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APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL 16 NO. 90, 16 PAGES, `10.00 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: 57,628.95 ▼ 360.95 NIFTY: 16,988.40 ▼ 111.65 NIKKEI 225: 26,945.67 ▼ 388.12 HANG SENG: 19,000.71 ▼ 517.88 `/$: 82.64 ▼ 0.09 `/€: 88.22 ▼ 0.34 BRENT: $72.80 ▼ $0.17 GOLD: `59,233 ▲ `1,199 $3.2 BN DEAL BROKERED BY GOVT UBS snaps up Credit Suisse All-stock agreement; RESCUE ACT Swiss Bank offers lifeline Modi, Kishida pledge to cement strategic and trade ties INDIAAND JAPAN on Monday pledged to cement their strategic partnership with the objective of a peaceful, stable and prosperous Indo-Pacific and seeking mutual benefits in diverse areas, reports fe Bureau. ■ PAGE 2 SC directs Sebi to refund `300 cr to NSE THE SUPREME COURT, by way of partial relief to NSE in the colocation matter, has directed Sebi to refund `300 crore to the exchange, reports fe Bureau. ■ PAGE 9 Airtel tweaks plans to counter Jio ATATIME when Reliance Jio is going aggressive to capture market share, Bharti Airtel has also stepped up to take on the competition with lucrative offerings, reports Jatin Grover. ■ PAGE 4 Order reserved in Google vs CCI case NCLAT on Monday reserved its judgement in Google's plea against the CCI order for abuse of dominant position by the US based tech giant, reports Surabhi. ■ PAGE 3 UBS and Credit Suisse used to be (in billion) similarly valued. Not anymore UBS Group 80 MARION HALFTERMEYER, EYK HENNING, JAN-HENRIK FÖRSTER & DINESH NAIR March 19 60 40 20 0 UBS GROUP AGREED to buy Credit Suisse Group in a historic,government-brokered deal aimed at containing a crisis of confidencethathadstartedtospreadacrossglobal financial markets.The Swiss bank is paying 3billionfrancs($3.2billion)foritsrivalinan all-share deal that includes extensive government guarantees and liquidity provisions. The price per share marked a 99% declinefromCreditSuisse’speakin2007. The Swiss National Bank is offering a 100 billion-franc liquidity assistance to UBS while the government is granting a 9 billion-francguaranteeforpotentiallosses from assets UBS is taking over. Regulator Finma said about 16 billion francs of Credit Suisse bonds, known as AT1s, will ■ UBS slumped 8.8% in early Zurich trading, while Credit Suisse fell about 64% Credit Suisse chairman Axel Lehmann (left) and UBS chairman Colm Kelleher in Bern on Monday ■ About 16 billion francs of Credit Suisse bonds, known as AT1s, will become worthless INSIDE become worthless to ensure private investors help shoulder the costs. UBS slumped 8.8% in earlyZurich trading,whileCreditSuissedeclinedabout64%, valuingthefirmatabout2.71billionfrancs. Swiss govt, central bank to offer support Deal likely for Signature Bank PAGE 8 Continued on Page 12 PAGE 8 Indices recover after 905-point fall SIDDHANT MISHRA Mumbai, March 20 INDIAN EQUITIES STAGED a late revival to recoup part of the losses incurred in early trade,on a daywhen financials and tech stocks dragged the indices down after UBS stepped in to acquire embattled rival Credit Suisse. Tracking Asian equities, the Sensex opened at 57,773.55, more than 200 points down fromFriday’sclose,andtouched anintra-daylowof57,084.91— a 905-point or 1.6% slide from its previous close — before settlingdowntoclose361pointsor 0.6% down at 57,628.95. Investor wealth declined by `2.09trillionto`255.43trillion duringthe session. While UBS’move may have come as a relief, it did little to calm sentiment, with Asian indices trading in the red on the day.TheNikkei,Hang Seng, ASX200, KOSPI, and Shanghai Composite all closed in the red. Europe’s Stoxx 50, too, opened in the red,shedding up to 2% before recovering losses to trade in green territory in afternoon trade. The biggest sectoralloserintheBSEuniverse was metals, down over 2.17%, withcommoditiesandinfotech alsosheddingcloseto1.3%.The midcap and smallcap indices alsoshed close to 1% each. The Bajaj twins led the losses,with Bajaj Finservdown over 4% and Bajaj Finance shedding over 3%, with two Tata group firms, Tata Steel and Tata Motors, also among the top losers. BANKING CRISIS WEIGHS HEAVY 57,989.90 TOP 5 NIFTY LOSERS Previous close 57,773.55 March 20 AI chief sees end to price wars after airline mergers Better control on capacity