BQuick On June 3: Top 10 Stories In Under 10 Minutes
A man stands near a shanty built on the edge of the Arabian Sea at Bandra. (Source: PTI)

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

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

1. Cyclone Nisarga Weakens, Mumbai Escapes With Little Damage

Severe cyclonic storm ‘Nisarga’ weakened into a cyclonic storm after it made landfall in coastal Maharashtra during the day.

  • The storm made landfall south of Alibag between 12:30 p.m. and 2:30 p.m. with a wind speed of 100-110 kilometres per hour gusting to 120 kmph, India's Meteorological Department said.
  • The storm is now moving north-northeastward with a much lower speed of 24 kmph.
  • Trees and electricity poles were uprooted in a lot of the affected areas.
  • India’s financial capital escaped the worst as businesses remained largely unaffected.
  • The cyclone also hasn’t affected operations at two nuclear plants in the storm-hit region so far.

Follow the advance of India’s second cyclone within a fortnight as it moves across the west coast here.

Also read: Watch Cyclone Nisarga Hit Maharashtra And Gujarat

2. Farmers Unshackled

India approved an ordinance to ensure a barrier-free trade in agricultural produce, a move that’s aimed at increasing farmers’ income at a time Asia’s third-largest economy is gradually reopening after a more than two-month lockdown to contain the coronavirus.

  • The cabinet chaired by Prime Minister Narendra Modi approved the Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 that aims at promoting inter- and intra-state trade outside the markets notified under State Agricultural Produce Marketing legislations.
  • It will help farmers with surplus produce to get better prices, according to a government statement.
  • “States APMC Act would continue but the areas that do not come under APMC, be it farmer’s house, companies, processing industry, farmer produce organisations can go to his house and buy the produce,” said Narendra Singh Tomar, minister of Agriculture and Farmers’ Welfare.
  • Outside APMC mandis, there will be a trading area, and no tax of any form will be levied on sale and purchases, he said.
  • Besides, a trader or entity, farmer produce organisations, and cooperative sector holding a PAN card “can definitely” buy farmers’ produce, Tomar said.

That’s aimed at preventing legal roadblocks and ‘Inspector Raj’.

3. Nifty Reclaims 10,000; Nasdaq Nears All-Time High

Indian equity markets maintained its best winning streak in seven months by ending higher for the sixth straight session.

  • The S&P BSE Sensex fell more than 350 points from the day's high to end with gains of 0.84% at 34,109.
  • The NSE Nifty 50 index managed to hold on to the 10,000 mark, ending 0.83% higher at 10,061, down 115 points from the day's high.
  • The Nifty IT and Nifty Metal index ended with marginal losses.

Follow the day’s trading actions here.

Investors should put their money in companies that make essential goods and reinvest the excess cash that they generate back into their business. Having found companies with this combination, they will have built themselves a portfolio that will make money even through disasters, pandemics and economic crises, said Saurabh Mukherjea.

Watch Mukherjea explain how to find the ‘Virat Kohlis’ of India Inc.

U.S. stocks extended a global rally as investors clung to optimism for a quick economic recovery from the pandemic.

  • The S&P 500 headed for its fourth straight gain and the Nasdaq 100 rose within 1% of an all-time high.
  • Gold, Treasuries and the dollar dropped, with the greenback hitting its weakest since early March, as investors turned away from havens after data on U.S. private payrolls showed fewer job losses than forecast in May.
  • Gold weakened 1.2% to $1,707.14 an ounce.

Get your daily fix of global markets here.

4. Why Aberdeen Standard Turned Defensive On India

Aberdeen Standard Investments Ltd. has adopted a “defensive stance” toward India over the short term as government measures to support the economy have fallen short of reviving demand with lacking key reforms.

  • “We view the package as a tad underwhelming, given that it does little to boost demand or relieve stress for companies and sectors that have effectively come to a standstill during the lockdown,” Kristy Fong, senior investment director for Asian Equities, said in an email.
  • It also lacked tax breaks or a plan for infrastructure spending and reforms to support the manufacturing sector.

The money manager expects stocks to remain volatile while the outbreak likely to be a hindrance to global economic recovery.

Related Coverage:

5. Depositors Put Their Faith In Government Banks

Private lenders garnered a much smaller share of incremental deposits raised by the banking sector in 2019-20, as the collapse of two non-government banks shook depositor confidence.

