BQuick On July 3: Top 10 Stories In Under 10 Minutes  
An e-rickshaw driver is reflected in a wing mirror while waiting for passengers at a stand in New Delhi, India (Photographer: Prashanth Vishwanathan/Bloomberg)  

BQuick On July 3: Top 10 Stories In Under 10 Minutes  

This is a roundup of the day’s top stories in brief.

1. What India’s GDP And Schrodinger’s Cat Have In Common

Remember the imaginary Schrödinger’s cat experiment? Where a cat is left in a box along with an unstable atom which has about a 50% chance of undergoing radioactive decay? If it does, the cat dies. If it doesn’t, the cat survives. But till you open the box, the cat is considered to be equally dead and alive.

  • That’s quantum mechanics. But it’s almost as if economies, including India’s, are facing a similar predicament.

  • Till the varying lockdowns across the nation and across different states are lifted, you won’t know how alive the economy really is.

  • For now, economists continue to adjust their estimates month to month as various stages of the lockdown unfold.

  • As the second quarter begins, a variety of restrictions on movement and regular business activity continue prompting a revision of estimates.

High-frequency indicators have continued to show improvement from week to week but some are showing signs of plateauing.

2. Jio Platforms: Intel Inside

The technology venture of billionaire Mukesh Ambani secured another $253 million from Intel Capital, adding to a slew of investments since April that have reached more than $15 billion.

  • The investment arm of computer chip giant Intel Corp. agreed to buy a 0.39% stake in Jio Platforms Ltd., giving the business an equity value of $65 billion, Ambani’s conglomerate Reliance Industries Ltd. said in a statement Friday.

  • “Through this investment, we are excited to help fuel digital transformation in India, where Intel maintains an important presence,” Wendell Brooks, Intel Capital president, said in the statement.

The slew of stake sales and progress in cutting debt have helped Reliance Industries shares double since late March.

Ambani Brings In Zoom Challenger

Zoom, one of the few success stories of the Covid-19 pandemic, now faces a new competitor in an app backed by Asia’s wealthiest person Mukesh Ambani.

  • Ambani’s Reliance Industries Ltd. has launched the JioMeet video conferencing app after beta testing.

  • The app has already garnered more than 100,000 downloads on the Google Play Store after becoming available Thursday evening.

  • Like Google Meet, Microsoft Teams and other services, JioMeet offers unlimited high-definition calls -- but unlike Zoom, it doesn’t impose a 40-minute time limit.

Find out what makes JioMeet stand out.

3. Sunil Mittal’s Big Bet On Satellites

A U.K. government consortium, led by an arm of Sunil Mittal's Bharti Enterprises Ltd., has won the bid for OneWeb, a bankrupt satellite firm whose investors include Japan’s SoftBank Group Corp.

  • Bharti Global Ltd. and the U.K. government will each commit $500 million in a deal expected to close by year-end, the bidders said in emailed statements on Friday.

  • Bharti will provide the company with “commercial and operational leadership” while the U.K. will have a final say over future access to the London-based satellite firm’s technology.

  • The deal will allow OneWeb to complete construction of a global satellite constellation that will provide enhanced broadband and other services to mobile and fixed terminals in countries around the world.

OneWeb makes the so-called low-Earth orbit satellites that provide high-speed communications.

4. Demand Is Not The Problem, Says RC Bhargava

As India enters the second phase of reopening its economy, demand isn’t the biggest problem facing the automobile industry, according to the chairman of the country’s largest carmaker. In fact, demand is on the rise and will continue to do so, at least in the short term, he said.

  • That, however, isn’t enough to bring a V-shaped recovery for the industry, which is still struggling with supply-side issues due to the pandemic apart from cost headwinds it has been facing over the last few years, Maruti Suzuki India Ltd.’s RC Bhargava said in an interview with BloombergQuint.

  • The most urgent of the problems is the lack of manpower, which affects the end product and the components that go into making a car, he said.

Watch the full interview with Bhargava where he explains how Maruti Suzuki is trying to expand production.

5. Nifty Caps Another Week Of Gains; Dollar Set For Weekly Drop

Indian equity markets ended with gains for the third straight session after trading in a narrow range throughout the day.

  • Both S&P BSE Sensex and the NSE Nifty 50 index ended with gains of 0.5% at 36,021 and 10,607 respectively.

  • The Sensex traded in a 250-point range while the Nifty was confined to a 70-point range through the day.

  • The Nifty realty index snapped a seven-day losing streak to end 1% higher.

Follow the day’s trading action here.

European stocks dropped with U.S. futures as investors mulled reported conflict among policy makers over a stimulus package for the single-currency region, and political upheaval in France.

  • The Stoxx 600 Index turned lower after Bloomberg News reported the European Central Bank is facing a potential rift over how much their emergency bond-purchase program should stay weighted toward weaker countries such as Italy.

  • The euro slipped as French President Emmanuel Macron named a new prime minister after asking his government to resign.

  • U.S. cash equity and bond markets are shut Friday for Independence Day.

  • The dollar was steady, though still headed for its first weekly drop in a month.

