Today's top business news: Coronavirus impact; JLR cuts production in UK; SBI reduces lending rate and more

Cleaners wash the street in Wuhan in Hubei province.  

4:50 PM

Coronavirus to have larger impact on global economy than SARS: IHS Markit

The outbreak of coronavirus will have a larger negative effect on the global economy than the SARS (Severe Acute Respiratory Syndrome) outbreak in 2003, as any slowdown in Chinese economy would send not ripples but waves across the globe, IHS Markit said on Friday, as reported by PTI.

IHS Markit has projected three scenarios on the impact of coronavirus outbreak on the global economy.

Mainland China is now the second-largest importer in the world, accounting for 10.4% of the world’s goods imports, compared with 4% of the world’s imports in 2002.

4:25 PM

Sensex, Nifty log 1st loss in five days

India's benchmark indices closed in red after four winning sessions on Friday in line with subdued Asian markets as investors globally fretted over rising death toll and economic damage from the coronavirus outbreak, as reported by PTI.

Sectorally, realty, auto and telecom indices were among the major laggards, while healthcare and consumer durables rose the most among the gainers.

In the broader market, the BSE smallcap and midcap indices clocked 0.72% and 0.42% gains, respectively.

The death toll in China’s novel coronavirus epidemic has climbed to 636 with 73 mortalities on Thursday, Chinese health officials said on Friday.

4:00 PM

Jaguar Land Rover pursues cost-cutting measures, cuts production

Britain's biggest car maker will reduce or stop production on certain days at two of its British factories over the next few weeks as the luxury car maker pursues cost-cutting measures in response to falling demand, Reuters reported.

The move is not connected to coronavirus, a spokeswoman for JLR said, which prompted Fiat Chrysler to warn on Thursday that a European plant could shut down within two to four weeks if Chinese parts suppliers cannot get back to work.

3:30 PM

French industrial output plunges in December as strikes weigh

French industrial production fell much more sharply than expected in December as factories contended with nationwide transport strikes and a broader European slowdown, official data showed on Friday, Reuters reported.

Manufacturers were forced to slow production in December as supply lines were hit by industrial action against President Emmanuel Macron's overhaul of pensions.

3:00 PM

Euro falls to four-month low on weak German data

The euro fell to a four-month low since October on Friday after German industrial output recorded its biggest decline in a decade, Reuters reported. Strong employment data from the U.S. encouraged investors to buy the dollar.

“The hard data sits inconsistently with most sentiment data pointing to some improvement. But the political line that `recovery is coming' is losing credibility fast,” MUFG analyst Derek Halpenny said, commenting on the weak data from Germany.

2:30 PM

SBI cuts lending rate by 5 bps

State Bank of India (SBI), the country’s largest lender, on Friday, February 7, 2020, reduced its benchmark lending rate — the marginal cost of funds based lending rate (MCLR) by 5 basis points (bps) across all tenors. The one year MCLR comes down to 7.85% p.a from 7.90% p.a. with effect from 10th February 2020. This is the ninth consecutive cut in MCLR in FY 2019-20.

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1:45 PM

Manappuram Finance to raise up to Rs 1,150 crore via debentures

Manappuram Finance Ltd on Friday said it plans to raise up to Rs 1,150 crore through issuance of debentures.

“Financial resources and management committee of the board of directors of the company held on February 07, 2020 approved the issuance and private placement of rated, secured, redeemable non-convertible debentures up to Rs 1,150 crore,” Manappuram Finance said in a regulatory filing.

A meeting of the financial resources and management committee of the board of directors of the company will be held on February 14, 2020 to consider the proposed allotment for the said issue, it said.

Shares of Manappuram Finance were trading at Rs 166.90 a piece on BSE, down 2.03 per cent from the previous close. PTI

1:30 PM

German industry output suffers biggest slump since 2009

German industrial output registered its biggest drop in more than a decade in December, highlighting the weakness of the manufacturing sector that is dragging on overall growth in Europe's largest economy.

Industrial production tumbled by 3.5% on the month, undershooting expectations for a 0.2% fall, data from the Statistics Office showed. That was the biggest drop since January 2009 and came after an upwardly revised 1.2% increase in November.

Separate trade figures showed seasonally adjusted exports edged up by 0.1% on the month while imports fell by 0.7% in December.

