OPINION, P6 COMPANIES, P4 INTERNATIONAL, P8 S SUBRAMANIAN AFFORDABLE PRICES REPUBLIC DAY EVENT This isn't really a V-shaped recovery; only big firms doing well, labour participation low Spurt in housing demand not pent-up, says Deepak Parekh Johnson cancels India visit amid growing Covid crisis in UK JS DEEPAK Subsidy to farmers, in the form of MSP, will have to continue NEW DELHI, WEDNESDAY, JANUARY 6, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 266, 18 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: 48,437.78 ▲ 260.98 NIFTY: 14,199.50 ▲ 66.60 NIKKEI 225: 27,158.63 ▼ 99.75 HANG SENG: 27,649.86 ▲ 177.05 `/$: 73.18 ▼ 0.16 `/€: 89.80 ▼ 0.03 BRENT: $51.98 ▲ $0.89 GOLD: `51,248 ▲ `236 Economy to shrink 9.6% in FY21: WB INDIA'S ECONOMY is estimated to contract by 9.6% in the fiscal 2020-21, reflecting a sharp drop in household spending and private investment, and the growth is expected to recover to 5.4% in 2021, the World Bank said on Tuesday, reports PTI. SC nod to Central Vista project THE SUPREME Court on Tuesday gave its nod to the proposed multi-crore Central Vista redevelopment project that covers a 3-km stretch from Rashtrapati Bhavan to India Gate in New Delhi, reports fe Bureau in New Delhi. Rupee falls on wider trade deficit worries FE BUREAU New Delhi, January 5 73.00 `/$ Intra-day, Jan 5 Inverted scale 73.08 THE RUPEE FELL to 73.18 on Tuesday, losing 0.2% to the dollar,the most in sevenweeks amid concerns India’s trade deficit would widen further in the coming months as the economyrecovers. The currency markets also apprehend foreign flows into the equity markets could slow afterrecord levelsofbuying;so far in January, however, FPIs have been big buyers.The yield on the benchmark remained steady at 5.82% with the markets reassured the continuing openmarketoperationsbyRBI would keep the yield sub-6%. Led by HDFC, the stocks of financials soared, sending the Bank Nifty to a one-year high and the Nifty close to 14,200. Theearningsseasonkicksoffon January8withTCSannouncing Q3FY21 results. Bank Nifty Brent ($/bbl) 5.84 5.83 Previous close: 73.0237 Open Close 10-yr bond yield (%) Intra-day, Jan 5 5.82 5.81 5.824 5.816 5.80 5.79 Previous close: 5.825 Open Close Intra-day, Jan 5 51.82 52.5 52.0 51.5 31,150 50.95 ‘Economy is riding Bharat Bio, Serum smoke peace pipe against Covid wave’ Finmin report says V-shaped recovery on, ascribes it to ‘liquidity booster’, credit push FE BUREAU New Delhi, January 5 THE ECONOMY HAS witnessed a “V-shaped recovery” since the June quarter debacle and is now riding against the Covid wave on the back of an effective management of the pandemic,thefinanceministry claimed on Tuesday, exuding confidence in the strength and durabilityof the rebound. “Theeffectivemanagement of the Covid-19 spread despite thefestiveseasonandtheonset of winter season, combined Rail freight Revenue (` cr, RHS) Loading (m tonne) 120 12,000 10,728 11,364 80 8,000 40 0Feb Credit growth Non-food credit Food credit (RHS) Jan 3 Source: RBI 0 Dec* *Up to Dec 30 10 8 6 4 2 0 4,000 (%, y-o-y) Bank credit Core imports (% change, y-o-y, in imports excluding oil and gold) 20 8.4 0 -20 -40 -60 -52.2 Apr Dec* *Preliminary estimate Rabi sowing 2020-21* (% change, y-o-y) 60 3.6 8.7 5.8 2.9 50 40 30 20 10 0 Chana Total -10 Wheat -20 (including Mustard -30 Dec 18 other crops) *As on Jan 1, 2021 with sustained improvement in high-frequency indicators and V-shaped recovery along with easing of lockdown restrictions,distinguishIndian economy as one riding against the Covid-wave,” the department of economic affairs said in its report on the economy for December. Continued on Page 2 Issue joint statement to say will work together to develop, make and supply Covid-19 vaccines FE BUREAU New Delhi, January 5 BHARAT BIOTECH FOUNDER and CMD Krisha Ella and Serum Institute of India