BQuick On April 22: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Covid-19 Cases Cross 20,000 In India, 25 Lakh Globally
The total number of confirmed Covid-19 cases in India crossed 20,000 on a day where it also saw a high number of recoveries.
- India reported 1,486 new cases over the last 24 hours taking the total in the country to 20,471, according to the health ministry's update at 5 p.m.
- This includes 3,960 who've recovered and 652 deaths.
- Over the last 24 hours, 700 people have recovered while 49 have died.
- While it took 76 days for India to report its first 10,000 cases, the next 10,000 have come in just 7 more days.
- Meanwhile, the ICMR today sent a new protocol for using rapid antibody testing after some states complained of variation in results.
- The health ministry reiterated rapid tests are largely to be used only as a surveillance tool.
Follow the Covid-19 outbreak in India here.
Globally, cases topped 25 lakh leaving over 1.78 lakh people dead.
- Singapore reported more than 1,000 new cases for the third straight day.
- Two deaths in California in early and mid-February, suggested the pathogen was circulating in the U.S. weeks earlier than health officials believed.
- Spain reported a small increase in the number of new cases, though the numbers remain steady.
Track how the virus is spreading across the globe here.
2. Facebook To Invest In Reliance Jio
Facebook Inc. will invest $5.7 billion, or Rs 43,574 crore, in the digital and telecom assets controlled by Mukesh Ambani as the U.S.-based social networking firm plans to expand footprint in its biggest global market.
- The Mark Zuckerberg-founded company will pick up a 10 percent stake in Jio Platforms Ltd., becoming the largest minority shareholder, Reliance Industries Ltd. said in a press statement.
- The deal values the unit controlled by India’s richest man at $65.95 billion, or Rs 4.6 lakh crore.
- Of the total investment, Rs 15,000 crore will be retained by Jio Platforms, while the remaining will be used by the company to redeem the optionally convertible preference shares held by RIL in the digital business.
- Shares of Reliance Industries surged, closing 10.3 percent higher on the Bombay Stock Exchange.
- Facebook’s biggest investment since buying Whatsapp in 2014 also propelled Ambani to reclaim the title of Asia’s wealthiest person from Alibaba founder Jack Ma.
Here is what the holding structure of Jio Platforms will look like.
3. Nifty Jumps 200 Points; WTI Crude Rallies
Indian equities shrugged off weak global cues to end higher with RIL being the single largest contributor to gains in benchmark indices.
- The S&P BSE Sensex ended 2.4 percent higher at 31,379.
- The NSE Nifty 50 index ended just a shade below the 9,200 mark at 9,187, higher by 2.3 percent.
- Most sectoral indices recovered from their opening lows.
- The Nifty Media Index was the top gainer, ending with gains of 6.6 percent.
- Nifty auto and FMCG indices also ended with gains of over 2.5 percent.
Follow the day’s trading action here.
India’s stock market tumbled as the new coronavirus pandemic brought the world to a virtual standstill. But that, according to Hugh Young, has made the valuations of Indian equities more attractive to overseas investors than China’s.
See why Aberdeen is bullish on India for the long-term.
U.S. stocks halted a two-day slide as investors digested the latest round of corporate earnings and optimism about the eventual reopening of the economy increased.
- The S&P 500 Index rebounded from the worst sell-off in three weeks amid quarterly results that sparked speculation a recovery will be sooner than expected.
- Treasury Secretary Steven Mnuchin said he anticipates most of the economy will restart by the end of August. House lawmakers on Thursday are set to pass another round of aid.
- The oil market continued to hold investor attention, with Brent crude slumping to a two-decade low before rebounding. American crude surged above $13 a barrel after President Donald Trump ordered the Navy to destroy any Iranian gun boats that harass American ships at sea.
Get your daily fix of global markets here.
4. What Jhunjhunwala, Damani And Other Veterans Bought And Sold
Equities in India put up their worst performance in 18 years in the quarter ended March as the new coronavirus pandemic upended economies worldwide and disrupted trade.
- Some large investors used this opportunity to buy or pare holdings in the small- and mid-cap space.
- Billionaire investor Radhakishan Damani's stake in Avenue Supermarts Ltd. fell 246 basis points.
- Rakesh Jhunjhunwala, along with his wife Rekha, cut and raised stakes in three companies each.
Find out what these veteran investors bought or sold in the March quarter.
