BQuick On May 5: Top 10 Stories In Under 10 Minutes

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

1. 11 States Now Have More Than 1,000 Covid-19 Cases

The total number of confirmed Covid-19 cases in India inched closer to 47,000 on Tuesday after the largest one-day spike in cases, as restrictions eased in some areas of the country.

• The country reported 3,875 new cases over the last 24 hours, taking the total tally to 46,711, according to the health ministry’s 5 p.m. update.
• This includes 13,161 patients who’ve been discharged and 1,583 who’ve died.
• Over the last 24 hours, 194 people have succumbed to the virus, while 1,399 people have recovered.
• The health ministry has also said that the rise in new cases is due to data correction from some states which had under-reported cases.
• With West Bengal now reporting 1,259 confirmed cases, there are now 11 states that have crossed the 1,000 cases threshold.

Track all the developments around the outbreak in India here.

India will deploy commercial jets, military transport planes and naval warships to bring back hundreds of thousands of citizens stranded across the world, in what’s set to be the biggest-ever peacetime repatriation exercise in history.

• The first phase of the drive is estimated to help about 18 lakh Indian citizens return home, according to the Indian Navy.
• Air India will operate 64 flights to evacuate stranded Indians from different countries, while the Indian Navy will deploy four ships to Gulf and one to Maldives region.
• Of the total flights 15 flights from 7 countries will come to Kerala, 11 flights to come Tamil Nadu, 7 to Maharashtra, 11 to Delhi.

People wanting to come back will have to pay for their journey.

Globally cases crossed 35 lakh leaving over 2.51 lakh people dead.

• The worst-hit countries in Europe moved to ease curbs as cases slowed.
• Signs of optimism emerged in the U.S. as New York reported the fewest new infections since mid-March and California took steps toward reopening.
• Scientists created a monoclonal antibody that can defeat the new coronavirus in the lab, an early but promising step.

Follow how the virus is spreading across the globe here.

2. What Bajaj Finance Stock's 50% Fall Says About India's Credit Cycle

The change in view on Bajaj Finance, going by its stock price, is interesting. Not so much because it reflects an about-turn for a much-loved and much-owned Indian financial services stock but because of what it tells you about the nervousness around the Indian credit markets, writes Ira Dugal.

• The shares have gone from trading as high as 12-times price-to-book ratio and at an average valuation of 9x P/B, to now trading at 5.5x P/B, close to its lowest valuation of 5.2x P/B, according to Bloomberg data.
• That nervousness stems from the fact that the fastest growing lending segments—those which banks had ignored and agile non-bank lenders like Bajaj Finance had swooped in to capture—are the very segments that could potentially bring the most pain in the current economic cycle.

While the nervousness around the likely turn in the Indian credit cycle is palpable, the extent of that turn is uncertain.

3. Sensex Falls; Brent Crude Back Above $30

After trading in a range for most parts of the trading day, Indian equity markets witnessed a sell-off in the final hour to end lower for the second straight day.

• The S&P BSE Sensex fell over 850 points from its day's high of 32,264 to end at 31,453, down 0.8 percent.
• The NSE Nifty 50 ended at 9,205, down over 250 points from the highest point of the day at 9,490. The index shed 0.95 percent in today's trading session.
• Thirty five out of the 50 index constituents ended with losses.
• The Nifty PSU Banking index was the top sectoral laggard, ending 3.1 percent lower.

Follow the day’s trading action here.

Investors should shift focus from old to new sector leaders as the money flows into healthcare and discretionary consumption during the new coronavirus pandemic, according to Atul Suri of Marathon Trends Advisory.

Find out how Suri is reorienting his portfolio.

U.S. equities followed European stocks higher, with sentiment buoyed as more economies moved toward easing their coronavirus lockdowns.

• The S&P 500 opened in the green as investors digested the latest earnings, including a beat from chemical maker DuPont Inc.
• Oil headed for its longest winning streak in nine months.

Get your daily fix of global markets here.

4. India’s Jobless Rate Jumps To 27%

The world’s biggest lockdown forced 12.2 crore people out of jobs in India last month, according to estimates from a leading private sector think tank.

• Employment plunged in April after the government imposed a 40-day lockdown in a nation of 130 crore people, forcing businesses to shut and pushing up the jobless rate to 27.1 percent in the week ended May 3, surveys by the Center for Monitoring Indian Economy Pvt. showed.
• Daily wage workers and those employed by small businesses have taken a massive blow, according to CMIE.
• These include hawkers, roadside vendors, workers employed in the construction industry and many who eke out a living by pushing handcarts to rickshaws.
• “This is not just a mind-boggling number,” Mahesh Vyas, chief executive of CMIE wrote in the Business Standard newspaper. “It is a human tragedy because these are perhaps, the most vulnerable parts of society.”

