated papers stood at 92% in April 2020. Exposure to similar AAA papers stood at 53% for medium duration funds, 72% for dynamic bond funds, 84% for short duration funds and 91% for medium to long duration funds, while long duration and corporate bond funds had higher exposure at 97% and 98%, respectively.
In addition to having higher investments in top-rated papers, the category had the least amount of investments in securities that had ‘negative’ or ‘watch negative’ outlook by rating agencies. It had just 1.4% of exposure to such securities as of the latest portfolio disclosure (April 2020). The next best were medium to long duration funds with 1.5% exposure to such securities, while credit risk funds had the highest exposure of over 27.4%.
Further, analysis of debt mutual fund portfolio liquidity of corporate bonds based on CRISIL’s internal model that factors trades and spreads of issuers show that the category also has relatively high liquidity in the underlying portfolio, enabling the fund manager to rebalance the portfolio more efficiently. Analysis of their portfolio for month of April 2020 reveals that banking and PSU funds enjoyed the average exposure at 94.6% to liquid assets (includes liquid corporate bond issuers, sovereign papers and cash & equivalents) only marginally lower than long duration funds (95.3% exposure).
Among other similar debt categories, medium to long duration funds had 82.4% exposure, corporate bond funds had 81.9%, dynamic bond funds had 72.7%, short duration funds stood at 71.4%, medium duration funds had 51.2% and credit risk funds had 25.3% of their portfolio in similar liquid assets.
Performance analysis
The category has also shown encouraging performance, beating all other categories analysed viz., corporate bond, credit risk, dynamic bond, medium duration, medium to long duration and short duration funds in 1, 3, 5 and 7- year periods ended May 22, 2020 with returns of 11.83%, 8.32%, 8.40% and 8.53% respectively. In the latest six-month period till May 22, the category average returns were 5.30%, marginally lower than medium to long duration funds which benefitted from the interest rate easing and gave 5.67% returns during the period.
Fitment
Investors with a low risk appetite looking for a relatively safe investment avenue can consider banking and PSU debt funds. However, these are mark-to-market products and exposed to market risk. Go for analysis of personal risk-return profile, portfolio attributes of the scheme, the fund house’s track record before investing.
The writer is senior director, CRISIL Funds & Fixed Income Research | the covid-19 pandemic has wreaked havoc across financial markets. even the hitherto steady fixed income market is shaken. investors are concerned about credit quality and liquidity of the underlying instruments. the banking and PSU category invest 80% of their assets in debt instruments of banks, PSUs, public financial institutions (PFIs) and municipal bodies. | Negative |
https://www.moneycontrol.com/news/business/economy/gdp-growth-at-23-9-in-q1fy21-here-are-the-key-highlights-5780201.html | The Indian economy witnessed a whopping 23.9 percent contraction, the gross domestic product (GDP) numbers for the April-June quarter of fiscal year 2020-21 released on August 31 showed.
The real GDP shrank 22.6 percent in the said quarter, marking the sharpest drop in the country's growth numbers in more than 40 years.
The July-September quarter numbers become extremely important as another contraction would technically mean India has entered recession. The country's economy had last entered a recession in 1979.
Also Read | India's GDP contracts 23.9% in Q1FY21 as lockdowns, restrictions bludgeon economy
In the Budget for 2020-21, Finance Minister Nirmala Sitharaman had assumed nominal GDP growth of 10 percent in 2020-21, and fiscal deficit of 3.5 percent of GDP, a goal that looks almost unthinkable to achieve given the rapid turn of events.
COVID-19 Vaccine Frequently Asked Questions View more How does a vaccine work? A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine. How many types of vaccines are there? There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine. What does it take to develop a vaccine of this kind? Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time. View more Show
Here are the key highlights from the Q1FY21 GDP numbers:
> The 'real' or inflation-adjusted gross domestic product (GDP) contracted 22.6 percent in the April-June quarter this fiscal.
> Barring the agriculture sector that grew 3.4 percent, all others were in the red.
> Manufacturing, mining and construction contracted 39.3 percent, 23.3 percent and 50.3 percent respectively.
> Gross Value Added (GVA), which is GDP minus taxes, contracted 22.8 percent in April-June 2020 compared to 4.8 percent growth last year.
> Trade, hotels, transport, communication and services related to broadcasting contracted 47 percent in the first quarter of 2020-21.
> The real estate sector, along with financial and professional services, shrank 5.3 percent in April-June 2020.
