BQuick On May 6: Top 10 Stories In Under 10 Minutes

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

1. India Cases Near 50,000; Mumbai Steps Up Covid-19 Fight

The total number of confirmed Covid-19 cases in India inched closer to 50,000 with state and the central governments struggling to find a balance between lives and livelihood.

• The country reported 2,958 new cases over the 24 hours preceding the Health Ministry’s 8 a.m. update, taking the total tally to 49,391.
• This includes 14,183 patients who’ve been discharged and 1,694 who’ve died.
• India saw its highest-ever one-day recoveries at 1,456, while 126 died in the last 24 hours.
• Meanwhile, Mumbai--the city with the highest number of confirmed Covid-19 cases in India--has given administrative heads of civic wards the power to take over private hospitals and nursing homes to fight the pandemic.
• Besides, Chief Minister Uddhav Thackeray has also requested Railways, Ports, Army, Navy and other central government undertakings to make their facilities available across Maharashtra for Covid-19 containment.
• This underscores the health crisis that the state, which has over 15,000 cases and over 600 deaths, is facing.

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

Globally, cases crossed 36 lakh leaving over 2.56 lakh people dead.

• The U.K.’s coronavirus death toll soared passed that of Italy, making it the worst-hit country in Europe.
• Hong Kong moved to ease restrictions, and the state of Bavaria set out plans to reopen its economy in what may serve as a blueprint for the rest of Germany.
• President Donald Trump said Americans should begin returning to their everyday lives even if it leads to more sickness and death.

Follow the global outbreak of the virus here.

2. What Kerala’s Covid-19 Strategy Can Teach The Centre

Kerala has only 36 active Covid-19 cases, yet, as per the central government’s zoning plan, social and commercial activity remains restricted across most of the state as 12 of 14 districts are either red or orange, only two are green.

• “We have been trying to tell Delhi that there is a lot of flexibility required,” Thomas Isaac, Kerala’s finance minister said even as he described the flexibility the state has given to local governments in managing health and social services.
• “We cannot be micromanaged from Delhi,” he told BloombergQuint when asked how states would administer the centre’s new zoning policy.
• Kerala may be an outlier, given its higher literacy levels and sustained investment in local healthcare infrastructure, its success in containing the virus spread, as narrated by Isaac below, underscores the one critical thing needed to win the battle — devolution of power.

Read more about Kerala's exit strategy and how the state is ready to restart.

3. India’s Services Activity Saw ‘Drastic Decline’ In April

The nationwide lockdown, which continued through the month of April, brought India’s services sector to a near standstill, showed data released by IHS Markit.

• The India Services Business Activity Index fell to 5.4 in April, an “extreme decline” from 49.3 in March, IHS Markit said. A reading of less than 50 indicates contraction in business activity.
• The reading is “indicative of the most severe contraction in services output since records began in December 2005,” the release said.
• According to respondents to the survey, activity fell severely as a result of the nationwide lockdown, leading businesses to shut down their operations as demand collapsed.

Approximately 97 percent of survey respondents observed a reduction in output.

4. Moratorium For NBFCs: SBI Relents

India’s largest lender State Bank of India will allow non-banking financial companies to avail the benefits of a three-month repayment moratorium permitted by the Reserve Bank of India, a senior bank official told BloombergQuint on condition of anonymity.

• Without relief from banks earlier, NBFCs were left in a spot.
• While they had to offer a moratorium to their customers, a similar relief was not provided to them, leading to potential asset-liability and cashflow mismatches at these lenders.
• SBI has now changed its position. The bank will offer a moratorium to NBFCs on repayments due between March 1 and May 31, the official quoted above said.
• Since much of the period for which is the moratorium is applicable has passed, the bank will not count any overdue payments from NBFCs as defaults.

The decision has been approved by the SBI top management and the bank’s board is expected to give its approval soon.

5. Chargesheet Filed Against Rana Kapoor

The Enforcement Directorate on Wednesday filed a chargesheet against Yes Bank Ltd. co-founder Rana Kapoor, arrested on money laundering charges.

• Kapoor, former managing director and chief executive officer of Yes Bank, was arrested by the ED on March 8 under the Prevention of Money Laundering Act.
• He is accused of sanctioning loans to certain firms against kickbacks.
• Among other things, the central probe agency is investigating Rs 600 crore received by a company allegedly controlled by Kapoor, his wife and three daughters from an entity linked to the scam-hit Dewan Housing Finance Ltd.

Kapoor is also accused of receiving bribes for going easy on the recovery of loans.