The data could get worse in India with the lockdown extended in many areas.

5. States Start Raising Taxes To Battle Covid-19

Indian states have started raising taxes as they witness higher-than-budgeted spending stemming from the unprecedented Covid-19 crisis.

• Delhi increased the value-added tax on fuel, raising petrol prices by Rs 1.67 a litre and a diesel prices by a steep Rs 7.1 per litre.
• That came after the Delhi government imposed a 70 percent ‘Special Corona Fee’ on the sale of liquor.
• Andhra Pradesh, too, followed it up by raising liquor prices by 50 percent a day after stores were reopened.

6. Nobel Laureate Abhijit Banerjee’s Stimulus Suggestion

India should put in a large enough stimulus package to revive demand, Nobel laureate Abhijit Banerjee said on Tuesday, asserting that putting cash in the hands of people would be the best way to boost the economy post the lockdown.

• Banerjee, while talking to Congress leader Rahul Gandhi through video-conferencing, suggested putting money into the hands of the bottom 60 percent population to help revive demand.
• The economist said it was important for India to announce a large enough stimulus package to deal with the crisis on the lines of what the U.S., Japan and the Europe are doing.
• “We really haven’t decided on a large enough stimulus package. We are still talking about 1 percent of GDP. The United States has gone for 10 percent of GDP,” the noted economist said.

Banerjee made a case for cash transfers and flagged off the bankruptcy threat after the pandemic.

7. India’s Sanitiser Market Boom: Winners And Losers

New entrants and local brands now dominate India’s sanitiser market that swelled more than fourfold after the novel coronavirus outbreak.

• The size of the category touched Rs 43 crore in March from Rs 10 crore a year ago, according to Nielsen India, as the highly contagious pathogen spread rapidly despite the world’s strictest lockdown.
• A total of 152 new manufacturers started making sanitisers in March, commanding 61 percent market and 46 percent value share, the researcher said without naming the brands.
• The market share of the top three brands — Dettol from Reckitt Benckiser India Ltd., Lifebuoy from Hindustan Unilever Ltd. and Pure Hands by Himalaya Drug Company Pvt. Ltd. — fell to 39 percent in March from 85 percent in January and February.

Read more to find how the demand for sanitisers surged since the coronavirus outbreak.

Related Coverage

• NBFCs ask RBI for a one-time restructuring of all loans till March 2021.
• Motor insurance sales fell to almost nothing in April, says ICICI Lombard.
• Electricity generation, demand tumble amid lockdown.
• Coal India unit seeks loans as lockdown saps energy payments
• India’s gold imports plummet by 99.5 percent.

8. Sarfaesi Act Applicable To Cooperative Banks: Supreme Court

A five-judge constitution bench of the Supreme Court of India today ruled that the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, will be applicable to state and multi-state cooperative banks.

• The ruling by a bench headed by Justice Arun Mishra came in a case that challenged the Parliament’s decision to amend Section 2(c) of the Sarfaesi Act—which allows banks and financial institutions to seize and auction properties of defaulters to recover their dues—and include cooperative banks among those who can exercise powers under the Act.
• With this judgment, state and multi-state cooperative banking societies can now seize and sell assets to recover their dues.
• The top court bench in its judgment also held that state and multi-state cooperative banks will fall under the definition of banks under the provisions of the Banking Regulation Act.

Prior to this, cooperative banks had to approach civil court or tribunals for recovery of dues.

9. Zee Learn Fails IiAS’ Test

Institutional Investor Advisory Services raised concerns over governance, capital allocation, pledged shareholding and debt at Zee Learn Ltd., bringing another Essel Group firm into the spotlight over similar worries.

• The operator of Kidzee preschools advocated an asset-light model but has ended up investing in heavy assets which have low margins and account for more than half of Zee Learn’s standalone debt, the proxy advisory firm said in an April 30 note, referring to other educational institutes set up by the company.
• “An asset light philosophy with asset heavy balance sheet reflect lack of clarity,” IiAS said.

IiAS also raised issue of related-party transactions.

10. Google’s Tracker Shows How Mobility Reduced In Lockdown

Google, with its repository of consumer data through various applications, has been able to track mobility across India show how various states complied with the nationwide lockdown.

• The latest Google Mobility Report, aimed at helping policymakers in planning and monitoring, was released on Friday and measured changes in mobility between March 15 and April 26.
• The report shows that mobility in areas of retail and recreation saw the steepest fall of 86 percent over this period. Mobility in residential areas dropped the least with a fall of 22 percent.
• State-wise data provided shows that Delhi, Maharashtra, Telangana and Tamil Nadu saw a steeper fall in mobility across categories compared to the rest of the country. Movement in Bihar, Kerala, Assam and other North-Eastern states saw a smaller dip.

The state-wise break-ups will help governments determine the impact of the lockdown.