BQuick On May 12: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. India Covid-19 Cases Near 71,000; Modi To Address Nation At 8 p.m.
The total number of confirmed coronavirus cases in India crossed 70,000 with nearly 2,300 dead, as the Prime Minister is set to address the nation with the future course of action on the nationwide lockdown.
- India added 3,604 new Covid-19 cases over 24 hours, according to the Union Health Ministry’s 8:00 a.m. update on May 12.
- The total number of cases in India stands at 70,756.
- This includes 22,455 people who’ve recovered and 2,293 deaths.
- India is now less the a week away from the end of the lockdown’s second extension.
- The Union Health Minister Harsh Vardhan today said that India can now do one lakh Covid-19 tests per day and claimed that the country's mortality rate is almost the lowest in the world.
- Meanwhile, late last night, the Indian Railways said that it will mandatory for passengers to install the Aarogya Setu app on their phones before commencing journey.
Track news and developments around the coronavirus outbreak in India here.
Prime Minister Narendra Modi is set to address the nation at 8 p.m. tonight, a day after meeting with state chief ministers to discuss the future course of the nationwide lockdown.
- Some state chief ministers had asked the prime minister to give them the flexibility to plan an exit strategy from the lockdown and also give them the power to conduct economic activities.
Follow live updates from the prime minister’s speech.
Globally, cases crossed 41.7 lakh leaving over 2.86 lakh people dead.
- Wuhan will test its entire population of 11 million after the city where the pandemic began reported new infections for the first time since lockdown was lifted.
- Premier U.S. epidemiologist Anthony Fauci has warned of the “danger of trying to open” prematurely as top officials discuss how to safely restart the economy.
- Russia added more than 10,000 infections for the 10th straight day and is now second only to the U.S. in total cases.
Follow the global spread of the virus here.
2. First Annual IIP Contraction Since 1980
India’s industrial output contracted in March as the spread of the Covid-19 virus began to disrupt economic activity from the middle of the month. The full impact of a nationwide lockdown, which was imposed on March 24, will be visible only in the month of April.
- The Index of Industrial Production fell by 16.7 percent in March over last year, compared to an increase of 4.5 percent in February, the government’s statistical office said in a release on Tuesday.
- It, however, released the data with the caveat that information flow from producing units was impacted due to the lockdown.
- As a consequence of the lower response rate, the quick estimates released are likely to undergo revision, the department said.
Still, the contraction in industrial output reported is worse than anticipated. Find out which industries were most impacted.
3. India May Offer Tax Holidays To Attract Investments
India’s trade ministry is proposing a tax holiday for companies bringing new investments as the government explores measures to support the economy amid the coronavirus pandemic, people familiar with the matter told Bloomberg News.
- The proposal to give a 10-year full tax exemption to companies making new investment upwards of $500 million is being evaluated by the finance ministry, said the people, who asked not to be identified citing rules.
- The plan requires companies to start operations within three years from June 1, and will cover sectors including medical devices, electronics, telecom equipment and capital goods, they said.
Another variant will be to provide a four-year tax holiday to companies that invest $100 million or more in labour-intensive sectors.
4. RIL Drags Nifty Lower
Indian equity markets ended lower for the second straight day, dragged lower by the heavyweight Reliance Industries Ltd.
- The S&P BSE Sensex index ended 0.6 percent lower at 31,371 while the NSE Nifty 50 failed to hold the 9,200 mark, ending 0.5 percent lower at 9,196.
- Among sectoral Indices, the Nifty Media index ended as the top gainer with gains of 1.6 percent.
- Reliance Industries’ shares fell over 6 percent in trade today.
- Shares of Asian Paints, too, fell 3 percent after Goldman Sachs turned bearish on the stock citing significant risks to sales growth.
Follow the day’s trading action here.
U.S. Stocks fell as investors tracked measures to ease coronavirus lockdowns amid souring relations between the world’s two largest economies.
- The S&P 500 erased earlier gains, led by real-estate and financial companies. The Nasdaq 100 dropped after a six-day rally, while the Dow Jones Industrial Average outperformed.
- Both the dollar and Treasuries were little changed.
- Oil jumped as demand continued to show signs of recovery.
Get your daily fix of global markets here.
5. Nestle Delivers Double-Digit Volume Growth; Bandhan Bank’s Provisions Surge
Nestle India Ltd.’s quarterly profit rose as lower corporate tax rates helped the maker of Maggi instant noodles and KitKat chocolates.
