The First Forum is an initiative that focuses on covering the latest happenings going around in the world in a brief format. This is in lieu with the importance of catching up with these events in this fast-changing world.
In this Forty-Seventh Edition of The First Forum we would be covering the following:
1. Business
2. Economics
3. Finance

(By Mehak Gupta , Nikunj Gulati and Kanika Meena)

Business

Start-ups have already shown interest in In-SPACe, says ISRO Chairman
Indian Space Research Organisation (ISRO) said that In-SPACe (Indian National Space Promotion and Authorisation Centre), the new national nodal agency, which was approved by the Cabinet in the middle of the week, would take 6 months to start functioning and had seen interest from start-ups, while larger players were yet to come out with their proposals. Read MorePrivate firms are allowed activities in launch vehicles, satellites, space-faring services, and in-ground operations for system readiness. The start-ups have shown interest in all four areas. IN-SPACe will be headed by a technology expert as the body may have to deal with various technology related aspects in the space sector. Earlier, the Department of Space said that IN-SPACe would act as a national nodal agency to hand-hold and promote private endeavours in the space sector and for this, ISRO would share its technical expertise as well as facilities.

Tata Steel BSL splits workers into ‘pods’ to keep them safe from Covid-19
At a time when Covid-19 fears have disquieted corporates across sectors, Tata Steel BSL has put in a place a novel system to keep its workers safe from the deadly contagion. The company has partnered global consultancy Boston Consulting Group (BCG) to implement ‘Tata Steel BSL Kavach’. Over 60 days into its initiation and roll out, the Corona proof system has proven to be foolproof to this date. Read MoreMore so at a time when peers like public sector Steel Authority of India Ltd (SAIL) and JSW Steel are trying hard to scale up in a ‘new normal’ with Covid-19 positive cases rising within their workforce. ‘Tata Steel BSL Kavach’ is a six-layered system, catering to government, supplies and operations protocols. The company’s intent was to modularise the whole workforce into small, self-contained units called ‘pods.’ Each pod can have from 2 to a maximum of 10 workers. The workers are skilled enough to manage the operations within a pod without depending on their counterparts in other pods.

Mukesh Ambani pushes for clean, affordable energy; tech to decarbonize
In his biggest push for clean and affordable energy, billionaire Mukesh Ambani on Friday said it was imperative to adopt technologies that can recycle to set the carbon balance right. With Prince Abdulaziz bin Salman Al-Saud, Energy Minister of the world’s largest oil exporter Saudi Arabia, listening, Ambani said there is a need to provide efficient, clean, and affordable energy. Read MoreAmbani said for those in the energy business, it is not so much about the decarbonization but about completing the cycle for zero carbon emission. “Energy is an essential requirement for all 8 billion people on this earth. There is a need to provide efficient, clean, affordable energy. And we have to do it in a responsible way. That’s the business. We should not confuse that between clean and unclean,” he said. Ambani’s company buys a significant quantity of crude oil from Saudi Arabia for processing at its twin refinery complex at Jamnagar. It is in talks to sell a fifth of its oil-to-chemical business to Saudi Aramco for an asking of $15 billion.

Hindustan Antibiotics seeks redemption amid rising anti-China sentiments
Rising anti-Chinese sentiments and India’s search for alternative sources of bulk drugs have come as a booster dose for sick public sector enterprises like Hindustan Antibiotics (HAL). The firm is charting a turnaround plan by beginning the manufacturing of key bulk drugs that the government has identified under a production-linked incentive (PLI) scheme. Read MoreThe PSU is planning to invest Rs 20 crore (the requirement for the newly announced PLI scheme) to augment its production capacity at its Pune plant, to make three key active pharmaceutical ingredients (APIs) — telmisartan, meropenem, and gabapentin. Of these, meropenem is now in high demand. For the financial year 2020-21, the firm is targeting Rs 100 crore in turnover and zero losses. The government had announced a Rs 10,000-crore PLI scheme in March, aimed at reducing dependence on China (for crucial antibiotics, vitamins, anti-diabetic medicines, etc). Under the scheme, it would provide Rs 10 crore to a domestic manufacturer who would make 41 products that cover 53 crucial APIs. The units need to be completely backward integrated.

