BQuick On March 30: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Covid-19 Cases In India Cross 1,000, Global Death Toll Hits 35,000
Total number of Covid-19 infections in India rose past 1,000 as authorities work towards increasing testing and producing essential medical equipment.
- Confirmed cases in India, as of Monday morning, stood at 1,071, according to the health ministry. This includes nearly a hundred cured or discharged patients and 29 who succumbed to the respiratory illness.
- The Indian Council of Medical Research said that testing has been stepped up with the help of private labs. India has done over 38,000 tests so far with over 3,500 tests conducted just on Sunday, ICMR said.
- India has also asked automobile manufacturers to use their facilities and produce ventilators to improve the country's healthcare capacity.
- Meanwhile, Defence Research and Development Organisation has also been asked to manufacture N-95 masks while Bharat Electronics Ltd. will make 30,000 ventilators.
- This marks the sixth day of the lockdown. Addressing rumours and concerns that the lockdown will be extended beyond the 21-day period, the government today said that it has no such plans.
Follow the developments around the coronavirus outbreak in India here.
Globally, cases topped over 7.37 lakh leaving over 35,000 dead. More than 1.5 lakh have recovered.
- Spain saw a slowdown in fatalities reporting fewer deaths.
- China’s government indicated it will start releasing data on how many people are infected with coronavirus but don’t have symptoms.
- Cases in Netherlands and Portugal also showed signs of slowing down.
- Cases in Iran, however, continued to surge.
Catch all updates from around the world here.
2. SBI Plans Blanket Term Loan Relief
India’s largest lender State Bank of India is likely to offer a three-month moratorium to all its term loan borrowers, as a way to ensure the quick pass-through of relief measures announced by the Reserve Bank of India.
- SBI will offer the moratorium to all customers rather than making individual assessments, two senior officials told BloombergQuint on condition of anonymity.
- The moratorium will also be offered to working capital facilities availed by micro, small and medium enterprises, the officials said.
- Borrowers who are not impacted by disruptions related to coronavirus can opt-out and continue to make payments after informing the bank, the officials said.
SBI thinks a selective approach could be cumbersome and delay relief.
3. SEBI, Insolvency Board Provide Leeway In Difficult Times
The market regulator has given credit rating agencies the option not to classify missed payments by a company as a default if it’s caused because of the lockdown or a loan moratorium granted to counter the economic disruption during the new coronavirus outbreak.
According to a circular by the Securities and Exchange Board of India, credit rating agencies may not recognise a delay in payment of interest or principal as a default if:
- Based on its assessment, a credit rating agency finds out that the delay is attributable solely due to the lockdown conditions, leading to operational challenges in servicing debt.
- Similarly, such event may not be classified as default if it is caused by delays in procedural approvals by lenders.
Will the relief granted by SEBI be helpful to companies and rating agencies?
Providing leeway to resolution professionals amid the coronavirus outbreak, the Insolvency and Bankruptcy Board of India has relaxed the timelines to be followed under the overall 330-day deadline for completion of insolvency resolution processes.
- Against the backdrop of the 21-day lockdown to curb spreading of coronavirus infections, IBBI has amended certain regulations.
- The lockdown period would not be counted for the purpose of timelines set under the IBBI regulations for Corporate Insolvency Resolution Process, according to a notification.
The flexibility is subject to overall time limit available under IBC.
4. Sensex Dives 4.6%, U.S. Stocks Gain
Indian equity markets began the truncated week on a negative note.
- S&P BSE Sensex ended 4.6 percent or 1,375.27 points lower at 28,440.
- 22 out of the 30 constituents ended the day with losses.
- NSE Nifty 50 shed 4.4 percent or 379.15 points to close at 8,281.10.
- All sectoral indices barring FMCG and pharma ended the day with losses, with Nifty Bank falling 6 percent and Nifty Realty seeing a 7 percent drop.
Follow the day’s trading action here.
U.S. stocks rose after a mixed overnight session, as investors saw glimmers of optimism in health-care efforts to deliver rapid virus testing.
- The S&P 500 Index climbed for the fourth time in five days even after a weekend full of negative pandemic news, including President Donald Trump’s abrupt order to extend recommendations aimed at inhibiting the spread.
- Health-care shares were among the biggest gainers as Abbott Laboratories surged after unveiling a five-minute coronavirus test and Johnson & Johnson announced a vaccine candidate for the virus.
- Crude fell more than 6 percent after briefly paring losses when Trump said he plans to speak with Russia’s Vladimir Putin about crude.
- The dollar was on course to snap a four-session losing streak.
Get your daily fix of global markets here.