  • Private banks garnered only 31.6% of the incremental deposits across the banking system in FY20, shows a BloombergQuint compilation of quarterly credit and deposit statistics released by the Reserve Bank of India.
  • State-run banks garnered 54.2% of the incremental deposits, the data showed. The remaining share of deposits is split between foreign banks, regional rural banks and small finance banks.
  • The direction of deposit flows in 2019-20 was markedly different from the previous year, when private banks took away 65% of incremental deposits.

This was the first time in at least eight quarters that deposits parked in public banks outpaced those in private banks.

6. Promoter Opportunism Vs Minority Protection

Two recent corporate actions have added fuel to the decades-old fire simmering between Indian promoters and minority shareholders. At a time when stock prices are at or near long-term lows, one promoter has proposed to delist his company, and the other has opted for a cheaper route of capital infusion. In both cases, governance advisory firms have cried...promoter opportunism. Hoping the regulator will intervene.

  • Meanwhile, others have proposed regulatory relaxations to permit businesses more flexibility in raising capital in the midst an unprecedented economic crisis.
  • Thereby, fanning the flames on an important debate—promoter opportunism versus minority protection.
  • At a time of unprecedented economic crises, should India review its governance and minority protection legal framework in order to tighten it or liberalise it?

Find out what corporate governance experts think of this recent trend.

7. Teething Issues With CDSL’s New System

A system introduced by Central Depository Services (India) Ltd. that lets individuals sell equity shares without giving their brokers power of attorney went live on Monday, crashed and had to be temporarily rolled back, a senior executive at a leading brokerage told BloombergQuint.

  • As a result, brokerages that had tried to implement the system had to revert to the earlier process.
  • Another attempt to move to the new system will be made Wednesday, the executive cited earlier said on the condition of anonymity as he isn’t permitted to speak to the media.

Find out how the new system works and the prickly issue of power of attorney.

8. India Has 2 Lakh Covid-19 Cases, But Over Half Have Recovered

The coronavirus tally in India breached the 2-lakh mark after the nation added around 50,000 cases in six days, just when the government planned a phased lifting of the lockdown that lasted for two months.

  • India added 8,909 fresh cases over the last 24 hours, taking the total case count to 2,07,615, according to the Health Ministry’s update at 8 a.m. on June 3.
  • This includes 1,00,303 recoveries and 5,815 people who have succumbed to the deadly virus.
  • The world’s second-most populous country is now adding more than 7,000 cases every day, only behind the U.S., Russia and Brazil.

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

Globally, cases crossed 64 lakh with deaths exceeding 3.8 lakh.

  • Iran reported its highest number of daily infections in two months, a surge that nears March’s peak levels.
  • The Netherlands reported 86 new confirmed cases, the first time the daily number dropped under triple digits in almost three months.
  • Scientists in London are testing whether a variant of the commonly used painkiller ibuprofen can help patients with Covid-19 avoid potentially lethal respiratory failure.

Follow the global spread of the virus here.

9. Indo-U.S. Digital Tax Tussle

India will defend its decision to widen a tax on digital services after the U.S. started a probe to determine whether the policy discriminates against American tech giants, a person with the knowledge of the matter told Bloomberg News.

  • The government isn’t considering changing its stance on including e-commerce within the scope of its levy, the person said, asking not to be identified as they’re not authorized to talk with media.
  • The broader tax was announced in Prime Minister Narendra Modi’s latest budget in February and has already come into effect.
  • Alongside defending its tax, India’s government will also negotiate with the Trump administration to seek to prevent the imposition of tariffs.

India is among ten nations facing a probe on digital taxes that have either been adopted or are under consideration.

Also read: Google Pulls Chinese-App Remover From Android for Violations

10. Saregama’s Facebook Deal

Saregama India Ltd. has announced a global deal with Facebook Inc. to license its music for video and other social experiences across Facebook and Instagram.

  • This partnership will allow users to choose from a wide variety of music to add to their social experiences such as videos, stories via stickers and other creative content, the Indian company said in a statement.
  • Users will also be able to add songs to their Facebook profile.

Saregama will allow people globally to use their favourite retro Indian music for content on Facebook.

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