Germany's export-dependent manufacturers are struggling with sluggish demand from abroad as well as business uncertainty linked to trade disputes and Britain's decision to leave the European Union. The services sector is in better shape.

The Ifo economic institute said on Thursday that the coronavirus could also cost Germany growth.

“Germany's auto firms have been hit by the fallout from the coronavirus, which is making it hard to source some key components,” said Andrew Kenningham at Capital Economics.

“In short, it is still too early to sound the all clear for German industry.”

The output figures came a day after the release of data showing industrial orders unexpectedly plunged in December on weaker demand from other euro zone countries, suggesting there is no let-up in sight for the manufacturing sector.

Highlighting the slowdown, Siemens on Wednesday reported first-quarter results that missed forecasts after a slowdown in its industrial automation business and problems in its power and gas and wind power operations.

The German economy narrowly dodged recession last year, and the Ifo institute's monthly survey last week showed business morale weakening, suggesting the economy got off to a slow start in 2020.

Chancellor Angela Merkel's ruling coalition is at odds over how to spend the federal government's budget surplus of 13.5 billion euros. Her conservatives are calling for corporate tax cuts, while centre-left Finance Minister Olaf Scholz favours more public investment. Reuters

1:20 PM

Ant Financial pauses credit rating service amid coronavirus outbreak

A Chinese credit rating service backed by Alibaba affiliate Ant Financial stopped updating scores as of Wednesday, saying many users could miss payments because of the coronavirus outbreak, a reflection of emerging financial pains caused by disease.

Zhima Credit, or Sesame Credit, said in a statement posted on the Alipay app that the decision was made to “better fight the situation and serve its clients.”

The scoring service will resume after the virus is under control and social functions return to normal, it said, without giving a specific time frame. Any missed payments will still be recorded in the system, it added, and the platform will later assess the each client to see whether to lower their scores.

Zhima Credit is one of China's most popular private credit-rating platforms, scoring people and small businesses based on their use of other Ant-linked services - in effect, their shopping and borrowing habits.

Alipay, the third-party payment app that Zhima draws most of its data from, had 1.2 billion users globally as of June 2019.

The spread of coronavirus has led central and local authorities to cordon off cities, suspend transport links and shutter facilities where crowds gather, choking off many forms of commerce. Reuters

1:15 PM

Strides to acquire 18 abbreviated new drug applications from Pharmaceutics International, Inc

Strides Pharma Science Ltd on Friday said its arm has entered into a pact with Pharmaceutics International, Inc to acquire 18 abbreviated new drug applications (ANDAs) for the US market.

“Strides...announced that its step-down wholly-owned subsidiary, Strides Pharma Global Pte Ltd, Singapore, has entered into a definitive asset transfer and licensing agreement with Pharmaceutics International, Inc (Pii) to acquire 18 ANDAs for the US market,” the company said in a filing to BSE.

With access to these products, Strides will significantly expand its niche offerings on its front-end, which has grown multi-fold to attain a quarterly revenue size of USD 66 million.

Of the 18 products successfully developed by Pii with their Pharmaceutics know-how, 11 are currently approved by USFDA while the remaining seven products are submitted and are under different stages of review with the agency, it said.

In addition, Strides will also have exclusive marketing rights for Levothyroxine Sodium Tablets, a narrow niche micro dose product indicated as replacement therapy in primary (thyroidal), secondary (pituitary), and tertiary (hypothalamic) congenital or acquired hypothyroidism with a market opportunity of USD 2.5 billion.

“Pii has developed the product for submission as ANDA and has completed the bioequivalence studies for four reference listed drugs - Synthroid, Unithroid, Levoxy and Thyro - tabs covering the entire addressable market opportunity,” it said.

The total aggregate consideration of USD 6.1 million payable to Pii towards the transferred assets, of which USD four million is paid upfront and the remainder is payable on achievement of the agreed milestones, it said.

Shares of Strides Pharma Science were trading at Rs 496.15 a piece in the morning trade on BSE, up 0.51 per cent from the previous close. PTI

1:00 PM

India Defence Minister Says will achieve $5 billion defence exports by 2024

India Defence Minister Rajnath Singh:

* says have signed over 70 memorandums of understanding with defence manufacturers in last 3 days

* says have signed over 200 agreements with several manufacturers

* says want to streamline India's defence offset policy

* says will achieve $5 billion of defence exports by 2024 Reuters

12:30 PM

Analysis: ECB's house price headache too big to solve

What if vital inflation data used to justify trillions of euros worth of central bank stimulus to support Europe's economy is flawed?

