BQuick On July 6: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. The Pandemic’s Most Tracked Economic Indicator
“Google it” has been a common response to many questions. That’s been true during the pandemic too. Google Trends shows spikes in questions on “when will corona end”, “coronavirus vaccine”, “coronavirus cases” and “coronavirus.”
Over the past few months, the ‘Google Mobility Reports’ have become a closely watched economic indicator.
The ‘mobility report’, together with other indicators like the ‘Tom-Tom Traffic index, the E-way bills data and electricity consumption data among others, have emerged as a set of ‘concurrent indicators’ being tracked to assess the impact of the pandemic and design policy responses.
The Google Mobility Index is being put out as a ‘public good’ and is made available to anyone who wants it — policymakers, researchers or individuals.
Google had this anonymised aggregated data. We have made it public before. While working with public health officials we realised that this could really help them frame lockdown strategies and social distancing norms.Anal Ghosh, Senior Programme Manager, Google India
Find out how Google Mobility Index tracks changes across the country and states.
2. Your Dream House In Mumbai Is Now Cheaper
Property prices have started falling in Mumbai, India’s costliest real estate market, as developers offer discounts to counter a liquidity crunch aggravated by the pandemic.
Prospective homebuyers can bargain for a reduction in prices, besides flexible or deferred payment schedules, BloombergQuint found in its conversations with developers, brokers and consultants.
In the Mumbai Metropolitan Region, developers and sellers are offering discounts to genuinely interested buyers to lock the deals, said Bhavin Thakker, managing director, Mumbai at property adviser Savills India.
About 70% of the projects in Mumbai saw prices fall in May and June, according to Propstack, a real estate data analytics platform that analysed registration data available for 275 projects.
Property prices have also fallen in the Delhi-National Capital Region, India’s biggest real estate market.
3. China Triggers A Global Stock Market Rally
U.S. stocks jumped, with tech shares leading the way, as a huge rally in Chinese markets pushed a global equity benchmark toward a one-month high.
The S&P 500 Index headed toward its fifth-straight increase and the Nasdaq Composite rose to a record, with high-flying tech names like Amazon.com Inc. and Tesla Inc. among the best performers.
Uber Technologies Inc. surged after the company agreed to buy Postmates Inc. in a $2.65 billion all-stock deal.
The Stoxx Europe 600 Index climbed more than 1% while developing-nation stocks added more than 2%.
Global stock markets started the week in an upbeat mood after a front-page editorial in China’s Securities Times on Monday said that fostering a “healthy” bull market after the pandemic is now more important to the economy than ever.
The Shanghai Composite Index posted its biggest advance since 2015.
Get your daily fix of global markets.
Indian equity markets ended higher for the fourth straight day, tracking positive global cues, even as Covid-19 cases in the country.
The S&P BSE Sensex ended 1.3% higher at 36,487 while the NSE Nifty 50 index gained 1.47% to end at 10,763.
Both benchmark indices ended at their highest level since March this year.
Among the sectoral indices, banking stocks moved in line with the benchmarks with the Nifty Bank index ending with gains of 1.6%.
Follow the day’s trading action here.
A global pandemic has shut the most economies, roiled international markets and prompted unprecedented monetary and fiscal stimuli, all in a matter of months. But, Macquarie Group’s Viktor Shvets says the virus itself is a mere “noise” that investors need to largely ignore.
4. Rural Revival For Automakers
Sales of passenger vehicles and tractors rose at dealerships but overall retail demand contracted for the third consecutive month in June even as the government unveiled measures to open up the economy following a stringent national lockdown lasting for more than two months.
Vehicle registrations, a measure of sales at dealerships, rose sequentially but was down 42.9 percent year-on-year to 9.74 lakh units in June, according to data from 1,225 regional transport offices in 32 states and union territories, collated by BloombergQuint from the website of the Ministry of Road Transport and Highways.
Most automakers, while showing decline in year-on-year factory gate sales, have witnessed recovery on a month-on-month basis. Tractors continue to outshine other vehicle categories.
Demand for passenger cars and two-wheeler, too, witnessed a recovery over the previous month but is largely skewed toward semi-urban and rural markets.
Two-wheeler and passenger car sales have recovered but are still at half the pre-Covid levels.
5. Vijay Shekhar Sharma, Paytm Enter Insurance
Paytm, along with its founder Vijay Shekhar Sharma, will acquire 100% in Raheja QBE General Insurance Company Ltd, the company disclosed on Monday.