Follow our coverage of the coronavirus crisis here | the real GDP shrank 22.6 percent in the said quarter, marking the sharpest drop in the country's growth numbers in more than 40 years. a vaccine works by mimicking a natural infection. a vaccine works by building herd immunity to put an end to the pandemic. a vaccine is a long, complex process that takes time and money. | Negative |
https://economictimes.indiatimes.com/news/international/business/eurozone-economy-to-shrink-8-7-in-2020-before-2021-rebound-european-central-bank/articleshow/76197471.cms | FRANKFURT: Hit hard by the coronavirus pandemic , the eurozone economy will see a sharp contraction of 8.7 percent in 2020 before rebounding in 2021, European Central Bank chief Christine Lagarde said Thursday.Growth is expected to come in at 5.2 percent next year and 3.3 percent in 2022, Lagarde said, warning that the extent of this year's recession would "depend crucially on the duration and effectiveness of containment measures" as well as policies to cushion the economic impact of the crisis. | eurozone economy will see a sharp contraction of 8.7 percent in 2020 before rebounding in 2021. growth is expected to come in at 5.2 percent next year and 3.3 percent in 2022. lagarde warns extent of this year's recession will depend on containment measures.. 'the extent of this year's recession will depend crucially on the duration and effectiveness of containment measures' | Negative |
https://www.moneycontrol.com/news/business/companies/bugged-by-bed-bugs-air-india-passengers-complain-of-being-covered-in-bite-marks-2752761.html | Air India
Several Air India passengers flying out of New Jersey’s Newark Liberty International Airport have complained of being bitten by bed bugs while in flight.
In a tweet by Pravin Toneskar, multiple bedbugs can be seen on the business class seats of the plane, which was en route to Mumbai – a nearly 17-hour flight.
@airindiain @sureshpprabhu @narendramodi_in Suresh Prabhuji - just arrived from New York on Air India 144 business class with family . All our seats infested with bed bugs . Sir , have heard of bed bugs on trains but shocked to experience on our maharaja and that too business pic.twitter.com/m2GnfOpTO3
— Pravin Tonsekar (@pat_tons) July 17, 2018
According to a report by Hindustan Times, Toneskar said the seats were ‘infested’ and they had to downgrade to economy just to escape the bugs. The economy seats were allegedly damaged and most facilities were inoperable.
Air India reached out to Toneskar, after he lodged an official complaint, and offered an apology, assuring him that corrective measures would be taken.
We are sorry to hear this, Mr. Pravin. Sharing the details with our maintenance team for corrective measures in this regard.
— Air India (@airindiain) July 17, 2018
Two days following this incident, another passenger Rohan, who was on the same flight, tweeted that his family was covered in bites and that he had paid about $10,000 for business class seats.
@airindiain my wife and three kids flex business class AI 144 from Newark to mumbai; now they have bed bug bites all over their body; is this is what we paid $10,000 for???
— Rohan (@roscrow) July 19, 2018
Other flyers, on a different Air India plane headed to Mumbai, suffered the same plight but an eight-month-old baby was in an especially bad shape.
The airline grounded both planes following the growing number of similar complaints and said fumigation was underway.
A Port Authority spokeswoman said they had not received any complaints of bed bugs in any other area of the airport. | a number of passengers have complained of being bitten by bed bugs. in a tweet by Pravin Toneskar, multiple bed bugs can be seen on the business class seats of the plane. the plane was en route to Mumbai – a nearly 17-hour flight. the airline grounded both planes following the growing number of similar complaints. a port authority spokeswoman said they had not received any complaints of bed bugs in any other area of the airport. | Negative |
https://www.moneycontrol.com/news/world/turkey-says-us-waging-economic-war-lira-weakens-2874341.html | The lira slid on Thursday after Turkey accused the United States of waging "economic war" amid a bitter standoff between the NATO allies over the fate of a Christian pastor detained by Ankara.
Turkish President Tayyip Erdogan's spokesman said Washington must respect the legal process concerning the pastor, Andrew Brunson, whose trial in Turkey on terrorism charges has infuriated US President Donald Trump.
The lira dipped as far as 6.1350 against the dollar and was 0.7 percent weaker on the day at 6.0785 at 1200 GMT. The dollar was boosted by US Federal Reserve minutes indicating it would raise interest rates in September.
The lira is down 37 percent this year, with the crisis in Turkish-US ties exacerbating losses prompted by concerns about Erdogan's influence on monetary policy. He says interest rates are the "mother and father of all evil" and opposes hiking them.
Economists said Turkey had still to convince investors it was ready to take measures needed to shore up its economy.
"The problems of Turkey are not fixed," said Cristian Maggio, head of emerging markets strategy at TD Securities. "There is not one single structural solution or reform that has been advanced or detailed by the local authorities."
Maggio added that lira volatility had increased due to thin trading volumes as Turkish markets are closed all week for the Muslim festival of Eid al-Adha.
Erdogan's spokesman, Ibrahim Kalin, told Reuters overnight that comments by Trump's national security adviser showed the United States was targeting Turkey's economy.
John Bolton told Reuters that Turkey had made a "big mistake" in not freeing Brunson, and was sceptical about $15 billion of investment support from Qatar, saying it was "utterly insufficient to have an impact on Turkey's economy".
"(Bolton's) statement is proof that the Trump administration is targeting a NATO ally as part of an economic war," Kalin said.
"The Trump administration has established that it intends to use trade, tariffs and sanctions to start a global trade war."
