BQuick On March 19: Top 10 Stories In Under 10 Minutes 
Pedestrians and traders gather in the Mahidharpura diamond market area of Surat, Gujarat, India (Photographer: Karen Dias/Bloomberg)  

BQuick On March 19: Top 10 Stories In Under 10 Minutes 

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

1. Coronavirus: India Bans Incoming Flights As Death Toll Rises To Four

The fourth coronavirus-related death has been confirmed in India, according to the health ministry’s website. Total number of confirmed cases have risen to 173 as of 5:00 p.m.

  • India barred all international flights from landing in the country for a week starting March 22, according to a government statement.
  • State governments have asked to enforce work from home for all private-sector employees except those in emergency and essential services.
  • Children below 10 years and citizens over 65 years of age have been advised to stay at home.
  • The government has reiterated that the outbreak has not reached the stage of community transmission yet.
  • Indian Council of Medical Research is stepping up its surveillance systems for community transmission testing. It will now include more areas where Covid-19 cases have been reported.
  • Prime Minister Narendra Modi will address the nation on efforts to tackle the outbreak tonight at 8 p.m. You can follow the speech here.

Follow the developments around the novel coronavirus outbreak in India here.

2. Europe Surpasses China As Covid-19 Hotbed

New coronavirus cases continued to soar with Europe now becoming the hotbed of infections. China said Wuhan, the hub of the outbreak in the country, reported no new infections and plans to reduce international flights to cut inbound infections.

  • Total cases have crossed 2.26 lakh worldwide while the death toll has climbed to 9,285.
  • Italy’s lockdown looks set to continue, France will likely extend a confinement period and Spain reported a surge in fatalities.
  • The Trump administration is revisiting the idea to issue ultra-long bonds to finance a $1.3 trillion fiscal stimulus plan.

Follow key developments from across the globe around the Covid-19 outbreak.

3. India’s Market Rout Continues...

Indian equity markets saw no respite from the selling pressure and ended with declines for the fourth day in a row, although benchmark indices staged a minor recovery from the lowest point of the day.

  • The S&P BSE Sensex ended with cuts of 2 percent or 581.28 points at 28,288.
  • The NSE Nifty 50 index ended 2.42 percent or 205.35 points lower at 8,263, the lowest level since Jan. 9, 2017.
  • The index recovered nearly 400 points from the day's low of 7,832.
  • All sectoral indices ended with losses, with the Nifty Auto index being the top laggard.

Follow the day’s trading action here.

BQuick On March 19: Top 10 Stories In Under 10 Minutes 

Rupee Weakens Past 75/$

India’s rupee weakened past 75 to a dollar to a new low as outflows from the nation’s stocks and bonds accelerated amid a global rout in risk assets.

  • The rupee retreated 1 percent to 75.0112 to go past the key psychological 75 level for the first time.
  • It closed at 74.99 per dollar.
  • Traders cited state-run banks selling dollars in a bid to ease the currency’s drop.
  • So far this month, the rupee has weakened 2.9 percent.

The Indian currency is responding to both global triggers and heavy selling by foreign investors in the local market.

Making The Most Of It

Envision Capital Services Pvt. Ltd. is looking for opportunities to plough the cash it’s holding in most of its portfolios into equities amid the coronavirus-fuelled selloff in the Indian stock markets.

  • “One would want to make the most of this kind of a steep correction which has set in. That’s what we’re trying to do now,” Nilesh Shah, managing director at the investment management firm said.
  • The money manager has started deploying money, he said, but still in very small amounts.

Watch the full conversation with Shah here.

4. Are Cash Transfers The Answer For Keeping Informal Economy Afloat?

Sectors ranging from travel and tourism to retail and hospitality are taking a hit as social distancing becomes the norm to tackle the coronavirus outbreak.

  • The lockdowns, in some cases partial and in others total, are likely to first hit contract workers across many of these industries.
  • To counter this, economists are now calling for some form of cash transfers to support those who have lost their source of income, even if temporarily.
  • Contract workers are usually the most vulnerable and the first to be laid off in the event of such downturns, said Mahesh Vyas, chief executive officer at the Centre for Monitoring the Indian Economy.
  • The biggest impact of the slowdown in business is expected on MSME entities in retailing, tourism and transportation, self-employed workers in the gig economy and contract workers in the informal economy, said a note from Kotak Institutional Equities.

Pinning down the number of contractual job losses is difficult but experts believe the hit can be large.

5. Why Virus-Triggered Rate Cuts Have Failed To Impress

There is little evidence to back the need for rate cuts and/or its efficacy to protect savings from vulnerability and counter volatility in the financial markets, writes Shankkar Aiyar.