CEOAdarPoonawalla on Tuesday issued a joint press release to signal allwaswell.At a press conference on Monday, Ella had sniped at SII without naming anyone. It is not clear if the government played a part in the rapprochement or whether the two vaccine-makers realised that giving the drugs regulator a bad name — by rubbishing each other’s product — Serum Institute of India CEO Adar Poonawalla (L); Bharat Biotech CMD Krishna Ella was hurting both of them. The statement said the two “communicated their combined intent to develop,manufactureandsupplytheCovid-19 vaccines forIndia and globally”. They added,“now that two Covid-19 vaccines have been issued EUA (emergency use authorisation) in India, the focus is on manufacturing, supply and distribution, such that populations that need it the most receive high quality, safe and efficacious vaccines”. Continued on Page 2 51.0 30,800 30,450 73.32 31,722.25 31,041.10 73.18 73.15 73.24 Intra-day, Jan 5 31,850 31,500 73.16 VACCINE WARS REVIVAL MODE 113.9 PROTESTING FARMERS on Tuesday announced they will hold a tractor march on January 7 on the newly built highways at the peripherals of Delhi as part of their plan to intensify the stir, reports fe Bureau in New Delhi. Talks with the government on Monday had ended in a stalemate. TUESDAY TRENDS 106.5 IN THE NEWS Farmers’ tractor rally on January 7 Previous close: 31,212.45 Open Parliament’s Budget session likely from Jan 29, Budget on Feb 1 50.5 Close 50.0 Open 6:43 pm S Africa strain raises growing alarm in UK THE CABINET Committee on Parliamentary Affairs(CCPA)hasrecommendedthattheBudget session of Parliament commence from January 29 and conclude on April 8, reports PTI. According to the committee’s recommendation,whilePart1oftheBudgetsession wouldbeheldfromJanuary29toFebruary15, Part 2wouldbe from March 8toApril 8. THENEWcoronavirus strain thatemergedinSouthAfrica is even more problematic than a mutated form that prompted new lockdowns across much of the UK, health authorities has said, reports Bloomberg. President Ram Nath Kovind would address the joint sitting of the two Houses of Parliament on January 29, a Friday, and the Union Budget would be presented on February 1, sources said citing the CCPA recommendations. All Covid-related protocols would be followed during the session,sources said. “I’m incredibly worried abouttheSouthAfricanvariant,” UK health secretary Matt Hancock said on BBC radio on Monday, citing a conversation over the Christmas holiday with his counterpart in South Africa. ● SUDDEN U-TURN ● REVVING UP Fiat to invest $250 m to NYSE scraps plan to delist 3 China telcos make 4 new Jeep SUVs Demand for work under the rural employment guarantee scheme remained at highly elevated levels since May; while the supply responded adequately in June-July, it has since declined. In December, the demand was still up 56% on year, but the supply hardly grew. `84,349 crore ore ore `71,020 crore Person days in entire FY20 Growth (%, y-o-y) re 265.39 crore Continued on Page 2 CATCHING UP Private banks close gap with PSBs on term deposit rates SHRITAMA BOSE Mumbai, January 5 AS PRIVATE BANKS gain share in the banking system’s deposit base, they have begun to close thegapwithpublicsectorbanks (PSBs) in terms of how much they pay for deposits.According to Reserve Bank of India (RBI) data on bank group-wise interestrates,thedifferencebetween the weighted average domestic termdepositratesofthetwosets ofbanksfelltothreebasispoints (bps)inNovember2020from32 bpsinDecember2019.Thedata also point to poor transmission of rate cuts,with the weighted average lending rate (WALR) on outstandingrupeeloansdeclining only 69 bps between February 2020 and November 2020 evenasthereporatefell115bps overthesameperiod. Privatelendersarenowcomfortable paying less on term deposits even as growth in this 6.50 6.82 Dec 2019 Jan 