"RESTRICTIVE AND PUNITIVE"
Until Kalin's statement, Turkish officials had been silent about comments on Turkey this week by Trump and Bolton. Trump told Reuters on Monday he would make no concessions to Ankara in return for Brunson's release.
Brunson, who has lived in Turkey for two decades, has been detained for 21 months and is now under house arrest. He denies the charges against him.
Trump, who counts evangelical Christians among his core voter base, has doubled tariffs on metal imports from Turkey, prompting Ankara to raise tariffs on U.S. car, alcohol and tobacco imports by the same amount.
Ankara has also initiated a WTO dispute complaint on the tariffs.
"Turkey will protect its national interests on every platform and work with the rest of the world against restrictive and punitive measures," Kalin said, adding that Qatar's support had had a positive impact on markets.
"The steps we have taken to prevent an assault on the Turkish lira yielded positive results" and the Finance Ministry and other institutions will continue to "take precautions and protect our economy", Kalin added.
A German government source said the International Monetary Fund could help Turkey weather its currency crisis, but Finance Minister Berat Albayrak, Erdogan's son-in-law, has said Ankara has no plans to go to the IMF.
Cemil Ertem, Erdogan's chief economic adviser, reinforced that message on Thursday, saying Turkey must deepen economic and trade ties with the European Union and other countries.
"Let alone the IMF, not one crumb of the IMF mentality must come through our door after this. If it does then we will face a real collapse and crisis," Ertem wrote in Milliyet newspaper, describing the "attack" on Turkey's economy as a "fantastic opportunity" for all emerging economies.
The analyst Maggio highlighted market concerns that Turkey's central bank has not been hiking interest rates despite double-digit inflation and the ailing lira.
"They just squeezed liquidity out of the market but now they have started to reduce that squeeze, which is removing the support the lira received," said Maggio. "I would be very surprised to see a sustained rally in the lira."
In his comments to Reuters, Kalin also said Mehmet Hakan Atilla, a banker at Turkey's state-owned Halkbank, had been unjustly convicted in the United States for taking part in a scheme to help Iran evade U.S. sanctions. Atilla was sentenced to 32 months in jail in May.
"It is unacceptable that certain baseless and false allegations are made against Halkbank to weaken this public bank," Kalin added.
"Turkey is extremely frustrated with this process." | lira dipped as far as 6.1350 against the dollar and was 0.7 percent weaker on the day. the dollar was boosted by US Federal Reserve minutes indicating it would raise interest rates. the lira is down 37 percent this year, with the crisis in Turkish-US ties exacerbating losses. the lira is down 37 percent this year, with the crisis exacerbating losses. | Negative |
https://www.financialexpress.com/india-news/covid-19-kerala-cm-pinarayi-vijayan-skips-pm-modis-meeting-with-chief-ministers/1940711/ | Kerala Chief Minister Pinarayi Vijayan on Monday skipped Prime Minister Narendra Modi’s crucial meeting with the chief ministers of all states to discuss the situation arising due to the coronavirus pandemic in the country. Kerala had sent its suggestions in writing and Vijayan had deputed Chief Secretary Tom Jose to represent the state.
Reports say that only seven states are allowed to speak during the video meet with the Prime Minister today and Kerala was not among those seven states. Kerala CM had the opportunity to speak in the PM’s second interaction held on April 11. For today’s meeting, the states who have no permission to speak have been asked to submit in writing what they want to convey to the Centre.
Monday’s meeting is the fourth such interaction with chief ministers since March 22 when he discussed the coronavirus situation and steps taken to limit the spread of the virus. It was on March 24 that the Prime Minister had announced the nationwide lockdown to control the spread of the virus.
Today’s meeting comes as the second phase of the nationwide lockdown enters its final week. While the Centre and states are likely to discuss a graded exit plan from May 4, there are also concerns over the impact that this opening of the economy would have on the spread of COVID-19. Some states have already recommended that the lockdown be extended beyond May 3, while many others have said they will go by whatever the Centre decides.