Also read: Should You Be Eyeing Debt Funds Right Now?
5. RBI Opens Up Key Government Bonds To Full Foreign Investment
The Reserve Bank of India has decided to open up key government securities to full foreign investment in an attempt to find a place in global bond indices.
- The RBI’s announcement follows an intent articulated in the Union Budget, where Finance Minister Nirmala Sitharaman said that certain specified securities would be opened up fully to foreign investors.
- To operationalise this, the RBI has opened a new window called the ‘Fully Accessible Route’.
- “The Reserve Bank shall notify the government securities that shall be eligible for investment under the fully accessible route. These specified securities will continue to be eligible for investment by residents,” the central bank said in a release.
- As a start, the central bank has picked some of the more liquid and benchmark securities and said that the 5-year, 10-year and 30-year bonds issued from financial year 2020-21 onwards will be eligible for full foreign investment.
Here are the implications of the move.
6. How Kishore Biyani’s Debt Profile Changed
While the world’s biggest equity rout in more than a decade sent shares of most Indians companies tumbling, for Future Group founder Kishore Biyani, the selloff has created a debt problem.
- Biyani, the controlling shareholder of Future Retail Ltd., is in breach of terms of loan agreements, Bloomberg reported citing unnamed people aware of the details.
- The value of the shares offered as collateral has fallen below the required cover as the stock prices of Future Group companies tumbled 49 to 71 percent in the last one month.
- Investors in bonds issued by two promoter companies took control of 8 percent stake in Future Retail after invoking pledged shares.
Still, Biyani’s debt profile is not like that of Subhash Chandra’s Essel Group and Anil Ambani's Reliance Group firms. Here’s why.
7. Sharpoorji Pallonji Looks To Raise $1 Billion With Tata Stake As Collateral
The Shapoorji Pallonji Group, controlled by billionaire Pallonji Mistry and his family, is in preliminary discussions to borrow as much as $1 billion to repay maturing debt using part of its stake in Tata Sons Ltd. as collateral, people with knowledge of the matter told Bloomberg News.
- Mistry, whose son Cyrus was ousted as chairman of Tata Sons in 2016, is the biggest single shareholder in India’s largest conglomerate, and is seeking a loan as the coronavirus outbreak delays a plan to sell assets, the people said, asking not to be identified as the discussions are private.
- Mistry is trying to use his 18 percent stake in Tata Sons, which is estimated to be worth as much as $14 billion, as the Covid-19 pandemic stalls economic activity across the world.
Yet, the tycoon may face a hurdle. Find out what.
8. Setback For Sun Pharma
The U.S. drug regulator barred India’s largest pharmaceutical company’s Halol, Gujarat, facility from getting any fresh approvals for exporting to the American market.
- Sun Pharmaceutical Industries Ltd. received a letter from the U.S. Food and Drug Administration classifying the plant as “official action indicated”, according to an exchange filing. U.S. FDA may withhold approval of any pending product applications or supplements filed from this facility till the outstanding observations are resolved, the filing said.
- The company, however, said it would continue to manufacture and distribute existing products for the U.S. market and doesn’t expect any major supply disruption for such items.
- But Sun Pharma, in the filing, said it doesn’t want to comment on a possibility of a warning letter being issued to this plant.
Read the story so far and what analysts have to say on the official action.
9. All That Needs To Be Done To Fix A Covid-19 Wrecked Economy
In response to Covid-19, India faces an unspeakable dilemma—balancing monetary cost with the human outcome. Whatever choices we make, we will likely incur significant humanitarian and economic costs, writes Ananth Narayan.
- We have no alternative but to pursue a print-and-spend emergency response through Covid-19.
- But this isn't free lunch. Our already weak economy will suffer another body blow.
We instead need a pivot towards hard reforms that we have put off for many years.
10. A Pandemic Bond To Fund The Covid-19 Response
The global spread of the coronavirus has spared virtually no country now. In response, nations have locked down borders and started looking inwards. But the funding needed to counter the economic fallout should be globally pooled, according to Taimur Baig, chief economist at DBS Bank Ltd.
- “This is a global crisis. The coronavirus knows no borders. And so the funding to fight this should also be globally pooled,” Baig said in an interview with BloombergQuint.
- India should also consider raising resources internationally to fight the economic cost of the pandemic.
Unfortunately, the financing part will be challenging. Could India consider a pandemic bond and sign a deal with global asset managers and sovereign wealth funds to underwrite that to some extent? I think there would be a lot of support across multilateral agencies for an approach like that.Taimur Baig, Chief Economist, DBS Bank
Find out how Baig thinks India should design such a financing strategy.