BQuick On June 2: Top 10 Stories In Under 10 Minutes

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

1. Watch Out For The Cyclone, Western India!

The India Meteorological Department issued a warning to coastal Maharashtra and Gujarat for a severe cyclonic storm brewing in the Arabian Sea.

• The deep depression over the Arabian Sea intensified into cyclonic storm ‘Nisarga’ as per IMD’s 2:30 p.m. update. It’s very likely to intensify into a severe cyclonic storm before midnight.
• The storm is expected to make landfall near the Maharashtra-Gujarat border between Harihareshwar and Daman, close to Alibag on Wednesday afternoon.
• The storm is expected to bring in gale winds of speed up to almost 120 kmph.
• Major damage to thatched houses and huts is expected. Power and communication lines could be damaged.
• The Navi Mumbai police advised citizens to stay indoors between 9 a.m. and 6 p.m. tomorrow.

Worried about the cyclone? Here’s what you can do to stay safe.

Mumbai, the financial capital of Asia’s third-largest economy, is likely to be affected by a cyclonic storm on Wednesday, potentially causing widespread disruption in business and hurting efforts to fight the virus outbreak in a city that’s emerged as the epicenter of infections in India.

• Mumbai is prone to heavy rains and floods, but cyclonic storms are rare in the mega city.
• The Jawaharlal Nehru Port Trust at Navi Mumbai has planned to sail out all berthed vessels after completing cargo work late on Tuesday, it said in an alert. All inward movements will be suspended until the weather condition improves, it added.
• The storm is unlikely to cause a major power outage in Mumbai as alternate transmission networks can be deployed to replace those damaged, according to Tata Power Co. Ltd.
• Large industrial establishments and petrochemical companies in Mumbai have been asked to take appropriate measures to keep their systems and materials safe.
• All hospitals in the city have been directed to ensure that their power generators are operational.

Cyclone Nisarga over the Arabian Sea is the biggest storm to make landfall near Mumbai in at least more than a decade.

2. Jio: Three Middle Eastern Investors?

Three of the largest Middle Eastern sovereign wealth funds are in advanced talks to invest in Reliance Industries Ltd.’s digital arm, people familiar with the matter told Bloomberg News.

• Abu Dhabi’s Mubadala Investment Co. is nearing a deal to invest about $1 billion into Jio Platforms Ltd. and an announcement could come as soon as this week, said the people, who asked not to be identified as the information is private.
• Reliance, backed by Asia’s richest man Mukesh Ambani, is also in discussions with Abu Dhabi Investment Authority and Saudi Arabia’s The Public Investment Fund, the people said.

Any new investment would add to the $10 billion that Jio Platforms has raised in recent weeks as it starts on early preparations for an overseas listing.

3. India Wants To Lure Smartphone Makers With Incentives

India is offering financial incentives and plug-and-play facilities with an outlay of about $6.6 billion (around Rs 50,000 crore) to attract investments from global companies in the manufacture of mobile phones and related components.

• The government will initially target five global suppliers and extend a financial incentive of as much as 6% on incremental sales of goods made in the country for a period of five years, according to the ministry for electronics and information technology.
• An incentive of 25% on capital expenditure will be provided for production of electronic components, semiconductors and other parts.
• Electronic manufacturing clusters with ready-to-use facilities will be offered.

The move has potential to make India a global mobile manufacturing hub.

4. Nifty Posts 5-Day Winning Streak; U.S. Stocks Rise

India’s rupee, sovereign bonds and stocks climbed as investors looked past the cut in the nation’s credit rating by Moody’s Investors Service to the lowest investment grade.

• The S&P BSE Sensex ended 1.57% higher at 33,825 while the NSE Nifty 50 index ended at 9,979, with gains of 1.56%.
• Both Sensex and Nifty ended at their highest level in nearly three months.
• The indices are now less than 20% away from their all-time high made earlier this year.
• Among sectoral indices, the realty index outperformed for the second straight day.

Follow the day’s trading action here.

U.S. equities rose alongside stocks in Europe and Asia as new bouts of stimulus and positive economic signals overshadowed social unrest in America.

• Banks led early gains on the S&P 500 Index. Gunmakers extended their rallies in the wake of President Donald Trump’s promise to deploy large numbers of troops if cities and states don’t act to contain violence from protests over police brutality.
• Stimulus hopes powered Europe’s Stoxx 600 to a 12-week high as Chancellor Angela Merkel sought to thrash out a second aid package for Germany.
• The dollar fell for a fourth straight day.
• Oil gained as investors eyed a potential extension of record production curbs by OPEC+.