Kerala has so far reported four coronavirus-related deaths and 458 positive cases. The deadly virus has infected over 30 lakh people in the world. The United States is the worst affected nation with over 9 lakh positive cases and over 53,000 deaths. In India, the virus has claimed 872 lives and left 27,892 people infected. | the prime minister has announced the nationwide lockdown to control the spread of the virus. the country has reported four coronavirus-related deaths and 458 positive cases. the united states is the worst affected nation with over 9 lakh positive cases and over 53,000 deaths. in india, the virus has claimed 872 lives and left 27,892 people infected. | Negative |
https://economictimes.indiatimes.com/news/politics-and-nation/lockdown-in-delhi-extended-till-may-31-vehicles-allowed-to-ply-with-limited-passengers/articleshow/75806593.cms | In consonance with the central directive, Delhi CM Arvind Kejriwal decided to extend the lockdown in the national capital till May 31. Emphasising the importance of gradual revival of economic activities, the chief minister announced a number of measures which will enable in restoring normalcy in Delhi. Arvind Kejriwal announced that bus services will resume but only 20 passengers will be allowed at a time."We have to slowly move towards opening of economy," the chief minister said, adding that masks and physical distancing would be vital in the city. 299 new coronavirus cases were reported in Delhi in the past 24 hours, taking the total number of cases to 10,054, according to a health bulletin released by the Delhi government.1. Construction activities are allowed in the national capital now but only with labourers who are in Delhi.2. Markets can open but shops will open on odd-even basis.3. Taxis & cabs will be allowed but only 2 passengers at a time in a car- Drivers will be responsible for disinfecting before every ride.4. Sports complexes & stadiums can open but without spectators.5 Buses will be allowed with 20 passengers only.6. Restaurants can open for home-delivery, dining facility not allowed.7. Inter state doctors and medical professionals, sanitation workers and ambulance.8. Wedding with 50 guests funeral with 20 guests.1. Barber shops, spas and saloons to remain closed for now2. Stepping out of homes between 7 pm to 7 am, except for essential services will be prohibited.3. Metro services.4. Schools/Colleges and educational institutions will remain closed.5. Shopping malls, religious gathering banned in Delhi.6. Carpooling or car-sharing will not be allowed for aggregators.7. No activity in containment zones. | the lockdown in the national capital will last until may 31. only 20 passengers will be allowed at a time. 299 new coronavirus cases were reported in the past 24 hours. the lockdown is in accordance with the central directive. the chief minister says masks and physical distancing will be vital in the city.. a wedding with 50 guests will be held with 20 guests. | Negative |
https://www.moneycontrol.com/news/business/coronavirus-crisis-many-jobs-may-vanish-forever-as-layoffs-mount-5302151.html | Representative Image
Patricia Cohen
Even as states begin to reopen for business, a further 2.4 million workers joined the nation’s unemployment rolls last week, and there is growing concern among economists that many of the lost jobs are gone for good.
The Labor Department’s report of new jobless claims, released Thursday, brought the total to 38.6 million since mid-March, when the coronavirus outbreak forced widespread shutdowns.
While workers and their employers have expressed optimism that most of the joblessness will be temporary, many who are studying the pandemic’s impact are increasingly worried about the employment situation.
“I hate to say it, but this is going to take longer and look grimmer than we thought,” Nicholas Bloom, an economist at Stanford University, said of the path to recovery.
COVID-19 Vaccine Frequently Asked Questions View more How does a vaccine work? A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine. How many types of vaccines are there? There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine. What does it take to develop a vaccine of this kind? Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time. View more Show
Bloom is a co-author of an analysis that estimates 42% of recent layoffs will result in permanent job loss.
“Firms intend to hire these people back,” he said, referring to a recent survey of businesses done by the Federal Reserve Bank of Atlanta. “But we know from the past that these aspirations often don’t turn out to be true.”
The precariousness of the path ahead was underscored Thursday by the Federal Reserve chair, Jerome Powell. “We are now experiencing a whole new level of uncertainty, as questions only the virus can answer complicate the outlook,” he said in remarks for delivery at an online forum.
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The economy that does come back is likely to look quite different from the one that closed. If social distancing rules become the new normal, causing thinner crowds in restaurants, theaters and stores, at sports arenas, and on airplanes, then fewer workers will be required.
Large companies already expect more of their workers to continue to work remotely and say they plan to reduce their real estate footprint, which will reduce the foot traffic that feeds nearby restaurants, shops, nail salons and other businesses.
Concerns about working in close quarters and too much social interaction could also accelerate the trend toward automation, some economists say.
New jobs are being created, mostly at low wages — for delivery drivers, warehouse workers and cleaners. But many more jobs will vanish.
“I think we’re in for a very long haul,” Bloom said.
Torsten Slok, chief economist for Deutsche Bank Securities, agreed that the government’s latest report pointed to lasting job losses. Even with states reopening, “the hemorrhaging has continued,” he said.
“I fear that maybe there is something more fundamental going on,” particularly in occupations most affected by social distancing rules, Slok added. He expects the official jobless rate for May to approach 20%, up from the 14.7% reported by the Labor Department for April.
A household survey from the Census Bureau released Wednesday offered further evidence of the widespread pain: 47% of adults said they or a member of their household had lost employment income since mid-March. Nearly 40% expected the loss to continue over the next four weeks.
Nonetheless, Larry Kudlow, director of the National Economic Council, knocked down the idea of extending unemployment benefits. “I do not believe that more government spending is going to give us a strong and durable recovery,” he said Thursday at an event sponsored by The Washington Post.
Emergency relief and expanded unemployment benefits that Congress approved in late March have helped tide households over. Roughly three-quarters of people who are eligible for a $1,200 stimulus payment from the federal government have received it, according to the Treasury Department.