This is precisely the European Central Bank's fear as it starts a one-year forensic review of its unprecedented foray into unconventional monetary policy in recent years.

The problem centres on house prices.

They are a key measure for tens of millions of homeowners and changes in prices affect their financial decisions and their overall perception of inflation and economic health.

Yet, unlike the United States, the monthly “headline” inflation data used by the euro zone central bank to help determine whether and when to intervene to shore up the economy excludes changes in the price of homes occupied by their owners.

As a result, the data underestimated the actual price increases households faced during the current housing boom, which was partly fuelled by rock-bottom central bank rates.

For the ECB, there are two ways out but neither looks promising: Eurostat, the EU statistics agency could fix the data or the ECB itself could target a different inflation measure.

The first appears highly unlikely, and the second so politically and economically risky, that the ECB's review is likely to just kick the can down the road, according to many economists.

At the core of the problem lies how Eurostat calculates the harmonised index of consumer prices (HICP), a measure that combines prices in 19 euro zone members into a single reading.

The importance of the figure can't be understated: The ECB targets this figure and has spent trillions of euros to cut borrowing costs because it is undershooting its aim of almost 2%.

If housing was included, inflation could be 0.2 to 0.3 percentage points higher. That may not seem much but would have pushed it closer to the ECB's target in recent years, weakening the case for stimulus.

The issue is that housing costs only get a 6.5% weight in the euro zone inflation basket - and that is largely from changes in rental prices - while it has over 20% in the U.S. Federal Reserve's preferred inflation measure.

The Eurostat figures excludes changes for so-called owner-occupied housing, data which is produced only quarterly and with a three-month lag. The United States overcomes this by calculating an imputed rent for owner-occupied housing. Reuters

12:15 PM

Oil rises on likely OPEC+ output cuts amid coronavirus outbreak

Oil prices advanced on Friday after Russia said it backs a recommendation for OPEC and other producers to cut their output further amid falling demand for crude as China battles the coronavirus epidemic.

Brent crude futures rose 24 cents, or 0.4%, to $55.17 a barrel by 0547 GMT, but were heading for a fifth weekly loss amid lingering fears over the impact of the virus.

U.S. West Texas Intermediate (WTI) crude futures were up 15 cents, or 0.3%, at $51.10 a barrel, also heading for a fifth consecutive week of losses.

Prices came off earlier highs in the session after China's central bank governor said the world's second-biggest economy may experience disruptions in the first quarter, while Japan announced a big jump in confirmed coronavirus cases among thousands of passengers confined to a cruise liner off its coast.

A panel advising the Organization of Petroleum Exporting Countries (OPEC) and allies led by Russia, known as the OPEC+ group, suggested provisionally cutting output by 600,000 barrels per day (bpd), three sources told Reuters on Thursday.

“We support this idea,” said Sergei Lavrov, Russia's Foreign Minister, when asked about the proposal at a news conference in Mexico City later in the day.

The OPEC+ group, which pumps more than 40% of the world's oil, has been withholding supply and agreed to deepen the cuts by 500,000 bpd from the start of this year, to 1.7 million bpd, nearly 2% of global demand.

“The OPEC+ cuts are supportive of prices near term, but we are still facing uncertainty about the timing and speed of Chinese activity restarting post Chinese New Year,” said Lachlan Shaw, head of commodities research at National Australia Bank in Melbourne.

Stimulus measures by the People's Bank of China (PBOC) are also supporting prices, Shaw said.

The PBOC has pumped hundreds of billions of dollars into the financial sector this week to help steady markets and boost the economy, along with other measures.

Eurasia group said it estimates a contraction in oil demand in China, the world's biggest importer of crude, of as much 3 million bpd in the first quarter from 2019 levels.

Meanwhile JPMorgan cut its estimate for Brent to average $60.40 a barrel in 2020, down $4.1 compared with its earlier forecast.

