BQuick On March 2: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Two New Cases Of Coronavirus Detected In India
India has recorded two more positive cases of the novel conronavirus, the union health ministry said on Monday, even as the outbreak in China spread to over 60 countries.
- The two new coronavirus cases were detected in Delhi and Telangana.
- The person from Delhi had travelled to Italy while the other had gone to Dubai recently, Union Health Minister Harsh Vardhan said.
- "Both the patients had self-reported after they developed symptoms. They tested positive. They are stable and being closely monitored," he said.
- As many as 25,738 people are under community surveillance across the country, Vardhan said as he advised people to avoid non-essential travel to Iran, Italy, South Korea and Singapore.
- Thirty-seven people across India are currently hospitalised to avail treatment for coronavirus or COVID-19.
So far, 3,217 samples have been tested in India out of which five tested positive for coronavirus while reports of 23 are awaited.
2. Virus Fears Trigger Late Nifty Selloff, Rupee Hits 1-Year Low
Indian equities ended lower after a sharp selloff in the last hour of trade, extending declines for the seventh consecutive session.
- The benchmark S&P BSE Sensex fell nearly 1,000 points off the day's high, after the health ministry reported two new coronavirus cases, to close at 38,149.67.
- The NSE Nifty 50 swung from a gain of as much as 2.06 percent and closed 0.62 percent lower at 11,132.75.
- The broader markets represented by the NSE Nifty 500 Index fell 0.62 percent.
- The market breadth was tilted in favour of sellers.
- Ten out of 11 sectoral gauges compiled by NSE ended lower.
- The Indian rupee too reacted to the new cases of coronavirus as it pared all initial gains and settled 56 paise down at 72.74 against the U.S. dollar on Monday.
- At the interbank foreign exchange market, the local currency opened at 72.09. During the day it saw a high of 72.04 and a low of 72.75 against the American currency.
Follow the day’s trading action here.
U.S. stocks headed for their first gain in eight sessions as investors assessed prospects for central-bank intervention to mitigate the economic impact from the spreading coronavirus.
- The S&P 500 advanced on Monday after suffering the worst week for the benchmark since 2008.
- Technology shares led gains as central banks from Japan to England joined the Federal Reserve in promising action as warranted.
- The two-year Treasury yield sank through its 2016 lows and 10-year rates fell below 1.10 percent.
- Oil rallied on expectations that the OPEC+ alliance will deepen output cuts.
Get your daily fix of global markets here.
3. Much-Awaited SBI Cards IPO Off To Steady Start
India’s first billion-dollar initial public offering in at least two years was subscribed 39 percent as of 5:00 p.m. on Monday, the first of the four-day share sale.
- Against an issue size of 10.02 crore shares, the SBI Cards IPO has received bids for 3.94 crore shares, with retail investors making the bulk of the purchases.
- SBI Cards, India’s second-largest card issuer behind HDFC Bank Ltd., is not comparable with banks as it’s the nation’s only pure-play card issuer.
- According to BloombergQuint’s calculations, the company will have market value of nearly Rs 70,900 crore at the upper end of the IPO price band.
- Banks and non-banking finance companies are usually valued on a price-to-book basis as price-to-earnings does not capture the inherent cyclicality and is used when earnings are more predictable.
Analysts, however, have different views on how to look at SBI Cards’ valuations.
Indians are spending more through their credit cards with time. This is true not just for large metropolitan cities but also for smaller towns. That is the demographic where SBI Cards and Payment Services sees significant potential for growth, said the company’s Chief Executive Officer Hardayal Prasad in an interview with BloombergQuint.
- Penetration in tier-2 and tier-3 towns is “pretty low and people have aspirations over there,” Prasad said.
- This, added to the expansion in the number of point-of-sale machines installed from 1.1 million to over 4 million and the e-commerce boom, has led to increased adoption of credit cards even from smaller centres, he added.
Prasad termed SBI Cards as an “algorithm-driven mathematical” company.
4. A Year On, Ravneet Gill Struggles To Keep Yes Bank Afloat
The tough hand that Ravneet Gill was dealt was made tougher by errors Gill made in the last 12 months, writes Ira Dugal.
- It started well. Gill seemed like just the antidote Yes Bank needed.
- Some insiders advised against any knee-jerk attempt to clean-up or ‘kitchen-sink’, but Gill, it seems, wanted to make a clean break.
- As the capital raising programme dragged out, Gill signed off on an announcement, which, from the outside, looks like a significant error of judgement.
