BQuick On March 17: Top 10 Stories In Under 10 Minutes
Covid-19 response: The Donald Trump administration is pushing to send direct payments to Americans within two weeks and the White House wants the checks to be larger than $1,000 in a one-of-a-kind stimulus measure. Read more here
And here’s your roundup of the day’s top stories in brief.
1. Coronavirus: More Cases, More Labs, More Measures
The number of coronavirus cases in the country rose to 137 on Tuesday, with fresh cases in Maharashtra, Delhi, Kerala, Karnataka and Uttar Pradesh, according to the health ministry’s website. One more death was reported in Maharashtra taking the total count to three.
- India decided to rope in accredited private laboratories to conduct testing for Covid-19. The Indian Council of Medical Research has urged the private labs to make testing free of cost.
- ICMR also said there are 72 labs for testing right now while 49 will be operational by end of the month.
- Besides, two more high-ouput facilities will be set up that can test at least 1,400 samples a day.
- Meanwhile, UP extended its shutdown till April 2, while Rajasthan imposed restrictions on public gatherings.
Follow the developments around the novel coronavirus outbreak in India.
Globally, cases rose over 1.83 lakh with deaths exceeding 7,400 as governments in Europe tightened curbs on free movement while some cities in U.S. went under lockdown.
- Spain reported about 2,000 new infections while Iran added 1,178 cases.
- Germany's public health authority said that there are more cases in Germany than what has been reported. Germany has confirmed 6,981 cases so far.
Catch all updates on how the world is battling the outbreak here.
2. Covid-19: Bankers Seek Relief, Courts Adapt
A lobby representing lenders is likely to approach the Reserve Bank of India for special relief on stressed asset classification amid the disruption caused by the novel coronavirus outbreak, two bankers aware of the matter said.
- The Indian Banks’ Association is in the process of drafting a proposal seeking more time to classify certain micro, small and medium enterprises as well as mid-corporates as non-performing assets, if they fail to repay loans on time, the bankers told BloombergQuint on the condition of anonymity.
- The proposal, according to the first of the two bankers, will likely seek a 30-60 day extension on the income recognition and asset classification norms that govern NPA disclosures by banks.
The special dispensation should be different from the RBI’s one-time restructuring scheme for MSMEs announced last month.
The Supreme Court of India wore a different look, with the number of lawyers, litigants and other people visiting it reduced drastically following restrictions imposed in the wake of a government advisory on containing the spread of the novel coronavirus.
- The apex court has decided to hear only cases that require urgent hearing and has restricted the entry of casual visitors.
- Public tours of the court have been adjourned and its canteens have been shut.
- The Bombay High Court has decided to hear only urgent cases and this order also covers its Nagpur, Aurangabad and Goa benches.
- The court has also requested the bar to cooperate in restricting entry for only those whose presence is required for official purposes.
Find out how the Securities Appellate Tribunal and the Delhi High Court are dealing with the coronavirus outbreak.
The civic authority of one of the world’s most densely populated cities--Mumbai--has one testing centre and is setting up another.
- These would cater to the city and its surround region that is home to more than 2 crore (20 million) people.
- Maharashtra has already shut malls and has advised people to avoid social gatherings in its capital and also unnecessary travel as part of its preventive measures.
Here are some of the steps taken by the BMC for suspected cases of Covid-19 in Mumbai.
3. Indian Markets Drop In Volatile Trade; U.S. Stocks Rebound
India’s benchmark stock index closed negative, reversing gains, after the country’s central bank announced a currency swap and measures to boost liquidity but held back from following global peers with an emergency rate cut.
- The S&P BSE Sensex fell 2.58 percent or 810.98 points to end at 30,579.
- These levels are the lowest since May 24, 2017.
- The NSE Nifty 50 index too ended at 8,966, down 2.51 percent or 230.35 points.
- The index closed below the mark of 9,000 for the first time since March 10, 2017.
- Barring FMCG and pharma, all other sectoral indices ended with losses.
Follow the day’s trading action here.
U.S. stocks rebounded from the biggest rout since 1987 after the Federal Reserve reintroduced additional crisis-era tools to stabilise financial markets roiled by the coronavirus.
- Investors continue to struggle to adjust to an unprecedented upheaval in social interactions that looks set to plunge the world into recession.
- The S&P 500’s gain topped 3 percent, while the Dow Jones Industrial Average notched a 1 percent gain, weighed down by another rout in Boeing Co.
- Treasuries declined, reversing part of a nearly 25 basis-point surge on Monday.
- The three-month dollar Libor rate jumped the most since 2008, and similar maturity cross currency basis swaps for euro-dollar, a proxy for how expensive it is to get the greenback, traded at the widest since 2011.
- West Texas Intermediate crude climbed 0.5 percent to $29.08 a barrel.
Get your daily fix of global markets here.
4. Foreign Investors Flee Indian Equities, Debt
Outflows from the Indian debt and equity markets in March are on track to be the highest on record, showed data available from the National Securities Depository Ltd.
