Bill Gates leaves boards of Microsoft and Berkshire Hathaway. Cabinet approves Yes Bank reconstruction plan. Moratorium on cash withdrawals to be lifted within three working days after scheme is notified. Despite Friday’s intraday rebounds, Sensex and Nifty record one of the worst weeks for Indian markets. Global markets experience high volatility. India’s aviation sector feels the pressure as hundreds of flights are cancelled and number of passengers declines. Private airport operators propose nominal levy on airfares to cover operational expenses. Apple opens all its official stores in China a month after shutting them down amidst lockdown. The US is now investigating ZTE for alleged bribery. US Pentagon reconsiders awarding cloud computing contract to Microsoft after Amazon’s protest. Bill Gates leaves boards of Microsoft and Berkshire Hathaway.
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The Cabinet has approved the RBI-proposed reconstruction plan for Yes Bank. The plan will be led by SBI, with other participants including HDFC, ICICI, Axis Bank, Kotak Mahindra Bank, RK Damani, Rakesh Jhunjhunwala and the Azim Premji Trust, which will invest a total ?12,000cr ($1.6bn).
SBI had previously said it will invest ?7,250cr ($978m) in the troubled private lender. HDFC and ICICI Bank said they will invest ?1,000cr ($134m) each, while Axis Bank said it will put in ?600cr ($80m).
Finance Minister Nirmala Sitharaman announced the decision after a Cabinet meeting on Friday. SBI will have to retain a minimum 26% stake in Yes Bank for three years, as per the RBI plan. As for the other investors, they will have to keep three-fourths of their holdings for three years. [ET Markets]
End to the Bar
“The notification with details of the reconstruction plan will be released as soon as possible," Sitharaman said. She added that the moratorium that was imposed on March 5th (which limited cash withdrawals to ?50,000 ($675) per person) will be lifted within three working days after the scheme is notified. [Livemint]
A Roller Coaster Ride No One Asked For
It’s been a wild week for markets around the world. On Friday, Indian stock indices plummeted as soon as trading began – in fact, trading had to be actually halted for 45 minutes in the morning when both Sensex and Nifty hit the lower circuit. But following this, Indian indices staged a smart rebound, with Sensex rallying over 1,300 points and Nifty staging its biggest intraday recovery since September 2019 to reclaim 9,900 levels.
Nonetheless, the week ending March 13th remains one of the worst for Indian markets. On a weekly basis, Sensex was down 9.2%, while Nifty fell nearly 9%. [Moneycontrol]
V for Volatile
Volatility struck global markets too. In the US, the Dow ended a 11-year bull market run and fell 20% the past week. But on Friday, it rose more than 9% following President Donald Trump’s declaration of a national emergency over the coronavirus outbreak. [Business Insider]
European stocks, meanwhile, also closed in positive territory but on a weekly basis were down nearly 19%, the worst week for the pan-European Stoxx 600 since October 2008, with Thursday’s 11% plunge being its biggest one-day loss ever. [CNBC]
The coronavirus pandemic is infecting global markets, dragging stocks to historic lows and beckoning a bear market. Here’s a deep dive into the matter.
Bringing the Skies to the Ground
The coronavirus pandemic is straining the aviation industry. On Friday, Air India decided to cancel flights to Italy, France, Germany, Spain, Israel, South Korea and Sri Lanka till April 30th.
In the last one month, over 600 international flights to and from India have been cancelled for varying periods. Close to 500 of these were by foreign carriers and the rest by Indian operators flying overseas.
Union Civil Aviation Minister Hardeep Puri recently said the number of international passengers arriving at the country's airports has come down to around 62,000 per day from 70,000 in the wake of the coronavirus outbreak.
This number – and the number of cancelled flights – is only likely to worsen in the near future in view of the Government suspending most visas till April 15th. [India Today]
Private airport operators wrote to the Government on Friday seeking relief. They sought permission to impose a “nominal passenger facilitation charge” on airfares to cover operating expenses.
Seven private operators represented by the Association of Private Airports Operators have said that both aeronautical and non-aeronautical revenues have been affected due to flight cancellations by domestic and international airlines in the past few weeks. The operators have proposed levying the charge and provisioning of an “airport operator alleviation package”. [Business Insider]
Hope is All We Need
All news these days seems to be coronavirus-related – and all of it seems to be negative. There are bright spots, though. Besides the fact that the number of new cases being reported in China and South Korea – countries that were severely affected only weeks ago – has come down, businesses across China, where the coronavirus outbreak originated, are slowly but surely springing back to life.
Apple, for example, has opened all 42 of its official stores in China, a month after shutting them down as several cities were put on lockdown to combat the spread of the virus. Foxconn, which assembles Apple's phones in huge factories, said employees had returned to work in numbers that "exceeded our expectations and imagination" – and that supplies of parts had returned to normal, too. [BBC]
Huawei is not the only Chinese tech giant US authorities are investigating. The US Justice Department has reportedly launched a new bribery investigation against telco ZTE.
The allegations go back to 2017, when ZTE pleaded guilty to violating US sanctions on Iran and North Korea and agreed to a civil and criminal penalty and forfeiture of $1.19bn. Read this report for more details. [NBC News]
Billion Dollar Reconsiderations
The Pentagon – meaning, the US Department of Defence – is reportedly reconsidering its awarding of a major $10bn cloud computing contract to Microsoft after rival Amazon protested what it called a flawed bidding process and went to court.
Amazon sued the Pentagon in October. Work on the project (Joint Enterprise Defense Infrastructure project, or JEDI) was halted as the lawsuit proceeded. Amazon, which owns cloud computing major Amazon Web Services, alleged that the White House intervened in favour of Microsoft because Jeff Bezos owns The Washington Post, a news outlet the Trump administration has often clashed with. [ABC News]
Bye Bye Bill
Bill Gates is stepping down from his board seats in Microsoft and Berkshire Hathaway. The billionaire tech icon said he intends to focus more on his philanthropic efforts.
“Microsoft will always be an important part of my life’s work and I will continue to be engaged with Satya [Nadella] and the technical leadership to help shape the vision and achieve the company’s ambitious goals,” Gates wrote in a LinkedIn post announcing his departure. [WSJ]
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