  • Gold drifted just below $1,800 an ounce.

Get your daily fix of global markets here.

6. Franklin Recovers Some Money, But Unitholders Won’t Get It Yet

Franklin Templeton Mutual Fund has so far recovered Rs 2,666.12 crore of the amount due to investors of the six debt schemes it shuttered in April citing redemption pressure.

  • The asset manager owed investors more than Rs 28,000 crore when it wound up the schemes.

  • But net assets have since fallen to Rs 25,000 crore after paying lenders and also because the value of some of the debt securities held declined.

  • The proceeds, however, can't be distributed to unitholders because of a stay by the Gujarat High Court on the e-voting process required to wind up the schemes.

  • Most of the money recovered came from investments made in the Franklin India Ultra Short Bond Fund.

The asset manager will first have to repay lenders before it can start generating funds to repay unitholders.

BQuick On July 3: Top 10 Stories In Under 10 Minutes  

7. Services Activity Is Improving, But Not Much

A gauge of India’s services sector indicated some improvement in activities as the nation eased the restrictions imposed to contain the coronavirus pandemic.

  • The India Services Business Activity Index, compiled by IHS Markit, stood at 33.7 in June compared with 12.6 in May, according to a media statement.

  • A reading below 50, however, indicates contraction in business activity.

  • The Composite PMI Output Index, measuring combined services and manufacturing output, rose to 37.8 in June from 14.8 in May. Still, it remains below the crucial 50.0 level.

  • The slower rate of decline was reflective of some stabilisation in activity levels, with around 59% of firms reporting no change in output since May. Only 4% registered growth, while 37% recorded a reduction, the statement said.

But demand continued to weaken on account of disruptions due to the pandemic.

Concerns About States’ Debt

A Reserve Bank of India working paper argued that state level debt in India is “just about sustainable” and limits set for it under the ‘Fiscal Responsibility Legislation’ may need to be reviewed.

  • The paper, which does not take into account the impact of Covid-19 on state government finances, said the UDAY power reforms scheme of 2016-17 has been a big factor in pushing up state level debt.

  • “States’ debt is just about sustainable with some potential signs of unsustainability. Guarantees given by states, if invoked, could certainly pose a potential risk to debt sustainability for Indian states,” the paper said.

According to the paper, states' debt is increasing at a double-digit rate.

8. India’s Trade War With China: A Juvenile Reaction?

Over the course of the last week, India is learned to have worked on a wide range of potential trade actions aimed at stemming the tide of imports from China. It also banned the use of 59 mobile applications of Chinese origin, and barred firms from Asia’s largest economy from participating in highway projects and investing in micro, small and medium enterprises.

  • However, duty increases done in a sporadic manner are “going to be counterproductive, if not accompanied by a proper strategy,” warned former Union Commerce Secretary Rajeev Kher, in an interview.

  • “If your fundamentals of domestic production are skewed, then a duty increase isn’t going to facilitate production,” he said.

Kher calls for targeted production-linked incentive programmes instead of juvenile reactions.

9. Yes Bank: No Interim Relief

Zee Entertainment Enterprises Ltd. cannot be restrained from disposing or transferring its assets, the Bombay High Court has said while denying interim relief to Yes Bank Ltd.

  • The bank had approached the high court arguing that a letter of comfort given by Zee Entertainment is in the nature of guarantee—a claim the court found no merit in.

  • In 2016, Zee Entertainment had provided a letter of comfort to Yes Bank against a loan extended to one of its group entities.

  • Additionally, Yes Bank was given a put option on Zee Entertainment’s shares in its subsidiary ATL Media Ltd.

Zee Entertainment had agreed to fulfill four conditions during the subsistence of the loan.

10. Covid-19: India’s Independence Day Vaccine Goal

Covid-19 cases in India continue to mount by the day amid the second phase of the reopening of the economy.

  • India added nearly 21,000 new cases of the novel virus, taking the total tally to 6,25,544, according to the Health Ministry’s update as of 8 a.m.

  • This is the first time the country has reported fresh cases and recoveries of over 20,000 in a day.

  • The Indian Council of Medical Research has written to select medical institutions and hospitals to fast-track clinical trials of Covaxin, a Covid-19 vaccine being developed in collaboration with Bharat Biotech Ltd.

  • ICMR aims to launch a ‘Made in India' Covid-19 vaccine by Aug. 15 this year.

  • After Bharat Biotech's Covaxin, another potential Covid-19 vaccine indigenously developed by Ahmedabad-based Zydus Cadila Healthcare Ltd got nod from the Drugs Controller General of India on Thursday for human clinical trials, government sources told PTI.

Track news and developments around the Covid-19 outbreak here.

Globally, cases inched closer to 1.1 crore leaving over 5.19 lakh dead.

  • The spread of the virus accelerated in the Americas with U.S. cases jumping the most in almost eight weeks.

  • Brazil reported its second-highest daily number.

  • Mexico logged a record rise in new infections.

  • North Korea, which has never reported any cases, said it has halted the spread of the virus.

Follow the global spread of the virus here.

Also read: Saroj Khan Never Stopped Dancing

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