2020 Mar May July Sep Nov 6.51 6.73 6.38 6.54 6.17 6.24 6.04 6.04 Outstanding rupee 5.74 term deposits 5.83 (in %) 5.72 PSBs Private banks Source: RBI 5.75 category of deposits has been slowingfortheminFY21sofar. Thecentralbank’s recentTrend and Progress Report attributed themoderationintermdeposits to easing interest rates and the lure of returns on competing asset classes. “Term deposit growth of PVBs decelerated sharplyevenasitquadrupledin PSBs,” the report said. Analysts attribute the 0.4 pply Person days (supply of work) ent so far in the current ﬁscal downtrend in private banks’ deposit rates to a longer-term phenomenon of market share shifts.InareportdatedDecember 16, analysts at Morgan Stanley said that one of the challenges for Indian private banks was that of funding, as theyweregainingmarketshare in loans fasterthan deposits. Continued on Page 2 New Delhi Nov 296.89 crore re Oct Funds disbursed under scheme in entire FY20 Dec Funds released by Centre so far this ﬁscal Sept NYKAA E-RETAIL is planning an IPO as soon as this year that could value the online cosmetic retailer at a minimum $3 billion, according to people familiar with the matter, reports Bloomberg. The start-up founded by Falguni Nayar, an ex-investment banker, is working with advisers to prepare for the share sale in Mumbai, the people said. PAGE 4 Work demand still strong, supply flat Aug THE RESERVE Bank of India (RBI) on Tuesday imposed a monetary penalty of `2.50 crore on Bajaj Finance for using coercive methods of recovery from its borrowers, and violation of general guidelines and one specific direction issued by the regulator, reports fe Bureau in Mumbai. PAGE 10 Nykaa plans IPO at value of $3 billion Iconic Jeep Wrangler to be locally assembled in Ranjangaon FE BUREAU July RBI slaps `2.5-crore fine on Bajaj Finance ■ Next generation Grand Cherokee to be locally assembled in Ranjangaon MGNREGA June QuickPicks ■ New Jeep Compass is market-ready and set for India launch Continued on Page 2 50.1 54.1 77.4 99.4 77.3 101.6 72.7 70.1 76.4 79.1 93 89.8 50 39.2 56.4 Farmers make jalebis during their ongoing protest against the new farm laws, at Singhu border in New Delhi on Tuesday consultationwithrelevantregulatory authorities”. HongKong-tradedsharesin the state-backed firms, China Mobile, China Telecom Corp andChinaUnicomHongKong, surged following the news. -48.3 BITTERSWEETTIMES THE NEW YORK Stock Exchange said it no longer intends to delist three Chinese telecom giants — a shock reversal of an announcement May AT A TIME when some US automobile firms are either folding up or curtailing their operations in India, ItalianAmerican auto major Fiat Chrysler Automobiles (FCA) has decided to expand its productline-up in the country. The company on Tuesday announced an investment of $250 million towards production of four new Jeep SUVs. This would be in addition to the $450 million the company has already invested in its Indian operations in the last five years. The all-new local vehicle line-up includes the 2021 made-in-India Jeep Compass, a locally produced and global-first three-row Jeep SUV, as well as the iconic Jeep Wrangler and the next-generation Grand Cherokee flagship, which will both be locally assembled in Fiat Chrysler’s joint venture (JV) manufacturing facility in Ranjangaon. The four new products will be on Indian roads by the end of 2022, FCA said in a statement. made onlylastweek and deepening confusion over a US crackdown on firms said to be linked to China’s military. The bourse, which had planned to delist the companiesbeforeJanuary11,saidina brief statement it had made the decision“in light of further Apr-35 FE BUREAU Chennai, January 5 PEI LI & TOM WESTBROOK Hong Kong/Singapore, January 5 Demand for work (persons) Supply of work (person days)
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