OPINION, P6&7 MARKETS, P10 RENU KOHLI Financial flows will have to revive for the economy to recover INTERNATIONAL, P8 VIVIAN FERNANDES CALL OF ASSURANCE COVID BLUES IARI fungal straw decomposer is no substitute for existing non-burning methods to deal with crop residue Your jobs, increments, bonuses secure: Puri to HDFC Bank employees World economy faces long, hard climb, says IMF chief Georgieva NEW DELHI, WEDNESDAY, OCTOBER 7, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 188, 16 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 39,574.57 ▲ 600.87 NIFTY: 11,662.40 ▲ 159.05 NIKKEI 225: 23,433.73 ▲ 121.59 HANG SENG: 23,980.65 ▲ 212.87 `/$: 73.46 ▼ -0.17 `/€: 86.47 ▼ -0.41 BRENT: $42.33 ▲ $1.04 GOLD: `50,817 ▲ `399 IN THE NEWS Govt removes export curbs on N-95 masks THE GOVERNMENT ON Tuesday removed export curbs on N-95 masks, which are in demand due to Covid, with a view to promote outbound shipments, reports PTI. Earlier, exporters were required to seek licence from the government for export of these masks. Discoveries about black holes win Nobel for Physics THREE SCIENTISTS WHO unravelled some of the deep mysteries of black holes have won the 2020 Nobel Prize in Physics, reports Reuters. Britain's Roger Penrose, University of Oxford professor, won half the prize of $1.1 million for his proof that black holes are a direct consequence of Albert Einstein's general theory of relativity. Yes Bank: ED arrests Cox and Kings ex-CFO ENFORCEMENT DIRECTORATE on Tuesday arrested the former CFO and internal auditor of the Cox and Kings Group in connection with its money laundering probe in the Yes Bank alleged loan default case, reports PTI. CAPITAL INFUSION Amazon readying big payments play Earlier this year, it had invested about `1,355 crore in the payments entity SHRITAMA BOSE & ASMITA DEY New Delhi, October 6 AMAZON INC APPEARS to be readying for a big play in the Indian payments market with a chunky capital infusion. Citing regulatoryfilings,business signals platform paper.vc, in a note, said Amazon Pay (India) has increased its authorised share capital from $820 million to $2.2 billion.Earlier this year, Amazon had invested about `1,355 crore in the payments entity. Theinvestmentgainssignificance at a time when incumbentsinthepaymentsspaceare going all out to woo the small merchantandtheenvironment is becoming increasingly competitive. Paytm has set itself a target of 25 million merchants for FY21,while Google Pay last yearsaiditistargetingover200 millionoffline merchants. To this end,both players,as also Walmart/Flipkart-owned PhonePe have, over the last couple of years, been working to build a presence at every APPOINTMENT GATHERING PACE ■ Amazon Pay (India) has increased authorised share capital from $820 million to $2.2 billion, says paper.vc note ■ Amazon investment gains significance as payments space incumbents are going all out to woo the small merchants ■ Paytm has set itself a target of 25 million merchants for FY21; Google Pay last year said it is targeting over 200 million offline merchants ` Pay storefront across the country. For at least a year now, Reliance Industries has also been trying to make inroads into this segment of retailers. TheFacebookinvestmentinJio Platforms is expected to accelerate the process. Continued on Page 12 EYE ON GROWTH Stimulus 2.0 soon, will be conservative PLI schemes for clutch of sectors, interest reliefs, urban jobs scheme, infra/construction sops likely FE BUREAU New Delhi, October 6 BALANCING ACT ■ Budgetary cost of stimulus 2.0 may be limited to `1-1.5 lakh crore Only a fraction of this to be spent in FY21, as more than half the year is over Centre's Budget size for this fiscal to be within `30.4 lakh crore estimated ■ ■ ■ SC stand on debt recast scheme crucial to stimulus 2.0 size Govt expects to save `4 lakh crore via spending curbs inApril-Dec, curbs may continue in Q4 ■ Extra burden on Budget from stimuli announced to be so far even below the `3 lakh cr estimated ■ THE MUCH-AWAITED STIMULUS package 2.0, which the policymakers want to be appropriately timed to ensure itsefficientand efficacioususe by key economic agents, will likely be unveiled during the next three weeks, given the recentsigns ofapick-upinvarious sectors, including manufacturing and exports. According to sources in the government, the package would consist of productionlinked incentive (PLI) schemes for a clutch of sectors, including steel,textiles and food processing, more incentives for infrastructure and construc- tion sectors given their high labourcontentandanemployment guarantee scheme for the urban poor on the lines of the popular rural scheme. Continued on Page 12 FM Sitharaman reiterates: MSP is there, will be there FINANCE MINISTER NIRMALA SitharamanonTuesdayhighlightedthegovernment’sresolvetocontinuewiththepractice of announcing the benchmark prices of select crops and procurement, seekingtodebunktheOpposition’scriticismthattheCentreistryingtoabdicateits purchase responsibilitythrough two farm Bills,reports feBureau in Chennai. Sitharaman defended the new laws andassertedthattheCentrehasnoplan to scrap the MSP (minimum support price) system.