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RBI Receives Poor Response for First TLTRO 2.0 Auction, Maruti Suzuki Won't Resume Manufacturing at Manesar Plant

Professor of Financial Economics and Part-time Value Investor, Transfin.
Apr 24, 2020 4:33 AM 6 min read
Editorial

RBI receives poor response for first TLTRO 2.0 auction. Maruti Suzuki refuses to resume Manesar plant operations despite official go-ahead. Vodafone PLC injects $200m into Vodafone Idea. Donald Trump signs order putting a 60-day ban on issuance of certain green cards. China stocks up on crude oil as prices collapse.

 

 

INDIAN BANKING

RBI receives poor response for first TLTRO 2.0 auction.

Operation Glass Half Full

The RBI today conducted the first auction under its Targeted Long-Term Repo Operations (TLTRO) 2.0, which had been announced on April 17th. The ₹50,000cr ($6.57bn) window’s first auction, however, received a poor response. Only ₹12,850cr ($1.69bn) of the ₹25,000cr ($3.28bn) auctioned today received bids, implying a bid to cover ratio of 0.5.

 

This could mean that banks have turned more risk-averse and unwilling to pile on cheap funds offered by the Central Bank and lend during these uncertain times. [ET Markets]

 

Three private lenders involved in Yes Bank rescue plan have sold part of their stakes.

Buy and Sell

Last month, an SBI-led plan to rescue crisis-laden private lender Yes Bank saw a large number of lenders come together to purchase stakes in Yes Bank in order to raise capital to rescue it.

 

Since then, between March 17th and March 31st, as per shareholding data from BSE, three private lenders have already sold part of their stakes. The highest number of shares were sold by Federal Bank at 5.8cr, followed by Kotak Mahindra Bank at 4.72cr and IDFC First Bank at 4.02cr shares. [Livemint]

 

COMPANIES

Maruti Suzuki refuses to resume Manesar plant operations despite official go-ahead.

Won't Budge

India's largest car-maker Maruti Suzuki has received an official nod to restart operations at its Manesar plant in a single shift with restricted number of staff and vehicles, a month after the plan was shutdown on the back of the nationwide lockdown.

 

However, the company’s Chairman R.C. Bhargava has ruled out actual production unless the vendors and the retail outlets are open. [The Hindu]

 

Technology startups expected to cut hundreds of jobs over the next 6-8 months.

The Slip is Pink

Technology startups are expected to cut hundreds of jobs over the next 6-8 months as demand falters amid tight funding, noted top venture capitalists and founders.

 

Much of the layoffs will be caused by distress sales and company closures. Multiple startups including Oyo, BlackBuck, Treebo, Acko, Fab Hotels, Meesho, Shuttl, Capillary have on average cut workforce by 30%, including temporary staff, in the past one month.

 

Many others, such as Ola, Zomato have reduced pay by as much as 50%, while a few have withdrawn job offers. [ET Tech]

 

Vodafone PLC injects $200m into Vodafone Idea.

A Helping Hand

Shares of Vodafone Idea surged 15% today before closing at ₹4.30 (+8.86%) after Vodafone PLC said it has accelerated a payment of $200m to Vodafone Idea, which was due in September 2020, under the terms of the contingent liability mechanism with Vodafone Idea. 

 

The infusion is expected to support the telecom giant manage operations amid the coronavirus crisis and pay outstanding statutory dues to the Government. [ET Markets]

 

THE FUTURE OF WORK

US government wants companies to get back to work – but that’s easier said than done.                                  

The Way Forward

The US coronavirus curve is showing signs of flattening and the White House is already calling for stay at home orders to be eased out and for the economy to turn back on. Washington issued guidelines last week for US states should they choose to reopen their public spaces, factories and workplaces. This, however, is easier said than done.

 

Here’s an explainer into why companies and workers are finding it difficult to get back to work. [AP]

 

Negligent employers in India could be charged for COVID-19 cases.

Meanwhile

A day after India Inc. executives flagged the issue in the official guidelines to restart economic activity, the Union Government on Wednesday clarified that that in case employees tested positive for COVID-19, their companies would be penalised only for negligence or cognisance under the Disaster Management Act, 2005. [BS]

 

IT industry could be permanently changed as millions work from home.

The Times They Are A-Changin'

India’s massive IT industry confronted a myriad of challenges when it transitioned to work from home following the March 24th nationwide lockdown. Now, many industry watchers believe that this will have a long-term impact on these companies. TCS, for example, is reportedly looking at a plan that has only a quarter of its employees working from offices by 2025. [ET ITeS]

 

TECH

Facebook Marketplace falls behind its rivals when it comes to virus precautions.

When the Giant Falls Short

Facebook Marketplace, one of the biggest second-hand buying and selling platforms in the world, has been accused of not taking sufficient measures against the spread of the virus vis-a-vis its rival apps. 

 

A host of Facebook Marketplace users in the UK said that they were still completing face-to-face transactions over the platform, most taking their own precautions by wearing masks and gloves.

 

Meanwhile, Facebook is not offering a contactless delivery service. Instead, it’s telling users that a number of delivery services still exist. [CNBC]

 

A bug in iPhone’s default mail app might let hackers access private data.

Apple and the Bug-stalk

Tech giant Apple is in the process of patching a bug discovered in the iPhone’s default Mail app last year during a routine investigation that security researchers say hackers have already used to steal data from their victims’ devices.

 

Dubious Distinctions

Typically, phone hacks require a user to take a specific action to download malware, such as clicking on a message or visiting a website. In this case, hackers have found a way to install malicious software without the recipient doing anything.

 

The bug could leave a large number of iPhones open to attack, though researchers say it doesn’t appear to have been widely deployed at this point. [TechCrunch]

 

GLOBAL

Donald Trump signs order putting a 60-day ban on issuance of certain green cards.

The Distant American Dream

US President Donald Trump has signed an executive order putting a 60-day ban on immigrants seeking to live and work in America permanently, as part of the pandemic crackdown.

 

He also said that the order could be extended depending on the economic fallout from the coronavirus pandemic.

 

While Trump says that the move aims to preserve jobs for American workers in an economy ravaged by the coronavirus, many critics view it as a means for him to greatly limit immigration as a whole - something he has been accused of wanting to do for some time now.

 

A Ray of Hope?

The order however includes a long list of exemptions, including for those who are currently in the country and those seeking entry to work as physicians and nurses, as well as the spouses and minor children of American citizens. [CNBC]

 

China stocks up on crude oil as prices collapse.

Gather Oil While the Prices Fall

China, the world’s biggest energy consumer, is building up stockpiles of crude oil as global prices plunge due to the coronavirus outbreak.

 

Imports rose 4.5% in March over a year earlier even as demand fell in the wake of the coronavirus pandemic and the following lockdown. For the first quarter of the year imports were up 5%.

 

As global prices fell, Chinese importers sent 84 tankers to Saudi Arabia in mid-March, each able to carry 2m barrels of crude, according to news reports that cited the China Shipbuilding Industry Association. [AP]

FIN.

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