Anil Ambani plans to increase stake in Reliance Infra, Reliance Power
Anil Ambani, chairman of Reliance Infrastructure (RInfra) and Reliance Power (RPower), told shareholders at a virtual annual general meeting (AGM) that promoters will increase their stake in the firms. Ambani also informed shareholders that RPower has refrained from taking a moratorium on its loans, calling the moratorium a “financial penalty”. The promoters plan to increase shareholding over time, in line with the applicable regulatory guidelines, RPower and RInfra said in separate statements. Read MoreApart from these two group companies, the AGM of Reliance Capital was also conducted digitally. Promoters held a 14.59% stake in RInfra and 19.29% in RPower as of March. Ambani said RPower would look at all “capital-light” opportunities, such as operations and maintenance services for power plants, and mine development services for coal mines. On pay-cuts undertaken, both RInfra and RPower said company executives agreed to a 50% reduction in compensation.

Economics

The US adds 4.8 million jobs as unemployment falls to 11.1%
U.S. unemployment fell to 11.1% in June as the economy added a solid 4.8 million jobs, It has now recovered roughly one-third of the 22 million jobs it lost to the pandemic recession. The US Labor Department said the leisure and hospitality sector added more than two million jobs, while retail added 740,000. Read MoreBut the job-market recovery may already be faltering because of a new round of closings and layoffs triggered by a resurgence of the coronavirus as economists have long warned that the economic benefits of allowing businesses to reopen would prove short-lived if the virus wasn’t brought under control. While the jobless rate was down from 13.3% in May, it is still at a Depression-era level. And the data was gathered during the second week of June, just before several states began to reverse or suspended the reopening of their economies to try to beat back the virus. Our economy is roaring back, President Trump told reporters during a White House news conference. 

Need Rs 50-60 lakh crore FDI to bolster the coronavirus-hit economy: Nitin Gadkari
India needs foreign direct investments worth Rs 50 to 60 lakh crore and the money can be tapped mainly through infrastructure projects as well as MSMEs sector to accelerate the wheels of the coronavirus-hit economy, according to Union minister Nitin Gadkari. He said Foreign Direct Investment (FDI) is the need of the hour and such funds would benefit the country as there is a need for pumping in liquidity into the market. Read MoreThe infrastructure sector including highways, airports, inland waterways, railways, logistic parks, broad gauge, and metro, apart from Micro, Small and Medium Enterprises (MSMEs) can attract large scale foreign investment, he noted. He further said that talks are on with investors from Dubai and the US for various sectors, including MSMEs. Further, the minister noted that public-private partnerships can help harness huge funds and would have a cascading impact by generating more employment and boosting the economy.

Ban on the import of power equipment from China
Union Minister R.K. Singh announced India will not import power equipment from China citing recent transgression in the border area and cybersecurity threats. He further said State distribution companies should not give orders for supply of equipment to China firms. India heavily depends on Chinese products as 80% of the solar equipment imports are from China. Read MoreSo, to reduce such dependence, a government-imposed ban on imports and India will manufacture everything in the domestic market. He stressed on that under the Atmanirbhar Bharat Mission India will not import anything which is available here and will go for inspection of imported equipment. Under inspection, the government can deny the import of equipment. Prime Minister is asking companies to look for Indian suppliers to spur economic recovery and create jobs after restrictions to contain the coronavirus halted businesses and disrupted global supply chains.

Fitch downgraded a record number of sovereign ratings
Fitch Ratings has downgraded a record thirty-three sovereign ratings in the first half of this year and has placed the credit ratings of forty countries or sovereign entities on a “negative” outlook due to the coronavirus pandemic pummels government finances. Expect more sovereign rating downgrade due to the coronavirus pandemic, says Fitch. James McCormack, Read MoreFitch’s global head of sovereign ratings, explained that many governments have increased spending to shelter their economies from being severely hit by the coronavirus pandemic. That is expected to cause a deterioration in the financial positions of all 119 countries rated by Fitch. He said the agency will be watching whether governments can bring down their debt levels after economies emerge from the coronavirus pandemic. 

Fiscal deficit at 58.6% of target in two months
India’s federal fiscal deficit in the first two months through May, this financial year stood at ₹4.66 lakh crore ($61.67 billion), or 58.6% of the budgeted target for the current fiscal year, as per the government data showed. The gap between the government’s revenue and expenditure during the same period in FY20 stood at 52% of the budget target, according to data on the website of the Controller General of Accounts. Read MoreIndia’s federal fiscal deficit touched 4.6% of GDP in the 2019-20 fiscal year ending March, from initial estimates of 3.3%. India’s gross domestic product is seen contracting for the first time in 40 years. The country has also increased its borrowing for the current year to Rs 12 lakh crore against Rs 7.8 lakh crore budgeted earlier. The rating agency expects India’s fiscal deficit to expand to Rs 13 lakh crore or 6.7% of GDP this fiscal.