“I find that absolutely unreasonabletokeepspeculatingonit and say that this is the concern of the farmer. MSP is there, it was there and it shall continue to be there,” she added. ■ Page 2 PLI SCHEME Final nod for Apple, Samsung to make phones in India Combined output to be `10.5 lakh crore in five years It will create additional indirect employment of 9 lakh FE BUREAU New Delhi, October 6 SAMSUNG, RISING STAR, A string of contract manufacturers for Apple as also a bunch of home-grownplayersareamong the mobile phone manufacturing firms that have won approvalstodobusinessinIndia under the PLI (performancelinked incentives) scheme. Thecombinedvalueoftheir merchandise is estimated at a staggering `10.5 lakh crore over the next five years and many multiples of the current investment of `11,000 crore. Of the total production value, ABU DHABI INVESTMENT Authority(ADIA)willpickupa 1.2% stake in Reliance Retail Ventures (RRVL) for `5,512.50 crore,valuing the theretailerat`4.29lakhcrore, reports fe Bureau in Mumbai. ADIA has also bought a PANDEMIC QuickPicks Services sector PMI inched towards normalcy in Sept A CONTRACTION in the services sector substantially narrowed in September, signalling a gradual return to normalcy, reports fe Bureau in New Delhi. The PMI for services stood at 49.8 in September, just shy of the 50-mark that separates contraction from expansion and compared with 41.8 in August. 70 Manufacturing PMI 56.8 60 51.4 50 40 48.7 49.8 30 20 Services PMI 10 0 Sept 2019 Sept 2020 New members may lend slight dovish tilt to MPC, analysts say WITH THE appointment of economists Ashima Goyal, Jayanth R Varma and Shashanka Bhide to the MPC, the rate-setting, six-member panel may acquire a slight dovish tilt, given their earlier criticism of hawkish policies, some analysts said, reports fe Bureau in New Delhi. Nevertheless, they expect the MPC to hold on to the benchmark lending rate in its October 7-9 meet. PAGE 10 Electronic book mechanism must for issuance of AT1 instruments THE SEBI on Tuesday mandated the usage of electronic book mechanism for issuance of Additional Tier 1 (AT1) instruments, reports PTI. Perpetual non-cumulative preference shares, innovative perpetual debt instruments and perpetual debt instruments are commonly referred to as AT1 instruments. As cases are rising... Delhi Bengaluru Aug 1 Oct 21 ...Bengaluru is running out of infra Hospital beds 34.5 ICU beds Sept 14 UNMASKING TRUMP US President Donald Trump faced a backlash on Tuesday for removing his mask when he returned to the White House and urging Americans not to fear Covid that has killed more than 209,000 people in the country and put him in hospital 14.3 50 40 30 20 10 0 41.7 (Availability, in %) Ventilator beds Oct 6 added by Bengaluru in the past seven days. Continued on Page 12 Oldest Delhi graveyard clears space to bury dead WORKERS WERE CLEARING undergrowth from wasteland on Tuesday to add 400 graves to the Indian capital’s oldest functioning cemetery beside the ruins of historiccitywalls,asthedeath toll from the coronavirus Continued on Page 12 1.16% stake in in Jio Platforms for`5,683.50crore. Thisistheseventhinvestment in RRVL in four weeks and the retailer has mopped up a staggering `37,710 crore by selling 8.51% of its equity. ■ Page 4 KIRAN RATHEE New Delhi, October 6 Projections 3,50,000 3,00,000 2,50,000 2,00,000 1,50,000 1,00,000 50,000 0 18.2 LAST MONTH, BENGALURU surpassed Mumbai to become the second city in India to cross two lakh infections. Today, the city leads India when it comes to active cases. The country’s IT capital reported 54,113 active infections last Friday, more than twice that in Delhi or Mumbai. At this pace, in about two weeks, Bengaluru will overtake Delhi to become the city with the highest number of confirmed Covid-19 cases. Although Delhi is closing in on three lakh infections and Bengaluru registered only 2,52,229 cases on Tuesday, infections in the garden city are growing at more than twice the rate as they are in Delhi; 1.9% compared with 0.8%. Close to 11.4% or 28,660 infections have been 60% or `6.5 lakh crore worth of goods is to be exported. BSNL will take 10 months to clear pending vendor dues of `15,000 cr grows,reports Reuters. Since its first virus burial in April, the Islamic graveyard of Jadid Qabristan has seenmorethan700funerals on a patch of adjoining wasteground designated for pandemicvictims. BIG TECH FIRMS ‘US House antitrust report hints at break-up’ The US House of Representatives antitrust report on Big Tech firms contains a "thinly veiled call to break up" the companies, Republican Congressman Ken Buck said in a draft response seen by Reuters. The House antitrust subcommittee is expected to publish its report this week on Amazon, Apple, Facebook