Workers who have successfully applied for unemployment benefits are getting the extra $600 weekly supplement from the federal government, and most states have finally begun to carry out the Pandemic Unemployment Assistance program, which extends benefits to freelancers, self-employed workers and others who don’t routinely qualify. The total number of new pandemic insurance claims reported, though, was inflated by nearly 1 million because of a data entry mistake from Massachusetts, according to the state’s Executive Office of Labor and Workforce Development.
Mistakes, lags in reporting and processing, and the weeding out of duplicate claims and reports have clouded the unemployment picture in some places.
What is clear, though, is that many states are still struggling to keep up with the overwhelming demand, drawing desperate complaints from jobless workers who have been waiting two months or more to receive their first benefit check. Indiana, Wyoming, Hawaii and Missouri are among the states with large backlogs of incompletely processed claims. Another is Kentucky, where nearly 1 in 3 workers are unemployed.
The $600 supplement has become a point of contention, drawing criticism from the White House and Republican congressional leaders who object to the notion that some workers — particularly low-wage ones — are getting more money in unemployment benefits than they would on the job. But many have also lost their employer-provided health insurance and other benefits.
Sami Adamson, a freelance scenic artist for theater, events and television shows, received the letter with her login credentials to collect benefits from New Jersey only Monday, more than two months after she first applied.
She said her partner, who is in the same line of work, had filed for jobless benefits in New York and quickly received his payments.
By the time she heard from New Jersey, a design studio had called her for a temporary assignment. She plans to eventually reclaim the lost weeks of benefits, but for now she is helping to make face shields in a large warehouse where assembly-line workers are spaced apart, handling plastic, foam and elastic.
“I don’t think I’ll need aid for the next two or three weeks,” Adamson said, “but I’m not sure too far ahead of that.”
Nearly half of the states have yet to provide the additional 13 weeks of unemployment insurance that the federal government has promised to those who exhausted their state benefits. Workers in Florida — which provides just 12 weeks of benefits, the fewest anywhere — are particularly feeling this pinch. And while several states, including those that pay the average of 26 weeks, have offered additional weeks of coverage during the pandemic, Florida has not.
Small-business owners who were hoping the Paycheck Protection Program would enable them to keep their workers on the payroll contend the program is not operating as intended.
Roy Surdej, who owns Peaches Boutique in Chicago, applied for a loan after he was forced to close and the pandemic eliminated the season’s wave of proms, quinceañeras and graduation celebrations.
Under the program, the loan turns into a grant if he rehires the 100-person staff he had built up in February in anticipation of selling thousands of ruffled, sequined and strappy dresses during the spring rush. But he said that would be impossible, given the income he had lost and the restrictions that continue to preempt social gatherings.
“No way can I qualify for full forgiveness,” said Surdej, who said revenue had dried up. “It’s devastating for us,” he added, saying he had no clue when he would be able to reopen and begin rehiring. “If the government can’t adjust the dates to allow us to use it properly so we can survive, then I won’t use it.”
At the same time, the Congressional Budget Office warned that businesses able to use the Paycheck Protection Program might end up laying off workers when the program expires at the end of June.
Several states have warned workers that they risk losing their benefits if they refuse an offer to work. Federal rules enacted during the pandemic say that workers are not compelled to return to unsafe working conditions, but just what constitutes such conditions is not necessarily clear.
On Tuesday, Democratic senators sent a letter to Labor Secretary Eugene Scalia to “clarify the circumstances” so that workers are not “forced to choose between going back to work in unsafe conditions, or continuing to social distance and losing their only source of income.”
Workers with child care responsibilities can stay on unemployment if public schools are closed, but once the term ends, a lack of day care or summer programs is not considered a legitimate reason. Nor are self-imposed quarantines.
Officials can lift stay-at-home and business restrictions, but then what happens?
“There are lingering concerns about health, family situations, kids not in school, relatives who are sick and needing care,” said Carl Tannenbaum, chief economist at Northern Trust. “There’s going to be a very slow and gradual process of reopening and restoring employment beyond just a declaration from the statehouse or the county seat.”
