BQuick On June 25: Top 10 Stories In Under 10 Minutes
1. India Says China Showing ‘Complete Disregard’ For Norms
China has been amassing a large contingent of troops and armaments along the Line of Actual Control since early May, External Affairs Ministry Spokesperson Anurag Srivastava said in an online media briefing.
- The conduct of the Chinese forces has been in complete disregard of all mutually agreed norms, India said holding Beijing responsible for the eastern Ladakh standoff.
- In early May, he said, the Chinese side took action to hinder India's "normal, traditional" patrolling pattern in the Galwan Valley area while it sought to change the status quo in other areas of the Western Sector couple in mid-May.
While there have been occasional departures in the past, the conduct of Chinese forces this year has been in complete disregard of all mutually agreed norms.Ministry of External Affairs Spokesperson
Here’s more from what the ministry had to say about the border row.
2. India Prepares For A Trade War With China
India plans to impose stringent quality control measures and higher tariffs on imports from China, people with the knowledge of the matter Bloomberg News.
- The state-run Bureau of Indian Standards is finalizing tougher norms for at least 370 products to ensure items that can be locally produced aren’t imported, the people said, asking not to be identified citing rules.
- The products include chemicals, steel, electronics, heavy machinery, furniture, paper, industrial machinery, rubber articles, glass, metal articles, pharma, fertilizer and plastic toys.
- Discussions are also on to raise import duty on products including furniture, compressors for air conditioners and auto components.
The Trade Ministry is separately evaluating non-tariff measures to check Chinese imports.
The India Inc. Impact
Indian makers of air-conditioners will be among the consumer durable companies that will see costs rising as the nation plans to increase duties on imports of components from China amid a border standoff.
- Higher duties will be a negative for air-conditioner manufacturers as compressors form 25-30% of the costs and are largely imported from China.
- The makers of cooling appliances have already lost out on summer sales this year due to the coronavirus lockdown.
Indian white goods makers are heavily dependent on China.
India’s plan to curb Chinese imports can put pressure on its auto components industry, already grappling with the effects of a slowdown and virus-induced shutdown.
- Weaning Indian automakers away from China may be difficult as more than a quarter of their global imports—or $4.6 billion out of $17.5 billion—come from that nation, according to the Auto Component Manufacturers Association.
- Chinese imports stretch across the value chain—from drivetrains and engine parts to electronics and electrical bits.
Component-wise, the maximum dependence is in the two-wheeler and passenger vehicle segments.
3. Brace Yourself. Fuel Will Get Even More Costly.
Retail fuel prices in India are near record highs after 17 consecutive hikes by state-owned oil marketers. Yet, consumers should brace for more.
- That’s because oil marketers are struggling to recover costs after the government increased taxes to shore up revenue during the slowdown.
- The only way for these companies to protect margins is by increasing prices at the pump.
- Retail prices have been rising since May-end as crude recovered from a record plunge in April. Petrol has turned costlier by Rs 10.39 a litre and diesel by Rs 12.13, to Rs 86.70 and Rs 78.34 a litre, respectively.
- Petrol in Mumbai is just Rs 4.6 a litre away from the all-time high, while diesel is Rs 1.76 under its record level.
Here’s India's oil price conundrum explained in charts.
4. One-Time Restructuring Of Loans In The Works
The government is in discussions with the Reserve Bank of India for a one-time restructuring of loans as the outbreak of Covid-19 pandemic has strained finances of borrowers, Finance Minister Nirmala Sitharaman said.
- “We are definitely talking with RBI to see if one-time restructuring can be offered also looking at characterization of a company as stressed, not stressed…,” Sitharaman said at an industry interaction on Thursday.
- Characterisation of companies as stressed or an NPA have added to stress and pain during the time of the pandemic, Sitharaman said.
Lenders have sought restructuring, including an extended repayment period, lower interest rates and additional financing.
5. Nifty Flat; U.S. Stocks Fluctuate
Indian equity markets ended little changed in what was a rangebound and volatile trading session.
- The S&P BSE Sensex ended 0.1% lower at 34,842 while the NSE Nifty 50 ended at 10,288, down 0.16%.
- 35 out of the 50 Nifty constituents ended with losses.