6. Nifty Rises; GSK To Sell HUL Stake At A Discount

Indian equity markets snapped a two-day losing streak and closed with modest gains.

• The S&P BSE Sensex gained over 550 points from the day's low to end at 31,685, up by 0.75 percent.
• The NSE Nifty 50 too gained 0.7 percent to close at 9,270, rebounding close to 150 points from the day's low.
• Among sectoral indices, the Nifty Bank index and the Nifty Auto index rose, while the FMCG index underperformed.

Follow the day’s trading action here.

GlaxoSmithKline Plc is selling its entire stake in Unilever’s listed India unit for about $3.3 billion, according to terms seen by Bloomberg.

• Glaxo and Horlicks Ltd. will together sell as many as 133.8 million shares in Hindustan Unilever Ltd.
• Prices will range between Rs 1,850-1,950 a share, representing a discount of as much as 8 percent to Wednesday’s close.
• JPMorgan Chase & Co., HSBC Holdings Plc and Morgan Stanley are the bookrunners.

The drugmaker received the stake as part of the payment for the sale of a portfolio of assets that was completed this month.

7. How India’s Steep Fuel Price Hike Hurts Oil Retailers

Shares of India’s three listed fuel retailers fell after the government raised taxes to shore up its revenue amid the new coronavirus pandemic.

• India raised taxes on petrol and diesel by Rs 10 and Rs 13 a litre, respectively, effective May 6. That’s the second such move in less than two months and comes at a time international crude oil prices slumped.
• Yet, retail sale price of the fuel will not change, implying the companies will have to bear the brunt of the hike in excise duty.
• And that’s expected to hurt their gross marketing margin.

Here’s which oil marketing companies in India will be most affected.

8. Is Covid-19 Redrawing Borders?

Ironically, a disease that knows no boundaries is causing us to think about trade transactions within smaller boundaries, writes Raj Bhala.

• The coronavirus is attacking our conventional wisdom that national units render us more secure than states and localities.
• We forgot in the pre-coronavirus era that while nations negotiate trade deals, it is people who trade. Now, citizens are thinking locally.
• The plight of migrant workers in India has undermined confidence in a model that rests on free mobility of labour within national boundaries.

Maybe building trade linkages within sub-central ecosystems is necessary for our post-pandemic health.

Related Coverage

• Glitches in Aadhaar Enabled Payment System amplified as transactions surge.
• India’s ailing credit market shows the limits of central bankers.
• Biggest job creator short of labour amid vast India unemployment.
• Large India broker sees more profit disappointments for stocks.

9. High Court Allows Bharti Airtel To Rectify 2017 GST Returns

The Delhi High Court allowed Bharti Airtel Ltd. to rectify GST returns filed between July and September 2017 after the telecom operator said it paid excess tax on inputs in absence of a purchase-related tax return form.

• The Sunil Mittal-controlled carrier said it paid an excess tax of Rs 923 crore as the details of the input tax credit—the tax paid on inputs that can be adjusted against future tax liabilities—during the period was offered based on estimates on account of non-operationalisation of the GSTR-2A form by the government.
• So, it underreported its claim for credit.
• The central government had opposed the carrier’s plea and said the rectification of mistakes of an earlier tax period couldn’t be done in any subsequent period.

The high court asked the central government to verify the refund claim after the rectified return is filed.

10. China Considers Dropping Numerical GDP Growth Target for 2020

China’s leaders are considering the option of not setting a numerical target for economic growth this year given the uncertainty caused by the global coronavirus pandemic, people familiar with the matter told Bloomberg News.

• What may instead be unveiled at the upcoming National People’s Congress later this month is a description of the goal for gross domestic product growth, one of the people said.
• Last year the target was a range of between 6 percent and 6.5 percent.
• A final decision hasn’t been made on how to characterise the target, the people said, who asked not to be identified discussing confidential policy deliberations.
• The government work report, which usually contains the GDP target, is typically revised repeatedly in the lead up to the conference.

The world’s second-largest economy is on track for its worst performance in the post-Mao era.

U.S. Stocks Mixed; Oil Retreats

U.S. stocks were mixed as investors digested corporate earnings and dismal economic data.

• The S&P 500 and Dow Jones Industrial Average indexes erased early gains, while Apple Inc. helped keep the Nasdaq Composite in the green.
• A report showed U.S. companies cut a record 20.2 million jobs in April.
• West Texas oil retreated after a rally that had doubled prices in the past five days.

Get your daily fix of global markets here.