BQuick On July 29: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. India Issues Unlock 3.0 Guidelines
India has issued further guidelines for a phased reopening of the economy that are aimed at opening up more activities outside containment zones.
Restrictions on the movement of individuals outside containment areas during night have been removed, according to the guidelines issued by the Ministry of Home Affairs.
International air travel will be permitted in a limited manner under the Vande Bharat mission.
Read what else is allowed and what's not.
2. As Covid-19 Cases Cross 15 Lakh, Signs Of Herd Immunity In Mumbai's Slums
Coronavirus infections in India continue to mount as the country's total case tally crossed the 15-lakh mark.
India added 48,513 fresh cases in 24 hours, taking the total tally to over 15.3 lakh, according to the Health Ministry’s 8 a.m. update.
Track news and developments around the Covid-19 outbreak in India here.
Around six in ten people living in some of India’s biggest slums have antibodies for the novel coronavirus indicating they’ve recovered from infection, in what appears to be one of the highest population immunity levels known worldwide.
The findings, from a July serological survey of 6,936 people across three suburbs in India’s financial center of Mumbai, may explain why a steep drop in infections is being seen among the closely-packed population, despite new cases accelerating overall in the hard-hit country.
“Mumbai’s slums may have reached herd immunity,” said Jayaprakash Muliyil, chairman of the Scientific Advisory Committee of India’s National Institute of Epidemiology, and the retired head of one of its premier medical colleges.
The findings may support public health strategies more focused on protecting the vulnerable without trying to suppress the virus completely.
3. Earnings: Bharti Airtel, Dr. Reddy's, Maruti Suzuki
Bharti Airtel Ltd. reported its fifth straight quarterly loss as it made one-time provisions related to payment of statutory dues mandated by the Supreme Court of India.
Net loss widened to Rs 15,933 crore in the quarter ended June from Rs 5,237 crore in the preceding three months, according to an exchange filing. Analysts’ estimates compiled by BloombergQuint had pegged the loss at Rs 138 crore.
Revenue rose 1% sequentially to Rs 23,938.7 crore, surpassing estimates.
Here's what led to the mammoth loss.
Dr. Reddy's Laboratories Ltd.'s quarterly profit fell on account of lower domestic sales. Still, it managed to beat estimates.
Net profit declined 12% year-on-year to Rs 594.6 crore.
The drugmaker reported a 10% drop in India business revenue at Rs 626 crore.
The company's revenue in North America, the largest market, rose, aided by new launches and a favorable forex rate.
But the benefit was partially offset by price erosion.
Maruti Suzuki India Ltd. reported its first loss since listing in 2003 after the Covid-19 lockdown disrupted operations for most part of the first quarter.
India’s largest carmaker recorded a loss of Rs 249.5 crore.
Lower operating expenses and higher fair-value gain on the invested surplus, however, partially cushioned the company.
Revenue declined 79.2% to Rs 4,106.5 crore.
A recovery, however, is still some time away as Indians are reluctant to spend amid job losses and salary cuts.
4. Turbulent Skies For Indian Airlines
IndiGo, India’s biggest airline, warned capacity will slump by 60% in the three months ending Sept. 30, as the coronavirus pandemic continues to slam the global aviation industry.
The airline, operated by InterGlobe Aviation Ltd., said “the aviation industry is going through a crisis of survival.”
IndiGo reported its biggest-ever loss of Rs 2,844 crore after revenue fell 92%.
The airline will raise additional funds by selling-and leasing-back assets.
Like many other airlines all around the world, IndiGo is also reducing its workforce and lowering salaries.
Indian budget carrier SpiceJet Ltd. posted a quarterly loss that was wider than consensus as the coronavirus pandemic hit the industry, even after it booked an income based on expected compensation from Boeing Co. for grounded 737 Max jets.
The carrier, one of the top buyers of the jets, expects the plane to return to service in the first quarter of 2021.
SpiceJet posted a loss of Rs 800 crore ($106 million) in the three months through March.
The airline has yet to report results for the quarter ending June 30.
That is likely to be an even tougher period as the coronavirus took hold in India.
5. Nifty Drops, U.S. Stocks Rise Ahead Of Fed
Indian equity markets reversed most of Tuesday's gains and ended near the lowest point of the day, dragged lower by heavyweight Reliance Industries Ltd.