FARE PLAY to help Air India & Indigo CAMPBELL WILSON, MD and CEO, Air India to push up fares SWARAJ BAGGONKAR Mumbai, March 20 Source: Bloomberg BLOOMBERG PM Narendra Modi with Japanese PM Fumio Kishida in New Delhi on Monday PTI A widening gap in market value 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 IN THE NEWS (% fall) -2.97 Bajaj Finserv Adani Enterprises Bajaj Finance -2.63 Hindalco -2.34 Tata Steel -4.21 57,628.95 March 20 -3.44 360.95 POINTS SENSEX Intra-day Continued on Page 12 EXPLAINER FARE WARS BETWEEN airlines will soon become a thing of the past and travellers should brace for higher ticket prices. Tata Group's move to merge its four airlines will give the industrya bettercontrol on capacity, which will lead to improved yields through higher airfares, Campbell Wilson, MD and CEO,Air India said on Monday. Two players – IndiGo and Air India – will thencontrolabout85%ofthedomesticmarket, thereby controlling prices. The two are looking to make timely additions to their fleets, currently at 960 aircraft. Speaking at the CAPA India Aviation Summit 2023, Wilson said,“Pricing is a function of many factors, supply and demand, economic and demographic growth. There will be two significantly sized private airlines who have a responsibility to their shareholders to improve the financial returns.” “There is going to be investments in people, systems and processes and all this will help to professionalise the ecosystem which ultimately leads to a profitable airline which leads togrowth,”Campbelladded. AjaySingh, chairman,SpiceJetwelcomed such a consolidation.“Any consolidation (in the aviation market) should lead to betteryields,”he said. FE S P E C I A L TYRE MAKER CEAT said on Monday said that its managing directorand CEO,Anant Goenka has resigned from the position to focus on group activities and has been appointedasvicechairmanofthefirm, reports fe Bureau. In his new role, Goenka will take up strategic functions at the group level for its next stage of growth. Thecompany'sboardhasappointed ArnabBanerjee,currentlychiefoperatingofficer,asitsnewMDandCEO. Russian President Vladimir Putin with Chinese counterpart Xi Jinping ahead of their meeting at the Kremlin in Moscow on Monday. Jinping callled Putin his "dear friend" and sought to deepen economic ties with an ally he sees as a useful counterweight to the West and to promote Beijing's role as a potential peacemaker in Ukraine, reports Reuters. Jinping also told Putin that he was convinced Russians would support him in a presidential election due in 2024 ■ Page 8 ‘Penetration of PCs per household still low in India’ Acer’s Sudhir Goel says the SMB and consumer segments are expected to do better in 2023 ■ EFE, P7 BLOCK/BULK ROUTE POPULAR AMONG PROMOTERS, LARGE INVESTORS Big shareholders seek to cash in as volatility weighs SIDDHANT MISHRA Mumbai, March 20 LARGESHAREHOLDERSINcompanies are increasingly looking at the block/bulk deal route to sell stake,at a timewhen share prices are in troubledwaters. Promoters and significant shareholdersusuallypickupstakesduring market volatility to strengthen their holdings and shore up confidence among investors. However, large shareholders are now cashing in owing to the prolonged uncertainty, saymarket analysts. Accordingtodata,somebigshareholderswhohavetakentheexitroute in recent weeks have been Dynasty, which shed its holding in Shriram Finance for over `1,000 crore, and Hulst,which sold its stake in Coforge TOP BLOCK DEAL SALES IN 2023 Amount (` crore) 5,282 2,240 3,215 2,806 Adani Green Energy Mar 2 Seller: S.B.Adani Family Trust forclose to `2,500 crore. Sumit Agrawal, partner, Regstreet Law Advisors, said the decision to sell stakes via block/bulk deals at a time when share prices are falling has several Seller: S.B.Adani Family Trust Seller: S.B.Adani Family Trust Redington Feb 24 Seller: Synnex (Mauritius) Adani Transmission Mar 2 Adani Ports & SEZ Mar 2 1,898 Syngene International Feb 1 Seller: Biocon 1,276 Shriram Finance Jan 13 Seller: Dynasty Acquisition (FPI) 1,040 954 Embassy Office Parks REIT Mar 3 Delhivery Mar 1 Seller: Embassy Property Developments Seller: SVF Doorbell (Cayman) reasons.First,one may need funds for personal reasons, such as to finance other business ventures or meet personal financial