Oil prices have fallen by more than a fifth since the outbreak of the virus in the city of Wuhan in China. Reuters

12:00 PM

Japan's Q4 GDP expected to post largest decline since 2014

Japan's economy likely shrank at the fastest pace since 2014 in the December quarter as a sales tax hike and a typhoon dented consumer spending and sluggish exports hit capital expenditure, a Reuters poll showed on Friday.

Adding to pressure to the outlook is China's virus outbreak, which has threatened exports and factory output and has already hit tourism in Japan.

Gross domestic product (GDP) is expected to have contracted an annualised 3.7% in the October-December quarter, the poll found, having grown 1.8% in the third quarter.

It would be the first contraction in the five quarters and the biggest fall since a 7.4% decline in April-June 2014, which was the last time Japan raised its sales tax.

The expected annualised contraction would translate to a 0.9% quarter-on-quarter decline after the economy grew 0.4% in the third quarter, the poll showed.

“Manufacturers' production and earnings were weak due to falls in exports, and employment and wages recovery slowed. We see the trend of consumer spending was weak,” said Kentaro Arita, senior economist at Mizuho Research Institute.

“Exports and capital spending are expected to stagnate and consumer spending will stay weak. We expect economic growth in the first half of 2020 will be limited considering the coronavirus impacts.”

Private consumption, which accounts for over 50% of GDP, likely dropped 2.0% for the quarter, the first fall in five quarters and the fastest decline since it fell 4.8% in April-June 2014.

Capital spending was seen down 1.6% in the fourth quarter, the first fall in three quarters and the biggest since a 3.4% drop in July-September 2018.

External demand - or exports minus imports - likely contributed 0.3 percentage point to GDP growth in the final quarter of 2019, the poll showed, although that positive contribution is mostly due to weakening imports rather than export strength.

It subtracted 0.2 percentage point off GDP in the third quarter last year.

The Bank of Japan's corporate goods price index (CGPI), which measures the prices companies charge eachother for goods and services, likely rose 1.5% in January from a year earlier, led by price gains in oil related products, the poll found.

Japanese Prime Minister Shinzo Abe has ordered his government to take “all necessary steps” to mitigate the impact of the virus outbreak on the economy, including tapping state budget reserves. Reuters

11:45 AM

Credit Suisse CEO Tidjane Thiam quits after spying scandal

Credit Suisse said on Friday it had accepted Chief Executive Tidjane Thiam's resignation following a spying scandal. The Zurich-based bank said he would be replaced by Thomas Gottstein, the head of the bank's Swiss business.

Credit Suisse's board also said Chairman Urs Rohner had backing to complete his term that runs until April 2021.

“Urs Rohner has led the Board of Directors commendably during this turbulent time,” said board member Severin Schwan in a statement. “After careful deliberations, the Board has been unanimous in its actions, as well as in reaffirming its full support for the Chairman to complete his term until April 2021.” Reuters

11:30 AM

Yuan inches lower, set for losing week on anxiety over virus impact on economy

China's yuan eased against the dollar on Friday as it staggered towards a feeble end to a week that saw no end in sight to the country's coronavirus epidemic even as Beijing stepped up containment efforts and support measures for the economy.

While investors have been comforted by China's moves to restore calm to battered markets, confidence remains fragile as the death toll from the outbreak continued to climb sharply to over 600, leaving policymakers fretting over the potential drag on global growth.

The People's Bank of China (PBOC) Vice Governor Pan Gongsheng said earlier in the day that China's economy could be disrupted in the first quarter due to epidemic, but it is expected to recover once the virus is brought under control.

Prior to market opening on Friday, the PBOC lifted the midpoint rate higher for the first time in seven trading days to 6.9768 per dollar, 217 pips or 0.3% firmer than the previous fix of 6.9985. That didn't stop the onshore yuan from retreating, having gained to a two-week high the previous day on Beijing's announcement that it would lower tariffs on some U.S. goods. It opened at 6.9750 per dollar and was changing hands at 6.9800 at midday, 80 pips weaker than the previous late session close.

If the yuan finishes its late night session at the midday level, it would have weakened about 0.6% to the dollar for the week. The volume in the onshore market shrunk further to $4.13 billion by midday from a normal half-day turnover of about $15 billion.

Traders said the extended Lunar New Year break and the virus outbreak have delayed the resumption of businesses across the country, disrupting broad sectors of the economy, and kept many corporate clients away from the market this week. Many traders expect the yuan to be under pressure over the short run, at least until the virus is brought under control.