and Alphabet. A Buck representative confirmed to Reuters the authenticity of the draft response. In the draft, he shared Democratic concerns about the power of Big Tech firms, with their penchant for "killer acquisitions" to eliminate rivals and self-preferencing in guiding customers to their other products. However, he objected to a plan to require them to delineate a clear "single line of business". ILLUSTRATION: ROHNIT PHORE Continued on Page 12 ISHAAN GERA New Delhi,October 6 The scheme will extend an incentive of 4% to 6% on incremental sales over base year of goods manufactured in India ● ON HOLD 38.3 25.8 DINESH KUMAR KHARA has been appointed chairman of State Bank of India (SBI) for three years starting October 7. Kharahasbeeninchargeofthe bank’s associates and subsidiaries in his role as managing director (MD). His tenure saw the listing of the bank’s two insurance arms and its credit card company. The foremost challenge for Khara in his new role will be to deal with the repercussions of Covid-19—intermsofrecoveries aswell as growth. Afresh dimension has been added to the restructuring schemeforCovid-relatedstress with the judiciary getting involved. If the government does indeed decide to bear the compound interest component for borrowers who took the moratorium, banks will have to launch a mammoth administrative exercise. Domestic value addition is expected to grow from the current 15-20% to 35-40% in case of mobile phones & 45-50% for electronic components ADIA invests `5,513 cr in Reliance Retail Dinesh Khara is Bengaluru to soon new SBI chairman become India’s top corona city SHRITAMA BOSE Mumbai, October 6 The scheme will generate 3 lakh direct employment opportunities in next five years ‘KILLER ACQUISITIONS’ ■ Panel is expected to Buck shares Democratic publish its report this week on Amazon, Apple, concerns about the power of Big Tech firms Facebook, Alphabet ■ Republican Ken THE VENDORS OF stateowned Bharat Sanchar Nigam (BSNL) would have to wait longer for clearance of their dues as the ailing company is notexpectedtoclearmorethan 10% of the outstanding dues everymonth.The companyhas a total dues of around `15,000 crore towards various vendors likeNokia,ZTE,UTStarcom,etc, who all were expecting that withthecompanyrecentlyraising `8,500 crore through sovereignbonds,wouldeitherclear their dues in one go or at least 40-50% of the total amount. “BSNL has cleared 10% of our dues after raising funds throughbonds.Wewereexpecting that about 50% of ourdues would be cleared but the BSNL management is saying bulk of themoneywouldbeutilisedfor retiring bank debts.They,however, have promised to make monthly payments in installments for outstanding dues,” said an official with one of the vendors.However,BSNLhasnot givenanywrittencommitment to the vendors regarding monthly clearance of dues through installments. Continued on Page 2 CHARTBUSTER S Korean retail investors bid over $50 bn to win coveted BTS label shares CYNTHIA KIM Seoul, October 6 SOUTH KOREAN RETAIL investors ponied up over $50 billion as they sought to lay theirhandsonsharesinBigHit Entertainment, the management label of K-pop sensation BTS — more than 600 times the value of shares on offer. The combined 58.4 trillion won ($50.3 billion) in orders fell just shy of a record 58.55 trillion won in bids for the retail portion of Kakao Games’ listing in September. Most of the bids for Big Hit’s stock, priced at 135,000 wonpershare,camelateonthe second of two days of orders from individual investors. “I waited until 2 pm this afternoontosubscribebecause I wanted to choose the arrangerwith less competition forbidding,”saidOhSang-min, a 32-yearold retailworkerwho placed bids worth 100 million won after taking out a loan. He was told by his money managerthat hewould be able Big Hit Entertainment is the management label of K-pop sensation BTS (above) to pick up just two shares. There has been some concern that funds pouring in from retail investors could affect short-term money markets as the funds would be at brokerages’ disposal for three days before investors who are not allocated shares get their money back. But the total amount of retail bids did not match some heady forecasts of 100 trillion won, and market sources said on Tuesday they were monitoring the situation but were New Delhi not overly concerned about the impact. Someanalystssaidtalkthat the band’s members may have to complete mandatory military service could have prevented retail demand from reaching such lofty heights. By law,all able-bodied men in South Korea aged between 18 and 28 must serve in the military for roughly two years as part of the country’s defences against North Korea. Continued on Page 2
The Financial Express (FE) is a business paper that’s closest to the people who are in the business of business. From business policies to market trends to new developments, The Financial Express comes packed with incisive news on every relevant issue.