Investors poorer by Rs 3.85 lakh crore in market selloff
A sharp plunge in the equity market made investors poorer by Rs 3.85 lakh crore on Friday as the BSE barometer Sensex plummeted over 1,400 points led by massive selloff in banking, metal and energy stocks.
Tracking the plunge in the indices, the market capitalisation of BSE-listed companies dropped by Rs 3,85,485.39 crore to Rs 1,43,99,995.94 crore.
In the opening trade, the 30-share BSE index plunged 1,459.52 points and was later trading over 900 points lower in afternoon session as sentiment in the market remained muted amid crisis at Yes Bank and rising concerns over the economic strain of coronavirus outbreak.
The BSE bank index dropped 2.46 per cent.
From the 30-share pack, all the constituents were trading with losses led by IndusInd Bank, Tata Steel, SBI and HDFC which plunged up to 7.3 per cent. PTI
AGR liabilities at Rs 21,533 crore as per self assessment: Vodafone Idea
Vodafone Idea on Friday said its adjusted gross revenue (AGR) liabilities stand at Rs 21,533 crore as per its self assessment, and that the calculation of dues has been filed with the telecom department.
The statement assumes significance as the government has estimated the company’s dues at over Rs 53,000 crore, of which it has so far paid only Rs 3,500 crore in two tranches.
The AGR liabilities calculated by Vodafone Idea (VIL) are only 41 per cent of the government’s assessment.
Vodafone Group CEO Nick Read is currently meeting Telecom Minister Ravi Shankar Prasad to discuss options to keep VIL afloat. PTI
Air India disinvestment process going on extremely well: Puri
The disinvestment process for Air India is going on “extremely well”, Civil Aviation Minister Hardeep Singh Puri said on Friday.
On January 27, the government came out with a Preliminary Information Memorandum (PIM) for Air India disinvestment.
It has proposed selling 100% stake in Air India along with budget airline Air India Express and the national carrier’s 50% stake in AISATS, an equal joint venture with Singapore Airlines.
No F&O contracts for Yes Bank from May 29: BSE, NSE
Leading stock exchanges BSE and NSE on Friday decided to drop Yes Bank from Futures and Options segment from May 29.
The existing Futures and Options contracts across all expiries will expire on May 28.
The development came after Yes Bank on Thursday was put under a moratorium, with the RBI capping deposit withdrawals at Rs 50,000 per account for a month and superseding its board.
In similar-worded circulars, the exchanges said,” the existing Futures and Options contracts, across all expiries shall expire on May 28, 2020. No Futures and Options contracts shall be available in Yes Bank for trading in equity derivatives segment from May 29, 2020 onwards“.
Derivatives markets or F&O segment reflect expectation of spot prices in the future, and current price bands or circuit filters are generally not applied on them. PTI
“I want to assure every depositor that their money shall be safe,” says FM Nirmala Sitharaman
Finance Minister Nirmala Sitharaman on Friday assured cash-starved Yes Bank depositors that their money is safe and the RBI is working on an early resolution of the issue.
“I’m in continuous interaction with the Reserve Bank of India (RBI). The central bank is fully seized of the matter and has assured they will give a quick resolution . I want to assure every depositor that their money shall be safe. Their monies are safe,” Ms. Sitharaman told reporters here.
She said the steps taken are in the interest of depositors, banks and the economy.
“We are fully of seized of the development. RBI Governor has assured me that there will be no loss to any depositor,” she added.
Oil drops on demand doubts, fears that producer output cuts not yet agreed
Oil slid 1% on Friday as worries about global oil demand and economic growth slowdown caused by the coronavirus outbreak were heightened by concern over non-OPEC crude producers not yet having agreed to cut output further to support prices.
Brent crude fell 49 cents, or 0.98%, to $49.50 per barrel by 0735 GMT, while U.S. West Texas Intermediate (WTI) was down 46 cents, or 1%, at $45.44 per barrel.
The Organization of the Petroleum Exporting Countries (OPEC) on Thursday pushed for crude output by OPEC and associated producers - a group known as OPEC+ - to be cut by an extra 1.5 million barrels per day (bpd) in total until the end of 2020. The call came ahead of an OPEC+ meeting scheduled for Friday in Vienna.
Non-OPEC states were expected to contribute 500,000 bpd to the overall extra cut, OPEC ministers said. But Russia and Kazakhstan, both members of OPEC+, said they had not yet agreed to the deeper cut, raising the risk of a collapse in cooperation that has propped up crude prices since 2016. Reuters
Why India’s popular restaurants are creating delivery-only brands
We all have our favourite restaurants, that we walk into for the familiar comfort of it, for the ambience, for the DJ who gets it just right, for the waiter who knows our go-to order, or for memories shared with friends, families or dates.
