BQuick On April 28: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Covid-19 Cases In India Close To 30,000
The total number of confirmed Covid-19 cases in India inched closer to the 30,000-mark as India mulls extending a lockdown—which is slated to end Sunday—for a second time.
- India added over 1,594 new cases of Covid-19 in the last 24 hours, taking the total tally to 29,974, according to the health ministry’s 5 p.m. update.
- This includes 937 deaths and 7,027 patients who recovered.
- Over the last 24 hours, India has recorded 51 deaths and 665 recoveries.
- In their meeting with PM Narendra Modi on Monday, some chief ministers sought an extension in the nationwide lockdown to contain the coronavirus pandemic, while gradually resuming economic activity.
- Meanwhile, India's health ministry clarified that plasma therapy should not be considered a foolproof treatment for Covid-19.
- The ministry said that the Indian Council of Medical Research is studying the efficacy of the therapy and till then it should only be used for research and trial purposes.
Follow developments around the outbreak of Covid-19 in India here.
Globally, cases crossed 30 lakh leaving over 2.11 lakh people dead.
- The number of new infections in Germany fell below 1,000 for the first time in more than five weeks, while Spain recorded a drop in new infections and fatalities.
- Singapore said the trend of overall cases is “indeed improving” but the government wants to be decisive before relaxing the lockdown measures.
- The Olympic Games would be cancelled instead of being further postponed if the coronavirus pandemic isn’t under control by 2021.
Track how the virus is spreading across the globe here.
2. Axis Bank Signs New Joint Venture Deal, Reports Surprise Loss
Axis Bank Ltd. has signed a definitive agreement to hold a 30 percent stake in Max Life Insurance Company Ltd., as a way to strengthen its position in the life insurance sector.
- As per the disclosures, Axis Bank will acquire 55.64 crore shares representing 29 percent stake in Max Life in cash. The lender has not disclosed the acquisition price for the shares.
- On conclusion of the deal, Axis Bank will hold a 30 percent stake in Max Life, while Max Financial Services will hold 70 percent.
With the Axis-Max deal, the private bank hopes to get a stronger foothold in the life insurance sector.
The private lender reported a surprise loss in the quarter ended March as it increased provisions for bad loans in a virus-struck economy.
- Net loss stood at Rs 1,387.8 crore compared with a profit of Rs 1,505 crore in the same quarter last year.
- Provisions nearly tripled over the same quarter last year to Rs 7,730 crore.
- Of these, provisions worth Rs 3,000 crore have been made to account for the impact of the Covid-19 pandemic.
- Meanwhile, Axis Bank’s board approved raising of up to Rs 35,000 crore through a mix of debt instruments.
Axis Bank’s asset quality showed slight improvement.
3. Stocks Rise In India, U.S.; Crude Volatile
Indian equity markets gained momentum after a sluggish first half to end higher for the second straight day.
- The S&P BSE Sensex added to Monday's 1.3 percent gains by gaining another 1.2 percent, to close at 32,114.
- The NSE Nifty 50 ended below the 9,400 mark, but with gains of 100 points, ending at 9,380.
- Twenty eight out of the 50 index constituents ended with gains.
- Reliance Industries Ltd. shares fell as much as 2 percent early in trade today after it announced the first rights issue in three decades. Shares closed 0.15 percent down.
Follow the day’s trading action here.
U.S. equities headed for their third straight gain as governments contemplated reopening economies and the earnings season gathered pace.
- Automakers and banks led the S&P 500 Index higher, though gains moderated mid-morning as data showed U.S. consumer confidence crashed in April to the lowest since 2014.
- The Stoxx Europe 600 headed toward a seven-week high as all major national benchmarks advanced.
- Oil futures in New York slumped to about $10 a barrel before reversing course in a volatile session.
- The dollar weakened, while Treasuries edged higher.
Get your daily fix of global markets here.
4. Franklin Templeton... The Unkindest Cut Of Them All?
Had there been any hope of an economic rescue, improving bond market, financial sector reforms, it’s unlikely the Franklin Templeton would have shut the door on its own foot, writes Abaneeta Chakraborty.
- This action is a vote of complete no confidence on financial sector reforms from our current policymakers.
- There’s a message in that for the regulator - Securities and Exchange Board of India, as well.
Here are three inferences from the Franklin Templeton saga.