c.2020 The New York Times Company
Follow our full COVID-19 coverage here | a further 2.4 million workers joined the nation’s unemployment rolls last week. there is growing concern among economists that many of the lost jobs are gone for good. a vaccine works by mimicking a natural infection. a vaccine helps quickly build herd immunity to put an end to the pandemic. a vaccine is a vaccine that is given to healthy people and also to those who are not. | Negative |
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The MSME and the small businesses sector is going to face problems as their earnings losses are inevitable and in view of that, they may not be able to meet their financial obligations towards vis-a-vis their borrowings. They need a moratorium of a minimum 3-6 months, ideally six months, when all their repayments towards NBFC and banks are deferred.Second, they would look for some cut in interest rates because it will take quite some time to bounce back to their earlier earning levels. The job losses are happening now that the entire cash flow of the small businesses is completely down.So, their earning losses have to be compensated by lower interest rate and the credit line has to be made available so that they can cope up with this kind of unprecedented situation.In the last three to four months, while the government has intervened and DFS has started tracking the disbursement, money was adequately available. While the cost of funds have not gone down much because the discussion with the lender used to be only about the money and not the rate of interest. So, the rate has not come down as such for either housing finance or MSME sectors when an NBFC goes to borrow from the banks.But the National Housing Bank has given a much lower rate to the housing finance companies. That can be a relief to the NBFCs as well as the end users, the MSMEs Our entire team and specifically the collection team engage with the customers because the latter’s businesses come to a sudden halt if they are not able to generate cash flows. We are keeping in touch with them because the EMIs are due in March. We are trying to assess if they need any funds. While we are not disbursing any money at the moment because we do not know whether the lockdown will be only up to mid April or might get extended. We are taking conservative view but we are trying to help some of the genuine borrowers who are in the grocery, essential supplies business where they need more working capital.We are considering disbursing money to these kinds of customers on a specific case basis. However, our collection team is keeping engaged with the customers for their upcoming repayments asking whether they need any help or if they would not be able to make the payment. We are analyzing our entire portfolio on a risk basis.All the NBFCs and banks see a lot of disbursements lined up in the March because March is the month of highest disbursement for everybody. Of course, growth is going to be stuck. We are not going to grow this month because nobody is on the ground. Our strategy is going to be yes, we are worried on the asset quality side looking at how some of the businesses may not be able to pay their EMIs. They might pay their EMIs partially. There is going to be a spike in delinquency. So let us see how the situation evolves.While we are keeping engaged with our customers, collection has come to a halt. We are worried about this month. On April 1 or April 5, when EMIs come for repayment, we might face some resistance and delinquency. | the job losses are happening now that the entire cash flow of the small businesses is completely down. they need a moratorium of a minimum of 3-6 months, ideally six months, when all their repayments towards NBFC and banks are deferred. the national housing bank has given a much lower rate to the housing finance companies. the lockdown is not expected to be only up to mid April or might get extended. | Negative |
https://www.businesstoday.in/current/economy-politics/coronavirus-lockdown-40-what-are-the-rules-for-offices/story/404127.html | The central government on Sunday extended the nationwide lockdown by two more weeks till May 31 to prevent the spread of coronavirus. The Ministry of Home Affairs (MHA) has issued fresh guidelines for organisations and its employees to follow at workplaces. Though the MHA has not mentioned clearly about the strength at offices, but in the last press statement on May 1, it had stated that private offices can operate with up to 33 per cent strength as per requirement, with the remaining people working from home.
As per the National Directives for COVID-19 Management, wearing of face covers is compulsory at all workplaces, and adequate stock of it should be made available. All workplaces must ensure adequate arrangements for temperature screening, hand wash and sanitiser at all entry and exit points and common areas.
Also Read: Coronavirus lockdown 4.0: What's open, what's closed in green, orange, red zones
Here are the new guidelines for offices:
As far as possible, the practice of work from home should be followed.
Staggering of work/business hours shall be followed in offices, work places, shops, markets and industrial and commercial establishments.
Provision for thermal scanning, hand wash and sanitiser must be made at all entry and exit points and common areas.
With a view to ensure safety in offices and workplaces, employers must ensure Arogya Setu app is installed by all employees having compatible mobile phones.
Frequent sanitisation of entire workplace, common facilities and all points which come into human contact, like door handles, shall be ensured, including between shifts.
All persons in charge of workplaces shall ensure social distancing through adequate distance between workers, adequate gaps between shifts, staggering the lunch breaks of staff.
Also Read: Coronavirus Lockdown 4.0: Now states, UTs to decide Green, Orange, Red Zones
Meanwhile, India reported 4,987 fresh coronavirus cases in 24 hours, highest single-day spike, with 120 deaths in a day, as the country gears to enter its fourth phase of lockdown. The country's total number of confirmed COVID-19 cases jumped to 90,927 on Sunday, according to the latest update by the Union Health Ministry. The tally includes 53,946 active cases, 34,108 cured/discharged, 1 migrated, and 2,872 deaths.
Also Read: Relief for stranded migrants! Inter-state movement of buses finally allowed | the central government on Sunday extended the nationwide lockdown by two more weeks. the government has issued fresh guidelines for organisations and its employees. wearing of face covers is compulsory at all workplaces. india reported 4,987 fresh coronavirus cases in 24 hours, highest single-day spike. the country gears to enter its fourth phase of lockdown. a total of 90,927 confirmed cases were reported on sunday. | Negative |
https://www.businesstoday.in/current/corporate/sebi-censures-astrazeneca-pharma-promoter-elliot-group-for-unfair-trade-practices-in-delisting-plan/story/406207.html | Markets regulator SEBI has strongly "censured" Astrazeneca Pharma India Ltd's promoter and Elliot Group for professional misconduct and following unfair trade practises during the company's delisting plan in 2014.