And then we have our favourite order-at-home options, which may or may not be (and usually are not) the same as our walk-in haunts.
Often, the latter is not a full-fledged restaurant but a cloud kitchen — one that focusses on how to portion and package a meal for one, indulgent or guilt-free, ideal for solitary binge sessions at the end of a long, hard day that leaves us too drained to cook. Restaurants are increasingly aware of why at-home diners prefer cloud kitchens over them. A large part of it has to do with serving size.
Angry customers queue up at Yes Bank for cash
Distressed and angry customers of the crisis-hit Yes Bank trooped outside scores of branches and ATMs in Mumbai, Thane, Pune, Nagpur and other cities on Friday to withdraw money after the RBI imposed curbs on withdrawal apart from other measures late on Thursday.
Panicky customers rushed to the ATMs since late Thursday for withdrawals but many soon became dry, leaving them exasperated, especially in the suburbs and residential areas, and the scene was repeated on Friday morning in commercial areas of south Mumbai, Bandra Kurla Complex, Andheri, Lower Parel, etc.
Besides, customers said certain UPI transactions which are on the Yes Bank PSP are reportedly not going through, all types of accounts are inaccessible even via netbanking, and many fintech players are hit badly.
Mumbaikars are particularly peeved as the RBI orders came on the eve of the popular Holi festival on Monday, followed by Gudi Padva after a fortnight, the ongoing examination season when cash in hand is a necessity, not to mention the long weekend breaks thousands have planned in advance. IANS
SEBI app to air investor grievance
The Securities and Exchange Board of India (SEBI) has launched a mobile application that will allow entities to lodge grievances against listed companies, market intermediaries and all categories of market participants. The app is a mobile version of the SEBI Complaints Redress System (SCORES), which was launched in June 2011, and has received, on an average, 40,000 complaints every year. Further, a total of 3.57 lakh complaints have been resolved using the SCORES platform
“The app has all the features of SCORES which is presently available electronically where investors have to lodge their complaints by using Internet medium,” stated a release by SEBI.
Interest of Yes Bank depositors will be protected: CEA
Chief Economic Advisor Krishnamurthy Subramanian on Friday said all options are under consideration for restructuring Yes Bank and assured that depositors’ money is safe.
His remarks come a day after the cash-starved lender was placed under a moratorium, with the RBI capping deposit withdrawals at Rs 50,000 per account for a month and superseding its board with immediate effect.
“The RBI has taken right steps. Yes Bank depositors’ money is safe,” he told reporters after meeting Finance Minister Nirmala Sitharaman.
Asserting that the interest of Yes Bank customers will be protected, Subramanian said all options are under consideration for restructuring Yes Bank. PTI
Ex-Yes Bank director seeks RBI action on CEO
Uttam Prakash Agarwal, a former board member of Yes Bank, has written to Reserve Bank of India governor Shaktikanta Das alleging violation of norms by the bank’s MD and CEO Ravneet Gill, demanding action.
Mr. Agarwal resigned from the board last month citing governance issues while Yes Bank said the board was scheduled to look into the ‘ﬁt and proper status’ of Mr. Agarwal but he resigned before the meeting started. In his letter, Mr. Agarwal alleged breach of governance, non-compliance, undue influence and control on a majority of board members by Mr. Gill.
He said discussion on his ‘fit and proper’ status was not in the board meeting agenda which he received on January 9.
Manmohan fears economic despair to expand due to CAA, COVID 19
Former Prime Minister Manmohan Singh on Friday said the country has becomes a majoritarian state in economic despair expressing concern over the possibility of coronavirus causing further decline in the economic growth and called for the need of the government to put together a detailed and meticulous plan to boost consumption demand and revive the economy.
“India faces imminent danger from the trinity of social disharmony, economic slowdown and a global health epidemic. Social unrest and economic ruin are self-inflicted while the health contagion of COVID-19 disease, caused by the novel coronavirus, is an external shock. I deeply worry that this potent combination of risks may not only rupture the soul of India but also diminish our global standing as an economic and democratic power in the world,” wrote the former Prime Minister in a national daily column published on Friday.
He said that while crisis due to coronavirus (COVID-19) was an external shock for the country, the riots in Delhi and worsening economy were self-inflicted injuries he expressed in an article. IANS
Also read: An unrest, a slowdown and a health epidemic
Third-party motor insurance premium rates set to go up
Third-party motor insurance premium for cars, two-wheelers, good carriers, buses, including school buses, and a host of other automobiles looks set to increase, sharply for some, with the Insurance Regulatory and Development Authority of India (IRDAI) proposing an increase in the rates for 2020-21.