Finance

HDFC Bank lends Rs 10,800 crore in Q1 FY21
India’s largest private sector lender, HDFC Bank has lent Rs 10,800 crore in the first quarter ended June 2020 (Q1Fy21), a period marked by a nationwide lockdown. The advances by the bank expanded by 21%, on year on year basis. The advances rose to approximately Rs 10,04,500 crore as of June 30, 2020. The outstanding loans were at 8,29,700 crores as of June 30, 2019, and Rs 9,93,700 crore as of March 31, 2020. Read MoreDuring the quarter ended June 30, 2020, the Bank purchased loans aggregating Rs 1,376 crore through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation Limited. However, rating agency CARE Rating has said that the overall credit growth in the Indian banking sector has remained flat during this time. The credit disbursal has been impacted by risk aversion in the banking system and weak demand. The metropolitan regions which account for about 63% of bank credit still did not open even after the lockdown was lifted, hence credit pickup is weak.

US Credit card industry reins balance transfer offers as banks fear defaults
Banks have pulled back from a popular credit card promotion on concerns that borrowers struggling during the coronavirus crisis may leave them with defaulting loans. Balance transfer offers, which typically entice borrowers to move their debt to a new lender in exchange for a temporary 0% interest rate, have been sharply reduced at banks including JPMorgan Chase, Citigroup, Bank of America, Barclays and Capital One, according to people with knowledge of the matter at each firm. Read MoreAmerican Express took the most drastic step, dropping the product altogether, according to a company spokesperson. Banks were burned in the 2008 recession when users of balance transfers defaulted at among the highest rates in the industry, according to the sources. Now, lenders are being more selective about who they make no-interest offers to, favouring customers with higher credit scores and other advantages, said the people.

Axis Bank seeks shareholders nod to raise Rs 50k cr via debt, equity
Axis Bank plans to raise up to Rs 50,000 crore through debt securities and equity share to maintain an adequate level of capital for risk-weighted assets and fund business growth. Under the proposal, the private bank will raise Rs 35,000 crore through debt securities in Indian or foreign currency, while Rs 15,000 crore to be raised through the issuance of equity shares or securities convertible into equity shares, Axis Bank said in a regulatory filing. Read MoreThe personal sector lender mentioned its annual normal assembly (AGM) is to be held on July 31, 2020, and it will search shareholders’ approval for the proposals. The AGM will happen via video conferencing. The debt securities could be via devices like long-run bonds, inexperienced bonds, masala bonds, optionally/compulsorily convertible debentures, and non-convertible debentures on a non-public placement foundation, throughout the interval of one year, from the date of passing of this special resolution.

IPOs in Shanghai and Hong Kong jump, despite pandemic and tensions with the US
Initial public offerings (IPOs) in greater China jumped in the first half of this year, bucking the declines seen elsewhere due to the impact of the coronavirus pandemic. In the first six months, listings in greater China were up 29% and the amount of money that was raised soared 72% from last year. Read MoreThe Hong Kong and Shanghai exchanges took the lead, in terms of the number of deals as well as the total amount raised. In contrast, both the number of IPOs and the amount raised in other regions fell significantly as compared with the same period last year. Asia Pacific’s IPO scene was more resilient as some economies reopened earlier and were among the first to recover from the initial impact of the coronavirus, EY said.

Africa sees surge in mobile money as the pandemic continues
The use of mobile money has surged significantly in the last couple of months in Africa, as along with the world, it also fights to stop the spread of the Covid-19 virus. The widespread use of mobile money has stopped the use of cash in Africa, which the World Health Organisation (WHO) flagged as a conduit for the spread of the coronavirus. Mobile money has also played a big role in curbing the spread of the Covid-19 virus there. Read MoreNot only that, but mobile money also facilitated the continued functioning of the African retail sector by allowing its citizens to shop digitally. The growth of mobile money in Africa is also expected to help the continent tackle its unemployment problem. With the issue of more licenses, more players will enter the mobile money market and will lead to the creation of various jobs within the sector.

Get The Connectere directly in your E-mail inbox !

Enter your email address to subscribe to The Connectere and receive notifications of our new content on your E-Mail