- Among the sectoral indices, the FMCG index outperformed, ending with gains of 2%.
- Broader markets outperformed the benchmarks.
Follow the day's trading action here.
U.S. equities fluctuated as investors weighed the threat to the American economy from resurgence in coronavirus cases continued to climb.
- The S&P 500 was little changed after falling as much as 0.9%, with trading 15% below the 30-day average at this time of day.
- The index is now flat for the month after one of the highest-ever increases in U.S. cases increased the possibility that some areas will have to reinstitute partial shutdowns.
- Investors also grappled with a mixed batch of economic data, after initial jobless claims topped estimates and durable goods orders came in better than expected.
- Brent crude dipped 1.7% to $39.62 a barrel.
Get your daily fix of global markets here.
6. SEBI Amends Insider Trading, Takeover Rules
India’s securities regulator approved amendments to rules around the preferential issuance of shares, prohibition of insider trading, and substantial acquisition of shares and takeovers in its quarterly board meeting, according to a statement.
- SEBI offered a new method to price preferential issue of shares.
- Acquisition through stock exchange settlement through bulk or block deals will be allowed during open offers.
- SEBI will also maintain a database on nature of unpublished price sensitive information and names of those who shared it.
Read the details of SEBI board’s decisions.
7. Aditya Puri's Salary Jumps
Aditya Puri, the long-time chief executive officer of India’s largest private lender HDFC Bank Ltd., saw a sharp increase in his salary in 2019-20.
- He also netted the most in at least the last five years by exercising stock options, though his shareholding in the bank remained unchanged at the start and end of the year.
- The bank’s annual report shows that Puri’s salary rose to Rs 15.92 crore in FY20 compared to Rs 10.73 crore in FY19 and Rs 7.62 crore in FY18.
- With perquisites, gross salary rose to Rs 18.12 crore from Rs 13 crore last year and Rs 9 crore a year before.
- Puri is slated for retirement in October as he has reached the age of 70.
HDFC Bank has already shortlisted three potential successors to Puri.
8. Four Suitors For Jet Airways
Lenders to Jet Airways (India) Ltd. have shortlisted four bidders who may potentially submit a bid next month, a person aware of the matter said.
- The shortlisted bidders have signed non-disclosure agreements with the committee of creditors and have been given access to the beleaguered airline’s financial data, the person told BloombergQuint on the condition of anonymity.
- The bidders will have two weeks to review the financial data and firm up their bids. A bidder can still choose to not submit a bid at the end of the due diligence process.
Find out who the four potential bidders are.
9. Bringing Light To The Loan Moratorium ‘Black Box’
It is incumbent on banks and the banking regulator to put out as much granular information as possible on the pool of moratorium loans, writes Ira Dugal.
- An easy place to start would be a standardised disclosure format.
- This can be mandated by the RBI as the regulator of banks or also the capital market regulator.
- Both regulators, in diverse circumstances have used disclosures as a way to bring clarity to businesses.
- Either way, a standard disclosure should be prescribed for comparability.
What should it hold? Find out here.
10. Covid-19: Delhi Crosses Mumbai As India's Most Infected City
Over 4.7 lakh people have been infected by the deadly Covid-19 virus in India, as new cases poured in from across the country taking the figure to a new high.
- The country added nearly 17,000 new Covid-19 cases, taking the total tally to 4,73,105, according to Health Ministry’s 8 a.m update on June 25.
- Over 2.7 lakh of these cases have been declared as “cured/discharged”.
- Delhi now has the highest number of confirmed Covid-19 cases in India, surpassing Mumbai, as the pace of transmission spirals in the national capital.
- The capital has also rolled back a rule that mandated institutional quarantine even for those who were under home isolation.
- Maharashtra, on the other hand, has said it will reopen hair salons for haircuts only from June 28.
Track news and developments around the Covid-19 outbreak in India here.
Globally, cases neared 95 lakh with over 4.83 lakh deaths.
- Germany’s infection rate fell to the lowest in almost three weeks.
- The outbreak worsened across the U.S. heartland and a new modeling predicts the virus will kill 1.8 lakh Americans by October.
- Thailand is set to extend its state of emergency for a third time.
Follow the global spread of the virus here.