Among private cars, those above 1500 cc or luxury cars is the only sub-segment where the rate of premium is proposed to be kept unchanged, at ₹7,890.
For cars below 1000 cc, a segment popular with those migrating from two-wheelers to cars and comprising the popular Alto model, the premium rate proposed is ₹2,182 or an increase of 5.3% from the existing rate of ₹2,072. The rate proposed for 1000-1500 cc cars is ₹3,383 (₹3,221) or an increase in excess of 5%.
Prashant Kumar takes charge as Yes Bank administrator
Yes Bank on Friday said Prashant Kumar, former deputy managing director and CFO of State Bank of India, has taken charge as its administrator.
The private sector lender was on Thursday placed under a moratorium, with the RBI capping deposit withdrawals at Rs 50,000 per account for a month and superseding its board.
Kumar taking charge as the Yes Bank administrator is in line with notifications issued by Department of Financial Services and the RBI.
“In line with the above, Prashant Kumar, ex-DMD and CFO of State Bank of India, who has been appointed as the Administrator by the Reserve Bank of India under Section 36ACA(2) of the Banking Regulation Act, 1949, has taken charge with effect from today,” Yes Bank said in a BSE filing.
Yes Bank stock was trading 71.51 per cent down at Rs 10.50 on the BSE. PTI
30 days is the outer limit to resolve Yes Bank, says RBI governor
Manojit Saha reports:
Reserve Bank of India governor Shaktikanta Das has said 30 days is the outer limit to find a resolution for private sector lender Yes Bank which has been put on moratorium.
"We have issued two press statements yesterday, they explain in details the background of our decision. It will be done very swiftly, it will be done very fast. 30 days is the outer limit," Mr Das said at the sidelines of an event organised by industry body Assocham.
He reiterated that the Indian banking system is safe and sound. "Depositors interest (of Yes Bank) will be protected," Mr Das assured. While putting the lender under moratorium till April 7, RBI capped deposit withdrwal at 50,000.
RBI has also superseded the board of the bank and appointed an administrator. State Bank of India, the country's largest lender, is exploring investment opportunity in Yes Bank.
Blackstone keen to invest in India’s stressed assets, says Schwarzman
Blackstone, one of world’s largest private equity (PE) majors, is bullish to invest in India inspite of the economic slowdown in the country.
Blackstone has identified “stressed assets” and warehousing as the new areas of investment, besides focus on technology and real estate, according to its chairman, CEO and co-founder Stephen A. Schwarzman.
Hinting at buying stressed assets, Mr. Schwarzman said, “Issues with India are more about slowing economic growth and limited credit extension by the banking system and neo banks, and that should create more need for owners of companies to look for other sources of liquidity. For us, if there is something very attractive here... we’ve a lot of long term confidence in India. So, we will be very active buyers or lenders in this market.”
Yes Bank moratorium: AMCs swing into action to safeguard investors
Following the 30-day moratorium placed on Yes Bank, asset management companies have asked their clients, who have bank accounts with the troubled lender, to furnish details of alternate accounts for receiving redemption payouts.
If clients want to change their redemption bank account mandate from Yes Bank to any other bank they can send a request... We shall process the request for tomorrow’s redemptions so that their money isn’t blocked, Kotak Mahindra Asset Management’s managing director, Nilesh Shah, said in a late night tweet on Thursday.
Edelweiss Asset Management also said it will ensure redemption payouts are not made to Yes Bank accounts from Friday onwards and asked its clients to give an alternate account.
We request investors who have redemption payouts pending to contact us... Advisors who have brokerage payouts pending should also contact us to change to alternative bank accounts, Edelweiss MF’s chief executive officer Radhika Gupta tweeted.
Stock market brokerage firm Zerodha has also cancelled withdrawal requests made to Yes Bank. PTI
Yes Bank to exit Nifty from March 27
Yes Bank will be excluded from the benchmark Nifty index with effect from March 27. The domestic lender will be replaced by Shree Cement, according to a release from the National Stock Exchange.
Yes Bank has seen a massive erosion in its valuation with its stock price dropping from a high of ₹286 in April 2019 to the current ₹35.
Incidentally, the banking stock was excluded from the benchmark Sensex in December 2019 when the 30-share index was reconstituted.
Yes Bank shares nosedive 25%; other banks plunge too
Shares of Yes Bank on Friday plunged 25 per cent after the company was placed under a moratorium.
The scrip suffered a massive beating and sank 24.96 per cent to Rs 27.65 -- its 52-week low -- on the BSE.
On the NSE, it plummeted 20 per cent to Rs 29.45.
The entire banking pack also came crashing in opening trade, with RBL Bank trading 15 per cent lower, followed by IndusInd Bank which dropped 11 per cent, SBI 7 per cent and Axis Bank 4 per cent on the BSE.
