Here is a roundup of the day’s top stories in brief.
1. Lakshmi Vilas Bank: Moratorium And A Merger
The Reserve Bank of India has placed private sector lender Lakshmi Vilas Bank Ltd. under moratorium for 30 days and announced that it will be merged with DBS Bank India Ltd.
As part of this, the regulator has capped deposit withdrawals by customers to Rs 25,000.
According to the banking regulator, the private sector lender has seen a steady decline in its financials with it incurring losses over the last three years.
The outlined merger, according to RBI, will bring additional capital and support credit growth.
Here are the details of the moratorium and the merger.
2. Modi’s Smart Cities Pitch To Foreign Investors
Prime Minister Narendra Modi is keen to attract foreign investment to modernise India’s urban centers as the world’s second-most-populous nation rebuilds its economy after the coronavirus pandemic halted activity.
Covid-19 has given governments the chance to accelerate the “process of making cities more livable for people,” Modi said in his speech at the Bloomberg New Economy Forum on Tuesday.
“We are looking at a future where a major chunk of education, healthcare, shopping, may happen online. Our cities need to be ready for the convergence of the physical and digital worlds,” he said.
India plans to continue raising funds in areas including urban technology and transport.
3. Nifty Extends Winning Streak; U.S. Stocks Pull Back
Indian equities opened the truncated trading week on a positive note, and extended the winning streak to three sessions.
The S&P BSE Sensex ended 0.7% or 315 points higher at 43,952.
The NSE Nifty 50 gained 0.8% or 94 points to end at 12,874.
Broader markets had a mixed day.
Follow the day’s trading action here.
U.S. stocks pulled back from record highs as investor focus turned to the surge in virus cases and new lockdown measures, overshadowing optimism that Covid-19 vaccines will eventually end the pandemic.
Energy producers were among the worst performers on the S&P 500 Index.
Tech shares outperformed as Tesla Inc. jumped after an announcement that Elon Musk’s carmaker will join the benchmark U.S. gauge.
West Texas Intermediate crude declined 1% to $40.93 a barrel.
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Also Read: Warren Buffett Likes Stocks Again
4. Morgan Stanley Sees Sensex At 50,000 By 2021-End
Morgan Stanley has raised its target for the Sensex, citing the coming growth cycle is not fully priced in.
The S&P BSE Sensex is expected to touch 50,000 by the end of next year against an earlier target of 37,300 by June 2021, the global investment bank and financial services company said in a note, as it maintained an ‘overweight’ rating on India.
“Covid-19 infections appear to have peaked, high-frequency growth indicators are coming in strong, government policy action is beating expectations, and Indian companies are picking up activity through the pandemic. Thus, we expect growth to surprise on the upside, rates trough to be behind, and real rates to remain in negative territory for several months,” Morgan Stanley said in the note.
Read more to see the sectors that Morgan Stanley is bullish on.
5. Goldman Sachs Raises India GDP Forecast
Goldman Sachs has revised India’s GDP forecast for the ongoing financial year as the global investment bank expects economic activity in Asia’s third-largest economy to normalise faster than estimated, provided an effective Covid-19 vaccine is available.
The global financial services provider expects India’s gross domestic product to contract 10.3% in 2020-21 against a contraction of 14.8% forecast in September, according to a report published on Tuesday.
GDP growth is estimated at 13% in FY22 compared with 15.7% projected earlier.
The pace of rebound, however, will be restrained by some economic scarring and other factors.
6. Few Takers For One-Time Debt Recast Scheme
About 99% of large companies are not planning to opt for the Reserve Bank of India’s one-time debt restructuring scheme, according to Crisil Ratings.
About two-thirds of such entities are eligible for the debt recast scheme, Crisil said in a report based on analysis of 3,523 firms, each with a total loan exposure of more than Rs 25 crore, rated by it.
Such companies may rather prefer additional working capital financing as announced by the central bank under its Covid-19 regulatory package.
7. India’s RuPay Push
The government’s nudge to banks to push RuPay cards comes against the backdrop of slow adoption of the homegrown network and a surge in foreign players across the payments industry.
“Promote RuPay cards. Make sure that the NPCI becomes a brand-India product which can be promoted elsewhere in the globe and NPCI therefore should be a priority,” Finance Minister Nirmala Sitharaman said at a gathering of Indian bankers on Nov. 10.
In the last fiscal, RuPay transactions comprised 20% volume and 11% value of the total card payments in the country.
That’s a marginal growth of 2% in transaction volumes and 1% in value over fiscal 2018-19.
Compared to MasterCard and Visa, RuPay’s adoption has lagged and it still has a long way to catch up.
8. Pandemic-Triggered Partnership
India’s small traders have lobbied hard for curbs on large online retailers, alleging they’re eating into their business through exclusive tie-ups, private labels and predatory pricing. While cheap data and half-a-billion internet users were already prompting businesses to go digital, one of the world’s harshest Covid-19 lockdowns made it clear it would be difficult to survive without embracing e-commerce.
These merchants are now becoming part of a digital economy that the government expects to grow fivefold to $1 trillion in five years as Amazon.com Inc., Walmart Inc.-owned Flipkart Group and Mukesh Ambani’s Reliance Industries Ltd. vie for a larger share.
The pandemic has fueled a shift to e-commerce in smaller cities and towns where consumers so far resisted shopping for groceries and cosmetics to medicines online.
E-commerce platforms in India have already seen record levels of interest from smaller sellers.
Read this BQ Blue Exclusive to understand why small retailers, once averse to going digital, are now rapidly adapting.
9. India’s New Covid Cases Lowest In Four Months
India’s coronavirus outbreak showed signs of slowing down as new cases in a day fell below the 30,000-mark for the first time in four months.
India added 29,163 fresh cases in a matter of 24 hours — lowest since July 14 — taking the total tally to over 88.7 lakh.
That includes nearly 83 lakh recoveries and 1.3 lakh deaths.
Track all Covid-19 related news around the outbreak in India, here.
Moderna Vs Pfizer: How Their Vaccines Stack
The first two Covid-19 vaccines out of the gate have now delivered positive news in the quest to end the pandemic. The encouraging late-stage trial results from Pfizer Inc. and Moderna Inc. set a high bar for rivals such as AstraZeneca Plc that are expected to follow soon with their own pivotal reports.
Moderna said Monday its vaccine was 94.5% effective in a preliminary analysis.
The shot created by Pfizer was found to be more than 90% effective.
Both shots rely on a technology called messenger RNA that has never been used before to develop an approved vaccine.
But there are some major differences. Find out here.
10. Flexible Work May Boost Women’s Applications For Top Jobs
Flexible working could be the solution for businesses struggling to recruit women into senior roles, according to a new study by Zurich Insurance Group AG.
Applications for management roles by women jumped 20% after the insurer advertised all possible positions with part-time, job share or flexible working options as part of research with the U.K. government’s Behavioural Insight Team.
The number of women hired for senior jobs jumped by one third as a direct result, it said Tuesday.
The initiative doesn’t just benefit women though.
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