The regulator, in a 65-page order, said that AstraZeneca Pharma India Ltd's (AZPIL) promoter AstraZeneca Pharmaceuticals AB Sweden (AZPAB), and Elliott Group, which held 15.52 percent stake in the company, had a 'private arrangement' to sail through the delisting process.
SEBI said it "strongly censure the noticees (AZPAB and Elliott Group) for displaying such gross professional misconduct and fraudulent trade practice and trying to arrive at a private arrangement amongst them so as to help the company sail through the delisting procedure".
It further said that the entire procedure was intended to dilute the reverse book building mechanism for discovery of delisting price of the scrip as per stipulations in the SEBI (Delisting of Equity Shares) Regulations, thereby jeopardising the interests of retail public shareholders and investors of the company at large.
SEBI came across certain reports stating that the Offer for Sale (OFS) through stock exchange mechanism of shares of AstraZeneca Pharma, carried out by its sole promoter AZPAB in May 2013, was a deliberate strategy to subsequently get the shares of AZPIL delisted at its own convenience.
It was also reported that more than 94 percent of total shares offered through OFS had been subscribed by a group of six Foreign Institutional Investors (FIIs) who were reportedly extending support to the promoters of AZPIL in the matter of delisting of AZPIL.
The reports also stated that in March 2014, AZPIL had informed the stock exchanges that it received a letter from AZPAB proposing to make voluntary delisting offer to the shareholders of the pharma company.
Following this, the regulator undertook an investigation of OFS exercise carried out by the promoter company of AZPIL and the earlier two attempts in 2004 and 2010 made by the pharma firm to delist its shares from the exchanges.
Elliott Group, through FII sub-accounts, had purchased 15.52 percent shareholding through the OFS. Also, the Group decided to participate in the delisting offer in 2014.
Elliott Associates L.P, Elliott International L.P, Elliot Advisors (HK) Ltd, Elliott Management Corporation, The Liverpool Limited Partnership, Mansfield (Mauritius) Ltd and Suffolk (Mauritius) Ltd were the sub-accounts.
SEBI found that the series of communications exchanged between the representatives of promoter of the company and the Elliott Group conspicuously indicate that the firm's promoter was very pro-active to arrive at an understanding with the Elliott Group about the price at which the Group would like to exit its stake in the firm so that AZPAB can realise its ultimate goal of delisting the company from the stock exchanges.
Besides, Elliott Group had voted in favour of the delisting resolution proposed by the company, and without its support, the delisting proposal would have certainly fallen through, it added.
It further said these are sufficient ground to conclude that "there existed a prior meeting of minds between AZPAB and the Elliott Group with regard to the proposed delisting of AZPIL".
The regulator said it is disquieting to note the way the promoters of the company and the Elliott Group have conducted themselves while brazenly dealing with each other trying to arrive at an negotiated deal on the best price that may be acceptable to the Elliott Group.
In this process, they have not bothered to think about the interest of other minority shareholders who had held 8.9 percent of the total shareholding of the company nor have they thought about the adverse impact of their collusive behaviour on the interest of other investors in the securities market, SEBI said.
However, their plan to execute their ambition through an artifice or device in the form of pre-arranged negotiated price for delisting could not fructify due to judicial intervention and the interest of the minority public shareholders remained protected as well as saved from being adversely affected by the probable manipulative their actions, it added.
In the order passed on Friday, the regulator cautioned the promoter company as well as Elliott Group and directed them to refrain from indulging in such unfair trade practices in future.
It further said that in case a fresh delisting proposal is initiated by the promoter company anytime in future, the same will be initiated only after complying with regulatory provisions in letter and spirit.
Stock exchanges, BSE and NSE, have been directed to closely monitor the entire delisting process to be initiated by the company in future to ensure complete satisfaction of all regulatory stipulations with fairness, transparency and integrity, and to promptly report any aberrations noticed in the delisting process of AZPIL to SEBI, it added.
Also read: Decline in direct tax collection on expected lines and temporary: CBDT
Also read: This stock held by Rakesh Jhunjhunwala has gained 38% since March, did you miss the rally? | market regulator says 'professional misconduct' was part of delisting plan. astraZeneca Pharma India Ltd's promoter and Elliott Group had a 'private arrangement' to sail through the delisting process. 94 percent of shares offered through OFS had been subscribed by six foreign institutional investors (FIIs). astraZeneca Pharma India Ltd's promoter AZPAB had a 'private arrangement' to sail through the delisting process. | Negative |
https://www.businesstoday.in/markets/commodities/gold-price-turns-volatile-silver-rates-at-rs-60900/story/416699.html | Gold, Silver prices in India on September 22: Gold price gave up early gains and traded flat on Tuesday, as the resurgence of coronavirus cases in Europe and uncertainty on more fiscal stimulus to support the economy in the US crippled market sentiment.
Gold rose in early trade today after the dollar index fell 0.14 per cent to 93.52 against a basket of six currencies. Although investors took a cautious stance on the bullion later and focused on speeches by Federal Reserve policymakers on the US central bank's approach to inflation and stimulus measures.
