BQuick On Sept. 8: Top 10 Stories In Under 10 Minutes
Top news, must-read stories and columns—all served up in less than 10 minutes.
This is a roundup of the day’s top stories in brief.
1. India Is Looking To Spend Its Way Out Of The Crisis
Expenditure Secretary TV Somanathan said the central government will keep up its spending and increase it, if needed, even as tax collections collapsed because of the coronavirus pandemic-driven economic contraction.
“The central government expenditure will be sustained, and we will certainly hit our budget targets regardless of the crunch in revenue,” Somanathan told BloombergQuint in an interview on Tuesday.
The government has constraints and these need to be managed, he said.
A reprioritisation of spending has been done by the government, and there’s been a “huge” increase in allocation for food, rural development, health and transfer to states, he said.
Spending will be increased as the need arises, he said. “How much expenditure will be increased, we will have to see as and when it comes.”
Here are the key highlights from the exclusive interview on the state of government finances.
2. Exclusive: A New Type Of Government Borrowing
The central government’s proposal to states to finance a shortfall in compensation cess for the current financial year may bring to the markets a new kind of government security. This security, if states accept the proposal, would in some ways be a hybrid of central government and state government bonds.
In a conversation with BloombergQuint, the government’s Expenditure Secretary TV Somanathan clarified that the plan doesn’t include any direct purchase of state government bonds, also known as state development loans, by the Reserve Bank of India.
Instead, what the government is suggesting is a special issue of state bonds, which, for all practical purposes, would be backstopped by the centre.
Such a structure would ensure that there is a very specific revenue stream which can be earmarked for the payment of this debt.
3. Crude Slides 6%; Nasdaq Extends Drop
U.S. shares tumbled, though major indices cut the worst of their losses by half, as volatility continued to grip financial markets.
The Nasdaq 100 fell as much as 4.3% before paring the drop to 2.2% mid-morning. It’s down almost 9% in three days of selling after its surge from March lows stretched valuations toward levels last seen in the dot-com era.
Tesla Inc. tumbled 13% after being snubbed for inclusion in the S&P 500 and is now down more than 20% in September.
All 11 S&P 500 groups retreated.
West Texas Intermediate crude fell toward $36 a barrel in New York.
Get your daily fix of global markets.
Sensex Edges Lower
Indian equity markets ended lower after trading in a narrow range for most parts of the trading day.
The S&P BSE Sensex ended 0.14% lower at 38,365 while the NSE Nifty 50 ended 0.33% lower at 11,317.
Only 13 out of the 50 Nifty constituents ended the session with gains.
Follow the day’s trading action here.
9. Covid-19: India’s New Cases Drop To Lowest In A Week
Daily coronavirus infections in India fell to the lowest in a week even as the country's total tally continued to head higher.
India added over 75,800 fresh cases—lowest in a week—taking the total tally to over 42.8 lakh, according to the health ministry's update.
This includes over 33.23 lakh people who've been discharged and 72,775 who've died.
India is only behind U.S.’ 63 lakh cases which is likely to be eclipsed if the virus continues to spread at the current rate.
The country has reported more than 1,000 casualties due to the highly contagious pathogen for seven straight days.
Track all Covid-19 related news and updates in India, here.
No Shortcuts To A Vaccine
Drugmakers racing to produce Covid-19 vaccines pledged to avoid shortcuts on science as they face pressure to rush a shot to market.
In an unusual public letter, the companies agreed to submit the vaccines for clearance only when they’re shown to be safe and effective in large clinical studies. 4
The chief executive officers of nine frontrunners in the push for a coronavirus inoculation signed the pledge: AstraZeneca Plc, BioNTech SE, GlaxoSmithKline Plc, Johnson & Johnson, Merck & Co., Moderna Inc., Novavax Inc., Pfizer Inc. and Sanofi.
“In the interest of public health, we pledge to always make the safety and well-being of vaccinated individuals our top priority,” the executives wrote.
The document is intended to counter perceptions of political pressure to deliver a shot as soon as possible.
10. Byju’s Secures Another $500 Million Fundraise
Private equity giant Silver Lake led a $500 million funding round for Byju’s that valued the Indian online education platform at around $10.8 billion, a person familiar with the matter said.
Existing backers Tiger Global, General Atlantic and Owl Ventures also took part in the latest funding round, according to the person, who asked not to be named discussing a private deal.
The startup remains locked in negotiations over several other rounds of financing.
Byju’s is close to getting about $400 million from Yuri Milner’s DST Global though that funding has yet to be completed, the person added.
The frenetic deal activity signals huge investor appetite for India’s edtech startups.