“As the economic indicators are released, market focus will be shifted back to economic fundamentals,” said a trader at a Chinese bank, expecting the yuan swing in a wider range of 6.93 to 7.03 per dollar in the near term. Reuters

11:00 AM

SBI cuts MCLR by 5 bps across tenors

The country’s largest lender State Bank of India (SBI) on Friday announced a 5 basis points reduction in its MCLR across tenors, effective February 10.

This is the ninth consecutive cut in MCLR by the bank in the current fiscal.

With this reduction, the one-year marginal cost of fund-based rate (MCLR) has come down to 7.85 per cent per annum from 7.90 per cent, a bank statement said.

The reduction in MCLR by the bank comes a day after the Reserve Bank of India (RBI) left the repo rates unchanged at 5.15 per cent but announced long-term repo operation for up to Rs 1 lakh crore, making cost of funds cheaper for banks.

SBI further said in view of surplus liquidity in the system, it has realigned its interest rate on retail term deposits (less than Rs 2 crore) and bulk term deposits (Rs 2 crore and above), effective February 10.

It slashed term deposits rates by 10-50 bps in the retail segment and 25-50 bps in the bulk segment.

“The impact of recent RBI policy measures and reduction in deposit rates will be reflected in the next review of MCLR,” the bank said. PTI

Also read: Rates to fall despite RBI’s status quo

10:45 AM

Fed includes 'heightened stress' in leveraged loans in 2020 bank stress tests

Large banks with significant trading operations will have their finances tested in 2020 against a scenario that includes “heightened stress” in leveraged loans, the Federal Reserve announced on Thursday.

The Fed also plans to test banks with substantial trading or processing operations against a hypothetical counterparty default as part of its 2020 round of stress tests.

The Fed's focus on leveraged lending in the upcoming round of stress tests comes after regulators and some in the industry have aired concern for years over the rapid growth in the corporate debt market, particularly in loans to already heavily-indebted firms.

This years stress test will help us evaluate how large banks perform during a severe recession, and give us increased information on how leveraged loans and collateralized loan obligations may respond to a recession,” said Fed Vice Chairman Randal Quarles in a statement.

The annual health check of big bank finances will continue to include a hypothetical severe economic downturn, where the unemployment rate nearly triples to 10% and economies worldwide contract significantly.

Eleven of the largest U.S. banks, including Goldman Sachs and JPMorgan Chase, will have to face the leveraged lending component, and those firms will also face the specific test on counterparty default alongside custody banks Bank of New York Mellon and State Street Corporation.

All told, 34 banks with more than $100 billion in assets will face this year's stress test. The Fed approved capital plans for all tested banks after the 2019 cycle. Reuters

10:30 AM

Rupee slips 9 paise to 71.27 against US dollar in early trade

The rupee opened on a weak note and declined by 9 paise to 71.27 against the US dollar in opening trade on Friday, tracking weak opening in domestic equities and foreign fund outflows.

Forex traders said weak opening in domestic equities, rising crude oil prices and foreign fund outflows dragged the local unit, but weakening of the American currency in the overseas market supported the rupee.

The rupee opened weak at 71.26 at the interbank forex market and then fell further to 71.27, down 9 paise over its last close.

The rupee had settled at 71.18 against the US dollar on Thursday.

Brent crude futures, the global oil benchmark, rose 0.31 per cent to USD 55.10 per barrel.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, as they sold shares worth Rs 560.36 crore on Thursday, as per provisional data.

Domestic bourses opened on a negative note on Friday with benchmark indices Sensex trading 27.18 points down at 41,278.85 and Nifty down 24.65 points at 12,113.30.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell by 0.05 per cent to 98.44.

The 10-year government bond yield was at 6.42 per cent in morning trade. PTI

10:15 AM

IMF: Gulf's financial wealth could be over in 15 years

The International Monetary Fund (IMF) said on Thursday Gulf Arab states -- some of the world's richest countries -- could see their financial wealth depleted in the next 15 years amid lower hydrocarbon revenues if they don't step up fiscal reforms.

The six-nation Gulf Cooperation Council (GCC) - whose net financial wealth the IMF estimates at $2 trillion - accounts for over one fifth of global oil supply, but economies in the region have been hit hard by a drop in oil prices in 2014 and 2015.