Precious metals have also moved in tandem with global equity markets and turned red on a firm dollar and on cautious stance ahead of US Federal Reserve official's speech later this week. Broader markets sold off again on Tuesday as investors were also concerned about the fresh coronavirus-induced curbs, globally denting hopes of a swift economic recovery.
On the Multi Commodity Exchange, Gold October Futures fell Rs 41 at Rs 50,430, after hitting an intraday low of Rs 50,385 against the previous close of Rs 50,417 per 10 gm.
Silver September Futures, traded Rs 186 lower at Rs 61,130 per kg today after they touched an intraday low of Rs 60,956 per kg. Silver Futures hit a lifetime high of Rs 77,949 on August 7.
Concerns about tensions between the US and China, worries about the sluggish pace of economic recovery also kept investors pessimistic.
Overseas, gold and silver gained marginally, aided by a weak dollar. Spot gold rose 0.3% to $1,918.20. Comex gold was trading 0.65% higher at $1,913 per ounce, while US gold futures gained 0.6% to $1,921.50. Silver gained 1.1% to $25 per ounce.
In the international platform, gold slumped 3.4% in the previous session, while Silver spot slipped as well by more than 1%, amid concerns over fresh rounds of coronavirus-induced lockdowns across Europe.
Gold price falls to Rs 51,500, silver rates at Rs 67,500
Gold has gained nearly 26% so far this year in the international market as near-zero interest rates globally dented hopes of fast economic recovery from the pandemic. Since the beginning of the year, the yellow metal has risen 41.5% to life-time high of Rs 56,191 per 10 gm, hit on August.
US dollar gave up some of its gains and fell today as focus turned towards Central bank Chairman's testimony. US FOMC Chair will testify today before the House of Representatives. Commodity traders said investors awaited developments on the US fiscal stimulus by the Federal Reserve policymakers in the US.
Uncertainty about a fresh round of fiscal stimulus from Washington and concerns over tensions between world two largest economies and worries about the sluggish pace of economic recovery have kept trades muted recently.
Similarly, on the equities front, global markets tumbled after Wall Street declined for the third week, and most of the European indices slipped more than 2.00%. Domestic indices too fell for the fourth straight day, amid fears about the potential worsening of the coronavirus pandemic. The 30-share BSE benchmark Sensex was trading 290.04 points lower at 37,744.10 and broader NSE Nifty slipped 95.10 points to 11,155.45.
Investors were spooked amid a resurgence in COVID-19 infections across the world and European cities announcing new restrictions to curb the pandemic from spreading. Worldwide, there were 314 lakh confirmed cases and 9.69 lakh deaths from COVID-19 outbreak. Meanwhile, India's death toll from COVID-19 infections rose to 0.88 lakh and total coronavirus cases stood at 55.62 lakh as of Tuesday.
On the retail front, physical gold dealers continued to offer discounts in India as the precious metal's demand fell due to high prices. In India, 24-carat bullion per 10 gram in the national capital fell marginally to Rs 54,770. Price of 24-carat gold stood at Rs 53,830 per 10 gram in Chennai. In Mumbai and Kolkata, the rate for 24-Carat gold stood at Rs 51,310 and 53,440, respectively.
Share Market News Live: Sensex falls 200 points, Nifty at 11,190; Tata Motors, GAIL, Adani Ports top losers
Technical outlook
Expressing views on gold's trend, Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking said," Despite falling retail sales, the slowdown in consumer spending and a weak labour market in the US, the Federal Reserve expressed hopes of a paced recovery in the coming months which weighed on the safe haven, Gold. While the US Federal Reserve vowed to keep the interest rates low, no signs of further stimulus infusion to support the economy shackled by the pandemic further limited the gains for Gold.
Cameron Alexander, Director of Precious Metals Research at GFMS, Refinitiv said,"The rally in gold has been powered by a safe-haven appeal for the metal due to the worsening economic conditions resulting from an out-of-control pandemic. The central banks around the world continue to inject stimulus to resuscitate domestic economies, which has led in some cases to currency devaluation especially dollar and lower interest rates, further supporting the rally. Another factor that could disrupt the financial markets and support the gold rally is the political developments in the US."
"Looking ahead, the focus will continue to be on the coronavirus developments worldwide and on fresh economic data coming out of the United States which will influence the price of gold in the short to medium term. Investors will be monitoring just how quickly the world's largest economy can return to expansion mode and how soon an economic relief bill will be finalised," he added.
Gold prices may fall below Rs 50,000 in coming days; should you buy or wait? | gold and silver traded flat on tuesday as markets sold off. dollar index fell 0.14 per cent to 93.52 against a basket of six currencies. gold and silver both fell marginally, aided by a weak dollar. concerns about tensions between the us and china also kept investors pessimistic. gold has gained nearly 26% so far this year in the international market. | Negative |