  • The moment called for bolstering availability of funds whereas the U.S. Fed was haunted by notions of affordability.
  • How does a person go out to shop or spend at a spa or travel through spring break if multiple segments of the economy have been shut-down?
  • Why would an entrepreneur set up a business or expand in the given circumstance of shutdown and collapse of demand?

The questions are particularly relevant to emerging economies.

6. New Things We’ve Learned About The Coronavirus

New evidence from Europe and the U.S. suggests that younger adults aren’t as impervious to the novel coronavirus that’s circulating worldwide as originally thought.

  • Despite initial data from China that showed elderly people and those with other health conditions were most vulnerable, young people — from twenty-somethings to those in their early forties — are falling seriously ill.
  • Many require intensive care, according to reports from Italy and France. The risk is particularly dire for those with ailments that haven’t yet been diagnosed.

Here’s what the data suggests.

Drug trials on coronavirus patients in China yielded mixed results, with an HIV pill showing little benefit and a flu medication made by Fujifilm Holdings Corp. resulting in faster clearance of the virus.

  • The combination of lopinavir and ritonavir, marketed by AbbVie Inc. as Kaletra, didn’t improve the condition of severe Covid-19 patients or prevent them from dying more than standard care in a randomized, controlled trial of 199 patients.
  • A separate study of 80 patients receiving Fujifilm’s favipiravir, or Avigan, found it helped clear the virus from patients a week earlier than the HIV medicine and was associated with improved chest symptoms shown on CT scans.

Patients in the lopinavir and ritonavir trial were also found to show more gastrointestinal side effects such as vomiting.

As Europe becomes the epicenter of the virus that first emerged in the central Chinese city of Wuhan, Beijing is stepping up its outreach to individual governments there.

  • That’s coming at the very moment that the U.S. -- and in some cases the EU -- is seen to be turning away.
  • The result is a battle for hearts and minds that China seems to be winning, at least for the moment.

For China, the outreach to Europe is part of an effort to claw back an international leadership role.

7. SEBI’s New Delisting Proposals Could’ve Been So Much More

The market regulator has proposed an easier route for certain companies to delist without following the delisting regulations.

  • The listed parent entity, SEBI has proposed, can integrate its business with the listed subsidiary by providing a share swap to all shareholders of the listed subsidiary through a scheme of arrangement.
  • While this is a welcome proposal, according to Harsh Pais of Trilegal, why can't the same be extended to a third party, he asks.
  • “So, while this proposal is good, it’s quite limited in scope and could have been more ambitious,” Pais said.

Ambition aside, the proposal may not be in the best interest of all shareholders.

8. ITC Announces Bigger Rewards For Shareholders

ITC Ltd. said it will offer higher dividend payouts for the ongoing financial year compared to the previous three fiscals.

  • India’s largest cigarette manufacturer, in a statement on its website, said its dividend payout policy from financial year ending March 2020 over the next few fiscal years is expected to be 80-85 percent of its net profit—higher than the nearly 69 percent average over last three years.
  • ITC shares surged as much as 7.5 percent to close at Rs 161.95 apiece on Thursday.

Here’s what could be the dividend yield at current market price.

9. Ashok Leyland’s Investment Under Fire

Shares of Ashok Leyland Ltd. tumbled the most in more than two decades as the Hinduja Group flagship commercial vehicle maker’s plan to pick up a stake in a non-bank lending unit turned investors cautious amid the current market scenario.

  • The company’s board approved a proposal to acquire up to 19 percent additional equity shares in Hinduja Leyland Finance Ltd. from the existing shareholders, in tranches, for a consideration of Rs 1,200 crore, subject to approval, according to an exchange filing.
  • “Given the challenging times due to the muted demand scenario in the commercial vehicle space domestically as well as uncertainty surrounding the economic impact of Covid-19, this investment is not a prudent step at this juncture,” Pankaj Pandey, head-research at ICICI Securities, said in a report.

The company is not “loaded with surplus cash on its books”, Pandey added.

10. Supreme Court Orders Madhya Pradesh Floor Test Tomorrow

The Supreme Court on Thursday directed the Madhya Pradesh Assembly Speaker NP Prajapati to convene a special session tomorrow for conducting the floor test which must conclude by 5 p.m.

  • A bench headed by Justice DY Chandrachud also ordered video recording and possible live streaming of the Assembly proceedings when the Kamal Nath led Congress government would undertake the floor test.
  • The bench, also comprising Justice Hemant Gupta, directed the police chiefs of Madhya Pradesh and Karnataka to provide security to the 16 rebel Congress lawmakers if they choose to appear in Assembly for the trust vote.

The bench also ordered that the Assembly will have a single-point agenda of the floor test.

Also read: The Battle Is Getting Bigger In One Corner Of India’s Consumer Market

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