obligations. Second, they may have concerns about the future perfor- mance and may want to reduce their exposure. Third, they may view the current market conditions as an opportune time to exit and lock in profits, he said. While 2023 has also seen block/bulk Airfares depend on a lot of factors. Since one player has a significant market share, they are price drivers. INSIDE Challenges faced by Indian aviation industry PAGE 4 Looking at 30% global mkt share in 2 years: IndiGo MD & CEO PAGE 4 Goenka quits as MD, now CEAT’s vice-chairman DAY OUTAT THE KREMLIN ■ PAGE 16 VINOD KANNAN, CEO, Vistara Continued on Page 12 ● FRIENDS’ Foreign universities in GIFT City Pricing is a function of many factors, supply and demand, economic and demographic growth. deals involving promoters, these have been largely those that were in the works, or done for a specific reason. The Adani family trust’s move to offload stakes in group firms followed the Hindenburg report,as the group needed the cash to assuage investorconcerns. Other major deals involving promoters this year were IndiGo promoter Shobha Gangwal paring her stake andAlibaba quitting Paytm. “Alibaba’s exit from Paytm was because of the pressure to cut ties with Chinese entities. Shobha Gangwal’s exit from IndiGo had been in the works since years following the dispute between the cofounders. Continued on Page 12 Goenka expressed his desire to hand over the charge of the company to a successorwith aviewto focus on initiatives at the group level.Accordingly,he sought to berelieved ofhisdutiesasMD& CEO of the company with effect from close of business hours of March 31, 2023, while continuing as a board member, CEAT said in a regulatory filing. He has been MD and CEO of the company since April 1, 2012,it added. ■ Page 4 India Inc can borrow & invest more: Finmin FE BUREAU New Delhi, March 20 WHILETHETIGHTENING of financial conditions has raised concerns over corporate debt vulnerabilities globally, Indian companies are much less leveraged and have sufficient space to borrow further to invest, the Union finance ministry said on Monday. "As of end of September 2022, India’s corporate sectorcredit-GDP ratio is about 12.3 percentage points below its historical trend,” the ministry noted in its monthly economic review for February. The commentscomeatatime,whenthe juryisstilloutonwhetheranewprivate capex cycle has indeed started. Non-food credit growth rose to 15.9% in April-February of FY23, nearly double the rate at which it grew in the year-ago period, although the credit flows have seen some fluctuations in recent months. Rise in capital and construction goods imports is another factorthat has given some credence to the assumption that at least in some sectors like chemicals, fresh investments are picking up. “While the current rate hike cycleandmonetarytightening continue to cause turbulence in global financial markets, the impact of adverse developments on the domestic private sectorwill remain limitedonaccountofitsstrongdebt profile, which has proven to be key in maintaining macroeconomic stability,”the ministry said. As per the Bank for International Settlements (BIS), the core debt of the corporate sector increased in both advanced economies (AEs) and emerging market economies (EMEs), reaching 149% of GDP in Q3 2022 for emerging market economies (compared to 82.3% in Q3 2008) and 153% in G20 in Q3 2022 (139.4%). Whereas for India, it MONTHLY ECONOMIC REVIEW ■ The comments come at a time, when the jury is still out on whether a new private capex cycle has indeed started ■ The govt has hiked budgetary capex steeply in the last two years and has budgeted to keep the pace in FY24 as well ■ India’s real GDP growth in Q3FY23 has come in at 4.4%, lower than expected ■ Forecasts by various agencies show that inflation in India will moderate in FY24 compared to FY23 INSIDE Govt's debt profile 'safe & prudent': FM PAGE 2 has declined to 87.7% in Q3 2022 compared with 107.3% in Q3 2008, the period of the global financial crisis, the ministry observed. The contribution of Gross Fixed Capital Formation (GFCF) to the growth momentum softened as its share in the real GDP moderated from 34.2% in Q2 FY23 to 31.8% in Q3. Continued on Page 14 Lucknow
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