The next challenge comes on March 14.
5. Another Month Goes By As Automakers Wait For Revival
India's auto sector continued to see weak demand for vehicles in February as most automakers reported yet another decline in monthly retail sales.
- Country’s largest carmaker Maruti Suzuki India Ltd. saw sales fall 1.1 percent to 1.47 lakh units.
- Mahindra & Mahindra Ltd. saw sales tumble 42 percent to 32,476 units.
- Tata Motors Ltd. also saw sales fall 32 percent over last year.
- Hero Motocorp Ltd. sales declined 19 percent, while Bajaj Auto Ltd. saw a 10 percent fall.
- The sales of Royal-Enfield parent Eicher Motors Ltd. grew 1 percent year-on-year to 63,536 units.
Read more on how Indian automakers’ sales fared in February.
6. Vistara Evaluating Bid For Air India
Vistara is evaluating bidding for Air India but a decision has not been taken yet on placing a bid, the chairman of the Tata Sons-Singapore Airlines joint venture said Monday.
- "We are evaluating Air India. Which company would not be interested in evaluating a sovereign airline of the country?" Bhat said. "Whether we bid or not comes later."
- On being asked if Vistara or Tata Sons were evaluating Air India, Bhat replied: "We (Vistara) are a joint venture."
- Tata Sons, while holds stake in Vistara and AirAsia India, is said to be among those who are evaluating a bid for the debt-laden national carrier.
- Gautam Adani-led Adani Group and London-based Hinduja brothers are among the potential suitors.
This comes as the March 17 deadline for placing Air India bids is now likely to be extended.
7. How India Plans To Avoid Another IL&FS-Like Event
Representation of funds, transfer of properties, ability to discharge liabilities, and disclosures on loans, guarantees, and investments of a company will now come under auditor scrutiny.
- To curb corporate scams, the Ministry of Corporate Affairs has specified 21 items that an auditor must include in its report, as per the government’s recent notification on Companies Auditors Report Order 2020 or CARO.
- It applies to all companies in India, except banks and insurers or firms below a specified threshold.
Here are the key disclosures that auditors would have to make in their report.
8. Supreme Court Refuses To Refer Plea Against Article 370 To Larger Bench
The Supreme Court refused to refer a batch of petitions challenging the central government’s move to abrogate provisions of Article 370 to a seven-judge bench.
- A five-judge bench headed by Justice NV Ramanna pronounced the order without going into the merits of the challenge.
- Several petitions were filed challenging the validity of removal of the special status to Jammu & Kashmir.
- The issue of reference to a larger bench stemmed from two petitioners—Jammu & Kashmir High Court Bar Association and People’s Union of Civil Liberties—arguing that the two judgments of the top court in the cases of Prem Nath Kaul versus State of Jammu and Kashmir, and Sampat Prakash versus State of Jammu and Kashmir were in direct conflict of each other.
The five-judge bench hasn’t yet fixed a date for the hearing of the case.
9. Your Sneakers May Soon Be Costlier
India’s increase of customs duty is unlikely to boost local manufacturing of footwear in the world’s No. 2 producer, and is only expected to make flip flops to sneakers costlier for consumers.
- Finance Minister Nirmala Sitharaman, in her budget for 2020-21, raised import duties on footwear and related raw materials by 10 percent and 5 percent, respectively.
- While companies agreed that cheap imports of ready products and raw materials does impact the local industry, they don’t expect the increased levy to counter that.
- There might be some slowdown in products coming from China, but they are already cheap or can come through countries like Vietnam that have lower duties because of free-trade agreement with India, according to Alok Kumar Gupta, president of Confederation of Indian Footwear Manufacturers.
Instead, prices of footwear are likely to go north.
10. Jack Welch, Much-Imitated Manager Who Reshaped GE, Dies
Jack Welch, the champion of corporate efficiency who built General Electric Co. into one of the world’s largest companies and influenced generations of business leaders, has died. He was 84.
- His death was reported on Monday by CNBC, which cited his wife, Suzy.
- The former GE chairman and chief executive officer, whose blunt style and ceaseless cost cutting earned him the sobriquet “Neutron Jack,” mentored proteges who went on to run some of the world’s best-known companies.
- Named “Manager of the Century” by Fortune magazine in 1999, he presided over a stock surge of almost 3,000 percent during a two-decade tenure.
Known simply as Jack to even low-level employees, Welch became the youngest CEO in GE’s history in 1981.