The BSE bankex was trading lower by nearly 3 per cent.
The broader market was also hit hard, with the BSE benchmark tanking 1,459.52 points. PTI
COVID-19 could cut global growth by 0.1% to 0.4%, says ADB
The Asian Development Bank (ADB) said on Friday the COVID-19 outbreak is set to trim economic growth in developing Asia and around the world this year.
More than 3,200 people worldwide have died from the respiratory illness that can lead to pneumonia, hurting financial markets and damaging economies.
The outbreak could slash global gross domestic product by 0.1 to 0.4%, with financial losses forecast to reach between $77 billion and $347 billion, the Manila-based lender said.
Sensex down over 1,000 points; Nifty below 11,000
Ashish Rukhaiyar reports:
A combination of global and domestic factors led to a huge sell off in the Indian equity markets with the benchmark Sensex shedding more than 1,000 points during the first hour of the trading session.
At 10am, the 30-share Sensex was trading at 37,389.31, down 1,081.3 points or 2.81%. The broader Nifty was at 10,954.80, down 314.20 points or 2.79%.
On the global front, most Asian indices were trading lower by 2-3% each as concerns related to the impact of coronavirus outbreak escalated. In the Indian context, the central bank's decision to impose a moratorium on Yes Bank made investors jittery even as the country's largest lender State Bank of India would be acquiring a stake in the troubled private sector lender.
While SBI lost more than 5% in the morning session, shares of Yes Bank tanked nearly 30%. The overall market breadth was extremely weak with more than 1,500 stocks in the red as against only around 200 gainers.
RBI decision on Yes Bank is credit negative: Moody's
Manojit Saha reports:
Reserve Bank of India's decision to put private sector lender Yes Bank under moratorium is a credit negative for the lender, Moody's Investors Service said.
The rating agency urged authorities to take steps to prevent to weakness in the bank's viability.
"RBI’s moratorium on Yes Bank is credit negative as it affects timely repayment of bank depositors and creditors. While Moody’s expects Indian authorities will take steps to prevent the weakness in the bank’s viability from significantly impacting its depositors and senior creditors, the lack of a coordinated and timely action highlights continued uncertainty around bank resolutions in India," said Alka Anbarasu, Vice President at Moody’s Investors Service.
Rupee opens weaker
The rupee opened 59 paise weaker against the dollar on Friday, indicating volatile day for financial markets ahead after Reserve Bank of India superseded Yes Bank board and put the bank under moratorium till April 3.
Yes Bank shares set to tumble as RBI takes control
Shares in India's fifth-largest private sector lender Yes Bank are expected to tumble on Friday, after the central bank took control of the bank and limited withdrawals because of a serious deterioration in its financial position.
India on Thursday placed Yes bank under a moratorium, with the Reserve Bank of India (RBI) taking over from its board for 30 days and saying it would work on a revival plan for the lender. ”Effectively Yes Bank should have no equity value left,” said Sandip Sabharwal, a Mumbai-based fund manager. “Ideally trading should be suspended till formal restructuring is announced.”
SBI said late Thursday that its board had given its in-principle nod to expore an investment in Yes Bank. Reuters
Spread your risks
What has changed?
The central government has raised the insurance for deposits in banks, as proposed in the Budget 2020-21. Earlier, deposits were insured up to ₹1 lakh; now insurance cover has risen to ₹5 lakh.
What does it mean to you, the depositor?
Deposit Insurance and Credit Guarantee Corporation (DICGC) is a wholly owned subsidiary of the Reserve Bank of India and in case of failure of a bank, the corporation provides cover to bank deposits of customers.
If the bank in which you have deposited funds goes bankrupt, the DICGC will ensure that your deposits are now covered against such risk up to a maximum of ₹5 lakh.
All funds held in ‘the same capacity and right’, as defined by the DICGC, at the same bank are added together before deposit insurance is determined. But, if the funds are in different types of ownership or are deposited in separate banks they would then be separately insured.
Bailout of Yes Bank a depositor one: JP Morgan
The bailout of Yes Bank is “a depositor one — not an equity one”, and the bailout will come at a large cut for equity holders, according to leading brokerage JP Morgan.
In a report on Yes Bank, it said the quasi-sovereign bailout (by SBI/LIC) “is a bondholder/depositor bailout and not an equity one, and hence today’s rally in the stock, where Yes Bank rose by 26% compared to a flat Nifty is unjustified”.
“The new capital will likely come in at a steep discount to current share price, as forced ‘bailout’ investors will likely want a large cut for equity holders and it remains to be seen if AT1 at the bank will be called for dilution, as such a move could have implications for future similar issuances by private banks,” it said.
JP Morgan has cut the target price to Re 1. IANS