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Supreme Court Eases March 31st Deadline for Sale of BS4 Vehicles Amidst Coronavirus Outbreak

Professor of Financial Economics and Part-time Value Investor, Transfin.
Mar 28, 2020 1:41 PM 7 min read
Editorial

Supreme Court eases March 31st deadline for sale of BS4 vehicles. Forex reserves fall by $12bn in a week to March 20th. WhatsApp records 40% increase in usage. Microsoft acquires 5G specialist Affirmed Networks. Abbott Laboratories launches a five-minute portable coronavirus test. TIndia prepares for massive screening effort after April 14th.

 

 

INDIA

Supreme Court eases March 31st deadline for sale of BS4 vehicles.

Brief Respite

The Supreme Court has eased the March 31st deadline for the sale of BS4 vehicles in India, giving an extension of 10 days post the end of the nationwide lockdown period. The apex court said that only 10% of unsold BS4 vehicles can be sold within 10 days after April 14th, which is when the lockdown is scheduled to end.

 

The Federation of Automobile Dealers Association (FADA) had previously moved the court and argued that 15,000 passenger cars, 12,000 commercial vehicles, 7L two-wheelers are at stake due to the auto slowdown and the coronavirus pandemic. [CarandBike]

 

Moratorium or not, don’t stop your loan EMIs if you can afford to pay.

Taking Care of Business

Consumers stand to gain from the RBI’s announcements yesterday, including the repo rate cuts and the moratorium on term loans, including home, auto, education, personal and credit card dues. However, the latter’s application depends on individual banks. Lenders are yet to decide whether the moratorium will be extended to all borrowers by default or it will be provided as an option.

 

However, if consumers are able to choose the way forward, they might want to ensure that EMIs and credit card dues are paid despite the moratorium and only opt for relief under exceptional circumstances. This will enable them to save on substantial interest outgo and avail higher savings. [Moneycontrol]

 

CAPITAL

Government raises ₹11,500cr ($1,530m) from strategic sale of THDC, NEEPCO to NTPC.

Heading Towards the Goal

The Government has raised ₹11,500cr ($1,530m) through strategic sale of two state-run power companies, THDC and NEEPCO, to NTPC.

 

It has sold 74.49% stake in THDC for ₹7,500cr ($997m) and 100% in NEEPCO for ₹4,000cr ($532m).

 

With this, the total disinvestments in the current FY stand at over ₹46,500cr ($6,187m). The Revised Estimates had pegged disinvestment receipts in the current financial year at ₹65,000cr ($8,648m). [News18]

 

Forex reserves fall by $12bn in a week to March 20th.

Crashing Down

India's foreign exchange reserves fell by a whopping $12bn to $470bn in the week to March 20th as the RBI continued to supply dollars into the market to curb the fall in the Rupee. 

 

On March 23rd, the Rupee fell sharply against the US Dollar, weakening past the 76 per Dollar mark for the first time ever as foreign investors continued to withdraw money from domestic equity and debt markets amid uncertainties due to the fast-spreading coronavirus. [PTI]

 

INDUSTRIES

A look at how the coronavirus pandemic is affecting three key industries – aviation, telecom and oil.

The Age of COVID-19 is undoubtedly a grim one for virtually all industries. Demand is down, markets are crashing and stocks and investor confidence are falling. Moreover, the streets are empty and stores are shut – the economic consequences will undoubtedly be dire. And once this crisis is over, recovery will take time and effort.

 

Let’s take a look at how three key industries are faring amidst the coronavirus pandemic.

 

Aviation

The 21-day national lockdown, which began on March 25th, has suspended all domestic and international commercial flights. This has invariably threatened incomes and jobs (6.2m in total) in the aviation industry, as well as put a cloud over the post-pandemic recovery. Airlines are cutting salaries, laying off pilots or sending some employees on compulsory leave without pay.