In a statement, Paytm said that it would acquire the 51% stake currently owned by Prism Johnson and the 49% held by QBE Australia in Raheja QBE General Insurance, subject to approvals from the Insurance Regulatory and Development Authority of India.
According to a stock exchange notification, Prism Johnson will sell its 51% stake in the insurance company to QorQL for an aggregate sum of Rs 289.68 crore.
That pegs the acquisition cost at Rs 568 crore. According to a person familiar with the matter, who spoke on condition of anonymity, Sharma will hold 51% in his personal capacity, while Paytm will hold the remaining 49%.
With this acquisition, Paytm will enter into the general insurance business inorganically.
6. Almost One-Fifth Of India Inc. Debt Could Be Stressed By Next Year
India Ratings & Research Pvt. expects the pandemic to worsen corporate stress in the next two financial years.
Stressed corporate debt could rise to 18.21% of outstanding debt by March 2022, from 11.57% currently, the rating agency said in a statement.
About Rs 1.67 lakh crore worth debt by top 500 debt-heavy private companies could turn delinquent in FY21 and FY22 owing to the Covid-19 pandemic and the associated stress, India Ratings estimates.
This is over and above Rs 2.54 lakh crore worth of debt estimated to turn sour before the pandemic.
7. Covid Impact: Finance Ministry Sees Adverse Impact On Business Sentiment
High uncertainty due to the Covid-19 pandemic may adversely impact business sentiment and force companies to delay investments.
That’s according to the finance ministry, which in a monthly report said coronavirus' impact on Indian economy is rapidly evolving, driving market volatility on a daily basis, as reflected in movements of volatility index of domestic equity market, and economic policy uncertainty index.
Besides investment, “an adverse impact on trade is expected” due to virus-induced supply chain disruptions, weak external demand, and persistent global trade tensions, the report said.
India being highly import dependent, the overall effect on net exports may be positive on the back of relatively sharper decline in imports and lower oil prices, it said.
The uncertainty with flattening of the Covid-19 curve, in the absence of a vaccine, poses a serious challenge.
Meanwhile, Firms Try To Woo Back Migrants
A mass exodus of workers that followed India’s harsh lockdown is forcing businesses to review their labour policies as they try to lure the people back with incentives as the economy reopens.
Some companies are promising benefits such as free travel tickets, housing and food to draw workers to urban areas.
Others are managing by hiring new faces from nearby locations.
Some are trying a mix of both.
For now, the efforts of companies to bring them back seem to be yielding some results.
8. Covid-19: India Now Third Most Infected Country
India’s coronavirus curve showed so signs of flattening on Monday with numbers reaching close to the 7-lakh mark.
The country added nearly 25,000 Covid-19 cases in just 24 hours to peg the total tally at nearly 6.97 lakh, according to the Health Ministry’s 8 a.m. update.
The rate at which cases are growing in India is one of the fastest in the world, only behind Brazil and U.S.
It is now the third-most infected country surpassing Russia with 6.8 lakh cases.
India is now behind Brazil which has roughly 10 lakh more cases.
Monday was the second day of more than 24,000 cases being reported in India.
Track news and developments around the outbreak in India here.
Globally, total confirmed cases crossed 1.14 crore while over 5.33 lakh people have died.
The World Health Organization reported a one-day high in global coronavirus infections over the weekend, while Iran and Indonesia reported their deadliest days yet.
Mexico overtook France with the fifth-deadliest outbreak, while Benjamin Netanyahu said Israel is in a state of emergency.
Follow the global spread of the virus here.
9. Bank Boards And Their Burdens
Reserve Bank of India’s discussion paper suffers from an identity crisis, writes M Damodaran.
It starts out as a discussion paper, with a background,
And promptly seeks to convert itself into the first draft of a proposed regulation,
Complete with provisions for “Interpretation”, “Transition” and “Repeal”.
But that is hardly its biggest flaw.
10. India, China Say Troops Are Disengaging
Indian and Chinese officials say soldiers from both sides have begun falling back along their contested Himalayan border that last month saw the worst flare up of violence in four decades.
- The People’s Liberation Army was seen removing tents and structures in the border area, following the last meeting between the senior commanders of both nations, an Indian government official said, asking not to be named citing rules.
- China had also begun moving its vehicles back at various points along the Line of Actual Control -- the 3,488 kilometer (2,167 mile) unmarked boundary -- including Galwan, Hotsprings and Gogra, the Indian official said, without specifying how far the vehicles have moved.
They re-affirmed both sides should respect and observe the Line of Actual Control and avoid any unilateral action to alter the status quo.