S&P BSE Sensex ended 1.1% lower at 38,071
NSE Nifty 50 index ended down 0.86% at 11,202.
Among sectoral indices, the auto index was the major laggard, ending 1.2% lower.
The I.T. index snapped a three-day gaining streak, ending 0.9% lower.
Follow the day’s trading action here.
As most investors write off the current financial year amid the disruption caused by the Covid-19 pandemic, Aditya Narain, head of research at Edelweiss Securities is preparing for financial year 2021-22 as that’s when corporate India is likely to achieve normalcy.
Watch the full interview to see what Narain is warning investors about.
U.S. stocks climbed on speculation the Federal Reserve will signal continued economic stimulus and as traders sifted through a batch of corporate earnings.
The S&P 500 extended its July rally and was on track for a fourth consecutive monthly gain.
Morgan Stanley increased its bull-case price target for Tesla Inc. for the second time in three weeks, sending the shares higher.
The Federal Open Market Committee is all but certain to keep its benchmark rate unchanged and reinforce the message that it will do whatever it can to support the recovery.
Get your daily fix of global markets.
6. NBFC Assets May Shrink First Time In 20 Years
Non-bank lenders’ assets are expected to contract the first time in nearly two decades, according to Crisil Ltd., as the nationwide lockdown to contain the pandemic stalled fresh disbursals.
Assets under management for the NBFC industry are expected to shrink 1-3% by March 2021, according to a Crisil report.
Barring the top five non-banking finance companies, the asset base will contract by a sharper 7-9%, the rating agency found in the study that included housing finance companies but excluded state-run non-bank lenders.
Lower repayments during the loan moratorium period (March 1 till Aug. 31) and capitalisation of interest accumulated will help limit the contraction for NBFCs, according to Crisil.
But, even after the lockdown is lifted, disbursals by non-bank lending industry will likely face four major hurdles.
7. Foreign Investors Keep Selling Indian Debt
Foreign investors remained net sellers of Indian debt for the fifth consecutive month in July, even though global and local markets calmed considerably. While the extent of selling has reduced, investors remain unconvinced of the attractiveness of Indian debt with fiscal uncertainty persisting.
So far in July, foreign investors have sold debt worth Rs 1,343 crore, adding to the tally of outflows seen this year.
Overall, foreign investors have sold Rs 1.08 lakh crore across the debt markets between January and July.
In 2020, the exodus was led by steep outflows in March alone, the highest recorded outflows since at least 2010.
8. What’s Behind The Surge In MCX Shares
Gold’s eye-popping rally is propelling shares of India’s biggest commodities exchange to record highs.
Multi Commodity Exchange of India Ltd. rallied as much as 5.5% to an all-time high of Rs 1,792.10 in Mumbai on Wednesday, as rocketing prices bolstered expectations that trading volumes in gold futures on the bourse will jump.
Morgan Stanley raised its target for the stock to Rs 2,000, citing strong balance sheet and high dividend payout.
While physical demand for the metal has suffered, investors have poured money into avenues such as exchange-traded funds.
9. Why Some Founders Fly While Others Flounder
It’s what Amar Bose, NR Narayana Murthy, Bahadur Mohan Singh Oberoi, and Karsanbhai Patel have in common, write Saurabh Mukherjea and Salil Desai.
The genesis of a company offers fascinating insights into the motivation of the founder/promoter to get into business.
The ‘Why’ of a venture often tells you about the foundational principles of a company.
This is an insight that is immensely valuable in understanding what makes a business tick.
10. India To Beef Up Border Security In Ladakh
India is preparing to position an additional 35,000 troops along its disputed Himalayan border with China as the possibility of an early resolution to the deadly tensions between the two neighbors fades.
The move would change the status quo along the contested 3,488 kilometer (2,162 mile) Line of Actual Control and stretch the nation’s already tight military budget, senior Indian officials said, asking not to be identified citing rules on speaking to the media.
“The nature of the Line of Control, at least in Ladakh, has changed forever,” the director of Delhi-based think-tank The United Service Institution of India and retired major general, B K Sharma said.
Strengthening border defenses comes at huge cost and places new pressure on the nation’s military modernisation program.