While lower crude prices have put pressure on governments to generate non-oil revenues and fix their finances, “the effect of lower hydrocarbon revenue is yet to be fully offset,” the IMF said in a report.

“At the current fiscal stance, the regions existing financial wealth could be depleted in the next 15 years,” it said.

The Washington-based international crisis lender said global oil demand could peak by around 2040 or much sooner in case of a stronger regulatory push for environmental protection and energy efficiency.

“All GCC countries have recognized the lasting nature of their challenge ... However, the expected speed and size of these consolidations in most countries may not be sufficient to stabilize their wealth.”

Gulf states have for decades used their energy wealth to provide millions of citizens with government jobs, part of a social contract by rulers that rewards political acquiescence and educational attainment with employment for life.

But high-paying public sector jobs that demand little of workers have translated into low productivity and an entitlement culture, as well as rising costs as populations grow.

Budgets are stretched further by hefty state spending on subsidies, social services and generous state pensions.

GCC governments have only gradually introduced austerity measures to avoid social discontent, such as the introduction of a value added tax (VAT) in some GCC countries. But most continue to struggle to balance fiscal consolidation and growth. Reuters

10:00 AM

Sensex, Nifty drop in early deals in line with Asian market

Indian equity benchmarks Sensex and Nifty edged lower in opening deals on Friday, tracking subdued Asian market.

The 30-share BSE Sensex was trading lower by 56.87 points or 0.14 per cent at 41,249.16, while the broader NSE Nifty fell 13.60 points or 0.11 per cent to 12,124.35 in early morning trade.

On Thursday, the Sensex had settled 163.37 points, or 0.40 per cent, higher at 41,306.03 and the Nifty had closed up 48.80 points, or 0.40 per cent, at 12,137.95 after the RBI left the policy rates unchanged but maintained its accommodative stance to boost growth.

Both equity benchmarks Sensex and Nifty had logged their fourth straight gains on Thursday.

Global crude benchmark Brent advanced 0.33 per cent to USD 55.30 per barrel.

On the currency front, the Indian rupee dropped 9 paise to 71.27 per US dollar in morning deals.

Exchange data showed foreign investors pulled out Rs 560.36 crore on a net basis from the Indian equity market on Thursday.

On the global financial market front, Asia was trading lower, while US stocks consolidated gains for a fourth consecutive day to climb new record highs, as sentiment kept improving on China’s pledge of tariff cuts on American goods.

In the sixth bi-monthly monetary policy review of 2019-20, the kept the repo rate unchanged at 5.15 per cent while retaining its accommodative stance.

The central bank also kept the GDP growth estimate unchanged for the current fiscal at 5 per cent but projected a pick up to 6 per cent in the next financial year. PTI

9:45 AM

Kerala’s GDP recorded higher growth rate at 7.5% in 2018-19

Economic Survey for 2018-2019 tabled by the Kerala government in the Assembly on Thursday showed a higher growth rate with the state’s Gross Domestic Product at 7.5 per cent during the period as against 7.3 per cent in 2017-18.

According to the survey, though the growth rate was on a higher side, agriculture and allied sector growth declined.

“The agriculture and allied sector growth declined to (-)0.5 per cent during 2018-19 from a growth rate of 1.7 per cent in 2017-18,” it said.

The survey also said contribution of secondary and tertiary sectors improved from 2017-18.

“In 2017-18, the contribution from secondary sector was 27.7 per cent at constant prices and 25 per cent at current prices.

Among the sectors, the highest growth was in the secondary sector with 8.8 per cent growth at constant (2011-12) prices followed by tertiary sector (8.4 per cent),” the survey said.

It also said the growth in secondary sector was mainly due to a spurt in the manufacturing sector.

The survey said the total turnover of State Public Sector Undertakings under Industries Department in 2018-19 was Rs 3,442.74 crore, an increase of 17.9 per cent from 2017-18.

It said the state has an internet penetration rate of 54 per cent and it was the second highest in the country.

The survey, citing the National Sample Survey Office, said women in Kerala were far ahead in terms of computer literacy and basic internet knowledge.

“In rural areas, 35.1 per cent of women in Kerala have basic internet knowledge. The all India level is 8.5 per cent.