Get your daily fix of global markets here.

5. Modi's Message To India Inc.

Prime Minister Narendra Modi said it’s not difficult to get India’s growth back, and he has full confidence in the country’s capabilities and crisis management.

• “Yes. We will definitely get our growth back…I have confidence in India’s innovation and intellect, its farmers, MSMEs, and entrepreneurs,” Modi said at the annual general meeting of industry body CII.
• The government’s highest priority is to re-strengthen India against the coronavirus, and it’s taking required steps immediately, Modi said, adding that these decisions will help the country in the long run.

Modi suggested five steps to bring India back. Find out what they are.

6. A ‘Rating’ For Growth

If our long-term growth does not rise above 6%, then we should expect India’s ratings to be downgraded to ‘junk’ by all the rating agencies, writes Arvind Chari.

• If you would have told anyone in 2005 that India will be downgraded to junk for lack of growth, they would have laughed you away.
• Three years of 9% GDP growth made everyone extrapolate India to be a sustainable double-digit real GDP growth economy.
• The actual average real GDP growth from FY08 to FY20 has been 6.2%.

India is 18-24 months away from being downgraded to ‘junk’.

7. IndiGo Lands Into A Loss, Britannia’s Profit Rises

Interglobe Aviation Ltd.’s quarterly revenue rose at its slowest pace since listing as flight services were suspended in the last week of March amid the coronavirus outbreak.

• Revenue rose 5.27% year-on-year to Rs 8,299 crore in the quarter ended March.
• The company reported a loss of Rs 873 crore during the quarter.
• A deferred tax credit of Rs 420 crore lowered net loss.

Find out why the airline was in a loss.

Britannia Industries Ltd.’s quarterly profit jumped, aided by lower tax outgo even as sales remained muted.

• Net profit increased 26.3% over the previous year to Rs 375 crore.
• Revenue rose 2.5% year-on-year to Rs 2,868 crore.

Britannia’s margin contracted despite lower raw material costs.

8. Covid-19: India Cases Near 2 Lakh

Covid-19 infections in India are now close to the 2-lakh mark with another day of adding more than 8,000 fresh cases.

• India reported 8,171 new cases taking the total to 1.98 lakh cases, as per the health ministry’s 8:00 a.m. update.
• Total recoveries stood at 95,527—indicating a recovery rate of 48%.
• Over 5,500 people have died from the respiratory illness in the country.
• India is now just behind Italy in the list of countries with highest cases, after recently surpassing France and Germany.
• India today granted approval to Gilead Sciences for marketing Remdesivir in India as the anti-viral drug is used for hospitalised Covid-19 patients. The approval process was accelerated due to the emergency situation and the unmet need for medicines for coronavirus.

Track news and developments around the Covid-19 pandemic in India here.

Globally, cases approached the 6.3-million-mark while deaths crossed 376,000.

• Singapore, starting its cautious return to work, said the number of new daily cases outside of migrant-worker dormitories dropped to zero.
• Iran’s daily number of new coronavirus cases edged up to 3,117, bringing the total known infections to 157,562.
• Hong Kong extended virus-prevention measures after a new cluster of cases and Tokyo saw infections spike.

Follow the global spread of the virus here.

9. Navneet Munot’s ‘Anxious Excitement’ About India Stocks

India’s equity market is offering a ‘once in a lifetime opportunity' to investors who select stocks from a bottom to top approach, especially in sectors that have taken the worst beating amid the coronavirus pandemic.

• That’s according to Navneet Munot, chief investment officer at SBI Mutual Fund, who said such opportunities are already available, despite the market having partially recovered from its lows in March.
• “Until two months back, great businesses were not available at reasonable valuations,” Munot said in a virtual panel discussion for the PMS AIF World Covid-19 To Wealth 20 event.
• “If you have time on your side they're going to be very exciting opportunities.” He, like most fund managers and market experts, advised investors to go long term.

Watch the full interview to see how Munot advises investors to pick stocks during the pandemic.

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10. So Much Debt To Refinance, So Few Places To Get Cash

A slump in Indian company foreign-currency loans to an 11-year low is raising concerns that weaker borrowers may struggle to refinance a record amount of maturing debt amid the pandemic.

• Local firms have secured $1.4 billion from offshore loans since April 1, down from $7.3 billion in the first quarter, according to data compiled by Bloomberg.
• Their overseas bond issuance has also dropped.
• Harder access to overseas financing adds to liquidity pressures for Indian borrowers, especially with Asia’s third-biggest economy expected to shrink this year for the first time in more than four decades.

Indian companies face a massive amount of loans and bonds to roll over.