 

In a letter to the Prime Minister recently, Alexandre De Juniac, Director General of the International Air Transport Association (IATA), said, "IATA estimates that COVID-19 could result in a 9% loss in passenger volumes and $2.1bn loss in passenger base revenues for the air transport market in India in 2020...The disruptions in air travel from COVID-19 could reduce about 575,000 jobs and $3.2bn in GDP supported by the air transport industry in India." [News18]

 

Telecom

The surge in the number of people working from home has seen home internet networks flooded with official usage, leading to network congestion. In the last few days alone, there was a 20-30% increase in data demand, leading to patchy networks and affecting everything from calls to video streaming,

 

Considering this, the Cellular Operators Association of India (COAI), the industry body for telecom operators like Airtel, Reliance Jio and Vodafone Idea, has urged mobile customers to use their data more responsibly. People are being requested to avoid “any trivial use of internet...so that remote working, online education, digital healthcare, payments and other critical services can run smoothly and uninterrupted.” [TelecomTalk]

 

Crude Oil

The oil industry, as you may have guessed, is no fan of lockdowns and curfews. The fall in demand has plunged oil prices to historic lows – Brent fell below $25 per barrel. This, coupled with the Saudi-Russian oil price war (read more on that here), is severely hurting oil companies around the world. [BS]

 

TECH

WhatsApp records 40% increase in usage. 

Together in Distress

As per new data from insights and consulting firm Kantar, Facebook-owned messaging platform WhatsApp has recorded 40% increase in usage as more users venture online to stay connected with family, friends and colleagues amidst the coronavirus pandemic and the subsequent lockdown imposed in multiple nations.

 

In places where the pandemic has hit the hardest, video and voice calling on Messenger and WhatsApp doubled. Italy clocked the highest number where people spend 70% more time on Facebook-owned apps with group calling having increased by over 1,000%. WhatsApp usage in Spain was up 76%.

 

Despite the increase in usage however, consumers reported they didn’t trust the social media platforms for critical news related to COVID-19. National news channels and government agency websites were considered better options. [TechCrunch]

 

Microsoft acquires 5G specialist Affirmed Networks.

Towards the Future

Tech giant Microsoft has acquired Affirmed Networks, a company that specialises in fully virtualised, cloud-native networking solutions for telecom operators.

 

With its customer base, Affirmed gives Microsoft another entry point into the telecom industry, especially at a time when the sector is all set to embrace the new 5G technology. 

 

The deal allows Microsoft to integrate Affirmed's network tech directly into Azure, enabling telcos to operate and manage their 5G networks on the cloud instead of through traditional hardware. Azure already has a $2bn cloud contract with AT&T as well as several other carriers. [Yahoo Finance]

 

Launch of Apple's first 5G phone may be delayed.

Wait for the Better

Apple's first 5G phone was expected to be launched this year. However, amidst the coronavirus outbreak, the tech giant is seemingly evaluating its present market scenario to understand whether the planned iPhone launch should be postponed.

 

The spread of the coronavirus pandemic and the nationwide lockdowns that followed have resulted in a shortage in the supply chain. In addition to this, companies also expect a large-scale fall in demand. [News18]

 

FIGHTING COVID-19

Abbott Laboratories launches a five-minute portable coronavirus test.

Test, Test, Test, and Test Even More

US-based medical device maker Abbott Laboratories has devised a coronavirus test than tell if someone is infected or not in as little as five minutes. The test is also small and portable, and can thus be used in any healthcare setting.

 

The company reportedly plans to scale up manufacturing and supply 50,000 tests a day starting April 1st.

 

The test begins with taking a swab from the nose or the back of the throat, mixing it with a chemical solution that breaks open the virus – if it is present – after which the mixture is inserted into a system that identifies any traces of the coronavirus genome. Large concentrations of COVID-19 can be identified in under five minutes while a thorough search can take up to 13 minutes. [BBG Quint]

 

India prepares for massive screening effort after April 14th.

Hold On to Your Testing Kits

India's 21-day lockdown may not be the first national lockdown imposed to counter the coronavirus crisis - that distinction belongs to Italy - but it is the largest lockdown in history. It affects all 1.3bn citizens in every state of the world's second-most populous country.

 

During this lockdown, medical professional can make do with limited testing kits with fewer people on the streets and most people isolated. However, once the restrictions are lifted and people come out of their homes, a massive testing programme is impertinent to identify positive COVID-19 cases.

 

The Indian Council of Medical Research (ICMR) had reportedly sought quotations earlier this week from suppliers for a million antibody kits (for screening through blood tests) and also 700,000 RNA extraction kits (the swab-based test for confirming COVID-19). As on Friday, a total of 157 laboratories were gearing up for large-scale testing. [BS]

FIN.

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