- Foreign investors have withdrawn a net amount of Rs 51,186 crore so far this month, the data showed.
- Of this, foreign portfolio investors have sold Rs 31,517 crore in equity and Rs 20,528 crore in debt.
- Over the month of March, the benchmark Sensex has fallen 16.3 percent, while the Indian rupee has weakened by 2.4 percent.
- The quantum of outflows in March has surpassed what was seen in 2013 at the time of taper tantrum, when the Indian rupee went into a free fall.
- In fact, the outflows are the highest monthly outflows on record going by NSDL data available till 2002.
To be sure, looking at just the quantum of outflows may not give the full picture. Here's why.
5. Only 1 Out Of 3 Yes Bank Depositors Withdrew The Full Rs 50,000 Limit
Yes Bank Ltd., which was placed under moratorium by the Reserve Bank of India on March 5, has seen only a third of its depositors withdraw the maximum permissible amount. That’s according to Prashant Kumar, the designated chief executive officer for the private lender.
- Under the moratorium, withdrawals from Yes Bank accounts were capped at Rs 50,000.
- Around 30 percent of the eligible depositors withdrew money up to the maximum limit, Kumar said.
- Yes Bank administrator Prashant Kumar and State Bank of India's Chairman Rajnish Kumar both assured that there are sufficient funding lines available for Yes Bank to go for a second round of capital raising.
- The bank administrator also emphasized on the need to move away from bulk deposits towards more granular deposits.
SBI chairman also spoke about the equity infusion and said that they will not sell Yes Bank shares for three years.
6. Yes Bank’s AT-1 Bondholders Cry Foul, Move High Court
Axis Trustee Services and Indiabulls Housing Finance Ltd. have moved the Bombay High Court challenging the Reserve Bank of India’s decision to write off their investments in additional tier-1 securities of Yes Bank Ltd. The total value of their AT-1 bonds exceeds Rs 8,400 crore.
- A separate petition has also been filed by the L&T Officers and Supervisory Staff Provident Fund Trust on similar grounds.
- Bondholders have filed a writ petition under Article 226 of the Constitution seeking directions against the RBI and the central government.
Bondholders opposed the write-off and proposed a scheme which entailed a partial conversion of their bonds into equity.
7. The Big Risk For India Inc. From Rupee’s Slide
The Indian rupee has declined about 2.5 percent against the dollar this month despite rebounding Tuesday. That broader weakness couldn’t come at a worse time for the nation’s companies facing a record international debt bill.
- The spread of the coronavirus has caused historic declines in asset prices globally, with investors increasingly bracing for a global recession and a jump in corporate defaults.
- Indian borrowers had been loading up on foreign currency-denominated debt amid a squeeze in rupee credit markets, and have to repay $7.5 billion of overseas bonds and loans in the April-June period, the most ever in a quarter.
- With only limited currency hedges, a weakening rupee means that the burden of such redemptions will increase at a time when a drop in global demand is hurting corporate cash flows and investors are shunning risk.
Indian firms have hedged only about 30-40 percent of their outstanding offshore debt.
8. Auto Dealers Seek More Time To Sell Off BS-IV Inventory
The Federation of Automobile Dealers Associations on Tuesday said it has filed an application with the Supreme Court seeking extension of sale and registration of BS-IV vehicles till May 31, 2020 -- an extension of two months from March-end deadline to clear the stock of such models.
- The automobile dealers' body on behalf of its members has once again approached the Supreme Court, and has filed an interlocutory application along with an application seeking modification in the writ petition dated Oct. 24, 2018.
- In the petition, in the matter of MC Mehta versus Union of India and others, the apex court had directed that no motor vehicle conforming to emission standard BS-IV shall be sold or registered in the entire country with effect from April 1, 2020.
FADA's earlier application was rejected but this time they said that the coronavirus spread led to a drastic drop in sales.
9. If Telecom Gets AGR Relief, Only One Operator Will Benefit
Debt-laden Vodafone Idea Ltd. is the only telecom operator that stands to benefit from the government’s plea in the Supreme Court seeking permission to allow wireless carriers pay statutory dues worth thousands of crores over 20 years.
- Vodafone Idea—has so far deposited only Rs 6,854 crore, or 32 percent of its self-assessed dues—and will benefit from any deferral of dues.
- The balance amount payable over the next 20 years is Rs 14,679 crore, which works out to instalments of Rs 1,495 crore including interest, according to BloombergQuint’s calculations.
The government’s decision would aid cash flows, particularly for Vodafone Idea which warned that the AGR dues would make survival difficult.
10. Sun Pharma To Reward Shareholders
Sun Pharmaceutical Industries Ltd. will buyback shares worth up to Rs 1,700 crore, the drugmaker said in a statement to the exchanges.
- The board of directors of the company today approved buying back four crore shares, or 1.67 percent of the total equity, at a maximum price of Rs 425 apiece from the open market.
- The promoters and members of the promoter group will not participate in the buyback.
The buyback price has been set at a 10 percent premium to the current market price.