5. Even Before Covid-19, India Inc.’s Debt Downgrades More Than Doubled
The credit quality of Indian companies deteriorated in 2019-20 as the value of debt downgraded more than doubled, according to ICRA Ratings Ltd. The disruption from the Covid-19 pandemic will only make things worse.
- ICRA cut credit ratings of 584 corporates with an aggregate debt of Rs 7 lakh crore in FY20, according to its report.
- That compares with 390 downgrades involving an aggregate borrowing of Rs 3.2 lakh crore in the previous fiscal.
- Ratings of about 282 firms were upgraded in FY20, down from 513 in FY19.
- About 58 percent of entities downgraded were financial firms, followed by companies from power, ferrous metals and construction sectors.
ICRA Ratings said the credit profile of a large number of sectors and companies has become vulnerable.
6. IDFC First Bank Mulls $200 Million Share Sale
IDFC First Bank Ltd. is considering a $200 million share sale to bolster its capital, people familiar with the matter told Bloomberg News, as the lockdown in India raises the risk of loan defaults.
- The private-sector lender is waiting for the five-week lockdown to end before firming up the route for fundraising, the people said, asking not to be identified because the information is private.
- The lender might consider a sale of new shares to institutional investors among other options, the people said.
As well as bolstering its capital, the new share issue would position the bank for growth once the lockdown ends.
7. Moody’s Cuts India’s GDP Forecast Again
Moody's Investors Service slashed India growth forecast for calendar year 2020 to 0.2 percent, from 2.5 percent projected in March.
- For 2021, Moody's expects India's growth to rebound to 6.2 percent.
- In its report titled - Global Macro Outlook 2020-21 (April 2020 update), Moody's has lowered G-20 advanced economies as a group to contract by 5.8 percent in 2020.
- Moody's said the economic costs of coronavirus crisis amid the near shutdown of the global economy are accumulating rapidly.
- Earlier in the day, Fitch Ratings warned that the spread of the novel coronavirus and measures to contain it, have damaged India’s fiscal outlook further and could pressure its sovereign rating.
- The cautionary note comes at a time when the Indian government is debating a second round of fiscal stimulus to support the economy.
- The first set of announcements, entailing a spend of Rs 1.7 lakh crore, accounted for less than 1 percent of nominal GDP.
India’s fiscal past may come back to haunt it during the crisis, warned Fitch.
8. Sajjan Jindal Calls For Urgent Measures To Save Economy
Industrialist Sajjan Jindal is seeking urgent measures to prevent the Indian economy from falling into slumber due to the coronavirus lockdown.
- The lockdown has had a positive effect in containing the Covid-19 pandemic, but it is imperative to also move focus on economic well-being, the JSW Group chairman said.
- “We need to rise now to ensure that the economy does not fall into a slumber that will take huge efforts to awaken. A depression in the economy is also a threat to this nation,” he said in a statement.
Jindal said Indian economy will need to find new ways to work till a vaccine is found.
9. How Covid-19 Could Increase Tax Burden On NRIs
Extended stay of non-residents and foreigners in India as a result of Covid-19 lockdown may result in higher tax liability for them.
- Non-residents may remain stuck in India due to travel restrictions, prevailing illnesses or restrictions imposed by other countries.
- The prolonged stay may result in higher tax incidence if their stay exceeds the prescribed thresholds, unless the government provides specific exemptions for mitigating the additional liability, Nand Kishore, partner at DSK legal, told BloombergQuint.
- Under the income tax law, a person is classified as a resident if she remains in India for a period exceeding 120 days in a financial year.
- Once classified as a resident, the person’s global income becomes liable to tax.
Here’s what experts say on the matter and what may be the possible defence in such cases.
10. Over 2 Lakh H-1B Workers In U.S. Could Lose Legal Status By June
As many as 2.5 lakh guest workers seeking a green card in the U.S.—about 2 lakh of them on H-1B visas—could lose their legal status by the end of June, according to Jeremy Neufeld, an immigration policy analyst with the Washington D.C.-based think tank Niskanen Center.
- Thousands more who are not seeking resident status may also be forced to return home as the Covid-19 pandemic has put a halt on paychecks.
- That's because H-1B recipients can only remain in the country legally for 60 days without being paid.
- H-1B workers who are terminated have 60-days to find another job, transfer to a different visa or leave the country.
- Even if they don’t lose their jobs, workers can find themselves in a dilemma if they can’t get their visas renewed during this period of disruption.
The visa crisis is causing “a catastrophe at a human level and an economic level”.