5. Behind The Spike In Bidding For India’s Treasury Bills
Interest rates for short-term government borrowings fell sharply on Wednesday, after an auction of treasury bills drew large bids.
- On April 22, the government auctioned Rs 45,000 crore worth of treasury bills for which it received bids worth Rs 3.43 lakh crore. This implies a bid-to-cover ratio of 7.6 times.
- In total, the government accepted Rs 44,979 crore in bids through the auction.
- As a result of the large volume of bids, the interest rates at which the government raised funds fell well below the policy repo rate of 4.4 percent.
Here’s why there has been increased bidding in the market.
6. Kotak Mahindra Bank Plans To Raise $1 Billion
Kotak Mahindra Bank Ltd. plans to raise about $1 billion with a new share issue in a move that will strengthen its capital buffers and reduce the stake held by its wealthy founder.
- The Mumbai-based lender didn’t provide pricing details on the 6.5 crore of new shares it said it will issue in a filing on Wednesday.
- However, under a regulatory formula, they should be priced around the level of the latest two-week average, which works out at about Rs 1,184 ($15).
- That would put a total value on the offering of about $1 billion, depending on the market price at the time of the issue.
The capital raising will provide an additional buffer as Indian banks brace for a surge in loan defaults.
7. Indian Lenders’ Nostalgia
The country’s top lenders are reaching out the Reserve Bank of India, seeking a return to a time when banks were allowed to restructure stressed accounts without having to classify them as non-performing.
- The policy, known in industry parlance as forbearance, was widely blamed for under-reporting of bad loans till an asset quality review unearthed the true extent of stress on bank balance sheets.
- Now, even as bad loans remain elevated, banks fear that large scale restructuring may become necessary due to the fallout of Covid-19.
- Over the next few days, the Indian Banks’ Association intends to write to the RBI seeking special forbearance for companies which delay loan repayments even after the three-month moratorium ends, two people in the know confirmed.
Bankers want the restructuring to include an extended repayment period, lower interest rates and additional financing.
8. Tata Steel’s Sales Fall On Covid-19 Freeze
Tata Steel Ltd.’s domestic and international sales volumes tumbled in the fourth quarter as lockdowns to contain the Covid-19 pandemic froze business activity.
- Combined volumes of standalone business, Bhushan Steel and longs business fell 14.6 percent year-on-year and declined 16.9 percent over the previous quarter to 4.03 million tonnes, according to Tata Steel’s exchange filing.
- Production, however, rose 6 percent from a year earlier.
- Sales volumes fell as the world’s biggest and strictest lockdown against the movel coronavirus outbreak left trucks stranded since March 25.
Domestic sales volume was below estimates but the European business did relatively better than expected.
9. Modi Brings Ordinance To Keep Medical Workers Safe
Prime Minister Narendra Modi’s government announced an executive order to ensure the safety of medical staff after they threatened to protest against rising incidences of violence over fears doctors are spreading the deadly coronavirus.
- Cabinet on Wednesday amended laws to convert such violent acts into non-bailable offenses and provide compensation for injury or loss to property.
- Prison terms range from three months to seven years and fines from Rs 50,000 to Rs 5,00,000.
- The government will also complete investigations into attacks on health-care professionals within 30 days.
While a backlash against doctors has been seen from Australia to the Philippines, it’s proving more widespread and intense in India.
10. NBCC Challenges Modifications To Its Successful Jaypee Infratech Bid
The appellate tribunal has agreed to hear a challenge by state-run NBCC (India) Ltd. against modifications to its bid for Jaypee Infratech Ltd. when it was approved by the insolvency court.
- The National Company Law Appellate Tribunal, however, declined to stay the implementation of the modified resolution plan.
- The NCLAT issued notice to ICICI Bank Ltd., the dissenting creditor entitled to cash payment after the modification; IDBI Bank Ltd., the lead lender of the consortium that initiated insolvency proceedings; and the interim resolution professional.
- “Till further orders, the approved ‘resolution plan’ may be implemented subject to outcome of this appeal,” said a bench headed by Justice Bansi Lal Bhat, acting chairperson of the NCLAT.
- “The interim resolution professional may constitute ‘interim monitoring committee’ comprising of the ‘successful resolution applicant’ [NBCC] … and the three major institutional financial creditors, who were members of the ‘Committee of Creditors.”
The case will come up for hearing next on May 15.