In case of urban areas, 41.7 per cent women in Kerala have basic internet knowledge (30.1 per cent at national level). Kerala is the first State to make internet access a basic right,” a release issued by the finance department said.

According to quick estimates for 2018-19, Kerala’s per capita income is Rs 1.48 lakh as against the national average of Rs 93,655.

“In other words, average income per person in Kerala was approximately 1.6 times the Indian average in 2018-19,” it said.

Finance minister Thomas Isaac will present the state budget on Friday. PTI

9:30 AM

Uber loses $1.1 billion investing in food delivery, driverless cars

Uber continued to lose money as it builds up its food delivery business and develops technology for driverless cars, but revenue for its rides business nearly tripled as the company picked up more passengers around the world.

The ride-hailing giant lost $1.1 billion in the fourth quarter of 2019, about 24% more than the same time last year. The loss amounted to 64 cents per share, which was slightly better than what analysts were expecting. Analysts polled by FactSet predicted Uber would lose $1.18 billion, or 67 cents per share, during the quarter.

Uber brought in $4.1 billion in revenue, up 37% from a year ago. Its revenue grew around the world, although the biggest gain was in the U.S. and Canada, where Uber pulled in 41% more than last year.

But its Eats business lost $461 million in the quarter before accounting for interest, taxes, depreciation and amortization, down 66% from the same time last year as Uber put money into growing the business in a highly competitive food delivery market.

“2019 was a transformational year for Uber and I’m gratified by our progress, steadily delivering against the commitments we’ve made to our shareholders on our path to profitability, said Dara Khosrowshahi, CEO, in a statement. We recognize that the era of growth at all costs is over. In a world where investors increasingly demand not just growth, but profitable growth, we are well-positioned to win through continuous innovation, excellent execution, and the unrivaled scale of our global platform.

In Uber’s last earnings call, Khosrowshahi said the company’s goal was to turn a full-year profit in 2021.

The fourth quarter was marked by painful disclosures at Uber.

In December, the company released a long-awaited report, in which its riders reported more than 3,000 sexual assaults during 2018.

The same month, Uber agreed to pay $4.4 million to end a federal sexual harassment probe about its internal corporate culture. But those announcements did not take a toll on the stock, which has been inching up over the past two months.

Uber’s stock cratered after its IPO, falling 42% to a low of $25.99 in November. But it recovered some ground over the last month, reaching $37 on Thursday, about 18% below its IPO price.

Its losses in the fourth quarter included $243 million in stock-based compensation. PTI

9:15 AM

India needs to double credit growth to 15% to achieve $5 trillion economy target by FY25: Bankers

The country needs to double credit growth to 15 per cent to become a USD 5 trillion economy by 2024-25, say bankers.

The country has recorded high double-digit credit growth in the past and is capable of achieving similar growth now as well, they added.

“If you want to reach a USD 5 trillion economy, the outstanding credit, which is around Rs 95-98 trillion, it will have to be doubled, which means we need to grow (credit) at around 15 per cent,” State Bank of India’s Chairman Rajnish Kumar said at an IBA event.

Echoing his views, Union Bank of India’s Managing Director and CEO Rajkiran Rai G said for a USD 5 trillion economy, credit growth has to be more than 15 per cent per annum.

“To sustain that kind of credit growth, we need to build a robust risk management system so that we don’t repeat the mistakes of past. The sourcing, process, monitoring have to be evolved and technology will play a major role in it,” Rai said.

Banks’ credit growth has been hovering at around 7 per cent, currently.

Prime Minister Narendra Modi on Thursday underlined the need for working together to make India a USD 5 trillion economy, while stressing that the government has been able to maintain macroeconomic stability amid tough global environment.

“Let’s move ahead with the resolve to make India a USD 5 trillion economy,” he said while replying to a debate on Motion of Thanks to President for his address to Parliament.

Kumar said one important sector where India needs huge amount of investments is infrastructure.

He said globally the norms around capital are getting tighter.

“There is demand for providing more for the risk, which restricts capital for growth,” he said.

Kumar said the country needs huge capabilities in project financing.

To enhance its project financing capabilities, SBI has done a lot of policy modification. He said the Indian Banks’ Association (IBA) is also working on resolving issues surrounding consortium lending. PTI

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