- Profit rose 13.4 percent over the previous year to Rs 525 crore in the quarter ended March, according to the company’s exchange filing. That’s slightly higher than the Rs 512 crore estimated by analysts tracked by Bloomberg.
- The company had previously switched to the lower corporate tax rate regime announced by Finance Minister Nirmala Sitharaman in September 2019. Nestle India paid 24 percent lower taxes during the quarter at Rs 1,849.6 crore. That has positively impacted the profit, the filing said.
Sales growth remained in double digits.
Bandhan Bank Ltd.’s quarterly profit declined after it set aside additional provisions to mitigate the Covid-19 impact even as its bad loans fell.
- Net profit fell 25.8 percent year-on-year to Rs 517.3 crore.
- Gross non-performing assets ratio stood at 1.48 percent compared with 1.93 percent.
- Net NPA ratio was at 0.58 percent versus 0.81 percent last quarter.
- Bandhan Bank nearly tripled its provisioning during the quarter to Rs 827.4 crore.
Still, the bank said it was a satisfying quarter as the deposit base continued to grow.
6. Anil Agarwal Looking To Take Vedanta Private?
Billionaire Anil Agarwal is exploring a potential deal to take Indian commodities giant Vedanta Ltd. private, according to people familiar with the matter.
- The tycoon is speaking with advisers about the possibility of buying out minority shareholders of the Mumbai-listed company, the people said, asking not to be identified because the information is private.
- While talks are advanced, a deal could still be delayed or fall apart, the people said.
- Companies controlled by Agarwal and his family own 50.1 percent of Vedanta, according to exchange filings in March.
Vedanta shares have fallen more than 40 percent this year.
7. ‘Bad Bank Of India’
The Indian Banks’ Association has once again pitched the idea of creating a ‘bad bank’ to help lighten the load of stressed assets on the books of Indian lenders.
- After a nudge from the government to find solutions, the IBA is working on a detailed plan, two senior bankers told BloombergQuint on the condition of anonymity.
- According to an internal presentation circulated by the IBA among lenders, banks would invest cumulatively Rs 100 crore into a National Asset Management Company.
- There NAMC will, in turn, hold a special purpose vehicle called National Asset Reconstruction Company, which would be capitalised by the government to the extent of Rs 10,000 crore. BloombergQuint has reviewed a copy of the presentation.
- According to five bankers, including the two quoted above, the bad bank would start with a book of about Rs 70,000-75,000 crore worth bad loans.
But will a bad bank work?
8. Anand Mahindra Warns India Against ‘Hara-Kiri’
India will risk an economic “hara-kiri”, a Japanese ritualistic suicide, if it extends the nationwide lockdown for much longer, veteran businessman Anand Mahindra said, at a time the central and state governments are struggling to strike a balance between lives and livelihood.
- “A functioning and growing economy is like an immune system for livelihoods. A lockdown weakens that immune system and most hurts the impoverished in our society,” the Mahindra Group chairman said in a tweet.
- “This doesn’t mean the lockdown hasn’t helped,” Mahindra said. However, India shouldn’t expect a quick flattening in its infection curve, he added.
Here are four points India should focus on going ahead.
9. Civil And Criminal Process That Ought To Follow The Vizag Gas Leak
Supreme Court advocate Karuna Nundy, who fought for the victims and families of those affected by the 1984 Bhopal Gas Tragedy, spoke with BloombergQuint about the nature of the Vizag gas leak and its fallout.
- The absolute liability will be of the company. They should provide an immediate payout without prejudice to any further pay-out.
- There should be arrests, looking at not just IPC Section 304(A), but also Section 300 Part 2.
- There also has to be regulatory responsibility. Were proper safety audits done?
10. How India’s Salon Business Is Taking A Pandemic Haircut
Aalim Hakim is hairdresser to stars. Salman Khan, Katrina Kaif, Sachin Tendulkar or Virat Kohli. You name them and it is likely that Hakim has styled their hair.
- Over the years, Hakim has established a chain of 10 salons across Mumbai, Pune, Bengaluru, Ahmedabad, Surat and Jaipur.
- The business is self-funded, Hakim told BloombergQuint.
- “I’ve never taken a loan for the business,” he adds. “We started with small capital and we made profits right from the beginning. And then we converted into a franchisee brand. I know how to manage costs.”
- But if business remains shuttered like this for one more month due to the Covid-19 pandemic, that might change.
Find out how Hakim is coping with the lockdown and why employers need to stand by their employees during the tough times.